As filed with the Securities and Exchange Commission on December 29, 1998
Registration No. 333-64599
<TABLE>
<CAPTION>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
BERRY PLASTICS CORPORATION
(Exact name of registrant as specified in charter)
Delaware 3089 35-1813706
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
BPC HOLDING CORPORATION
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 35-1814673
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
BERRY IOWA CORPORATION
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 42-1382173
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
BERRY TRI-PLAS CORPORATION
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 56-1949250
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
BERRY STERLING CORPORATION
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 54-1749681
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
AEROCON, INC.
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 35-1948748
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PACKERWARE CORPORATION
<S>
(Exact name of registrant as specified in charter)
Kansas 3089 48-0759852
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
BERRY PLASTICS DESIGN CORPORATION
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 62-1689708
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
VENTURE PACKAGING, INC.
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 51-0368479
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
VENTURE PACKAGING MIDWEST, INC.
<S>
(Exact name of registrant as specified in charter)
Ohio 3089 34-1809003
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
VENTURE PACKAGING SOUTHEAST, INC.
<S>
(Exact name of registrant as specified in charter)
South Carolina 3089 57-1029638
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
NIM HOLDINGS LIMITED
<S>
(Exact name of registrant as specified in charter)
England and Wales 3089 N/A
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
NORWICH INJECTION MOULDERS LIMITED
<S>
(Exact name of registrant as specified in charter)
England and Wales 3089 N/A
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
KNIGHT PLASTICS, INC.
<S>
(Exact name of registrant as specified in charter)
Delaware 3089 35-2056610
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
___________________
</TABLE>
<TABLE>
<CAPTION>
101 Oakley Street
Evansville, Indiana 47710
(812) 424-2904
<S> <C>
(Address, including zip code, and telephone number,
including area code, of registrants' principal executive offices)
___________________
Martin R. Imbler
President and Chief Executive Officer
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
(812) 424-2904
(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)
___________________
WITH COPIES TO:
Julie M. Allen, Esq.
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
(212) 408-2400
___________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this Form are being offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the following box:
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the
same offering. __________________
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
_____________________
___________________
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
</TABLE>
<PAGE>
PROSPECTUS
BERRY PLASTICS CORPORATION
OFFER TO EXCHANGE UP TO $25,000,000 OF ITS
12{1}/{4}% SERIES C SENIOR SUBORDINATED NOTES DUE 2004
FOR ANY AND ALL OUTSTANDING
12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004
Berry Plastics Corporation, a Delaware corporation ("Berry", the "Company" or
the "Issuer") and wholly owned subsidiary of BPC Holding Corporation, a
Delaware corporation ("Holding"), hereby offers, upon the terms and subject to
the conditions set forth in this Prospectus and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer") to exchange $1,000
principal amount of 12{1}/{4}% Series C Senior Subordinated Notes due 2004 (the
"New Notes") of the Issuer for each $1,000 principal amount of the issued and
outstanding 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old
Notes", and the Old Notes and the New Notes, collectively, the "Notes") of the
Issuer from the Holders (as defined herein) thereof. As of the date of this
Prospectus, there is $25,000,000 aggregate principal amount of the Old Notes
outstanding. The terms of the New Notes are identical in all material respects
to the Old Notes, except that the New Notes have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and therefore will
not bear legends restricting their transfer and will not contain certain
provisions providing for the payment of liquidated damages to the holders of
the Old Notes under certain circumstances relating to the Registration Rights
Agreement (as defined herein), which provisions will terminate as to all of the
Notes upon the consummation of the Exchange Offer.
Interest on the New Notes will accrue from October 15, 1998 and will be payable
in cash semi-annually in arrears on October 15 and April 15 of each year,
commencing April 15, 1999. Interest will be payable on the Old Notes accepted
for exchange to, but not including, October 15, 1998.
The New Notes will be unconditionally guaranteed (the "Note Guarantees") on a
senior subordinated basis by Holding, Berry Iowa Corporation, a Delaware
corporation and wholly owned subsidiary of the Company ("Berry Iowa"), Berry
Tri-Plas Corporation, a Delaware corporation and wholly owned subsidiary of the
Company ("Berry Tri-Plas"), Berry Sterling Corporation, a Delaware corporation
and wholly owned subsidiary of the Company ("Berry Sterling"), AeroCon, Inc., a
Delaware corporation and wholly owned subsidiary of the Company ("AeroCon"),
PackerWare Corporation, a Kansas corporation and wholly owned subsidiary of the
Company ("PackerWare"), Berry Plastics Design Corporation, a Delaware
corporation and wholly owned subsidiary of the Company ("Berry Design"),
Venture Packaging, Inc., a Delaware corporation and wholly owned subsidiary of
the Company ("Venture Holdings"), Venture Packaging Midwest, Inc., an Ohio
corporation and wholly owned subsidiary of Venture Holdings ("Venture
Midwest"), Venture Packaging Southeast, Inc., a South Carolina corporation and
wholly owned subsidiary of Venture Holdings ("Venture Southeast"), NIM Holdings
Limited, a company organized under the laws of England and Wales and wholly
owned subsidiary of the Company ("NIM Holdings"), Norwich Injection Moulders
Limited, a company organized under the laws of England and Wales and wholly
owned subsidiary of NIM Holdings ("Norwich"), Knight Plastics, Inc., a Delaware
corporation and wholly owned subsidiary of the Company ("Knight Plastics" and,
collectively with Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon,
PackerWare, Berry Design, Venture Holdings, Venture Midwest, Venture Southeast,
NIM Holdings and Norwich, the "Guarantors").
The New Notes will mature on April 15, 2004. On or after April 15, 1999, the
New Notes will be redeemable at any time at the option of the Company, in whole
or in part, at the redemption prices set forth herein, plus accrued and unpaid
interest, if any, to the date of redemption. In addition, in the event of a
Change of Control (as defined herein), each holder of New Notes may require the
Company to repurchase such holder's New Notes, in whole or in part, at a price
equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, to the date of repurchase. For a definition of the
term "Change of Control," see "Description of New Notes - Repurchase at the
Option of Holders - Change of Control."
The New Notes will be unsecured senior subordinated obligations of the Company,
ranking PARI PASSU with the $100 million of the Company's 12{1}/{4}% Senior
Subordinated Notes due 2004 (the "1994 Notes"), and will be subordinate in
right of payment to all Senior Indebtedness (as defined herein) of the Company,
which includes borrowings under the Credit Facility (as defined herein) and the
Nevada Bonds (as defined herein). The New Notes will be senior to any
indebtedness which by its terms is subordinate to the New Notes, regardless of
when such indebtedness is incurred. The Note Guarantees will be unconditional
joint and several unsecured senior subordinated obligations of the Guarantors
and will be subordinate in right of payment to all Senior Indebtedness of the
Guarantors, including their guarantees of the Company's indebtedness under the
Credit Facility. As of September 26, 1998, the aggregate amount of outstanding
Senior Indebtedness of the Company was $76.8 million, the aggregate amount of
outstanding total indebtedness of the Company was $203.4 million, including the
1994 Notes, and the indebtedness of the Guarantors senior to the Note
Guarantees would have been $307.7 million. As of September 26, 1998, all
indebtedness of the Company other than the Senior Indebtedness was PARI PASSU
in right of payment to the Notes, and there was no indebtedness subordinated to
the Notes. The Indenture (as defined herein) will permit the Company and its
subsidiaries to incur additional indebtedness, including Senior Indebtedness,
subject to certain limitations. The Indenture also provides that the Company
and the Guarantors will not incur any additional indebtedness that is both
subordinate in right of payment to any Senior Indebtedness and senior in right
of payment to the Notes or the Note Guarantees, as the case may be. See
"Description of Notes." Holding is a holding company and is entirely dependent
on the declaration by the Company of dividends to pay its obligations,
including its obligations on its Note Guarantee. Under the terms of the Credit
Facility, the Company is severely restricted from declaring dividends to
Holding. In addition, the indenture (the "1996 Indenture") governing the 1996
Notes (as defined herein) of Holding restricts the ability of Holding to make
certain payments, including payments under its Note Guarantee. See "Risk
Factors - Limited Ability of Holding to Perform Under Note Guarantee."
CONTINUED ON NEXT PAGE.
___________________
SEE "RISK FACTORS" COMMENCING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS PRIOR TO TENDERING OLD NOTES IN THE
EXCHANGE OFFER.
___________________
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1999
<PAGE>
The Old Notes were not registered under the Securities Act in reliance upon an
exemption from the registration requirements thereof. In general, the Old Notes
may not be offered or sold unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act. The New Notes are being offered hereby in order to satisfy
certain obligations of the Issuer and the Guarantors contained in the
Registration Rights Agreement. Based on interpretations by the staff of the
Securities and Exchange Commission (the "Commission" or "SEC") set forth in no-
action letters issued to third parties, the Issuer believes that the New Notes
issued pursuant to the Exchange Offer in exchange for Old Notes may be offered
for resale, resold or otherwise transferred by any holder thereof (other than
any such holder that is an "affiliate" of the Issuer within the meaning of Rule
405 promulgated under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Notes are acquired in the ordinary course of such holder's
business, such holder has no arrangement with any person to participate in the
distribution of such New Notes and neither such holder nor any such other
person is engaging in or intends to engage in a distribution of such New Notes.
Notwithstanding the foregoing, each broker-dealer that receives New Notes for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with any resale of New Notes received in exchange for such
Old Notes where such Old Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities (other than Old Notes
acquired directly from the Issuer). The Issuer and the Guarantors have agreed
that, for a period of one year after the date of this Prospectus, they will
make this Prospectus available to any broker-dealer for use in connection with
any such resale. See "Plan of Distribution."
The Old Notes are designated for trading in the Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") market. There is no established
trading market for the New Notes. The Issuer does not currently intend to list
the New Notes on any securities exchange or to seek approval for quotation
through any automated quotations system. Accordingly, there can be no
assurance as to the development or liquidity of any market for the New Notes.
The Issuer will not receive any proceeds from the Exchange Offer. The Issuer
will pay all of the expenses incident to the Exchange Offer. Tenders of Old
Notes pursuant to the Exchange Offer may be withdrawn as provided herein at any
time prior to the Expiration Date (as defined herein). The Exchange Offer is
subject to certain customary conditions.
This Prospectus has been prepared for use in connection with the Exchange Offer
and may be used by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
in connection with offers and sales related to market-making transactions in
the Notes. DLJ may act as principal or agent in such transactions. Such sales
will be made at prices related to prevailing market prices at the time of sale.
See "Plan of Distribution."
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS STATEMENTS THAT CONSTITUTE FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). THOSE
STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS PROSPECTUS AND INCLUDE
STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY,
PRIMARILY WITH RESPECT TO THE FUTURE OPERATING PERFORMANCE OF THE COMPANY.
WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES," "PLANS,"
"EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. HOLDERS OF THE NOTES ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND MAY INVOLVE RISKS AND
UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER FROM THOSE IN THE FORWARD-
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. VARIOUS ECONOMIC AND
COMPETITIVE FACTORS COULD CAUSE ACTUAL RESULTS OR EVENTS TO DIFFER MATERIALLY
FROM THOSE DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS. THE ACCOMPANYING
INFORMATION CONTAINED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, THE
INFORMATION SET FORTH UNDER "RISK FACTORS" AND "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," IDENTIFIES
IMPORTANT FACTORS THAT COULD CAUSE SUCH DIFFERENCES, INCLUDING THE COMPANY'S
ABILITY TO PASS THROUGH RAW MATERIAL PRICE INCREASES TO ITS CUSTOMERS, ITS
ABILITY TO SERVICE DEBT, THE AVAILABILITY OF PLASTIC RESIN, THE IMPACT OF
CHANGING ENVIRONMENTAL LAWS AND CHANGES IN THE LEVEL OF THE COMPANY'S CAPITAL
INVESTMENT. ALTHOUGH MANAGEMENT BELIEVES IT HAS THE BUSINESS STRATEGY AND
RESOURCES NEEDED FOR IMPROVED OPERATIONS, FUTURE REVENUE AND MARGIN TRENDS
CANNOT BE RELIABLY PREDICTED.
<PAGE>
AVAILABLE INFORMATION
The Issuer has filed with the Commission a Registration Statement on Form S-4
(together with all amendments, exhibits, schedules and supplements thereto, the
"Registration Statement") under the Securities Act with respect to the New
Notes being offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted pursuant to the rules and regulations promulgated by the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document are not necessarily complete. With
respect to each such contract, agreement or other document filed or
incorporated by reference as an exhibit to the Registration Statement,
reference is made to such exhibit for a more complete description of the matter
involved, and each such statement is qualified in its entirety by such
reference.
The Registration Statement may be inspected by anyone without charge at the
Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material may also be obtained at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, upon payment of prescribed fees. Such materials can also be
inspected on the Internet at http://www.sec.gov.
The Company and Holding are subject to the informational reporting requirements
of the Exchange Act. In accordance therewith, the Company and Holding file
reports and other information with the Commission. Such materials filed by the
Company and Holding with the Commission may be inspected, and copies thereof
obtained, at the places, and in the manner, set forth above.
In the event that the Issuer ceases to be subject to the informational
reporting requirements of the Exchange Act, the Issuer has agreed that, so long
as the Notes remain outstanding, it will file with the Commission and
distribute to holders of the Notes copies of (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Issuer were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to annual information only, a
report thereon by the Issuer's independent auditors and (ii) all reports that
would be required to be filed with the Commission on Form 8-K if the Issuer
were required to file such reports. The Issuer will also make such reports
available to prospective purchasers of the Notes, securities analysts and
broker-dealers upon their request. In addition, the Issuer has agreed that for
so long as any of the Old Notes remain outstanding it will make available to
any prospective purchaser of the Old Notes or beneficial owner of the Old Notes
in connection with any sale thereof the information required by Rule 144A(d)(4)
under the Securities Act, until such time as the Issuer has either exchanged
the Old Notes for New Notes or until such time as the holders thereof have
disposed of such Old Notes pursuant to an effective registration statement
filed by the Issuer.
<PAGE>
SUMMARY OF PROSPECTUS
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES,
THE TERMS "BERRY," THE "COMPANY" AND THE "ISSUER" REFER TO BERRY PLASTICS
CORPORATION, ITS SUBSIDIARIES AND THEIR RESPECTIVE OPERATIONS, AND THE TERM
"HOLDING" REFERS TO BPC HOLDING CORPORATION. THE FISCAL YEAR OF HOLDING AND
THE COMPANY IS THE 52 OR 53 WEEK PERIOD ENDING ON THE SATURDAY CLOSEST TO
DECEMBER 31. ALL REFERENCES IN THIS PROSPECTUS TO "FISCAL 1993," "FISCAL
1994," "FISCAL 1995," "FISCAL 1996" AND "FISCAL 1997" REFER TO THE FISCAL YEARS
OF THE COMPANY ENDED ON JANUARY 1, 1994, DECEMBER 31, 1994, DECEMBER 30, 1995,
DECEMBER 28, 1996 AND DECEMBER 27, 1997, RESPECTIVELY.
THE COMPANY
The Company is a leading domestic manufacturer and marketer of plastic
packaging products focused on four key markets: the aerosol overcap, rigid
open-top container, drink cup and houseware markets. Within each of its
markets, the Company concentrates on manufacturing value-added products sold to
marketers of image-conscious industrial and consumer products that utilize the
Company's proprietary molds, superior color matching capabilities and
sophisticated multi-color printing capabilities. The Company believes that it
is the largest supplier of aerosol overcaps in the United States, with sales of
over 1.4 billion overcaps in 1997. Berry also believes that it is the largest
domestic supplier of thinwall, child-resistant and pry-off open top containers.
Berry has utilized its national sales force and existing molding and printing
capacity at multiple-plant locations to become a leader in the plastic drink
cup market, which includes the Company's 32 ounce and 44 ounce drive-through
("DT") cups, which fit in standard vehicle cup holders. The Company entered
the housewares market (which includes the lawn and garden market) for semi-
disposable plastic products, sold primarily to national retail marketers, as a
result of the acquisition of PackerWare in January 1997. From fiscal 1993 to
fiscal 1997, on a pro forma basis, the Company's net sales increased from $87.8
million to $270.6 million, representing a compound annual growth rate ("CAGR")
of 32%.
The Company supplies aerosol overcaps for a wide variety of commercial and
consumer products. Similarly, the Company's containers are used for packaging
a broad spectrum of commercial and consumer products. The Company's plastic
drink cups are sold primarily to fast food restaurants, convenience stores,
stadiums, table top restaurants and retail. The Company also sells houseware
products, primarily seasonal, semi-disposable housewares and lawn and garden
items, to major retail marketers. Berry's customer base is comprised of over
4,000 customers with operations in a widely diversified range of markets. The
Company's top ten customers accounted for approximately 19% of the Company's
fiscal 1997 net sales, and no customer accounted for more than 4% of the
Company's net sales in fiscal 1997.
The historical allocation of the Company's total net sales among its product
categories is as follows:
<TABLE>
<CAPTION>
FISCAL Thirty-Nine
Weeks Ended
1995 1996 1997 September 26, 1998
<S> <C> <C> <C> <C> <C>
Aerosol overcaps 31% 33% 21% 17%
Rigid open-top containers 51 53 49 54
Drink cups 12 9 17 15
Housewares -- -- 8 9
Other 6 5 5 5
</TABLE>
The Company believes that it derives a strong competitive position from its
state-of-the-art production capabilities, extensive array of proprietary molds
in a wide variety of sizes and styles and dedication to service and quality.
In the aerosol overcap market, the Company distinguishes itself with superior
color matching capabilities, which is of extreme importance to its base of
image-conscious consumer products customers, and proprietary packing equipment,
which enables the Company to deliver a higher quality product while lowering
warehousing and shipping costs. In the container market, an in-house graphic
arts department and sophisticated printing and decorating capabilities permit
the Company to offer extensive value-added decorating options. The Company's
drink cup product line is strengthened by both the larger market share and
diversification provided through its acquisition of PackerWare. Berry entered
the housewares business with its acquisition of PackerWare, which has a
reputation for outstanding quality and service among major retail marketers and
for products which offer high value at a reasonable price to consumers. The
Company believes that it is an industry innovator, particularly in the area of
decoration. These market-related strengths, combined with the Company's modern
proprietary mold technology, high speed molding capabilities and multiple-plant
locations, all contribute to the Company's strong market position.
In addition to these marketing and manufacturing strengths, the Company
believes that its close working relationships with customers are crucial to
maintaining market positions and developing future growth opportunities. The
Company employs a direct sales force which is focused on working with customers
and the Company's production and product design personnel to develop customized
packaging that enhances customer product differentiation and improves product
performance. The Company works to develop innovative new products and identify
and pursue non-traditional markets that can use existing Company products.
The Company's address is 101 Oakley Street, Evansville, Indiana 47710. The
Company's telephone number is (812) 424-2904.
RECENT ACQUISITIONS
THE KNIGHT ACQUISITION
On October 16, 1998, Knight Plastics, Inc. ("Knight"), a newly formed wholly
owned subsidiary of the Company, acquired substantially all of the assets of
the Knight Engineering and Plastics Division of Courtaulds Packaging Inc. (the
"Knight Acquisition") for aggregate consideration of approximately $18 million.
Knight, a manufacturer of aerosol overcaps and closures, had fiscal 1997 net
sales of approximately $24 million. Management believes that the Knight
Acquisition will enhance the Company's overcap and closure business and better
position the Company to meet the needs of its domestic and multi-national
customers.
THE NORWICH ACQUISITION
On July 2, 1998, NIM Holdings, a newly formed, wholly owned subsidiary of the
Company, acquired all of the capital stock of Norwich Injection Moulders
Limited ("Norwich Moulders") of Norwich, England (the "Norwich Acquisition"),
for aggregate consideration of approximately <pound-sterling>8.5 million
(approximately $14 million). Norwich Moulders, a manufacturer and marketer of
injection-molded overcaps and closures for the European market, had fiscal 1997
net sales of approximately <pound-sterling>8.1 million (approximately $13
million).
Management believes that the Norwich Acquisition will provide the Company with
a production platform that will allow it to better serve its global customers
and to introduce its product lines in Europe.
THE VENTURE PACKAGING ACQUISITION
On August 29, 1997, the Company acquired Venture Packaging, Inc. of
Monroeville, Ohio ("Venture Packaging") for aggregate consideration of
approximately $43.7 million which included cash, the payment or assumption of
indebtedness, and $5.0 million of preferred stock of Holding and warrants to
purchase stock of Holding (the "Venture Packaging Acquisition"). Venture
Packaging, a manufacturer and marketer of injection-molded containers used in
the food, dairy and various other markets, had fiscal 1996 net sales of
approximately $42 million.
Management believes that the Venture Packaging Acquisition has strategically
assisted the Company in marketing its product line of open-top containers and
lids. Venture Packaging is a leading supplier to the food service industry.
The Monroeville, Ohio facility is strategically located to service the large
northeastern U.S. market, and Venture Packaging has an excellent reputation for
outstanding service. Management believes that continued sales to Venture
Packaging's customers has enhanced the Company's position in the container
market.
As part of the Venture Packaging Acquisition, the Company acquired the
Anderson, South Carolina operations of Venture Packaging. The Company phased
down the operations of this facility in 1998. The majority of this business
has been relocated to the Company's existing Charlotte, North Carolina
facility. The remaining business has been relocated to the Company's existing
Evansville, Indiana and Monroeville, Ohio facilities.
THE VIRGINIA DESIGN ACQUISITION
On May 13, 1997, Berry Design, a newly formed wholly owned subsidiary of the
Company, acquired substantially all the assets of Virginia Design Packaging
Corp. ("Virginia Design") of Suffolk, Virginia (the "Virginia Design
Acquisition"). Virginia Design, a manufacturer and marketer of injection-
molded containers used primarily for food packaging, had fiscal 1996 net sales
of approximately $15 million. Management believes that the acquisition of
these assets has enhanced the Company's position in the food packaging and food
service markets.
THE PACKERWARE ACQUISITION
On January 21, 1997, the Company acquired PackerWare Corporation, a Kansas
corporation, for aggregate consideration of approximately $28.1 million
(including the payment of outstanding debt of PackerWare) by way of a merger of
PackerWare with and into a newly formed, wholly owned subsidiary of the Company
(the "PackerWare Acquisition"). PackerWare, a manufacturer and marketer of
plastic containers, drink cups, housewares and lawn and garden products, had
fiscal 1996 net sales of approximately $43 million.
Management believes that the PackerWare Acquisition significantly diversified
and expanded the Company's position in the drink cup business and gave the
Company immediate penetration into the housewares market. PackerWare's
reputation among its major customers for outstanding quality and service is
consistent with the customer-oriented goals of Berry. PackerWare's houseware
product line is primarily in the seasonal semi-disposable plastic segment of
the market, with other products in the complementary lawn and garden segment.
Customers for this product line are primarily large retail marketers with
national chains. The PackerWare Acquisition provided the Company with a plant
located in Lawrence, Kansas, that is well-situated to service its markets. In
addition, the PackerWare Acquisition provided additional product line breadth
and market presence to Berry's existing open-top container product line.
THE CONTAINER INDUSTRIES ACQUISITION
On January 17, 1997, the Company acquired certain assets of Container
Industries, Inc. ("Container Industries") of Pacoima, California (the
"Container Industries Acquisition") . Container Industries, a manufacturer and
marketer of injection molded industrial and pry-off containers for building
products and other industrial markets, had fiscal 1996 net sales of
approximately $4 million. Berry did not acquire Container Industries'
manufacturing facility located in Pacoima, and Berry transferred production to
its Henderson, Nevada plant. Management believes the Container Industries
Acquisition has provided additional market presence on the west coast,
primarily in the pry-off container product line.
<PAGE>
THE EXCHANGE OFFER
<TABLE>
<CAPTION>
REGISTRATION RIGHTS AGREEMENT The Old Notes were sold by the Company on August 24, 1998
to Donaldson, Lufkin & Jenrette Securities Corporation (the
"Initial Purchaser"), who placed the Old Notes with
institutional investors. In connection therewith, the
Company, the Guarantors and the Initial Purchaser executed
and delivered for the benefit of the holders of the Old
Notes a registration rights agreement (the "Registration
Rights Agreement") providing, among other things, for the
Exchange Offer.
<S> <C>
THE EXCHANGE OFFER New Notes are being offered in exchange for a like
principal amount of Old Notes. As of the date hereof,
$25,000,000 aggregate principal amount of Old Notes are
outstanding. The Company will issue the New Notes to
Holders promptly following the Expiration Date. See "Risk
Factors - Consequences of Failure to Exchange."
EXPIRATION DATE 5:00 p.m., New York City time, on February __, 1999, unless
the Exchange Offer is extended as provided herein, in which
case the term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended.
INTEREST Each New Note will bear interest from October 15, 1998.
Interest will be payable on the Old Notes accepted for
exchange to, but not including, October 15, 1998.
Conditions to the Exchange Offer The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company. The
Company reserves the right to amend, terminate or extend
the Exchange Offer at any time prior to the Expiration Date
upon the occurrence of any such condition. See "The
Exchange Offer - Conditions."
PROCEDURES FOR TENDERING OLD NOTES Each Holder of Old Notes wishing to accept the Exchange
Offer must complete, sign and date the Letter of
Transmittal, or a facsimile thereof, in accordance with the
instructions contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal, or such
facsimile, or an Agent's Message (as defined herein)
together with the Old Notes and any other required
documentation to the exchange agent (the "Exchange Agent")
at the address set forth herein. By executing the Letter
of Transmittal or delivering an Agent's Message, each
Holder will represent to the Company, among other things,
that (i) the New Notes acquired pursuant to the Exchange
Offer by the Holder and any beneficial owners of Old Notes
are being obtained in the ordinary course of business of
the person receiving such New Notes, (ii) neither the
Holder nor such beneficial owner has an arrangement with
any person to participate in the distribution of such New
Notes, (iii) neither the Holder nor such beneficial owner
nor any such other person is engaging in or intends to
engage in a distribution of such New Notes and (iv) neither
the Holder nor such beneficial owner is an "affiliate," as
defined under Rule 405 promulgated under the Securities
Act, of the Company. Each broker-dealer that receives New
Notes for its own account in exchange for Old Notes, where
such Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading
activities (other than Old Notes acquired directly from the
Company), may participate in the Exchange Offer but may be
deemed an "underwriter" under the Securities Act and,
therefore, must acknowledge in the Letter of Transmittal
that it will deliver a prospectus in connection with any
resale of such New Notes. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
See "The Exchange Offer - Procedures for Tendering" and
"Plan of Distribution."
SPECIAL PROCEDURES FOR BENEFICIAL OWNERS Any beneficial owner whose Old Notes are registered in the
name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact such
registered Holder promptly and instruct such registered
Holder to tender on such beneficial owner's behalf. If
such beneficial owner wishes to tender on such beneficial
owner's own behalf, such beneficial owner must, prior to
completing and executing the Letter of Transmittal or
delivering an Agent's Message and delivering his Old Notes,
either make appropriate arrangements to register ownership
of the Old Notes in such beneficial owner's name or obtain
a properly completed bond power from the registered Holder.
The transfer of registered ownership may take considerable
time. See "The Exchange Offer - Procedures for Tendering."
Guaranteed Delivery Procedures Holders of Old Notes who wish to tender their Old Notes and
whose Old Notes are not immediately available or who cannot
deliver their Old Notes, the Letter of Transmittal or an
Agent's Message or any other documents required by the
Letter of Transmittal to the Exchange Agent prior to the
Expiration Date must tender their Old Notes according to
the guaranteed delivery procedures set forth in "The
Exchange Offer - Guaranteed Delivery Procedures."
Withdrawal Rights Tenders may be withdrawn as provided herein at any time
prior to 5:00 p.m., New York City time, on the Expiration
Date. See "The Exchange Offer - Withdrawal of Tenders."
ACCEPTANCE OF OLD NOTES AND DELIVERY OF NEW NOTES The Company will accept for exchange any and all Old Notes
which are properly tendered in the Exchange Offer prior to
5:00 p.m., New York City time, on the Expiration Date. The
New Notes issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date. See "The
Exchange Offer - Terms of the Exchange Offer."
EXCHANGE AGENT United States Trust Company of New York is serving as
Exchange Agent in connection with the Exchange Offer. See
"The Exchange Offer - Exchange Agent."
USE OF PROCEEDS There will be no cash proceeds to the Company from the
exchange pursuant to the Exchange Offer.
FEDERAL INCOME TAX CONSEQUENCES The exchange of Old Notes for New Notes will not be a
taxable exchange for Federal income tax purposes. See
"Certain Federal Income Tax Considerations."
CONSEQUENCES OF FAILURE TO EXCHANGE Holders of Old Notes who do not exchange their Old Notes
for New Notes pursuant to the Exchange Offer will continue
to be subject to the restrictions on transfer of such Old
Notes as set forth in the legend thereon as a consequence
of the issuance of the Old Notes pursuant to exemptions
from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state
securities laws. In general, Old Notes may not be offered
or sold unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state
securities laws.
</TABLE>
SUMMARY DESCRIPTION OF THE NEW NOTES
The Exchange Offer applies to $25,000,000 aggregate principal amount of Old
Notes. The terms of the New Notes are identical in all material respects to
the Old Notes, except that the New Notes have been registered under the
Securities Act and, therefore, will not bear legends restricting their transfer
and will not contain certain provisions providing for an increase in the
interest rate on the Old Notes under certain circumstances relating to the
Registration Rights Agreement, which provisions will terminate as to all of the
Notes upon the consummation of the Exchange Offer. The New Notes will evidence
the same debt as the Old Notes and, except as set forth in the immediately
preceding sentence, will be entitled to the benefits of the Indenture, under
which both the Old Notes were, and the New Notes will be, issued. See
"Description of New Notes."
<TABLE>
<CAPTION>
THE NEW NOTES $25 million in aggregate principal amount at maturity of 12
1/4% Series C Senior Subordinated Notes due 2004.
<S> <C>
MATURITY DATE April 15, 2004.
INTEREST PAYMENT DATES October 15 and April 15 of each year, commencing on April
15, 1999.
MANDATORY REDEMPTION The Company is not required to make mandatory redemption or
sinking fund payments with respect to the New Notes.
Optional Redemption On or after April 15, 1999, the New Notes will be
redeemable at any time at the option of the Company, in
whole or in part, at the redemption prices set forth
herein, plus accrued and unpaid interest, if any, to the
date of redemption.
CHANGE OF CONTROL In the event of a Change of Control, each Holder of the
Notes will have the right to require the Company to
repurchase such Holder's Notes, in whole or in part, at a
price equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, to the
date of repurchase.
GUARANTEES The New Notes will be guaranteed by the Guarantors. The
Note Guarantees will be unconditional joint and several
obligations of each Guarantor and will be subordinated as
described below under "Ranking."
Ranking The New Notes will be unsecured senior subordinated
obligations of the Company, will rank PARI PASSU with the
1994 Notes and will be subordinate in right of payment to
all Senior Indebtedness of the Company, which will include
borrowings under the Credit Facility. The New Notes will
be senior to any indebtedness which by its terms is
subordinate to the New Notes, regardless of when such
indebtedness is incurred. Each Note Guarantee will be
subordinate in right of payment to all Senior Indebtedness
of each respective Guarantor. Senior Indebtedness of the
Company consists of borrowings under the Credit Facility,
the Nevada Bonds (as defined herein) and the South Carolina
Bonds (as defined herein). Senior Indebtedness of the
Guarantors consists of their joint and several guarantee of
the obligations of the Company under the Credit Facility
and obligations with respect to the Nevada Bonds and, in
the case of Holding, the 1996 Notes. As of September 26,
1998, the aggregate amount of outstanding Senior
Indebtedness of the Company would have been $76.8 million,
the aggregate amount of outstanding total indebtedness of
the Company, including the 1994 Notes, would have been
$203.4 million, and the indebtedness of the Guarantors
senior to the Note Guarantees would have been $307.7
million. As of September 26, 1998, all indebtedness of the
Company other than the Senior Indebtedness was PARI PASSU
in right of payment to the New Notes, and there was no
indebtedness subordinated to the New Notes.
Certain Covenants The Indenture pursuant to which the Old Notes were, and the
New Notes will be, issued (the "Indenture") contains
covenants, including, but not limited to, covenants with
respect to the following matters: (i) limitations on the
retention of proceeds from asset sales; (ii) limitations on
the incurrence of additional indebtedness and the issuance
of disqualified stock; (iii) limitations on restricted
payments; (iv) limitations on transactions with affiliates;
(v) limitations on liens; (vi) limitations on dividends and
other payment restrictions affecting subsidiaries; and
(vii) limitations on mergers, consolidations and sales of
assets. In addition, while the Indenture contains, among
other things, the foregoing covenants as well as a
requirement to offer to purchase New Notes upon a Change of
Control, the Indenture does not contain any provisions
specifically intended to protect Holders of the New Notes
in the event of a future highly leveraged transaction
involving the Company or any Guarantor. See "Description
of Notes."
</TABLE>
<PAGE>
RISK FACTORS
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS PRIOR TO TENDERING OLD NOTES IN THE
EXCHANGE OFFER, INCLUDING HIGHLY LEVERAGED CONDITION, OPERATING RESTRICTIONS,
COMPANY GROWTH AND RISKS RELATED TO ACQUISITIONS, LIMITED ABILITY OF HOLDING TO
PERFORM UNDER NOTE GUARANTEE, HISTORICAL NET LOSSES, SUBORDINATION OF THE NOTES
AND NOTE GUARANTEES, UNSECURED STATUS OF NOTES, RANKING OF NOTES WITH 1994
NOTES, FLUCTUATING INTEREST EXPENSE ON SENIOR INDEBTEDNESS, FRAUDULENT
CONVEYANCE RISK, POSSIBLE ADVERSE EFFECT OF INCREASE IN RESIN PRICES, RELIANCE
ON CERTAIN SUPPLIER, CONTROLLING STOCKHOLDERS, COMPETITION, ENVIRONMENTAL
MATTERS, POTENTIAL LACK OF FUNDING FOR CHANGE OF CONTROL OFFER, LACK OF A
PUBLIC MARKET FOR THE NEW NOTES, CONSEQUENCES OF FAILURE TO EXCHANGE, NECESSITY
TO COMPLY WITH EXCHANGE OFFER PROCEDURES AND BLUE SKY RESTRICTIONS ON RESALE OF
NEW NOTES.
<PAGE>
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
(DOLLARS IN THOUSANDS)
The following table sets forth (i) summary consolidated historical financial
data of Holding and its subsidiaries and (ii) pro forma consolidated summary
financial data of Holding and its subsidiaries which gives effect to (a) the
Offering and (b) the PackerWare, Virginia Design, Venture Packaging and Norwich
Acquisitions as of December 29, 1996 for consolidated operations statement data
and consolidated other data for the year ended December 27, 1997. The
following financial data should be read in conjunction with "Capitalization,"
"Pro Forma Condensed Consolidated Financial Statements," "Selected Historical
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements of Holding
and its subsidiaries and the accompanying notes thereto, which information is
included elsewhere herein.
<TABLE>
<CAPTION>
FISCAL Pro Forma Year Ended Pro Forma Thirty-
December 27, Nine Weeks Ended
September 26,
1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C>
CONSOLIDATED OPERATIONS STATEMENT DATA:
Net sales $140,681 $151,058 $226,953 $270,598 $211,977
Cost of goods sold 102,484 110,110 180,249 214,429 156,161
------- ------- ------- ------- -------
Gross margin 38,197 40,948 46,704 56,169 55,816
Operating expenses(1) 17,670 23,679 30,505 36,711 32,103
------- ------- ------- ------- -------
Operating income 20,527 17,269 16,199 19,458 23,713
Other expenses(2) 127 302 226 226 492
Interest expense, net(3) 13,389 20,075 30,246 35,238 27,100
------- ------- ------- ------- -------
Income (loss) before income taxes 7,011 (3,108) (14,273) (16,006) (3,879)
Income taxes 678 239 138 428 371
------- ------- ------- ------- -------
Net income (loss) $6,333 ($3,347) ($14,411) ($16,434) ($4,250)
======= ======= ======= ======= ========
Preferred stock dividends -- (1,116) (2,558) (2,558) (2,620)
Common stock dividends -- -- -- -- --
CONSOLIDATED OTHER DATA:
Adjusted EBITDA(4) $31,569 34,718 40,268 48,876 46,802
Adjusted EBITDA margin(5) 22.4% 23.0% 17.7% 18.1% 22.1%
Cash provided by operating activities 12,969 14,426 14,154 17,417 29,460
Cash used for investing activities (25,385) (14,639) (102,102) (105,365) (34,784)
Cash provided by financing activities 11,124 2,370 80,444 80,444 890
Depreciation and amortization(6) 9,536 11,331 19,026 24,371 18,696
Capital expenditures 11,247 13,581 16,774 -- --
AT SEPTEMBER 26, 1998
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents $ 7,122
<S> <C> <C>
Working capital (deficiency) 5,020
Total assets 248,521
Total Berry Plastics long-term debt 203,391
Total long-term debt 308,391
Stockholders' equity (deficit) (115,078)
</TABLE>
____________________
(1) Operating expenses include pursued acquisition costs of $473 and business
start-up expenses of $394 in fiscal 1995; compensation expense related to the
1996 Transaction (as defined herein) of $2,762, Tri-Plas Acquisition (as
defined herein) start-up expenses of $671 and $907 for costs related to the
consolidation of the Winchester, Virginia facility during fiscal 1996; and
business start-up and machine integration expenses of $3,255 related to the
1997 Acquisitions (as defined herein), and plant consolidation expenses of $480
and $368 related to the shutdown of the Winchester, Virginia and Reno, Nevada
facilities, respectively, during fiscal 1997. Pro forma fiscal 1997 operating
expenses include the same non-recurring expenses as disclosed above for fiscal
1997. Operating expenses include business start up and machine integration
expenses of $1,080 related to the 1997 Acquisitions and plant consolidation
expenses of $87 and $2,072 related to the shutdown of the Reno, Nevada and
Anderson, South Carolina facilities, respectively, for the pro forma thirty-
nine weeks ended September 26, 1998.
(2) Other expenses consist of loss on disposal of property and equipment for
the respective periods.
(3) Includes non-cash interest expense of $950, $1,212 and $2,005 in fiscal
1995, 1996 and 1997, respectively, and $2,042 and $1,135 for the pro forma year
ended December 27, 1997 and the pro forma thirty-nine weeks ended September 26,
1998, respectively.
(4) Adjusted EBITDA is defined as income (loss) before income taxes, net
interest expense, depreciation and amortization of intangibles adjusted to
exclude (i) non-cash charges relating to amortization of restricted stock
awards and market value adjustment related to stock options of ($214) and $358
for fiscal 1995 and 1996, respectively, (ii) other non-recurring or "one-time"
expenses as described in Note (1) above, (iii) management fees and reimbursed
expenses paid to First Atlantic (as defined herein) of $853, $749, $828 and
$654 for fiscal year 1995, 1996 and 1997 and pro forma thirty-nine weeks ended
September 26, 1998, respectively, and certain legal expenses associated with
unusual litigation of $650, $100, and $500 for fiscal year 1996 and 1997 and
thirty-nine weeks ended September 26, 1998, respectively, and (iv) loss on
disposal of property and equipment as described in Note (2) above. Pro forma
fiscal 1997 adjustments are the same as fiscal 1997 adjustments. Adjusted
EBITDA should not be considered in isolation or as an alternative to income
from operations or to cash flows from operating activities (as determined in
accordance with generally accepted accounting principles) and should not be
construed as an indication of a company's operating performance or as a measure
of liquidity. In addition, the Company's calculation of Adjusted EBITDA
differs from that presented by certain other companies and thus is not
necessarily comparable to similarly titled measures used by other companies.
EBITDA is presented because it is a widely accepted financial indicator of a
company's ability to service and/or incur debt. However, EBITDA should not be
considered in isolation or as an alternative to income from operations or to
cash flows from operating activities (as determined in accordance with
generally accepted accounting principles) and should not be construed as an
indication of a company's operating performance or as a measure of liquidity.
In addition, the Company's calculation of EBITDA may differ from that presented
by certain other companies and thus may not be comparable to similarly titled
measures used by other companies.
(5) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net
sales.
(6) Depreciation and amortization excludes non-cash amortization of deferred
financing and origination fees and debt discount amortization which are
included in interest expense.
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE
FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY BY HOLDERS OF OLD NOTES BEFORE
MAKING A DECISION TO TENDER THEIR OLD NOTES IN THE EXCHANGE OFFER.
HIGHLY LEVERAGED CONDITION
The Company and Holding are highly leveraged. As of September 26, 1998, the
Company's total consolidated indebtedness was approximately $203.4 million, and
Holding's consolidated stockholders' deficit was approximately $115.1 million.
The high degree of leverage could have important consequences to holders of the
Notes, including, but not limited to, the following: (i) a substantial portion
of Berry's cash flow from operations must be dedicated to the payment of
principal and interest on its indebtedness, thereby reducing the funds
available to Berry for other purposes; (ii) Berry's ability to obtain
additional debt financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other purposes may be
impaired; (iii) certain of Berry's borrowings will be at variable rates of
interest, which will expose Berry to the risk of higher interest rates; (iv)
the indebtedness outstanding under the Credit Facility is secured by
substantially all of the assets of Berry and matures prior to the maturity of
the Notes; (v) Berry is substantially more leveraged than certain of its
competitors, which may place Berry at a competitive disadvantage, particularly
in light of its acquisition strategy; and (vi) Berry's degree of leverage may
hinder its ability to adjust rapidly to changing market conditions and could
make it more vulnerable in the event of a downturn in general economic
conditions or its business. As of September 26, 1998, the Company had unused
borrowing capacity under the Credit Facility's borrowing base of approximately
$40.4 million.
Berry's ability to pay principal and interest on the Notes will depend on
Berry's financial and operating performance, which in turn are subject to
prevailing economic conditions and to certain financial, business and other
factors beyond its control. However, if Berry cannot generate sufficient cash
flow from operations to meet its obligations, then it may be forced to take
actions such as reducing or delaying capital expenditures, selling assets,
restructuring or refinancing its indebtedness, or seeking additional equity
capital. There is no assurance that any of these remedies could be effected on
satisfactory terms, if at all. See "Management's Discussion and Analysis of
Financial Condition and Results and Operations - Liquidity and Capital
Resources."
OPERATING RESTRICTIONS
The Indenture restricts, among other things, the ability of the Company and its
subsidiaries to incur additional indebtedness, pay dividends, redeem capital
stock, create liens, dispose of certain assets, engage in mergers, make
contributions, loans or advances and enter into transactions with affiliates.
In the event that the Company's cash flow and existing working capital are
insufficient to fund the Company's expenditures or to service its indebtedness,
including the Notes, the 1994 Notes and borrowings under the Credit Facility,
the Company would be required to raise additional funds through capital
contributions from Holding, the refinancing of all or a part of the Company's
indebtedness or a sale of assets or subsidiaries. The restrictions contained
in the Indenture, the indenture governing the 1994 Notes (the "1994 Indenture")
and the Credit Facility, in combination with the Company's highly leveraged
financial position, could severely limit the Company's ability to raise such
additional funds or to respond to changing market and economic conditions,
provide for capital expenditures or take advantage of business opportunities
which may arise. See "Use of Proceeds," "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources," "Description of Certain Indebtedness" and "Description of Notes."
COMPANY GROWTH AND RISKS RELATED TO ACQUISITIONS
As part of its growth strategy, the Company aggressively pursues the
acquisition of other companies, assets and product lines that either complement
or expand its existing business. In fiscal 1997, the Company consummated the
Container Industries Acquisition, the PackerWare Acquisition, the Virginia
Design Acquisition and the Venture Packaging Acquisition (collectively, the
"1997 Acquisitions") and in fiscal 1998, the Company has consummated the
Norwich Acquisition and the Knight Acquisition. See "Summary of Prospectus -
Recent Acquisitions." The Company continually evaluates potential acquisition
opportunities, including those which could be material in size and scope.
Acquisitions involve a number of special risks and factors, including the
diversion of management's attention to the assimilation of the acquired
companies and the management of expanding operations, the incorporation of
acquired products into the Company's product line, the increasing demands on
the Company's operational systems, adverse effects on the Company's reported
operating results, the amortization of acquired intangible assets, the loss of
key employees and the difficulty of presenting a unified corporate image.
The Company has had preliminary acquisition discussions with, or has evaluated
the potential acquisition of, numerous companies over the last year.
Acquisition opportunities identified to date include companies and divisions of
companies, with annual revenues ranging from several million dollars to
revenues that approach those of the Company. The Company has taken the
following actions in the pursuit of various acquisitions opportunities:
preliminary discussions; exchange of confidential, nonpublic information;
verbal and written expressions of interest; and proposals and negotiations
regarding potential transaction structure and price.
The Company is unable to predict whether or when any prospective acquisition
candidates will become available or the likelihood of a material acquisition
being completed. If the Company proceeds with an acquisition, and if such
acquisition is relatively large and consideration is in the form of cash, a
substantial portion of the Company's available cash resources could be used in
order to consummate any such acquisition. In addition, due to the relatively
large size of several potential acquisition opportunities, the general risks
described above inherent in acquisitions would be particularly acute.
The Company has no agreements, arrangements or understandings concerning any
acquisition which would be material in size and scope to the Company's
business. However, the Company intends to pursue appropriate acquisition
opportunities actively. No assurance can be given that any acquisition by the
Company will or will not occur, that if an acquisition does occur that it will
not materially and adversely affect the Company or that any such acquisition
will be successful in enhancing the Company's business.
LIMITED ABILITY OF HOLDING TO PERFORM UNDER NOTE GUARANTEE
Holding is a holding company and is entirely dependent on the declaration by
the Company of dividends to pay its obligations, including its obligations
under its Note Guarantee. Under the terms of the Credit Facility, the Company
is severely restricted from declaring dividends to Holding. In addition, the
1996 Indenture governing the 1996 Notes limits the ability of Holding to make
certain payments, including payments under its Note Guarantee. Accordingly,
absent a substantial increase in operating results of the Company and a
refinancing of the 1996 Notes or an equity offering, Holding is not expected to
be able to perform under its Note Guarantee.
HISTORICAL NET LOSSES
Consolidated earnings have been insufficient to cover fixed charges by $3.3
million, $14.6 million, $16.3 million and $4.2 million for fiscal year 1996,
1997, pro forma year ended December 27, 1997 and pro forma thirty-nine weeks
ended September 26, 1998, respectively. In addition, Holding has experienced
consolidated net losses during each of such periods principally as a result of
expenses and charges incurred in connection with acquisitions by the Company.
These net losses were $3.3 million, $14.4 million, $16.4 million and $4.3
million for fiscal 1996, fiscal 1997, pro forma year ended December 27, 1997
and pro forma thirty-nine weeks ended September 26, 1998, respectively.
Holding expects that it will continue to experience consolidated net losses for
the foreseeable future.
SUBORDINATION OF THE NOTES AND NOTE GUARANTEES; UNSECURED STATUS OF NOTES
SUBORDINATION
Pursuant to the terms of the Indenture, payments on the Notes are subordinated
to the prior payment of all Senior Indebtedness, which includes borrowings
under the Credit Facility and the Nevada Bonds. As of September 26, 1998, the
Notes were subordinated to approximately $76.8 million of Senior Indebtedness
of the Company. In addition, as of such date, up to $40.4 million was
available for borrowing under the Credit Facility (subject to applicable
borrowing base limitations), and there was no indebtedness subordinated to the
Notes. See "Description of Certain Indebtedness - Credit Facility." The
Indenture does not limit the amount of additional Senior Indebtedness that may
be incurred by the Company or its subsidiaries provided that a certain fixed
charge coverage test is met. See "Description of Notes."
By reason of such subordination, in the event of the insolvency, liquidation,
reorganization, dissolution or the winding up of the Company, or in the event
that the Senior Indebtedness is otherwise accelerated, holders of Senior
Indebtedness must be paid in full before the holders of the Notes may be paid
by the Company. In such event, there may be insufficient assets remaining to
satisfy the claims of the holders of the Notes. In addition, the Company will
not be permitted to make any payment with respect to the Notes for a
substantial period of time if defaults under the Credit Facility or certain
other Senior Indebtedness exist and are continuing and certain other conditions
are satisfied. The Notes rank PARI PASSU with the 1994 Notes and PARI PASSU
with, or senior to, all other subordinated debt of the Company. In addition,
the Note Guarantees are subordinated to all existing and future Senior
Indebtedness of each Guarantor, including the guarantees under the Credit
Facility, and, in the case of Holding, the 1996 Notes.
UNSECURED STATUS OF NOTES
The Notes and Note Guarantees are unsecured obligations of the Company and the
Guarantors, respectively. The Indenture permits the Company to incur certain
secured indebtedness, including indebtedness under the Credit Facility, which
is secured by a lien on substantially all of the assets of the Company and the
Guarantors. The holders of any secured indebtedness will have a claim prior to
the holders of the Notes with respect to any assets pledged by the Company as
security for such indebtedness. Upon an event of default under the Credit
Facility, the lender thereunder would be entitled to foreclose on the assets of
the Company and the Guarantors. In such event, the assets of the Company and
the Guarantors remaining after repayment of such secured indebtedness may be
insufficient to satisfy the obligations of the Company with respect to the
Notes.
RANKING OF NOTES WITH 1994 NOTES
The terms of the 1994 Notes and the Notes are identical in all material
respects except that the 1994 Notes have a priority upon the payment of
proceeds pursuant to an Asset Sale (as defined herein). See "Description of
Notes - Repurchase at the Option of Holders - Asset Sales."
FLUCTUATING INTEREST EXPENSE ON SENIOR INDEBTEDNESS
The Company's and the Guarantors' respective obligations under the Credit
Facility and the Nevada Bonds bear interest at rates that may be expected to
fluctuate over time. Under the terms of the Indenture, the Company may incur
indebtedness under the Credit Facility of up to the greater of $132.6 million
and the Borrowing Base (as defined herein). Accordingly, a substantial
increase in interest rates could adversely affect the Company's ability to
service its debt obligations, including its obligations on the Notes. See
"Description of Certain Indebtedness."
FRAUDULENT CONVEYANCE RISK
If a court of competent jurisdiction in a suit by an unpaid creditor or a
representative of creditors (such as a trustee in bankruptcy or a debtor-in-
possession) were to find that, at the time of the incurrence of the
indebtedness represented by the Notes and the Note Guarantees, as the case may
be, the Company or a Guarantor was insolvent, was rendered insolvent by reason
of such incurrence, was engaged in a business or transaction for which its
remaining assets constituted unreasonably small capital, intended to incur, or
believed that it would incur, debts beyond its ability to pay such debts as
they matured, or intended to hinder, delay or defraud its creditors, and that
the indebtedness was incurred for less than reasonably equivalent value or fair
consideration, then such court could, among other things, (i) void all or a
portion of the Company's or such Guarantor's obligations to the holders of the
Notes, the effect of which could be that the holders of the Notes might not be
repaid in full and/or (ii) subordinate the Company's or such Guarantor's
obligations to the holders of the Notes to other existing and future
indebtedness of the Company or such Guarantor, as the case may be, the effect
of which would be to entitle such other creditors to be paid in full before any
payment could be made on the Notes.
The measure of insolvency for purposes of the foregoing will vary depending
upon the law applied in such case. Generally, however, the Company would be
considered insolvent if the sum of its debts, including contingent liabilities,
was greater than all of its assets at a fair valuation or if the present fair
saleable value of its assets was less than the amount that would be required to
pay the probable liabilities on its existing debts, including contingent
liabilities, as they become absolute and matured.
POSSIBLE ADVERSE EFFECT OF INCREASE IN RESIN PRICES
The primary materials used by the Company in the manufacture of its products
are various plastic resins, which in fiscal 1997 constituted approximately
$72.1 million, or 40% of the Company's total cost of goods sold. Accordingly,
the Company's financial performance is materially dependent on its ability to
pass through resin price increases to its customers. Plastic resins are
subject to cyclical price fluctuations, including those arising from supply
shortages and as a result of changes in the prices of natural gas, crude oil
and other petrochemical intermediates from which resins are produced. Although
the Company has been able historically to pass on increases in resin prices to
its customers, no assurance can be given that this trend will continue or that
a significant increase in resin prices would not have a material adverse effect
on the Company's financial performance. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - General Economic
Conditions and Inflation" and "Business - Sources and Availability of Raw
Materials."
RELIANCE ON CERTAIN SUPPLIER
The Company purchases approximately 58% of its total resin requirements (in
dollars) from Dow Chemical Company ("Dow") pursuant to purchase orders issued
from time to time by the Company. The Company has a long-standing relationship
with Dow, but it has no master agreement with Dow. The Company has worked
closely with Dow to develop resins which yield maximum performance from the
Company's equipment. Although the Company believes its relationship with Dow
is mutually beneficial, no assurance can be given that Dow will continue to be
a supplier to the Company in the future or that alternative sources would be
available for the Company's resin requirements.
CONTROLLING STOCKHOLDERS; MANAGEMENT STOCKHOLDERS
Atlantic Equity Partners International II, L.P., a Delaware limited partnership
("International"), owns approximately 54% (on a voting common stock equivalent
basis) of Holding's outstanding voting capital stock. As such, subject to the
terms of the New Stockholders Agreement (as defined herein), International has
the ability to elect all of the members of Holding's board of directors and can
determine the outcome of any corporate transaction or other matter submitted to
the stockholders of Holding or the Company for approval, including mergers,
consolidations and the sale of the Company or all or substantially all of the
Company's assets. See "Certain Transactions - Stockholders Agreements."
Atlantic Equity Associates International II, L.P., a Delaware limited
partnership ("AEA II"), is the sole general partner of International. Mr.
Buaron, the Chairman and a director of the Company, is the sole shareholder of
Buaron Holdings Ltd. ("BHL"). BHL is the sole general partner of AEA II.
Through his affiliations with BHL and AEA II, Mr. Buaron may be deemed to
control International. See "Principal Stockholders."
Including the shares of capital stock owned by International, all executive
officers and directors of the Company as a group beneficially own approximately
94.9% (on a voting common stock equivalent basis) of Holding's outstanding
voting capital stock. See "Management" and "Principal Stockholders."
COMPETITION
Most of the Company's products are sold in highly competitive markets in the
United States. The Company competes with a significant number of companies of
varying sizes, including divisions or subsidiaries of larger companies, on the
basis of price, service, quality and the ability to supply products to
customers in a timely manner. A number of the Company's competitors have
financial and other resources that are substantially greater than those of the
Company. Competitive pressures or other factors could cause the Company's
products to lose market share or could result in significant price erosion,
either of which would have a material adverse effect on the Company's results
of operations. See "Business."
ENVIRONMENTAL MATTERS
Federal, state and local governments could enact laws or regulations concerning
environmental matters that increase the cost of producing, or otherwise
adversely affect the demand for, plastic products. The Company is aware that
certain local governments have adopted ordinances prohibiting or restricting
the use or disposal of certain plastic products that are among the types of
products produced by the Company. If such prohibitions or restrictions were
widely adopted, such regulatory and environmental measures or a decline in
consumer preference for plastic products due to environmental considerations
could have a material adverse effect upon the Company. In addition, certain of
the Company's operations are subject to Federal, state and local environmental
laws and regulations that impose limitations on the discharge of pollutants
into the air and water and establish standards for the treatment, storage and
disposal of solid and hazardous wastes. While the Company has not been
required historically to make significant capital expenditures in order to
comply with applicable environmental laws and regulations, the Company cannot
predict with any certainty its future capital expenditure requirements because
of continually changing compliance standards and environmental technology.
Furthermore, although the Company is not aware of additional environmental
issues, currently unknown conditions of noncompliance or currently unknown
contamination of sites currently or formerly owned or operated by the Company
(including contamination caused by prior owners and operators of such sites)
may give rise to additional compliance or remediation costs or other
liabilities. The Company does not have insurance coverage for environmental
liabilities and does not anticipate obtaining such coverage in the future. See
"Business - Environmental Matters and Governmental Regulation."
POTENTIAL LACK OF FUNDING FOR CHANGE OF CONTROL OFFER
In the event of a Change of Control, the Company will be required, subject to
certain conditions, to offer to purchase all outstanding Notes and 1994 Notes
at a purchase price equal to 101% of the principal amount thereof (or 101% of
$125,000,000), plus accrued interest to the date of repurchase. There can be
no assurance that the Company will have sufficient funds available to purchase
all of the outstanding Notes and 1994 Notes were they to be tendered in
response to an offer made as a result of a Change of Control. Moreover, the
Credit Facility and the 1996 Indenture restrict such a purchase and the offer
would require the approval of the lender or securityholders thereunder, as the
case may be. As a result of this potential lack of funds and the restrictions
contained in the Credit Facility and the 1996 Indenture, the Indenture may
offer little, if any, protection to the Holders of the Notes in the event of a
Change of Control. The Company's failure to purchase Notes rendered upon a
Change of Control would constitute an event of default under the Indenture. In
the event of a change of control, Holdings will also be required, subject to
certain conditions, to offer to purchase all outstanding 1996 Notes at a
purchase price equal to 101% of the principal amount thereof (or 101% of
$105,000,000), plus accrued interest to the date of repurchase. The Credit
Facility provides that events similar to a Change of Control will constitute an
event of default thereunder. Upon the occurrence of an event of default under
the Credit Facility, all amounts outstanding thereunder may become due and
payable. All indebtedness of the Company under the Credit Facility, which may
be up to $132.6 million (plus <pound-sterling>1.5 million under the UK Revolver
and <pound-sterling>4.5 million under the UK Term Loan), is Senior
Indebtedness. Accordingly, in the event of an event of default under the
Credit Facility, including with respect to an event similar to a Change of
Control, the subordination provisions contained in the Indenture will prohibit
the Company (if the holders of Senior Indebtedness issue a notice to the
Company to such effect) from making any payment on the Notes until such event
of default is cured or upon the expiration of 179 days (unless the holders of
Senior Indebtedness accelerate the maturity of the Senior Indebtedness). The
Company could, in the future enter into certain transactions, including
acquisitions, refinancings or other recapitalizations or highly levereaged
transactions, that would not result in a Change of Control but would increase
the amount of indebtedness outstanding or otherwise affect the Company's
capital structure or credit ratings or otherwise adversely affect holders of
the Notes. See "Description of Certain Indebtedness - Credit Facility" and
"Description of Notes - Repurchase at Option of Holders - Change of Control."
LACK OF A PUBLIC MARKET FOR THE NEW NOTES
The New Notes will constitute a new class of securities with no established
trading market. The Company does not intend to list the New Notes on any
national securities exchange or to seek the admission thereof to trading in the
Nasdaq National Market. The Old Notes are designated for trading in the PORTAL
market. The Company has been advised by DLJ that DLJ currently intends to make
a market in the New Notes. DLJ is not obligated to do so, however, and any
market-making activities with respect to the New Notes may be discontinued at
any time without notice. In addition, such market-making activity will be
subject to the limits imposed by the Securities Act and the Exchange Act, and
may be limited during the Exchange Offer and the pendency of any Shelf
Registration Statement (as defined herein). Accordingly, no assurance can be
given that an active public or other market will develop for the New Notes or
as to the liquidity of the trading market for the New Notes. If a trading
market does not develop or is not maintained, holders of the New Notes may
experience difficulty in reselling the New Notes or may be unable to sell them
at all. If a market develops for the New Notes, future trading prices of the
New Notes will depend on many factors, including among other things, prevailing
interest rates, the Company's and Holding's consolidated financial condition
and results of operations and the market for similar notes. Depending on those
and other factors, the New Notes may trade at a discount from their principal
amount.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Old Notes who do not exchange the Old Notes for New Notes pursuant
to the Exchange Offer will continue to be subject to the restrictions on
transfer of such Old Notes as set forth in the legend thereon as a consequence
of the issuance of the Old Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws. In general, the Old Notes may not be
offered or sold unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register the Old Notes under the Securities Act. In addition, any
trading market for the Old Notes not exchanged for New Notes will be adversely
affected to the extent that Old Notes are tendered and accepted in the Exchange
Offer. Based on interpretations by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that the New
Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be
offered for resale, resold or otherwise transferred by any holder thereof
(other than any such holder that is an "affiliate" of the Company within the
meaning of Rule 405 promulgated under the Securities Act) without compliance
with the registration and prospectus delivery provisions of the Securities Act,
PROVIDED that such New Notes are acquired in the ordinary course of such
holder's business, such holder has no arrangement with any person to
participate in the distribution of such New Notes and neither such holder nor
any such other person is engaging in or intends to engage in a distribution of
such New Notes. Notwithstanding the foregoing, each broker-dealer that
receives New Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with any resale of New Notes received in exchange
for Old Notes where such Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities (other than Old
Notes acquired directly from the Company). The Company and the Guarantors have
agreed that, for a period of one year from the date of this Prospectus, they
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution." However, the ability of any
Holder to resell the New Notes is subject to applicable state securities laws
as described in "Risk Factors - Blue Sky Restrictions on Resale of New Notes."
NECESSITY TO COMPLY WITH EXCHANGE OFFER PROCEDURES
To participate in the Exchange Offer, and to avoid the restrictions on transfer
of the Old Notes, Holders of Old Notes must transmit a properly completed
Letter of Transmittal or an Agent's Message, including all other documents
required by such Letter of Transmittal, to the Exchange Agent at one of the
addresses set forth below under "The Exchange Offer - Exchange Agent" on or
prior to the Expiration Date. In addition, either (i) certificates for such
Old Notes must be received by the Exchange Agent along with the Letter of
Transmittal or (ii) a timely confirmation of a book-entry transfer of such Old
Notes, if such procedure is available, into the Exchange Agent's account at The
Depository Trust Company pursuant to the procedure for book-entry transfer
described herein, must be received by the Exchange Agent prior to the
Expiration Date or (iii) the Holder must comply with the guaranteed delivery
procedures described herein. The method of delivery of the Old Notes and the
Letter of Transmittal and all other required documents to the Exchange Agent is
at the election and risk of the Holder. Neither the Company, the Exchange
Agent nor any other person shall incur any liability for failure to notify
Holders of defects or irregularities with respect to tenders of Old Notes. See
"The Exchange Offer."
BLUE SKY RESTRICTIONS ON RESALE OF NEW NOTES
In order to comply with the securities laws of certain jurisdictions, the New
Notes may not be offered or resold by any holder unless they have been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and the requirements of such
exemption have been satisfied. The Company does not currently intend to
register or qualify the resale of the New Notes in any such jurisdictions.
However, an exemption is generally available for sales to registered broker-
dealers and certain institutional buyers. Other exemptions under applicable
state securities laws may also be available.
<PAGE>
COMPANY HISTORY
HISTORY
Imperial Plastics, the Company's predecessor, was established in 1967 in
Evansville, Indiana. Berry Plastics, Inc. ("Old Berry") was formed in 1983 to
purchase substantially all of the assets of Imperial Plastics. In 1988, Old
Berry acquired Gilbert Plastics of New Brunswick, New Jersey, a leading
manufacturer of aerosol overcaps, and subsequently relocated Gilbert Plastics'
production to Old Berry's Evansville, Indiana facility. In 1990, the Company
and Holding, the holder of 100% of the outstanding capital stock of the
Company, were formed to purchase the assets of Old Berry. The Company acquired
substantially all of the assets (the "Mammoth Acquisition") of the Mammoth
Containers division of Genpak Corporation in February 1992, adding plants in
Forest City, North Carolina (which was subsequently sold by the Company) and
Iowa Falls, Iowa.
In March 1995, Berry Sterling, a newly formed, wholly owned subsidiary of the
Company, acquired substantially all of the assets of Sterling Products, Inc.
(the "Sterling Products Acquisition"), a producer of injection molded plastic
drink cups and lids. Management believes that the Sterling Products
Acquisition gave the Company immediate penetration into a rapidly expanding
plastic drink cup market.
In December 1995, Berry Tri-Plas (formerly Berry-CPI Corp.) acquired
substantially all of the assets of Tri-Plas, Inc. (the "Tri-Plas Acquisition"),
a manufacturer of injection molded containers and lids, and added manufacturing
plants in Charlotte, North Carolina and York, Pennsylvania. Management
believes that the Tri-Plas Acquisition gave the Company an immediate presence
in the polypropylene container product line, which is mainly used for food and
"hot fill" applications.
In January 1996, the Company acquired the assets relating to the plastic drink
cup product line and decorating equipment of Alpha Products, Inc., a subsidiary
of Aladdin Industries, Inc. The addition of these assets complemented the
drink cup product line acquired in the Sterling Products Acquisition.
In January 1997, the Company acquired PackerWare Corporation of Lawrence,
Kansas and certain assets of Container Industries, Inc. of Pacoima, California.
In May 1997, Berry Design acquired substantially all of the assets of Virginia
Design Packaging Corp. of Suffolk, Virginia. In August 1997, the Company
acquired Venture Packaging, Inc. of Monroeville, Ohio. In July 1998, the
Company acquired Norwich Injection Moulders Limited of Norwich, England. In
October 1998, Knight acquired substantially all of the assets of the Knight
Engineering and Plastics Division of Courtaulds Packaging, Inc. See "Summary
of Prospectus - Recent Acquisitions."
THE 1996 TRANSACTION
On June 18, 1996, Holding consummated the transaction described below (the
"1996 Transaction"). BPC Mergerco, Inc. ("Mergerco") was organized by
International, Chase Venture Capital Associates, L.P. ("CVCA") and certain
other institutional investors to effect the acquisition of a majority of the
outstanding capital stock of Holding. Pursuant to the terms of a Stock
Purchase and Recapitalization Agreement dated as of June 12, 1996, each of
International, CVCA and certain other equity investors (collectively, the
"Common Stock Purchasers") subscribed for shares of common stock of Mergerco.
In addition, pursuant to the terms of a Preferred Stock and Warrant Purchase
Agreement dated as of June 12, 1996, CVCA and the Northwestern Mutual Life
Insurance Company (the "Preferred Stock Purchasers") purchased shares of
preferred stock of Mergerco (the "Preferred Stock") and warrants (the "1996
Warrants") to purchase shares of common stock of Mergerco. Immediately after
the purchase of the common stock, the preferred stock and the 1996 Warrants of
Mergerco, Mergerco merged (the "Merger") with and into Holding, with Holding
being the surviving corporation. Upon the consummation of the Merger, (i) each
share of Class A Common Stock, $.00005 par value, and Class B Common Stock,
$.00005 par value, of Holding and certain privately held warrants exercisable
for such Class A and Class B Common Stock were converted into the right to
receive cash equal to the purchase price per share for the common stock into
which such warrants were exercisable less the amount of the nominal exercise
price therefor, (ii) all other classes of common stock of Holding, a majority
of which was held by certain members of management, were converted into shares
of common stock of the surviving corporation (constituting approximately 19% of
the post-merger common stock of the surviving corporation) and (iii) the common
stock, preferred stock and warrants of Mergerco were converted into common
stock, preferred stock and warrants of the surviving corporation, respectively.
In addition, upon the consummation of the Merger, the holders of the warrants
(the "1994 Warrants") to purchase capital stock of Holding that were issued in
connection with the offering in April 1994 by Berry of $100 million aggregate
principal amount of the 1994 Notes (such transaction being the "1994
Transaction"), became entitled to receive cash equal to the purchase price per
share for the common stock into which such warrants were exercisable less the
amount of the exercise price therefor.
The aggregate consideration paid to the sellers of the equity interests in
Holding, including the holders of the 1994 Warrants, was approximately $119.6
million in cash. In order to finance the 1996 Transaction, including the
payment of related fees and expenses: (i) Holding issued 12.50% Senior Secured
Notes due 2006 (with such Notes being exchanged in October 1996 for the 12.50%
Series B Senior Secured Notes due 2006 (the "1996 Notes")) for net proceeds of
approximately $100.2 million (or $64.6 million after deducting the amount of
such net proceeds used to purchase marketable securities available for payment
of interest on the 1996 Notes); (ii) the Common Stock Purchasers, the Preferred
Stock Purchasers and certain members of management made equity and rollover
investments in the aggregate amount of $70.0 million (which amount included
rollover investments of approximately $7.1 million by certain members of
management and $3.0 million by an existing institutional shareholder); and
(iii) Holding received an aggregate of approximately $0.9 million in connection
with the exercise of certain management stock options to purchase common stock
of Holding.
In connection with the 1996 Transaction, International, CVCA, certain other
institutional investors and certain members of management entered into the New
Stockholders Agreement pursuant to which certain stockholders, among other
things, (i) were granted certain registration rights and (ii) under certain
circumstances, have the right to force a sale of Holding. See "Certain
Transactions - Stockholders Agreements."
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were sold by the Company on August 24, 1998 to the Initial
Purchaser, who placed the Old Notes with institutional investors. In
connection therewith, the Company, the Guarantors and the Initial Purchaser
entered into the Registration Rights Agreement, pursuant to which the Company
and the Guarantors agreed, for the benefit of the Holders of the Old Notes,
that the Company and the Guarantors would, at their sole cost, among other
things, (i) within 90 days following the original issuance of the Old Notes,
file with the Commission the Registration Statement (of which this Prospectus
is a part) under the Securities Act with respect to an issue of a series of new
notes of the Company identical in all material respects to the series of Old
Notes (except that such New Notes would not contain terms with respect to
transfer restrictions) and (ii) cause such Registration Statement to be
declared effective under the Securities Act within 150 days following the
original issuance of the Old Notes. Upon the effectiveness of the Registration
Statement, the Company will offer, pursuant to this Prospectus, to the Holders
of Transfer Restricted Securities (as defined herein) who are able to make
certain representations the opportunity to exchange their Transfer Restricted
Securities for a like principal amount of New Notes, to be issued without a
restrictive legend and which may, generally, be reoffered and resold by the
holder without restrictions or limitations under the Securities Act. The term
"Holder" with respect to the Exchange Offer means any person in whose name Old
Notes are registered on the books of the Company or any other person who has
obtained a properly completed bond power from the registered holder.
The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the New
Notes issued pursuant to the Exchange Offer in exchange for the Transfer
Restricted Securities may be offered for sale, resold or otherwise transferred
by any holder without compliance with the registration and prospectus delivery
provisions of the Securities Act. Instead, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that New Notes issued pursuant to the Exchange Offer in
exchange for Transfer Restricted Securities may be offered for resale, resold
and otherwise transferred by any holder of such New Notes (other than any such
holder that is an "affiliate" of the Company within the meaning of Rule 405
promulgated under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, PROVIDED that such
New Notes are acquired in the ordinary course of such holder's business, such
holder has no arrangement or understanding with any person to participate in
the distribution of such New Notes and neither such holder nor any other such
person is engaging in or intends to engage in a distribution of such New Notes.
Since the Commission has not considered the Exchange Offer in the context of a
no-action letter, there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer. Any
Holder who is an affiliate of the Company or who tenders in the Exchange Offer
for the purpose of participating in a distribution of the New Notes cannot rely
on such interpretations by the staff of the Commission and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a resale transaction.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Notes received in exchange for Transfer Restricted Securities where such
Transfer Restricted Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company). The Company and the
Guarantors have agreed that, for a period of one year after the date of this
Prospectus, they will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."
If (i) the Company and the Guarantors are not permitted to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
Commission policy or (ii) any holder of Transfer Restricted Securities notifies
the Company prior to the 20th day following consummation of the Exchange Offer
that (A) it is prohibited by law or Commission policy from participating in the
Exchange Offer or (B) that it may not resell the New Notes acquired by it in
the Exchange Offer to the public without delivering a prospectus and this
Prospectus is not appropriate or available for such resales or (C) that it is a
broker-dealer and owns Notes acquired directly from the Company or an affiliate
of the Company, the Company and the Guarantors will file with the Commission a
shelf registration statement (the "Shelf Registration Statement") to cover
resales of the Notes by the holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement. The Company and the Guarantors will use their best
efforts to cause the applicable registration statement to be declared effective
as promptly as possible by the Commission. For purposes of the foregoing,
"Transfer Restricted Securities" means each Old Note (together with any related
note guarantees) until (i) the date on which such Old Note has been exchanged
by a person other than a broker-dealer for a New Note in the Exchange Offer,
(ii) following the exchange by a broker-dealer in the Exchange Offer of an Old
Note for a New Note, the date on which such New Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
this Prospectus, (iii) the date on which such Old Note has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement or (iv) the date on which such Old Note is
distributed to the public pursuant to Rule 144 under the Securities Act.
The Registration Rights Agreement provides that (i) the Company and the
Guarantors will file the Registration Statement with the Commission on or prior
to 90 days after the original issuance of the Old Notes, (ii) the Company will
use its best efforts to have the Registration Statement declared effective by
the Commission on or prior to 150 days after the original issuance of the Old
Notes, (iii) unless the Exchange Offer would not be permitted by applicable law
or Commission policy, the Company and the Guarantors will commence the Exchange
Offer and use their best efforts to issue, on or prior to 30 business days
after the date on which the Registration Statement was declared effective by
the Commission, New Notes in exchange for all Old Notes tendered prior thereto
in the Exchange Offer and (iv) if obligated to file the Shelf Registration
Statement, the Company and the Guarantors will use their best efforts to file
the Shelf Registration Statement with the Commission on or prior to 45 days
after such filing obligation arises and to cause the Shelf Registration
Statement to be declared effective by the Commission on or prior to 90 days
after such obligation arises. If (a) the Company and the Guarantors fail to
file any of the registration statements required by the Registration Rights
Agreement on or before the date specified for such filing, (b) any of such
registration statements is not declared effective by the Commission on or prior
to the dated specified for such effectiveness (the "Effectiveness Target
Date"), or (c) the Company and the Guarantors fail to consummate the Exchange
Offer within 30 business days of the Effectiveness Target Date with respect to
the Registration Statement, or (d) the Shelf Registration Statement or the
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights Agreement
(each such event referred to in clauses (a) through (d) above a "Registration
Default"), then the Company and the Guarantors will pay Liquidated Damages to
each Holder of Old Notes with respect to the first 90-day period immediately
following the occurrence of the first Registration Default in an amount equal
to $.05 per week per $1,000 principal amount of Old Notes held by such Holder.
The amount of the Liquidated Damages will increase by an additional $.05 per
week per $1,000 principal amount of Old Notes with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of Liquidated Damages for all Registration Defaults of $.50 per week per
$1,000 principal amount of Old Notes. All accrued Liquidated Damages will be
paid by the Company and the Guarantors on each Damages Payment Date to the
Global Note Holder (as defined herein) by wire transfer of immediately
available funds or by Federal funds check and to Holders of Certificated
Securities (as defined herein) by wire transfer to the accounts specified by
them or by mailing checks to their registered addresses if no such accounts
have been specified. Following the cure of all Registration Defaults, the
accrual of Liquidated Damages will cease.
Holders of Old Notes will be required to make certain representations to the
Company and the Guarantors in order to participate in the Exchange Offer and
will be required to deliver certain information to be used in connection with
the Shelf Registration Statement and to provide comments on the Shelf
Registration Statement within the time periods set forth in the Registration
Rights Agreement in order to have their Old Notes included in the Shelf
Registration Statement and benefit from the provisions regarding Liquidated
Damages set forth above.
The summary herein of certain provisions of the Registration Rights Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
The Old Notes are designated for trading in the PORTAL market. To the extent
Old Notes are tendered and accepted in the Exchange Offer, the principal amount
of outstanding Old Notes will decrease with a resulting decrease in the
liquidity in the market therefor. Following the consummation of the Exchange
Offer, Holders of Old Notes who were eligible to participate in the Exchange
Offer but who did not tender their Old Notes will not be entitled to certain
rights under the Registration Rights Agreement and such Old Notes will continue
to be subject to certain restrictions on transfer. Accordingly, the liquidity
of the market for the Old Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus and
in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $1,000 principal amount of New
Notes in exchange for each $1,000 principal amount of outstanding Old Notes
accepted in the Exchange Offer. Holders may tender some or all of their Old
Notes pursuant to the Exchange Offer. However, Old Notes may be tendered only
in integral multiples of $1,000.
The form and terms of the New Notes will be identical in all material respects
to the form and terms of the Old Notes, except that the New Notes have been
registered under the Securities Act and therefore will not bear legends
restricting their transfer and will not contain certain provisions providing
for an increase in the interest rate on the Old Notes under certain
circumstances relating to the Registration Rights Agreement, which provisions
will terminate upon the consummation of the Exchange Offer. The New Notes will
evidence the same debt as the Old Notes and will be entitled to the benefits of
the Indenture under which the Old Notes were, and the New Notes will be,
issued.
As of the date of this Prospectus, $25,000,000 aggregate principal amount of
the Old Notes are outstanding. The Company has fixed the close of business on
January , 1999 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus, together with the Letter of
Transmittal, will initially be sent. As of such date, there were
registered Holders of the Old Notes.
Holders of the Old Notes do not have any appraisal or dissenters' rights under
the Delaware General Corporation Law (the "DGCL") or the Indenture in
connection with the Exchange Offer. The Company intends to conduct the
Exchange Offer in accordance with the applicable requirements of the Exchange
Act and the rules and regulations of the Commission promulgated thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes when,
as and if the Company has given oral notice (confirmed in writing) or written
notice thereof to the Exchange Agent. The Exchange Agent will act as agent for
the tendering Holders for the purpose of the exchange of Old Notes.
If any tendered Old Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
any such unaccepted Old Notes will be returned, without expense, to the
tendering Holder thereof as promptly as practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Old Notes pursuant
to the Exchange Offer. The Company will pay all charges and expenses, other
than certain applicable taxes, in connection with the Exchange Offer. See "The
Exchange Offer - Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
February , 1999, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral notice (confirmed in writing) or written notice
and will make a public announcement thereof prior to 9:00 a.m., New York City
time, on the next business day after each previously scheduled expiration date.
The Company reserves the right, in its sole discretion, (i) to delay accepting
any Old Notes, to extend the Exchange Offer or, if any of the conditions set
forth below under "The Exchange Offer - Conditions" shall not have been
satisfied, to terminate the Exchange Offer, by giving oral notice (confirmed in
writing) or written notice of such delay, extension or termination to the
Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by a public announcement thereof. If the
Exchange Offer is amended in a manner determined by the Company to constitute a
material change, the Company will promptly disclose such amendment by means of
a prospectus supplement that will be distributed to the registered Holders, and
the Company will extend the Exchange Offer for a period of five to 10 business
days, depending upon the significance of the amendment and the manner of
disclosure to the registered Holders, if the Exchange Offer would otherwise
expire during such five- to 10-business-day period.
Without limiting the manner in which the Company may choose to make public
announcement of any delay, extension, termination or amendment of the Exchange
Offer, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones News Service.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from October 15, 1998. Interest will be
payable on the Old Notes accepted for exchange to, but not including, October
15, 1998.
PROCEDURES FOR TENDERING
The tender of Old Notes by a Holder thereof pursuant to one of the procedures
set forth below and the acceptance thereof by the Company will constitute a
binding agreement between such Holder and the Company in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal. This Prospectus, together with the Letter of Transmittal, will
first be sent on or about January , 1999, to all Holders of Old Notes known
to the Company and the Exchange Agent.
Only a Holder of the Old Notes may tender such Old Notes in the Exchange Offer.
A Holder who wishes to tender any Old Notes for exchange pursuant to the
Exchange Offer must transmit a properly completed and duly executed Letter of
Transmittal, or a facsimile thereof, or an Agent's Message, including any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. In addition, either (i) the certificates for
such Old Notes must be received by the Exchange Agent along with the Letter of
Transmittal or (ii) a timely confirmation of a book-entry transfer (a "Book-
Entry Confirmation") of such Old Notes, if such procedure is available, into
the Exchange Agent's account at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration Date or
(iii) the Holder must comply with the guaranteed delivery procedures described
below. To be tendered effectively, the Old Notes, Letter of Transmittal or
Agent's Message and other required documents must be received by the Exchange
Agent at the address set forth below under "Exchange Agent" prior to 5:00 p.m.,
New York City time, on the Expiration Date.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Exchange Agent and forming a part of
a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering Old Notes which are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal, and that the Company may enforce such
agreement against such participant.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IF SENT BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED AND PROPER INSURANCE BE
OBTAINED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY
TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTERS OF TRANSMITTAL OR
OLD NOTES SHOULD BE SENT TO THE COMPANY.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact the registered Holder promptly and instruct such
registered Holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such beneficial owner's own behalf, such
beneficial owner must, prior to completing and executing the Letter of
Transmittal or delivering an Agent's Message and delivering such beneficial
owner's Old Notes, either make appropriate arrangements to register ownership
of the Old Notes in such beneficial owner's name or obtain a properly completed
bond power from the registered Holder. The transfer of registered ownership
may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined herein)
unless the Old Notes tendered pursuant thereto are tendered (i) by a registered
Holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantee must be by a member firm
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an "eligible guarantor institution"
within the meaning of Rule 17Ad-15 promulgated under the Exchange Act (an
"Eligible Institution").
If the Letter of Transmittal is signed by a person other than the registered
Holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered
Holder as such registered Holder's name appears on such Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Notes will be determined by
the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old
Notes not properly tendered or any Old Notes the Company's acceptance of which
would, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the right to waive any defects, irregularities or conditions of
tender as to particular Old Notes. The Company's interpretation of the terms
and conditions of the Exchange Offer (including the instructions in the Letter
of Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Although the Company intends
to notify Holders of defects or irregularities with respect to tenders of Old
Notes, neither the Company, the Exchange Agent nor any other person shall incur
any liability for failure to give such notification. Tenders of Old Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that the Company
determines are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
By tendering, each Holder will represent to the Company, among other things,
that (i) the New Notes acquired by the Holder and any beneficial owners of Old
Notes pursuant to the Exchange Offer are being obtained in the ordinary course
of business of the persons receiving such New Notes, (ii) neither the Holder
nor such beneficial owner has an arrangement with any person to participate in
the distribution of such New Notes, (iii) neither the Holder nor such
beneficial owner nor any such other person is engaging in or intends to engage
in a distribution of such New Notes and (iv) neither the Holder nor any such
other person is an "affiliate," as defined under Rule 405 promulgated under the
Securities Act, of the Company. Each broker-dealer that receives New Notes for
its own account in exchange for Old Notes, where such Old Notes were acquired
by such broker-dealer as a result of market-making activities or other trading
activities (other than Old Notes acquired directly from the Company), may
participate in the Exchange Offer but may be deemed an "underwriter" under the
Securities Act and, therefore, must acknowledge in the Letter of Transmittal
that it will deliver a prospectus in connection with any resale of such New
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect to
the Old Notes at the Book-Entry Transfer Facility for purposes of the Exchange
Offer within two business days after the date of this Prospectus, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the Book-
Entry Transfer Facility, the Letter of Transmittal or facsimile thereof, or an
Agent's Message, with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received by the Exchange
Agent at one of the addresses set forth below under "The Exchange Offer -
Exchange Agent" on or prior to the Expiration Date or the guaranteed delivery
procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date may effect a tender if:
(a)the tender is made through an Eligible Institution;
(b)prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting
forth the name and address of the Holder, the certificate number(s) of such Old
Notes and the principal amount of Old Notes tendered, stating that the tender
is being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof) or an Agent's Message, together with the certificate(s)
representing the Old Notes, or a Book-Entry Confirmation, and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent; and
(c)such properly completed and executed Letter of Transmittal (or
facsimile thereof) or an Agent's Message, as well as the certificate(s)
representing all tendered Old Notes in proper form for transfer, or a Book-
Entry Confirmation, as the case may be, and all other document required by the
Letter of Transmittal are received by the Exchange Agent within three New York
Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
To withdraw a tender of Old Notes in the Exchange Offer, a written or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Old Notes to be withdrawn (the "Depositor"),
(ii) identify the Old Notes to be withdrawn (including the certificate number
or numbers and principal amount of such Old Notes), (iii) be signed by the
Holder in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Old Notes register the transfer of such
Old Notes into the name of the persons withdrawing the tender and (iv) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. If certificates for Old Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates, the withdrawing Holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such Holder is an
Eligible Institution. If Old Notes have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Old Notes and otherwise comply with
the procedures of such facility. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company in its sole discretion, which determination shall be final and
binding on all parties. Any Old Notes so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer and no New Notes will
be issued with respect thereto unless the Old Notes so withdrawn are validly
retendered. Properly withdrawn Old Notes may be retendered by following one of
the procedures described above under "The Exchange Offer - Procedures for
Tendering" at any time prior to the Expiration Date.
Any Old Notes which have been tendered but which are not accepted for payment
due to withdrawal, rejection of tender or termination of the Exchange Offer
will be returned as soon as practicable to the Holder thereof without cost to
such Holder (or, in the case of Old Notes tendered by book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to
the book-entry transfer procedures described above, such Old Notes will be
credited to an account maintained with such Book-Entry Transfer Facility for
the Old Notes).
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not be
required to accept for exchange, or exchange New Notes for, any Old Notes, and
may terminate the Exchange Offer as provided herein before the acceptance of
such Old Notes, if:
(a)the Exchange Offer shall violate applicable law or any applicable
interpretation of the staff of the Commission; or
(b)any action or proceeding is instituted or threatened in any court or by
any governmental agency that might materially impair the ability of the Company
to proceed with the Exchange Offer or any material adverse development has
occurred in any existing action or proceeding with respect to the Company; or
(c)any governmental approval has not been obtained, which approval the
Company shall deem necessary for the consummation of the Exchange Offer.
If the Company determines in its sole discretion that any of the conditions are
not satisfied, the Company may (i) refuse to accept any Old Notes and return
all tendered Old Notes to the tendering Holders (or, in the case of Old Notes
tendered by book-entry transfer into the Exchange Agent's account at the Book-
Entry Transfer Facility pursuant to the book-entry transfer procedures
described above, such Old Notes will be credited to an account maintained with
such Book-Entry Transfer Facility), (ii) extend the Exchange Offer and retain
all Old Notes tendered prior to the expiration of the Exchange Offer, subject,
however, to the rights of Holders to withdraw such Old Notes (see "The Exchange
Offer - Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Old Notes which
have not been withdrawn. If such waiver constitutes a material change to the
Exchange Offer, the Company will promptly disclose such waiver by means of a
prospectus supplement that will be distributed to the registered Holders, and
the Company will extend the Exchange Offer for a period of five to 10 business
days, depending upon the significance of the waiver and the manner of
disclosure to the registered Holders, if the Exchange Offer would otherwise
expire during such five- to 10-business-day period.
EXCHANGE AGENT
The United States Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance, requests
for additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notices of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
<TABLE>
<CAPTION>
To: United States Trust Company of New York, as Exchange Agent
BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE: BY HAND BEFORE 4:30 P.M.:
United States Trust Company of New York (212) 780-0592 United States Trust Company of New York
P.O. Box 843 Attention: Customer Service 111 Broadway
Cooper Station New York, New York 10006
New York, New York 10276 Attention: Lower Level Corporate Trust
Attention: Corporate Trust Services Window
<S> <C> <C>
CONFIRM BY TELEPHONE TO: BY OVERNIGHT COURIER AND BY HAND AFTER
(800) 548-6565 4:30 P.M. ON THE EXPIRATION DATE:
United States Trust Company of New York
770 Broadway
New York, New York 10003
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The principal
solicitation is being made by mail; however, additional solicitation may be
made by telegraph, telephone or in person by officers and regular employees of
the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the Exchange
Offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the Exchange Offer. The Company, however, will pay the Exchange
Agent reasonable and customary fees for its services and will reimburse it for
its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will be
paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
The Company will pay all transfer taxes, if any, applicable to the exchange of
Old Notes pursuant to the Exchange Offer. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Old Notes tendered, or
if tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
Holder or any other person) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering Holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes as
reflected in the Company's accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized. The
expenses of the Exchange Offer and the unamortized expenses related to the
issuance of the Old Notes will be amortized over the term of the New Notes.
<PAGE>
CAPITALIZATION
(DOLLARS IN THOUSANDS)
The following table sets forth the consolidated capitalization of Holding and
its subsidiaries at September 26, 1998. The information in the table below is
qualified in its entirety by, and should be read in conjunction with, the
historical consolidated financial statements of Holding and the related notes
included elsewhere herein.
<TABLE>
<CAPTION>
AT SEPTEMBER 26, 1998
<S> <C>
Marketable securities available to pay interest on 1996 Notes $13,121
=========
Current portion of long-term debt $18,280
=========
Long-term debt, excluding current portion:
BERRY PLASTICS CORPORATION:
Term loans $54,864
Nevada Bonds 4,000
Capital lease obligations 378
1994 Notes 100,000
Notes 25,000
Debt premium (discount) 869
---------
Total Berry Plastics long-term debt, excluding current portion 185,111
HOLDING:
1996 Notes 105,000
---------
Total consolidated long-term debt, excluding current portion 290,111
=========
Stockholders' equity:
Class A Preferred Stock; 800,000 shares authorized;
600,000 shares issued 14,571
Less discount (2,843)
Class B Preferred Stock; 200,000 shares authorized and issued 5,000
Class A Common Stock, par value $0.01:
Voting: 500,000 shares authorized; 91,000 shares issued 1
Nonvoting: 500,000 shares authorized; 259,000 shares issued 3
Class B Common Stock, par value $0.01:
Voting: 500,000 shares authorized; 144,936 shares issued 1
Nonvoting: 500,000 shares authorized; 58,168 shares issued 1
Class C Common Stock, par value $0.01:
Nonvoting: 500,000 shares authorized; 16,960 shares issued --
Treasury stock; 726 shares (81)
Additional paid-in capital 46,616
Warrants 3,511
Retained earnings (deficit) (181,970)
Cumulative foreign currency transaction adjustment 112
--------
Total stockholders' equity (deficit) (115,078)
--------
Total capitalization $175,033
========
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated statement of
operations data of Holding (collectively, the "Pro Forma Statements") give
effect to (i) the Offering and (ii) the PackerWare, Virginia Design, Venture
Packaging and Norwich Acquisitions, as if the transactions had occurred as of
December 29, 1996 for the statement of operations data. The Pro Forma
Statements do not purport to represent what Holding's consolidated financial
position or results of operations would actually have been if such transactions
had in fact occurred on such dates or to project Holding's consolidated
financial position or results of operations for any future date or period. The
pro forma adjustments are based on information and upon assumptions that
management believes to be reasonable. The Pro Forma Statements and
accompanying notes should be read in conjunction with the historical
consolidated financial statements and other financial information pertaining to
Holding and related notes thereto included elsewhere in this Prospectus.
BPC HOLDING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 27, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HOLDING Acquisitions Pro Forma Offering Pro Forma
HISTORICAL Adjustments for the Adjustments for the
Acquisitions Acquisitions
and the
Offering
<S> <C> <C> <C> <C> <C>
Net sales $226,953 $43,645{(1)} $270,598 $ -- $270,598
Cost of goods sold 180,249 34,180{(2)} 214,429 -- 214,429
------- ------- ------- ------- -------
Gross margin 46,704 9,465 56,169 -- 56,169
Operating expenses 30,505 6,206{(3)} 36,711 -- 36,711
------- ------- ------- ------- -------
Operating income 16,199 3,259 19,458 -- 19,458
Other expenses 226 0 226 -- 226
Interest expense, net 30,246 3,903{(4)} 34,149 1,089{(7)} 35,238
------- ------- ------- ------- -------
Loss before income taxes (14,273) (644) (14,917) (1,089) (16,006)
Income taxes 138 290{(5)} 428 -- 428
------- ------- ------- ------- -------
Net loss ($14,411) ($934) ($15,345) (1,089) ($16,434)
======= ======= ======= ======= =======
BERRY PLASTICS CORPORATION DATA:
Cash interest expense, net $17,187 $3,825{(6)} $21,012 $1,130 $22,142
</TABLE>
<PAGE>
BPC HOLDING CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
39 WEEKS ENDED SEPTEMBER 26, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HOLDING Norwich Pro Forma Offering Pro Forma
HISTORICAL Acquisition for the Norwich Adjustments for the Norwich
Adjustments Acquisition Acquisition
and the
Offering
<S> <C> <C> <C> <C> <C>
Net sales $205,116 $6,861{(1)} $211,977 $ -- $211,977
Cost of goods sold 151,083 5,078{(2)} 156,161 -- 156,161
------- ------ ------- ------ -------
Gross Margin 54,033 1,783 55,816 -- 55,816
Operating expenses 31,136 967{(3)} 32,103 -- 32,103
------- ------ ------- ------ -------
Operating income 22,897 816 23,713 -- 23,713
Other expenses 492 -- 492 -- 492
Interest expense, net 25,691 683{(4)} 26,374 726{(7)} 27,100
------- ------ ------ ------ -------
Income (loss) before income taxes (3,286) 133 (3,153) (726) (3,879)
Income taxes 331 40{(5)} 371 -- 371
------ ------ ------ ------ ------
Net income (loss) ($3,617) $93 ($3,524) ($726) ($4,250)
======= ====== ======= ====== ======
BERRY PLASTICS CORPORATION DATA:
Cash interest expense, net $15,288 $683{(6)} $15,971 $753{(7)} $16,724
</TABLE>
<PAGE>
BPC HOLDING CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 27, 39 Weeks
1997 Ended
September 26, 1998
<S> <C> <C>
PACKERWARE, VIRGINIA DESIGN, VENTURE PACKAGING AND NORWICH ACQUISITION
ADJUSTMENTS:
(1)Partial year net sales of the acquisitions $50,715 $6,861
Deduct customers lost due to acquisitions (7,070) --
------- -------
Adjusted net sales for acquisitions $43,645 $6,861
======= =======
(2)Cost of goods sold of the acquisitions $42,790 $5,078
Deduct cost of goods sold due to customers lost from acquisitions (6,970) --
Deduct resin costs due to volume discounts available to Berry (1,640) --
------- -------
Adjusted cost of goods sold for acquisitions $34,180 $5,078
======= =======
(3)Operating expenses of the acquisitions $5,924 $791
Deduct costs related to closed operating facility, net of incremental costs (612) --
incurred
Deduct salaries of owners of acquisitions no longer employed by the Company (455) (129)
Add amortization of goodwill resulting from the acquisitions 1,349 305
------- -------
Adjusted operating expenses for acquisitions $6,206 $967
======= =======
(4)Interest expense of the acquisitions $1,323 $59
Add incremental interest expense from the acquisitions 2,580 624
------- -------
Adjusted interest expense for acquisitions $3,903 $683
======= =======
(5)Provision for income taxes of the acquisitions $106 $289
Adjust taxes for the acquisitions 184 (249)
------- -------
Adjusted tax expense for acquisitions $290 $40
======= =======
(6)Net cash interest expense of the acquisitions $1,323 $59
Add incremental net cash interest expense from acquisitions 2,502 624
------- -------
Adjusted net cash interest expense for acquisitions $3,825 $683
======= =======
OFFERING ADJUSTMENTS:
(7)Adjustment of net interest expense:
Cash interest on Notes $3,062 $2,041
Cash interest on debt reduction (1,932) (1,288)
Amortization of premium on Notes (239) (159)
Amortization of deferred financing costs associated with the Offering 198 132
------- -------
Change in net interest expense $1,089 $726
======= =======
</TABLE>
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS)
The following selected financial data of Holding and its subsidiaries as of and
for the five fiscal years ended December 27, 1997 are derived from the
consolidated financial statements of Holding which have been audited by Ernst &
Young LLP, independent auditors. The following selected consolidated financial
data for the 39 weeks ended September 27, 1997 and September 26, 1998 are
derived from the unaudited condensed consolidated financial statements of
Holding and, in the opinion of management, include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of such
data. Operating results for the 39 weeks ended September 26, 1998 are not
necessarily indicative of the results that may be achieved for Holding's fiscal
year ending January 2, 1999. The selected financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements, related
notes and other financial information included in this Prospectus.
<TABLE>
<CAPTION>
Fiscal Twenty-Six Weeks Ended
---------------------------------------------------------------- ---------------------
<CAPTION>
Statement of Operations Data: 1993 1994 1995 1996 1997 September 27, September 26,
1997 1998
------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales ....................... $87,830 $106,141 $140,681 $151,058 $226,953 $164,715 $205,116
Cost of goods sold .............. 65,652 73,997 102,484 110,110 180,249 129,054 151,083
------- -------- -------- -------- -------- -------- --------
Gross margin .................... 22,178 32,144 38,197 40,948 46,704 35,661 54,033
Operating expenses (1) .......... 14,447 15,160 17,670 23,679 30,505 21,508 31,136
------- -------- -------- -------- -------- -------- --------
Operating income ................ 7,731 16,984 20,527 17,269 16,199 14,153 22,897
Other expenses (2) .............. 2,780 184 127 302 226 89 492
Interest expense, net (3) ....... 6,582 10,972 13,389 20,075 30,246 22,069 25,691
------- -------- -------- ------- -------- ------- --------
Income (loss) before income taxes (1,631) 5,828 7,011 (3,108) (14,273) (8,005) (3,286)
and extraordinary charge ....
Income taxes .................... 72 11 678 239 138 151 331
------- -------- -------- -------- -------- -------- --------
Income (loss) before extraordinary
charge ...................... (1,703) 5,817 6,333 (3,347) (14,411) (8,156) (3,617)
Extraordinary charge (4) ........ - 3,652 - - - - -
------- -------- -------- -------- -------- -------- --------
Net income (loss) ............... $(1,703) $ 2,165 $ 6,333 $ (3,347) $ (14,411) $ (8,156) $ (3,617)
======= ======== ======== ======== ======== ======== ========
Preferred stock dividends ....... $ - $ - $ - $ (1,116) $ (2,558) $ (1,757) $ (2,620)
Common stock dividends .......... - 50,000 - - - - -
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital ................. $ 384 $ 13,393 $ 13,012 $ 15,910 $ 20,863 $13,769 $ 5,020
Fixed assets .................... 36,615 38,103 52,441 55,664 108,218 109,420 104,564
Total assets .................... 60,143 91,790 103,465 145,798 239,444 250,908 248,521
Total debt ...................... 40,936 112,287 111,676 216,046 306,335 299,736 308,391
Stockholders' equity (deficit) .. 5,973 (38,838) (32,484) (97,550) (108,975) (101,919) (115,078)
OTHER DATA:
Adjusted EBITDA (5).............. $20,840 $25,683 $30,716 $33,319 $39,340 $30,108 $45,305
Cash provided by operating
activities .................... 14,110 15,555 12,969 14,426 14,154 9,614 28,580
Cash used for investing
activities .................... (3,821) (9,495) (25,385) (14,639) (102,102) (91,232) (25,036)
Cash provided by (used for)
financing activities .......... (9,859) 2,184 11,124 2,370 80,444 73,868 890
Depreciation and amortization (6) 11,198 8,176 9,536 11,331 19,026 12,622 17,949
Capital expenditures ............ 5,586 9,118 11,247 13,581 16,774 8,795 13,540
Ratio of earnings to
fixed charges(7) ............... - 1.5x 1.4x - - - -
</TABLE>
________________________________
(1) Operating expenses include $3,675 of costs associated principally with
the shutdown and disposal of a facility acquired in the Mammoth Acquisition and
$330 of costs related to an unsuccessful acquisition in fiscal 1993; $116 in
pursued acquisition costs in fiscal 1994; pursued acquisition costs of $473 and
business start-up expenses of $394 in fiscal 1995; compensation expense related
to the 1996 Transaction of $2,762, Tri-Plas Acquisition start-up expenses of
$671 and $907 for costs related to the consolidation of the Winchester,
Virginia facility during fiscal 1996; business start-up and machine integration
expenses of $3,255 related to the 1997 Acquisitions and plant consolidation
expenses of $480 and $368 related to the shutdown of the Winchester, Virginia
and Reno, Nevada facilities, respectively, during fiscal 1997; plant
consolidation expenses related to the shutdown of the Winchester and Reno
facilities of $365 and $414, respectively, and $2,004 of integration expenses
related to the 1997 Acquisitions for the thirty-nine weeks ended September 27,
1997; and $1,080 of business start-up and machine integration expenses related
to the 1997 Acquisitions and plant consolidation expenses of $2,072 and $87
related to the shutdown of the Anderson, South Carolina and Reno, Nevada
facilities, respectively, for the thirty-nine weeks ended September 26, 1998.
(2) Other expenses consist of loss on disposal of property and equipment for
the respective periods.
(3) Includes non-cash interest expense of $1,617, $1,178, $950, $1,212 and
$2,005 in fiscal 1993, 1994, 1995, 1996 and 1997, respectively, and $1,139 and
$1,335 for the thirty-nine weeks ended September 27, 1997 and September 26,
1998.
(4) During 1994, an extraordinary charge of $3.7 million was recognized as a
result of the retirement of debt concurrent with the issuance of the 1994
Notes.
(5) Adjusted EBITDA is defined as income (loss) before income taxes, net
interest expense, depreciation and amortization of intangibles adjusted to
exclude (i) non-cash charges relating to amortization of restricted stock
awards and market value adjustment related to stock options, (ii) other non-
recurring or "one-time" expenses as described in Note (1) above, (iii) loss on
disposal of property and equipment as described in Note (2) above, and (iv)
management fees and reimbursed expenses paid to First Atlantic (as defined
herein). EBITDA is presented because it is a widely accepted financial
indicator of a company's ability to service and/or incur debt. However, EBITDA
should not be considered in isolation or as an alternative to income from
operations or to cash flows from operating activities (as determined in
accordance with generally accepted accounting principles) and should not be
construed as an indication of a company's operating performance or as a measure
of liquidity. In addition, the Company's calculation of EBITDA may differ from
that presented by certain other companies and thus may not be comparable to
similarly titled measures used by other companies.
(6) Depreciation and amortization excludes non-cash amortization of deferred
financing and origination fees and debt discount amortization which are
included in interest expense.
(7) In calculating the ratio of earnings to fixed charges, earnings consist
of (i) income (loss) before income taxes, plus (ii) fixed charges consisting of
interest on indebtedness (including amortization of deferred financing fees),
plus (iii) that portion of lease rental expense representative of the interest
factor. Earnings were inadequate to cover fixed charges for fiscal 1993, 1996
and 1997 and the twenty-six weeks ended September 27, 1997 and September 26,
1998 by $1,468, $3,333, $14,614, $8,244 and $3,611, respectively.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with
"Selected Historical Financial Data" and the consolidated
financial statements and the notes thereto included elsewhere
in this Prospectus. Unless the context requires otherwise, the
"Company" as used in this Management's Discussion and Analysis
of Financial Condition and Results of Operations shall include
Holding and its subsidiaries on a consolidated basis.
OVERVIEW
The Company is highly leveraged. The high degree of leverage
could have important consequences, including, but not limited
to, the following: (i) a substantial portion of Berry's cash
flow from operations must be dedicated to the payment of
principal and interest on its indebtedness, thereby reducing
the funds available to Berry for other purposes; (ii) Berry's
ability to obtain additional debt financing in the future for
working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired; (iii)
certain of Berry's borrowings will be at variable rates of
interest, which will expose Berry to the risk of higher
interest rates; (iv) the indebtedness outstanding under the
Credit Facility is secured by substantially all of the assets
of Berry and matures prior to the maturity of the Notes; (v)
Berry is substantially more leveraged than certain of its
competitors, which may place Berry at a competitive
disadvantage, particularly in light of its acquisition
strategy; and (vi) Berry's degree of leverage may hinder its
ability to adjust rapidly to changing market conditions and
could make it more vulnerable in the event of a downturn in
general economic conditions or its business.
Berry's ability to pay principal and interest on the Notes will
depend on Berry's financial and operating performance, which in
turn are subject to prevailing economic conditions and to
certain financial, business and other factors beyond its
control. However, if Berry cannot generate sufficient cash
flow from operations to meet its obligations, then it may be
forced to take actions such as reducing or delaying capital
expenditures, selling assets, restructuring or refinancing its
indebtedness, or seeking additional equity capital. There is
no assurance that any of these remedies could be effected on
satisfactory terms, if at all.
Consolidated earnings have been insufficient to cover fixed
charges by $3.3 million, $14.6 million, $16.3 million and $4.2
million for fiscal year 1996, 1997, pro forma year ended
December 27, 1997, and pro forma thirty-nine weeks ended
September 26, 1998, respectively. In addition, Holding has
experienced consolidated net losses during each of such periods
principally as a result of expenses and charges incurred in
connection with acquisitions by Berry. These net losses were
$3.3 million, $14.4 million, $16.4 million, and $4.3 million
for fiscal 1996, fiscal 1997, pro forma year ended December 27,
1997, and pro forma thirty-nine weeks ended September 26, 1998.
Holding expects that it will continue to experience
consolidated net losses for the foreseeable future.
RESULTS OF OPERATIONS
39 WEEKS ENDED SEPTEMBER 26, 1998 ("YTD")
COMPARED TO 39 WEEKS ENDED SEPTEMBER 27, 1997 ("PRIOR YTD")
NET SALES. Net sales increased $40.4 million, or 25%, to
$205.1 million for the YTD from $164.7 million for the prior
YTD with an approximate 2% decrease in net selling prices due
mainly to competitive market conditions. The increase in net
sales can be primarily attributed to the addition of Venture
Packaging with YTD net sales of approximately $30.6 million,
the addition of Norwich Moulders with YTD net sales of $3.6
million, and higher non-Venture Packaging container sales of
$3.5 million.
GROSS MARGIN. Gross margin increased by $18.4 million to $54.0
million for the YTD from $35.7 million for the prior YTD. This
increase in gross margin can be attributed to the combined
impact of the sales volume, productivity improvement
initiatives and the cyclical impact of lower raw material
costs.
OPERATING EXPENSES. Selling expenses increased by $2.9 million
to $10.9 million for the YTD from $8.0 million for the prior
YTD principally as a result of expanded sales coverage related
to the acquisition of Venture Packaging and increased product
development and marketing expenses. General and administrative
expenses increased by $4.7 million to $13.3 million YTD from
$8.6 million for the prior YTD. The increase of $4.7 million
is primarily attributable to increased patent litigation
expenses and increased accrued employee profit sharing expense.
YTD one-time transition expenses include $2.2 million related
to the shutdown of the Reno and Anderson facilities and $1.0
million related to the 1997 Acquisitions. One-time transition
expenses for the prior YTD were $2.0 million related to the
1997 acquisitions, and $0.8 million related to the Winchester
and Reno plant consolidations.
INTEREST EXPENSE. Interest expense increased $2.8 million to
$26.5 million for the YTD compared to $23.7 million for the
prior YTD primarily due to additional borrowings under the
Credit Facility to support the 1997 and Norwich Moulders
acquisitions.
INCOME TAX. The Company's income tax expense was $0.3 million
for the YTD compared to an income tax expense of $0.2 million
in the prior YTD. The Company continues to operate in a net
operating loss carryforward position for Federal income tax
purposes.
NET LOSS. Net loss for the YTD of $3.6 million improved $4.5
million from a net loss of $8.1 million for the prior YTD for
the reasons discussed above.
YEAR ENDED DECEMBER 27, 1997
COMPARED TO YEAR ENDED DECEMBER 28, 1996
NET SALES. Net sales increased 50.2% to $227.0 million in
1997, up $75.9 million from $151.1 million in 1996, which sales
included an approximate 2% increase in net selling price due
mainly to the impact of cyclical adjustments in the price of
plastic resin. Container sales increased $30.1 million in
1997, primarily due to the continued market strength of base
products and the Venture Packaging, Virginia Design and
Container Industries Acquisitions. Net sales in the drink cup
product line increased $23.8 million in 1997 as a result of the
PackerWare Acquisition and a strong increase in existing drink
cup business. Aerosol overcap net sales were relatively flat,
decreasing approximately $2.6 million. The PackerWare
Acquisition also brought the Company into the housewares
product market, which provided an additional $17.5 million of
net sales in 1997. Other product lines, including custom
molded products and custom mold building, increased $7.1
million due to large custom programs that occurred in 1997.
GROSS MARGIN. Gross margin increased $5.8 million or 14.1%
from $40.9 million (27.1% of net sales) in 1996 to $46.7
million (20.6% of net sales) in 1997. The increase in gross
margin is primarily attributed to increased sales volume as
described above. The gross margin as a percent of net sales
derived from the 1997 Acquisitions was approximately 10.6%
compared to 23.8% for non-acquisition related sales.
Significant productivity improvements were made during the
year, including the addition of state-of-the-art injection
molding equipment, molds and printing equipment at several of
the Company's facilities. These productivity improvements were
offset by increased resin prices in 1997 and the transition
expenses of the 1997 Acquisitions.
OPERATING EXPENSES. Operating expenses during 1997 were $30.5
million (13.4% of net sales), compared with $23.7 million
(15.7% of net sales) for 1996. Sales related expenses,
including the cost of expanded sales coverage and higher
product development and marketing expenses, increased $4.4
million, primarily as a result of the 1997 Acquisitions ($3.3
million). General and administrative expenses decreased $2.3
million in 1997 primarily as a result of the $2.8 million one-
time compensation expense incurred in 1996 which related to the
1996 Transaction. Intangible amortization increased from $0.5
million in 1996 to $2.2 million for 1997, primarily as a result
of the amortization of $1.6 million related to the 1997
Acquisitions.
Other expense increased $2.5 million from $1.6 million for 1996
to $4.1 million in 1997. The 1997 Acquisitions resulted in a
charge of $3.2 million in 1997 for start-up related expenses.
The PackerWare Acquisition included a facility in Reno, Nevada,
which was closed in 1997. Expense related to the closing of
the Reno facility was $0.5 million in 1997. Plant closing
expenses related to the Winchester, Virginia facility resulted
in expenses of $0.4 million for 1997. Included in 1996 was a
charge of $0.7 million of start-up related expenses associated
with the Tri-Plas Acquisition and $0.9 million related to the
Winchester plant closing.
INTEREST EXPENSE AND INCOME. Net interest expense, including
amortization of deferred financing costs for 1997, was $30.2
million (13.3% of net sales) compared to $20.1 million (13.3%
of net sales) in 1996, an increase of $10.1 million. This
increase is due to the full year impact of the 1996
Transaction, which occurred in June 1996. The 1996 Transaction
included an offering of $105.0 million aggregate principal
amount of the 1996 Notes, which bear interest at 12.5%
annually. $35.6 million of the proceeds from the 1996 Notes
were placed in escrow to pay the first three years of interest
on the 1996 Notes. Interest is payable semi-annually on June
15 and December 15 of each year. Cash interest paid in 1997 was
$29.9 million as compared to $19.7 million for 1996. Interest
income for 1997 was $2.0 million, up from $1.3 million in 1996,
also attributed to the full year impact of the 1996
Transaction.
INCOME TAXES. During fiscal 1997, the Company incurred $0.1
million in Federal and state income tax compared to $0.2
million for fiscal 1996. The Company continues to operate in a
net operating loss carryforward position for Federal income tax
purposes.
NET INCOME (LOSS) AND EBITDA. The Company recorded a net loss
of $14.4 million in 1997 compared to a $3.3 million net loss in
1996 for the reasons stated above.
YEAR ENDED DECEMBER 28, 1996
COMPARED TO YEAR ENDED DECEMBER 30, 1995
NET SALES. Net sales increased 7% to $151.1 million in 1996,
up $10.4 million from $140.7 million in 1995. Sales of aerosol
overcaps increased $6.1 million. This growth of 14% was mainly
due to a strengthening of base business and the addition of new
products. Container sales increased $9.7 million in 1996, due
to the continued market strength of base products and the Tri-
Plas Acquisition. Sales in the drink cup product line declined
$3.2 million principally because a national promotion from a
major marketer that was received in 1995 was not repeated in
1996. Other product lines, including custom molded products
and custom mold building, decreased $2.2 million also due to a
custom program that occurred in 1995 but was not repeated in
1996. Overall, prices declined approximately 2.0% from 1995
due to both market response to changing raw material prices and
competitive market conditions.
GROSS MARGIN. Gross margin increased $2.7 million or 7.1% from
$38.2 million (27.2% of net sales) for 1995 to $40.9 million
(27.1% of net sales) in 1996. The increase in gross margin is
primarily attributed to increased sales volume. Significant
productivity improvements were made during the year, including
the addition of state-of-the-art injection molding equipment,
molds and printing equipment at several of the Company's
facilities. The increase in operating efficiency offset the
previously mentioned price declines, preserving the Company's
gross margin as a percentage of sales.
The Winchester, Virginia facility, which was added to the
Company as part of the Sterling Products Acquisition and used
primarily for the production of drink cups, was consolidated
into other Berry locations late in 1996 to better utilize the
operating leverage at other manufacturing facilities throughout
the Company.
OPERATING EXPENSES. Operating expenses during 1996 were $23.7
million (15.7% of net sales), compared with $17.7 million
(12.6% of net sales) for 1995. Sales related expenses,
including the cost of expanded sales coverage, and higher
product development and marketing expenses, increased $1.3
million. General and administrative expenses increased $4.3
million, including $2.7 million due to a one-time compensation
expense directly related to the 1996 Transaction, patent
litigation expenses of $0.8 million and $0.6 million of
additional expense as a result of the Tri-Plas Acquisition.
Other expense increased $0.7 million from $0.9 million for 1995
to $1.6 million in 1996. Included in 1996 was a charge of $0.9
million for plant closing expenses related to the Winchester,
Virginia facility, and $0.6 million of start-up related expense
associated with the Tri-Plas Acquisition. Included in 1995
expense was a charge of $0.5 million due to the discontinued
pursuit of a potential acquisition and $0.2 million of costs
associated with the transfer of the Tri-Plas business.
INTEREST EXPENSE AND INCOME. Net interest expense, including
amortization of deferred financing costs for 1996, was $20.1
million (13.3% of net sales) compared to $13.4 million (9.5% of
net sales) in 1995, an increase of $6.7 million. This increase
is due to the 1996 Transaction, when the Company completed an
offering of $105.0 million aggregate principal amount of the
1996 Notes which bear interest at 12.5% annually. Interest is
payable semi-annually on June 15 and December 15 of each year.
Cash interest paid in 1996 was $19.7 million as compared to
$13.4 million for 1995. Interest income for 1996 was $1.3
million and 1995 was $0.6 million.
INCOME TAXES. During fiscal 1996, the Company incurred $0.2
million in income tax compared to $0.7 million of income tax
for fiscal 1995.
NET INCOME (LOSS) AND EBITDA. The Company recorded a net loss
of $3.3 million in 1996 compared to net income in 1995 of $6.3
million for the reasons stated above.
INCOME TAX MATTERS
Holding has unused operating loss carryforwards of $21.7
million for Federal income tax purposes which begin to expire
in 2010. AMT credit carryforwards of approximately $2.0
million are available to Holding indefinitely to reduce future
years' Federal income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a credit facility with NationsBank, N.A. for a
senior secured line of credit in an aggregate principal amount
of $132.6 million (plus the UK Revolver (as defined herein) and
the UK Term Loan (as defined herein)). The Credit Facility
provides Berry with a $50.0 million revolving line of credit
(plus <pound-sterling>1.5 million under the UK Revolver),
subject to a borrowing base formula, $63.7 million in term loan
facilities (plus <pound-sterling>4.5 million under the UK Term
Loan), and $5.6 million in letters of credit to support Berry's
and its subsidiaries' obligations under the Nevada Bonds. The
indebtedness under the Credit Facility is guaranteed by Holding
and the Company's subsidiaries. The Credit Facility requires
the Company to comply with specified financial ratios and
tests, including a minimum Tangible Capital Funds (as defined
in the Credit Facility) test, maximum leverage ratio, interest
coverage ratio, debt service coverage ratio and a fixed charge
coverage ratio. At September 26, 1998, the last quarterly test
date, the Company was in compliance with all of the financial
covenants and tests tested on such date. See "Description of
Certain Indebtedness - Credit Facility."
The 1994 Indenture and the 1996 Indenture restrict, and the
Indenture will restrict, the Company's ability to incur
additional debt and contains other provisions which could limit
the liquidity of the Company. At September 26, 1998, the
Company had unused borrowing capacity under the Credit
Facility's borrowing base of $40.4 million. Any additional
indebtedness above the borrowing base requires approval from
the Credit Facility's lenders. See "Description of Certain
Indebtedness" and "Description of Notes."
Net cash provided by operating activities was $28.6 million for
the YTD, an increase of $19.0 million from the prior YTD. The
increase is primarily the result of improved operating
performance with income before depreciation and amortization
increasing $9.7 million from the prior YTD. Net working
capital changes (defined as accounts receivable, inventories,
prepaid expenses, other receivables, accounts payable and
accrued expenses) also increased for the YTD cash $7.3 million
from the prior YTD. Net cash provided by operating activities
was $14.2 million in 1997 as compared to $14.4 million in 1996.
The decrease can be attributed to a reduction in accounts
payable of approximately $3.5 million resulting from a
discounting program with a key supplier offset partially by
positive operating cash flows generated primarily from
increased sales volume.
YTD capital spending of $13.5 million included $7.4 million for
molds and machines and $6.1 million for building and accessory
equipment. Berry currently intends to finance future capital
spending through cash flow from operations, existing cash
balances and cash available under the Credit Facility's
revolving line of credit. As of September 26, 1998, the
Company had $5.1 million of committed capital projects.
Capital expenditures in 1997 were $16.8 million, an increase of
$3.2 million from $13.6 million in 1996. Included in capital
expenditures during 1997 was $3.3 million relating to the
addition of a new warehouse, production systems and offices
necessary to support production operating levels throughout the
Company. Capital expenditures also included investment of $8.7
million for molds, $1.2 million for molding machines, $1.4
million for printing equipment and $2.2 million for
miscellaneous accessory equipment and systems.
Increased working capital needs occur whenever the Company
experiences strong incremental demand or a significant rise in
the cost of raw material, particularly plastic resin. However,
the Company anticipates that its cash interest, working capital
and capital expenditure requirements for 1998 will be satisfied
through a combination of funds generated from operating
activities and cash on hand, together with funds available
under the Credit Facility. Management bases such belief on
historical experience and the substantial funds available under
the Credit Facility. However, the Company cannot predict its
future results of operations.
The Indenture and the 1994 Indenture restrict, and the Credit
Facility prohibits, Berry's ability to pay any dividend or make
any distribution of funds to Holding to satisfy interest and
other obligations on the 1996 Notes. Based upon historical
operating results, without a substantial increase in the
operating results of Berry, management anticipates that it will
be unable to generate sufficient cash flow to permit a dividend
to Holding in an amount sufficient to meet Holding's interest
payment obligations under the 1996 Notes which begin after the
depletion in June 1999 of the escrow account that was
established to pay such interest and the expiration of
Holding's option to pay interest by issuing additional 1996
Notes. In that event, management anticipates that such
obligations will only be met by refinancing the 1996 Notes or
raising capital through equity offerings. No assurance can be
given that then-current market conditions would permit Holding
to consummate a refinancing or equity offering.
At September 26, 1998, the Company's cash balance was $7.1
million, and the Company had unused borrowing capacity under
the Credit Facility's borrowing base of approximately $40.4
million.
GENERAL ECONOMIC CONDITIONS AND INFLATION
The Company faces various economic risks ranging from an
economic downturn adversely impacting the Company's primary
markets to market fluctuations in plastic resin prices. In the
short term, rapid increases in resin cost, such as those
experienced during 1996, may not be fully recovered through
price increases to customers. Also, shortages of raw materials
may occur from time to time. In the long term, however, raw
material availability and price changes generally do not have a
material adverse effect on gross margin. Cost changes
generally are passed through to customers. In addition, the
Company believes that its sensitivity to economic downturns in
its primary markets is less significant due to its diverse
customer base and its ability to provide a wide array of
products to numerous end markets.
The Company believes that it is not affected by inflation
except to the extent that the economy in general is thereby
affected. Should inflationary pressures drive costs higher,
the Company believes that general industry competitive price
increases would sustain operating results, although there can
be no assurance that this will be the case.
IMPACT OF YEAR 2000
The Company has been working on modifying or replacing portions
of its software since 1991 so that its computer systems will
function properly with respect to dates in the Year 2000 and
thereafter. Because the Company commenced this process early,
the costs incurred to address this issue in any single year
have not been significant. The Company's current business
applications are Year 2000 compliant. Acquired businesses are
converted to the Company's applications for Year 2000
compliance and consistency in applications and reporting. The
most recent acquired business is expected to be converted to
the Company's applications on January 4, 1999.
Also, the Company is currently replacing significant portions
of its primary information systems, principally because of the
growth the Company has experienced in recent years due to
acquisitions. Such replacement will allow the Company to
continue to achieve its future growth plans and will be fully
Year 2000 compliant. The Company anticipates that the
implementation of such systems will occur before the Year 2000.
The current estimated cost for replacing or fixing non-business
application systems is $110,000. These systems include
personal computers, postage machines, plant automation and
telephone systems.
Vendor survey responses are expected by the end of 1998. After
review of the responses, a plan will be put in place by the end
of March 1999 to minimize the risk of vendors' not meeting the
Year 2000 deadline. To date, the Company is not aware of any
external agent with a Year 2000 issue that would materially
impact the Company's results of operations, liquidity or
capital resources. However, the Company has no means of
ensuring that external agents will be Year 2000 compliant. The
inability of external agents to complete their Year 2000
resolution process in a timely fashion could materially impact
the Company. The effect of non-compliance by external agents
is not determinable.
Management of the Company believes it has an effective program
in place to resolve the Year 2000 issue in a timely manner.
However, the Company could incur a material disruption, such as
the inability to produce product, should significant suppliers
not be Year 2000 ready. In addition, disruptions in the
economy resulting from Year 2000 issues could also materially
adversely affect the Company. The amount of potential
liability and lost revenue cannot be reasonably estimated at
this time. The Company currently has no contingency plans in
place in the event it does not complete all phases of the Year
2000 program. The Company plans to evaluate the status of
completion in March 1999 and determine whether such a plan is
necessary.
<PAGE>
BUSINESS
GENERAL
The Company is a leading domestic manufacturer and marketer of
plastic packaging products focused on four key markets: the
aerosol overcap, rigid open-top container, drink cup and
houseware markets. Within each of its markets, the Company
concentrates on manufacturing value-added products sold to
marketers of image-conscious industrial and consumer products
that utilize the Company's proprietary molds, superior color
matching capabilities and sophisticated multi-color printing
capabilities. The Company believes that it is the largest
supplier of aerosol overcaps in the United States, with sales
of over 1.4 billion overcaps in 1997. Berry also believes that
it is the largest domestic supplier of thinwall,
child-resistant and pry-off open top containers. Berry has
utilized its national sales force and existing molding and
printing capacity at multiple-plant locations to become a
leader in the plastic drink cup market, which includes the
Company's 32 ounce and 44 ounce DT cups, which fit in standard
vehicle cup holders. The Company entered the housewares market
(which includes the lawn and garden market) for semi-disposable
plastic products, sold primarily to national retail marketers,
as a result of the acquisition of PackerWare in January 1997.
From fiscal 1993 to fiscal 1997, on a pro forma basis, the
Company's net sales increased from $87.8 million to $270.6
million, representing a CAGR of 32%.
The Company supplies aerosol overcaps for a wide variety of
commercial and consumer products. Similarly, the Company's
containers are used for packaging a broad spectrum of
commercial and consumer products. The Company's plastic drink
cups are sold primarily to fast food restaurants, convenience
stores, stadiums, table top restaurants and retail. The
Company also sells houseware products, primarily seasonal,
semi-disposable housewares and lawn and garden items, to major
retail marketers. Berry's customer base is comprised of over
4,000 customers with operations in a widely diversified range
of markets. The Company's top ten customers accounted for
approximately 19% of the fiscal 1997 net sales, and no customer
accounted for more than 4% of the Company's net sales in fiscal
1997.
The historical allocation of the Company's total net sales
among its product categories is as follows:
<TABLE>
<CAPTION>
FISCAL Thirty-nine
Weeks Ended
1995 1996 1997 September 26, 1998
<S> <C> <C> <C> <C> <C>
Aerosol overcaps 31% 33% 21% 17%
Rigid open-top containers 51 53 49 54
Drink cups 12 9 17 15
Housewares -- -- 8 9
Other 6 5 5 5
</TABLE>
The Company believes that it derives a strong competitive position from its
state-of-the-art production capabilities, extensive array of proprietary molds
in a wide variety of sizes and styles and dedication to service and quality.
In the aerosol overcap market, the Company distinguishes itself with superior
color matching capabilities, which is of extreme importance to its base of
image-conscious consumer products customers, and proprietary packing equipment,
which enables the Company to deliver a higher quality product while lowering
warehousing and shipping costs. In the container market, an in-house graphic
arts department and sophisticated printing and decorating capabilities permit
the Company to offer extensive value-added decorating options. The Company's
drink cup product line is strengthened by both the larger market share and
diversification provided through its acquisition of PackerWare. Berry entered
the housewares business with its acquisition of PackerWare, which has a
reputation for outstanding quality and service among major retail marketers and
for products which offer high value at a reasonable price to consumers. The
Company believes that it is an industry innovator, particularly in the area of
decoration. These market-related strengths, combined with the Company's modern
proprietary mold technology, high speed molding capabilities and multiple-plant
locations, all contribute to the Company's strong market position.
In addition to these marketing and manufacturing strengths, the Company
believes that its close working relationships with customers are crucial to
maintaining market positions and developing future growth opportunities. The
Company employs a direct sales force which is focused on working with customers
and the Company's production and product design personnel to develop customized
packaging that enhances customer product differentiation and improves product
performance. The Company works to develop innovative new products and identify
and pursue non-traditional markets that can use existing Company products.
AEROSOL OVERCAP MARKET
The Company believes it is the leader in the U.S. market for aerosol overcaps.
Approximately one-third of this market consists of national marketers who
produce overcaps in-house for their own needs. Management believes that a
portion of these in-house producers will increase the outsourcing of their
production to high technology, low cost manufacturers, such as the Company, as
a means of reducing manufacturing assets and focusing on their core marketing
objectives.
The Company's aerosol overcaps are used in a wide variety of end-use markets
including spray paints, household and personal care products, insecticides and
a myriad of other commercial and consumer products. Most U.S. manufacturers
and contract fillers of aerosol products are customers of the Company for some
portion of their needs. In fiscal 1997, no single overcap customer accounted
for more than 3% of the Company's total net sales.
Management believes that, over the years, the Company has developed several
significant competitive advantages, including a reputation for outstanding
quality, short lead-time requirements, long-standing relationships with major
customers, the ability to accurately reproduce over 3,500 colors, proprietary
packing technology that minimizes freight cost and warehouse space, high-speed,
low-cost molding and decorating capability and a broad product line of
proprietary molds. The Company continues to develop new products in the
overcap market, including the "spray-thru" line of aerosol overcaps.
The Company's major competitor in this product line is Knight Engineering. In
addition, a number of companies, including several of the Company's customers
(e.g., S.C. Johnson, Cheseborough-Ponds and Reckitt & Colman), currently
produce aerosol overcaps for their own use.
<PAGE>
CONTAINER MARKET
The Company classifies its containers into six product lines: thinwall,
child-resistant, pry-off, dairy, polypropylene and industrial. Management
believes that the Company is the leading U.S. manufacturer in the thinwall,
child-resistant and pry-off product lines. Management considers industrial
containers to be a commodity market, characterized by little product
differentiation and an absence of higher margin niches. The following table
describes each of the Company's six product lines.
<TABLE>
<CAPTION>
PRODUCT LINE DESCRIPTION SIZES MAJOR END MARKETS
<S> <C> <C> <C>
Thinwall Thinwalled, multi-purpose 6 oz. to 2 gallons Food, promotional products, toys
containers with or without and a wide variety of other uses
handles and lids
Child-resistant Containers that meet Consumer 2 lbs. to 2 gallons Pool and other chemicals
Product Safety Commission
standards for child safety
Pry-off Containers having a tight lid-fit 4 oz. to 2 gallons Building products, adhesives,
and requiring an opening device other industrial uses
Dairy Thinwall containers in 6 oz. to 5 lbs., Multi- Cultured dairy products including
traditional dairy market sizes pack yogurt, cottage cheese, sour
and styles cream and dips
Polypropylene Usually clear containers in 6 oz. to 5 lbs. Food, deli, sauces, salads
round, oblong or rectangular
shapes
Industrial Thick-walled, larger pails 2.5 to 5 gallons Building products, chemicals,
designed to accommodate heavy paints, other industrial uses
loads
</TABLE>
The largest end-uses for the Company's containers are food products, building
products, chemicals and dairy products. The Company has a diverse customer
base for its container lines, and no single container customer exceeded 3% of
the Company's total net sales in fiscal 1997.
Management believes that no other container manufacturer in the U.S. has the
breadth of product line offered by the Company. The Company's container
capacities range from 4 ounces to 5 gallons and are offered in various styles
with accompanying lids, bails and handles, as well as a wide array of
decorating options. In addition to a complete product line, the Company has
sophisticated printing capabilities, an in-house graphic arts department, low
cost manufacturing capability with nine plants strategically located throughout
the United States and a dedication to high quality products and customer
service. Product engineers, located in most of the Company's facilities, work
with customers to design and commercialize new containers.
The Company seeks to develop niche container products and new applications by
taking advantage of the Company's state-of-the-art decorating and graphic arts
capabilities and dedication to service and quality. Management believes that
these capabilities have given the Company a significant competitive advantage
in certain high-margin niche container applications for specialized products.
Examples include popcorn containers for new movie promotions and professional
and college sporting and entertainment events, where the ability to produce
sophisticated and colorful graphics is crucial to the product's success. In
order to identify new applications for existing products, the Company relies
extensively on its national sales force. Once these opportunities are
identified, the Company's sales force interfaces with product design engineers
to meet customers' needs. Finally, the quality and performance of the
Company's dairy product line have enabled the Company to establish a solid and
growing reputation in this market.
In non-industrial containers, the Company's strongest competitors include
Airlite, Sweetheart, Landis, Cardinal and Polytainers. The Company also
produces commodity industrial pails for a market which is dominated by large
volume competitors such as Letica, Plastican, NAMPAC and Ropak. The Company
does not participate heavily in this market due to generally lower margins.
The Company intends to selectively participate in the industrial container
market when higher margin opportunities, equipment utilization or customer
requirements make participation an attractive option.
DRINK CUP MARKET
The Company believes that it is a leading provider of plastic drink cups in the
U.S. As beverage producers, convenience stores and fast food restaurants
increase their marketing efforts for larger sized drinks, the Company believes
that the plastic drink cup market will expand because of plastic's desirability
over paper for larger drink cups. Injection-molded plastic cups range in size
from 12 to 64 ounces, and often come with lids. Primary markets are fast food
restaurants, convenience stores, stadiums, table top restaurants and retail.
Virtually all cups are decorated, often as promotional items, and Berry is
known in the industry for innovative, state-of-the-art graphics capability.
Berry has historically supplied a full line of traditional straight-sided and
DT style drink cups from 12 to 64 ounces with disposable and reusable lids
primarily to fast food and convenience store chains. With the PackerWare
Acquisition, the Company expanded its presence while diversifying into the
stadium and table top restaurant markets. The 64 ounce cup, which has been
highly successful with convenience stores, is one of the Company's fastest
growing drink cups. In addition to a full product line, Berry has the
advantage of being the only supplier that can provide sophisticated printing
and/or labeling capacity on a nation-wide basis; in 1997, five different plants
molded and decorated drink cups. Major drink cup competitors include Packaging
Resources Incorporated, Pescor Plastics and WNA (formerly Cups Illustrated).
HOUSEWARES MARKET
The Company entered the housewares market as a result of the PackerWare
Acquisition in January 1997. The housewares market is a multi-billion dollar
market. The Company's participation is limited to seasonal (spring and summer)
semi-disposable plastic housewares and plastic lawn and garden products, which
consist primarily of outdoor flower pots. Berry sells virtually all of its
products in this market through major national retail marketers and national
chain stores.
PackerWare's historical position with this market was to provide a high value
to consumers at a relatively modest price, consistent with the key price points
of the retail marketers. Berry believes outstanding service and fashion
capabilities further enhance its position in this market.
CUSTOM MOLDED PRODUCTS MARKET
The Company also produces custom molded products by utilizing molds provided by
its customers. Typically, the low cost of entry in the custom molded products
market creates a commodity-like marketplace. However, the Company has focused
its custom molding efforts on those customers that are cognizant of the
Company's mold and product design expertise, superior color matching abilities
and sophisticated multi-color printing capabilities. The majority of the
Company's custom business in 1997 required specialized equipment and expertise,
supporting the Company's desire to pursue higher volume-added niche
opportunities in every market in which it participates.
MARKETING AND SALES
The Company reaches its large and diversified base of over 4,000 customers
primarily through its direct field sales force, which has been expanded from 14
sales representatives in fiscal 1990 to 45 at the end of fiscal 1997. These
field sales representatives are focused on individual product lines, but are
encouraged to sell all Company products to serve the needs of the Company's
customers. The Company believes that a direct field sales force is able to
better focus on target markets and customers, with the added benefit of
permitting the Company to control pricing decisions centrally. The Company
also utilizes the services of manufacturing representatives to augment its
direct sales force.
The Company believes that it has a reputation for a high level of customer
satisfaction. Highly skilled customer service representatives are located in
each of the Company's facilities to support the national field sales force. In
addition, telemarketing representatives, marketing managers and sales/marketing
executives oversee the marketing and sales efforts. Manufacturing and
engineering personnel work closely with field sales personnel to satisfy
customers' needs through the production of high-quality, value-added products
and on-time deliveries.
Additional marketing and sales techniques include a Graphic Arts department
with computer-assisted graphic design capabilities and in-house production of
photopolymer printing plates. Berry also has a centralized Color Matching and
Materials Blending department that utilizes a computerized spectrophotometer to
insure that colors match those requested by customers.
MANUFACTURING
GENERAL
The Company manufactures its products using the plastic injection molding
process. The process begins when plastic resin, in the form of small pellets,
is fed into an injection molding machine. The injection molding machine then
melts the plastic resin and injects it into a multi-cavity steel mold, forcing
the plastic resin to take the final shape of the product. At the end of each
molding cycle (generally five to 25 seconds), the plastic parts are ejected
from the mold into automated handling systems from which they are packed in
corrugated containers for further processing or shipment. After molding, the
product may be either decorated (printing, silk-screening, labeling) or
assembled (e.g., bail handles fitted to containers). The Company believes that
its molding and decorating capabilities are among the best in the industry.
Each of the Company's plants is managed by a local plant manager and is treated
as a profit center. The Company's overall manufacturing philosophy is to be a
low-cost producer by using high speed molding machines, modern multi-cavity hot
runner, cold runner and insulated runner molds, extensive material handling
automation and sophisticated printing technology. The Company utilizes
state-of-the-art robotic packaging processes for large volume products, which
enables the Company to deliver a higher quality product (due to reduced
breakage) while lowering warehousing and shipping costs (due to more efficient
use of space). Each plant has complete tooling maintenance capability to
support molding and decorating operations. The Company has historically made,
and intends to continue to make, significant capital investments in plant and
equipment because of the Company's objectives to grow, to improve productivity,
to maintain competitive advantages and to meet the asset-intensive nature of
the injection molding business.
The Company operates 175 molding machines ranging from 150 to 825 ton clamp
capacity. The Company's largest overcap machines are capable of producing 10
thousand to 15 thousand aerosol overcaps per hour. Due to the wide variety of
container and drink cup styles and sizes produced by the Company, production
rates vary significantly. The Company owns over 750 active molds.
PRODUCT DEVELOPMENT
The Company utilizes full-time product engineers who use three-dimensional
computer-aided-design (CAD) technology to design and modify new products and
prepare mold drawings. Engineers use an in-house model shop, which includes a
thermoforming machine, to produce prototypes and sample parts. The Company can
simulate the molding environment by running unit-cavity prototype molds in a
small injection molding machine dedicated to research and development of new
products. Production molds are then designed and outsourced for production by
various companies in the United States and Canada with whom the Company has
extensive experience and established relationships. The Company's engineers
oversee the mold-building process from start to finish.
QUALITY ASSURANCE
Each plant extensively utilizes Total Quality Management philosophies,
including the use of statistical process control and extensive involvement of
employees to increase productivity. This teamwork approach to problem-solving
increases employee participation and provides necessary training at all levels.
The Evansville, Henderson and Iowa Falls plants were approved for ISO 9000
certification in 1994, 1995 and 1996, respectively, which certifies compliance
by a company with a set of shipping, trading and technology standards
promulgated by the International Standardization Organization. The Company is
actively pursuing ISO certification in all of the remaining facilities.
Extensive testing of parts for size, color, strength and material quality using
statistical process control (SPC) techniques and sophisticated technology is
also an ongoing part of the Company's traditional quality assurance activities.
SYSTEMS
Berry utilizes a fully integrated computer software system at its plants
capable of producing complete financial and operational reports by plant as
well as by product line. This accounting and control system is easily
expandable to add new features and/or locations as the Company grows. In
addition, the Company has in place a sophisticated quality assurance system
based on ISO 9000 certification, a bar code based material management system
and an integrated manufacturing system.
SOURCES AND AVAILABILITY OF RAW MATERIALS
The most important raw material purchased by the Company is plastic resin. The
Company purchased approximately $68 million of resin in fiscal 1997 (excluding
specialty resins), of which 74% was high density polyethylene ("HDPE"), 11%
linear low density polyethylene and 15% polypropylene. The Company's
purchasing strategy is to deal with only high-quality, dependable suppliers,
such as Dow, Union Carbide, Chevron and Phillips. Although the Company does
not have any supply requirements contracts with its key suppliers, management
believes that the Company has maintained outstanding relationships with these
key suppliers over the past several years and expects that such relationships
will continue into the foreseeable future. See "Risk Factors - Possible
Adverse Effect of Increase in Resin Prices" and "- Reliance on Certain
Supplier."
EMPLOYEES
As of December 31, 1997, the Company had approximately 2,100 employees. No
employees of the Company are covered by collective bargaining agreements. On
February 5, 1998, the employees in Monroeville, Ohio voted to decertify the
union in the facility. This facility was acquired as a result of the Venture
Packaging Acquisition and was the Company's only plant with a collective
bargaining agreement during 1997.
PATENTS AND TRADEMARKS
The Company has numerous patents and trademarks with respect to its products.
None of the patents or trademarks are considered by management to be material
to the business of the Company. See "- Legal Proceedings" below.
ENVIRONMENTAL MATTERS AND GOVERNMENT REGULATION
The past and present operations of the Company and the past and present
ownership and operations of real property by the Company are subject to
extensive and changing Federal, state and local environmental laws and
regulations pertaining to the discharge of materials into the environment, the
handling and disposition of wastes or otherwise relating to the protection of
the environment. The Company believes that it is in substantial compliance
with applicable environmental laws and regulations. However, the Company
cannot predict with any certainty that it will not in the future incur
liability under environmental statutes and regulations with respect to non-
compliance with environmental laws, contamination of sites formerly or
currently owned or operated by the Company (including contamination caused by
prior owners and operators of such sites) or the off-site disposal of hazardous
substances.
Based upon a May 1998 compliance inspection, the Ohio Environmental Protection
Agency ("OEPA") issued a Notice of Violation dated June 23, 1998 to Venture
Packaging alleging that the Monroeville, Ohio facility failed to file certain
reports required pursuant to the Federal Emergency Planning and Community
Right-to-Know Act of 1986 (also known as "SARA Title III") for reporting years
1994 and 1995. The Company filed the subject reports in June 1998. The OEPA
notice states that the alleged violations have been referred to its Division of
Air Pollution Enforcement for review and that further enforcement action may be
forthcoming. Based upon information currently available to the Company, the
Company does not believe that any sanctions that might be imposed for the cited
violations would have a material adverse effect on its business or financial
condition.
Like any manufacturer, the Company is subject to the possibility that it may
receive notices of potential liability, pursuant to CERCLA or analogous state
laws, for cleanup costs associated with offsite waste recycling or disposal
facilities at which wastes associated with its operations have allegedly come
to be located. Liability under CERCLA is strict, retroactive and joint and
several. No such notices are currently pending.
The Food and Drug Administration (the "FDA") regulates the material content of
direct-contact food containers and packages, including certain thinwall
containers manufactured by the Company. The Company uses approved resins and
pigments in its direct contact food products and believes it is in material
compliance with all such applicable FDA regulations.
The plastics industry in general, and the Company in particular, also are
subject to existing and potential Federal, state, local and foreign legislation
designed to reduce solid wastes by requiring, among other things, plastics to
be degradable in landfills, minimum levels of recycled content, various
recycling requirements, disposal fees and limits on the use of plastic
products. In addition, various consumer and special interest groups have
lobbied from time to time for the implementation of these and other similar
measures. The principal resin used in the Company's products, HDPE, is
recyclable, and, accordingly, the Company believes that the legislation
promulgated to date and such initiatives to date have not had a material
adverse effect on the Company. There can be no assurance that any such future
legislative or regulatory efforts or future initiatives would not have a
material adverse effect on the Company. On January 1, 1995, legislation in
Oregon, California and Wisconsin went into effect requiring products packaged
in rigid plastic containers to comply with standards intended to encourage
recycling and increased use of recycled materials. Although the regulations
vary by state, the principal requirement is the use of post consumer regrind
("PCR") as an ingredient in containers sold for non-food uses. Additionally,
Oregon and California allow lightweighting of the container or concentrating
the product sold in the container as options for compliance. Oregon and
California provide for an exemption from all such regulations if statewide
recycling reaches or exceeds 25% of rigid plastic containers. In September
1996, California passed a new bill permanently exempting food and cosmetics
containers from the foregoing requirement. However, non-food containers are
still required to comply.
In December 1996, the Department of Environmental Quality estimated that Oregon
had met its recycling goal of 25% for 1997 (based on 1996 data), and
accordingly, is in compliance for the 1997 calendar year. However, in January
1998, California finally approved a 23.2% recycling rate for the state during
1996, and since this falls below the required 25% rate for exemption of non-
food containers, the state can now begin enforcing its recycled content mandate
on any non-food plastic containers from 8 oz. to 5 gallons. The Company, in
order to facilitate individual customer compliance with these regulations, is
providing customers the option of purchasing containers which contain PCR or
using containers with reduced weight. See "Risk Factors - Environmental
Matters."
PROPERTIES
The following table sets forth the Company's principal facilities:
<TABLE>
<CAPTION>
LOCATION ACRES SQUARE FOOTAGE USE
<S> <C> <C> <C>
Evansville, IN 12.4 397,000 Headquarters and manufacturing
Henderson, NV 12.0 168,000 Manufacturing
Iowa Falls, IA 14.0 101,000 Manufacturing
Charlotte, NC 32.0 48,000 Manufacturing
Lawrence, KS 19.3 423,000 Manufacturing
York, PA 10.0 40,000 Manufacturing
Suffolk, VA 14.0 102,000 Manufacturing
Monroeville, OH 19.0 112,000 Manufacturing
North Walsham, England 5.0 44,000 Manufacturing
Woodstock, Illinois 11.7 98,000 Manufacturing
</TABLE>
The Company believes that its property and equipment are well maintained, in
good operating condition and adequate for its present needs.
LEGAL PROCEEDINGS
The Company is party to various legal proceedings involving routine claims
which are incidental to its business. Although the Company's legal and
financial liability with respect to such proceedings cannot be estimated with
certainty, the Company believes that any ultimate liability would not be
material to its financial condition.
The Company and/or Berry Sterling are currently litigating two lawsuits that
involve United States Patent No. Des. 362,368 (the "'368 Patent"). The '368
Patent claims an ornamental design for a cup that fits an automobile cup
holder. On September 21, 1995, Berry Sterling filed suit in United States
District Court, Eastern District of Virginia, against Pescor Plastics, Inc.
("Pescor Plastics") for infringement of the '368 Patent. Pescor Plastics filed
counterclaims seeking a declaratory judgment of invalidity and
non-infringement, and damages under the Lanham Act. On December 28, 1995,
Berry Sterling filed suit against Packaging Resources Incorporated ("Packaging
Resources") in United States District Court, Southern District of New York, for
infringement of the '368 Patent and seeking, among other equitable relief,
damages in an unspecified amount. Packaging Resources has filed counterclaims
against Berry Sterling alleging violation of the Lanham Act, tortious
interference with Packaging Resources' prospective business advantage, consumer
fraud and requesting a declaratory judgment that its "Drive-N-Go" cup does not
infringe the '368 Patent. Packaging Resources has not specified the amount of
damages sought. On February 25, 1998, after trial, a jury rendered a verdict
in Berry Sterling's action against Pescor Plastics. The jury found the '368
Patent to be invalid on the grounds of functionality and obviousness and
awarded Pescor $150,000 on its counterclaim. The jury also found that Pescor
willfully infringed the '368 Patent and awarded Berry Sterling damages of $1.2
million, but this award was not included in the judgment because of the finding
of the invalidity of the Patent. On March 11, 1998, Berry Sterling filed a
motion with the Court to set aside the verdict of invalidity and the award on
the counterclaim, which was subsequently denied by the Court. On April 29,
1998, Berry Sterling filed a Notice of Appeal of the Court's judgment and the
denial of its motion to set aside the jury's verdict. The Court in the
Packaging Resources case put the case on its suspense calendar pending the
appeal in the Pescor Plastics case.
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers, directors and certain key personnel of Holding and its
subsidiaries:
<TABLE>
<CAPTION>
NAME Age Title Entity
<S> <C> <C> <C>
Roberto Buaron(1)(4) 51 Chairman and Director Company and Holding
Martin R. Imbler(1)(4) 50 President, Chief Executive Company
Officer and Director
President and Director Holding
Ira G. Boots 44 Executive Vice President, Company
Operations and Director
James M. Kratochvil 41 Executive Vice President, Chief Company
Financial Officer, Treasurer and
Secretary
Executive Vice President, Chief Holding
Financial Officer and Secretary
R. Brent Beeler 45 Executive Vice President, Sales Company
and Marketing
Randy Hobson 32 Vice President - Sales and Company
Marketing
Ruth Richmond 35 Vice President - Planning and Company
Administration and Assistant
Secretary
Assistant Secretary Holding
David Weaver 35 Vice President and Plant Manager Company
- Lawrence
Fredrick A. Heseman 45 Vice President and Plant Manager Company
- Evansville
Bruce J. Sims 48 Vice President - Sales and Company
Marketing, Housewares
George A. Willbrandt 53 Vice President - Sales and Company
Marketing
Joseph S. Levy(2)(3) 30 Vice President, Assistant Company
Secretary and Director
Vice President, Assistant Holding
Secretary and Director
David M. Clarke 47 Director Company and Holding
Lawrence G. Graev(2)(3) 53 Director Company and Holding
Donald J. Hofmann, Jr.(1)(2)(3)(4) 40 Director Company and Holding
Mathew J. Lori 34 Director Company and Holding
</TABLE>
________________________________
(1)Member of the Stock Option Committee of Holding.
(2)Member of the Audit Committee of Holding.
(3)Member of the Audit Committee of the Company.
(4)Member of the Compensation Committee of the Company.
<PAGE>
ROBERTO BUARON has been Chairman and a Director of the Company since it was
organized in December 1990. He has also served as Chairman and a Director of
Holding since 1990. He is the Chairman and Chief Executive Officer of First
Atlantic Capital, Ltd. ("First Atlantic"), which he founded in 1989. From 1987
to 1989, he was an Executive Vice President with Overseas Partners, Inc., an
investment management firm. From 1983 to 1986, he was First Vice President of
Smith Barney, Inc., and a General Partner of First Century Partnership, its
venture capital affiliate. Prior to 1983, he was a Principal at McKinsey &
Company. Mr. Buaron is also a director of CFP Holdings, Inc., a processed meat
company.
MARTIN R. IMBLER has been President, Chief Executive Officer and a Director of
the Company since January 1991. He has also served as a Director of Holding
since January 1991, and as President of Holding since May 1996. From June 1987
to December 1990, he was President and Chief Executive Officer of Risdon
Corporation, a cosmetic packaging company. Mr. Imbler was employed by American
Can Company from 1981 to 1987, as Vice President and General Manager of the
East/South Region Food and General Line Packaging business from 1985 to 1987
and as Vice President, Marketing, from 1981 to 1985. Mr. Imbler is also a
Director of Portola Packaging, Inc., a manufacturer of closures used in the
dairy industry.
IRA G. BOOTS has been Executive Vice President, Operations, and a Director of
the Company since April 1992. Prior to that, Mr. Boots was Vice President of
Operations, Engineering and Product Development of the Company from December
1990 to April 1992. Mr. Boots was employed by Old Berry from 1984 to December
1990 as Vice President, Operations.
JAMES M. KRATOCHVIL was promoted to Executive Vice President, Chief Financial
Officer, Secretary and Treasurer of the Company in December 1997. He formerly
served as Vice President, Chief Financial Officer and Secretary of the Company
since 1991, and as Treasurer of the Company since May 1996. He was also
promoted to Executive Vice President, Chief Financial Officer and Secretary of
Holding in December 1997. He formerly served as Vice President, Chief
Financial Officer and Secretary of Holding since 1991. Mr. Kratochvil was
employed by Old Berry from 1985 to 1991 as Controller.
R. BRENT BEELER was promoted to Executive Vice President, Sales and Marketing
in February, 1996. He formerly served as Vice President, Sales and Marketing
of the Company since December 1990. Mr. Beeler was employed by Old Berry from
October 1988 to December 1990 as Vice President, Sales and Marketing.
RANDY HOBSON has been Vice President - Sales and Marketing of the Company since
June 1998. Mr. Hobson was Marketing Manager - Containers for the Company from
November 1997 to June 1998. Prior to that, he was a Regional Sales Manager
from 1992 to November 1997. Mr. Hobson joined Old Berry in 1988.
RUTH RICHMOND has been Assistant Secretary of Holding and the Company since
April 1998. Ms. Richmond has been Vice President, Planning and Administration
of the Company since January 1995. From January 1994 to December 1994, Ms.
Richmond was Vice President and Plant Manager-Henderson. Ms. Richmond was
Plant Manager-Henderson from February 1993 to January 1994 and Assistant
General Manager-Henderson from February 1991 to February 1993. Ms. Richmond
joined the accounting department of Old Berry in 1986.
DAVID WEAVER has been Vice President and Plant Manager-Lawrence of the Company
since January 1997. From January 1993 to January 1997, he was Vice President
and Plant Manager-Iowa Falls. From February 1992 to January 1993, Mr. Weaver
was Plant Manager-Iowa Falls and, prior to that, he was Maintenance Engineering
Supervisor from July 1990 to February 1992. Mr. Weaver was a Project Engineer
from January 1989 to July 1990 for Old Berry.
FREDRICK A. HESEMAN was promoted to Vice President and Plant Manager-Evansville
of the Company in December 1997. From October 1996 to December 1997, Mr.
Heseman was Plant Manager-Evansville, and prior to that, he was Engineering
Manager from December 1990 to October 1996. Mr. Heseman was employed by Old
Berry from June 1987 to December 1990 as Engineering Manager.
BRUCE J. SIMS has been Vice President, Sales and Marketing, Housewares of the
Company since January 1997. Prior to the PackerWare Acquisition, Mr. Sims
served as President of PackerWare from March 1996 to January 1997 and as Vice
President from October 1994 to March 1996. From January 1990 to October 1994,
he was Vice President of the Miner Container Corporation, a national injection
molder. Mr. Sims was Executive Vice President of MKM Distribution Company from
1985 to 1990.
GEORGE A. WILLBRANDT was promoted to Vice President, Sales and Marketing of the
Company in April 1997. He formerly served as Vice President, Sales and
Marketing of Berry Sterling since 1995. Prior to that, he was President and
co-owner of Sterling Products, which he founded in 1983.
JOSEPH S. LEVY has been Vice President and Assistant Secretary of the Company
and Holding since April 1995. Mr. Levy has been a Director of Holding and the
Company since April 1998. Mr. Levy has been a Vice President of First Atlantic
since December 1994. From 1991 to December 1994, Mr. Levy was an Associate at
First Atlantic.
DAVID M. CLARKE has been a Director of Holding and the Company since June 1996.
Mr. Clarke is a Managing Director with Aetna, Inc., a private equity investment
group and, prior to that, he had been a Vice President in the Investment Group
of Aetna Life Insurance Company from 1988 to 1996.
LAWRENCE G. GRAEV has been a Director of the Company and Holding since August
1995. Mr. Graev is the Chairman of the law firm of O'Sullivan Graev &
Karabell, LLP of New York, where he has been a partner since 1974. Mr. Graev
is also a Director of First Atlantic.
DONALD J. HOFMANN, JR. has been a Director of Holding and the Company since
June 1996. Mr. Hofmann has been a General Partner of Chase Capital Partners
since 1992. Prior to that, he was head of MH Capital Partners Inc., the equity
investment arm of Manufacturers Hanover.
MATHEW J. LORI has been a Director of the Company and Holding since October
1996. Mr. Lori has been a Principal with Chase Capital Partners since January
1998, and prior to that, Mr. Lori had been an Associate since April 1996. From
September 1993 to March 1996, he was an Associate in the Merchant Banking Group
of The Chase Manhattan Bank, N.A.
The New Stockholders Agreement contains provisions regarding the election of
directors. See "Certain Transactions - Stockholders Agreements."
BOARD COMMITTEES
The Board of Directors of Holding has an Audit Committee and a Stock Option
Committee, and the Board of Directors of the Company has an Audit Committee and
a Compensation Committee. The Audit Committees oversee the activities of the
independent auditors and internal controls. The Stock Option Committee
administers the BPC Holding Corporation 1996 Stock Option Plan. The
Compensation Committee makes recommendations to the Board of Directors of the
Company concerning salaries and incentive compensation for officers and
employees of the Company.
<PAGE>
Executive Compensation
The following table sets forth a summary of the compensation paid by the
Company to its Chief Executive Officer and the four other most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") for services rendered in all capacities to the Company
during fiscal 1997, 1996 and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
ANNUAL COMPENSATION COMPENSATION
Securities
Fiscal Underlying Other
Name and Principal Position YEAR SALARY BONUS OPTIONS COMPENSATION(1)
<S> <C> <C> <C> <C> <C>
Martin R. Imbler 1997 $ 307,396 $ 87,623 - $ 1,520
President and Chief Executive Officer 1996 292,078 128,993 8,472 595,848
1995 275,625 157,500 - 1,424
Douglas E. Bell(2) 1997 154,485 72,868 - 1,520
Executive Vice President, Sales and Marketing 1996 145,735 94,205 5,214 239,335
1995 137,525 124,428 - 1,424
Ira G. Boots 1997 151,691 72,868 - 1,520
Executive Vice President, Operations 1996 145,735 94,205 5,214 239,335
1995 137,525 124,428 - 1,424
James M. Kratochvil 1997 119,459 56,307 - 1,520
Executive Vice President, Chief Financial 1996 112,614 72,796 3,259 120,427
Officer, Treasurer and Secretary 1995 106,270 96,150 - 1,424
R. Brent Beeler 1997 125,973 60,554 - 1,520
Executive Vice President, Sales and Marketing 1996 121,108 72,796 3,259 120,427
1995 106,270 96,150 - 1,424
</TABLE>
________________________
(1)Amounts shown reflect contributions by the Company under the Company's
401(k) plan and payments made in fiscal 1996 under a one-time deferred bonus
award plan. See "Certain Transactions - Management."
(2)Mr. Bell resigned from the Company in June 1998.
<PAGE>
FISCAL YEAR-END OPTION HOLDINGS
The following table provides information on the number of exercisable and
unexercisable management stock options held by the Named Executive Officers at
December 27, 1997.
FISCAL YEAR-END OPTION VALUES(1)
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
Fiscal Year-End at Fiscal Year-End
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
(#)(2) (2)
<S> <C> <C>
Martin R. Imbler 2,541/5,931 $55,902/$130,482
Douglas E. Bell 1,564/3,650 34,408/80,300
Ira G. Boots 1,564/3,650 34,408/80,300
James M. Kratochvil 977/2,282 21,494/50,204
R. Brent Beeler 977/2,282 21,494/50,204
</TABLE>
_______________________
(1)None of Holding's capital stock is currently publicly traded. The values
reflect management's estimate of the fair market value of the Class B Nonvoting
Common Stock at December 27, 1997.
(2)All options granted to management of the Company are exercisable for shares
of Class B Nonvoting Common Stock, par value $.01 per share, of Holding.
DIRECTOR COMPENSATION
Directors receive no cash consideration for serving on the Board of
Directors of Holding or the Company, but directors are reimbursed for
out-of-pocket expenses incurred in connection with their duties as
directors.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Imbler (the "Imbler
Employment Agreement") that expires on June 30, 2001. Base
compensation under the Imbler Employment Agreement for fiscal 1997
was $307,396. The Imbler Employment Agreement also provides for an
annual performance bonus of $50,000 to $175,000 based upon the
Company's attainment of certain financial targets. The Company may
terminate Mr. Imbler's employment for "cause" or upon a "disability"
(as such terms are defined in the Imbler Employment Agreement). If
the Company terminates Mr. Imbler "without cause" (as defined in the
Imbler Employment Agreement), Mr. Imbler is entitled to receive,
among other things, the greater of (i) one year's salary or (ii) 1/12
of one year's salary for each year (not to exceed 24 years in the
aggregate) of employment with the Company. The Imbler Employment
Agreement also contains customary noncompetition, nondisclosure and
nonsolicitation provisions.
The Company also has employment agreements with each of Messrs.
Boots, Kratochvil and Beeler (each, an "Employment Agreement" and,
collectively, the "Employment Agreements"), each of which expires on
June 30, 2001. The Employment Agreements provided for fiscal 1997
base compensation of $151,691, $119,459 and $125,973, respectively.
Salaries are subject in each case to annual adjustment at the
discretion of the Compensation Committee of the Board of Directors of
the Company. The Employment Agreements entitle each executive to
participate in all other incentive compensation plans established for
executive officers of the Company. The Company may terminate each
Employment Agreement for "cause" or a "disability" (as such terms are
defined in the Employment Agreements). If the Company terminates an
executive's employment without "cause" (as defined in the Employment
Agreements), the Employment Agreements require the Company to pay
certain amounts to the terminated executive, including (i) the
greater of (A) one year's salary or (B) 1/12 of one year's salary for
each year (not to exceed 24 years in the aggregate) of employment
with the Company, and (ii) certain benefits under applicable
incentive compensation plans. Each Employment Agreement also
includes customary noncompetition, nondisclosure and nonsolicitation
provisions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company established the Compensation Committee, comprised of
Messrs. Buaron, Imbler and Hoffman, in October 1996. The annual
salary and bonus paid to Messrs. Imbler, Bell, Boots, Kratochvil and
Beeler for fiscal 1997 were determined by the Compensation Committee
in accordance with their respective employment agreements. All other
compensation decisions with respect to officers of the Company are
made by Mr. Imbler pursuant to policies established in consultation
with the Compensation Committee.
The Company is party to an Amended and Restated Management Agreement
(the "FACL Management Agreement") with First Atlantic pursuant to
which First Atlantic provides the Company with financial advisory and
management consulting services in exchange for an annual fee of
$750,000 and reimbursement for out-of-pocket costs and expenses. In
consideration of such services, the Company paid First Atlantic fees
and expenses of $771,200 for fiscal 1997, $787,600 for fiscal 1996
and $816,900 for fiscal 1995. First Atlantic also received a
$100,000 advisory fee in both March and December 1995 for
originating, structuring and negotiating the Sterling Products
Acquisition and the Tri-Plas Acquisition, respectively. In
connection with the 1996 Transaction, the FACL Management Agreement
was amended to provide for a fee for services rendered in connection
with certain transactions equal to the lesser of (i) 1% of the total
transaction value and (ii) $1,250,000 for any such transaction
consummated plus out-of-pocket expenses in respect of such
transaction, whether or not consummated. Also in connection with the
1996 Transaction, Holding paid a fee of $1,250,000 plus reimbursement
for out-of-pocket expenses to First Atlantic for advisory services,
including originating, structuring and negotiating the 1996
Transaction. First Atlantic received advisory fees of approximately
$287,500 and $28,700 in January 1997 for originating, structuring and
negotiating the PackerWare Acquisition and the Container Industries
Acquisition, respectively. First Atlantic received advisory fees of
approximately $117,900 and $531,600 in May 1997 and August 1997,
respectively, for originating, structuring and negotiating the
Virginia Design Acquisition and the Venture Packaging Acquisition,
respectively. First Atlantic received advisory fees of approximately
$140,000 and $180,000 in July 1998 and October 1998, respectively,
for originating, structuring and negotiating the Norwich Acquisition
and the Knight Acquisition, respectively. See "Certain
Transactions."
Mr. Buaron, the Chairman and a director of Holding and the Company,
is the Chairman and Chief Executive Officer of First Atlantic. Mr.
Graev is a director of First Atlantic. As an officer and the sole
stockholder of First Atlantic, Mr. Buaron is entitled to receive any
bonuses paid and any dividends declared by First Atlantic on its
capital stock, including any bonuses paid as a result of, and any
dividends paid out of, the $1,250,000 fee paid by Holding to First
Atlantic in connection with the 1996 Transaction or any of the fees
paid with respect to the acquisitions described above. First
Atlantic is engaged by International to provide certain financial and
management consulting services for which it receives annual fees.
First Atlantic and International have completely distinct ownership
and equity structures. See "Certain Transactions."
Atlantic Equity Partners, L.P. (the "AEP Fund"), a stockholder of
Holding prior to the consummation of the 1996 Transaction, received
approximately $67.6 million from the sale of its common stock in
Holding and warrants to purchase common stock. First Atlantic is
engaged by the AEP Fund to provide certain financial and management
consulting services for which it receives annual fees. First
Atlantic and the AEP Fund have completely distinct ownership and
equity structures. Atlantic Equity Associates, L.P., a Delaware
limited partnership ("AEA"), is the sole general partner of the AEP
Fund. Mr. Buaron is the sole shareholder of Buaron Capital
Corporation ("Buaron Capital"). Buaron Capital is the managing and
sole general partner of AEA. By virtue of their direct and indirect
ownership interests in the AEP Fund, Mr. Levy and Buaron Capital are
entitled to receive a portion of the proceeds from the sale of the
equity interests in Holding ($178,000 and $4,672,000, respectively).
See "Certain Transactions."
In connection with the 1996 Transaction, Mr. Imbler, a director of
the Company and Holding, and Messrs. Bell and Boots, a former
director and director of the Company, respectively, received
approximately $5.9 million, $2.5 million and $2.4 million,
respectively, from their sale of certain equity interests in Holding.
In connection with the 1994 Transaction, the Company paid a $50.0
million dividend on its common stock to Holding, and Holding
distributed that amount to its holders of equity interests. In
connection therewith, Holding agreed to pay cash bonuses, upon the
occurrence of certain events, to the members of management who held
options under Holding's 1991 Stock Option Plan in amounts equal to
the amounts they would have been entitled to had the shares of common
stock underlying their unvested options been outstanding at the time
of the declaration of the $50.0 million dividend by Holding. As a
result of the 1996 Transaction, such bonuses were paid to Messrs.
Imbler, Bell and Boots in the amounts of approximately $594,000,
$238,000 and $238,000, respectively. See "Certain Transactions."
In connection with the 1996 Transaction, Chase Securities, Inc.
("Chase Securities"), an affiliate of CVCA and Messrs. Hofmann and
Lori, received a fee of $500,000 for arranging the sale of $15.0
million of Holding's Common Stock to certain of the Common Stock
Purchasers and the sale of $15.0 million of Holding's Preferred Stock
to CVCA. Chase Manhattan Investment Holdings, Inc. ("CMIHI"), an
affiliate of Chase Securities and Messrs. Hofmann and Lori, received
approximately $13.6 million from the sale of equity interests of
Holding in the 1996 Transaction.
STOCK OPTION PLAN
Employees, directors and certain independent consultants of the
Company and its subsidiaries are entitled to participate in the BPC
Holding Corporation 1996 Stock Option Plan (the "Option Plan"), which
provides for the grant of both "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and stock options that are non-qualified under
the Code. The total number of shares of Class B Nonvoting Common
Stock of Holding for which options may be granted pursuant to the
Option Plan is 51,620. The Option Plan will terminate on October 3,
2003 or such earlier date on which the Board of Directors of Holding,
in its sole discretion, determines. The Stock Option Committee of
the Board of Directors of Holding administers all aspects of the
Option Plan, including selecting which of the Company's directors,
employees and independent consultants will receive options, the time
when options are granted, whether the options are incentive stock
options or non-qualified stock options, the manner and timing for
vesting of such options, the terms of such options, the exercise date
of any options and the number of shares subject to such options.
Directors who are also employees are eligible to receive options
under the Option Plan.
The exercise price of incentive stock options granted by Holding
under the Option Plan may not be less than 100% of the fair market
value of the Class B Nonvoting Common Stock at the time of grant and
the term of any option may not exceed seven years. With respect to
any employee who owns stock representing more than 10% of the voting
power of the outstanding capital stock of Holding, the exercise price
of any incentive stock option may not be less than 110% of the fair
market value of such shares at the time of grant and the term of such
option may not exceed five years. The exercise price of a non-
qualified stock option is determined by the Stock Option Committee on
the date the option is granted. However, the exercise price of a
non-qualified stock option may not be less than 100% of the fair
market value of Class B Nonvoting Common Stock if the option is
granted at any time after the initial public offering of such stock.
Options granted under the Option Plan are nontransferable except by
will and the laws of descent and distribution. Options granted under
the Option Plan typically expire after seven years and vest over a
five-year period based on timing as well as achieving financial
performance targets.
Under the Option Plan, as of December 27, 1997, there were
outstanding options to purchase an aggregate of 47,708 shares of
Class B Nonvoting Common Stock to 52 employees of the Company, at an
exercise price between $100 and $108 per share. Of that amount,
options to purchase an aggregate of 25,418 shares have been issued to
the Named Executive Officers in October 1996, at an exercise price of
$100 per share, including 8,472 to Mr. Imbler, 5,214 to each of
Messrs. Bell and Boots, and 3,259 to each of Messrs. Beeler and
Kratochvil.
<PAGE>
PRINCIPAL STOCKHOLDERS
All of the outstanding capital stock of the Company is owned by
Holding. The following table sets forth certain information
regarding the ownership of the capital stock of Holding with respect
to (i) each person known by Holding to own beneficially more than 5%
of the outstanding shares of any class of its voting capital stock,
(ii) each of Holding's directors, (iii) the Named Executive Officers
and (iv) all directors and officers as a group. Except as otherwise
indicated, each of the stockholders has sole voting and investment
power with respect to the shares beneficially owned. Unless
otherwise indicated, the address for each stockholder is c/o Berry
Plastics Corporation, 101 Oakley Street, Evansville, Indiana 47710.
<TABLE>
<CAPTION>
Shares of Shares of
Voting Nonvoting
Common Stock(1) Common Stock(1) Percentage of
<S> <C> <C> <C> <C> <C> <C> <C>
Percentage of All Classes
Name and Address of Voting of
Beneficial Owner Class A Class B Common Stock Class A Class B Class C Common Stock
(Fully-
Diluted)
Atlantic Equity
Partners - 128,142 54.3% - 3,385 11,470 21.4%
International II,
L.P.(2)
Chase Venture Capital
Associates, 52,000 5,623 (4) 23.8 148,000 17,837 (4) - 33.4
L.P.(3)
BPC Equity, LLC(5) 31,200 - 13.2 88,800 - - 17.9
Roberto Buaron(6) - 128,142 54.3 - 3,385 11,470 21.4
Martin R. Imbler - 5,494 2.3 - 18,177 (7) 1,795 4.7
Joseph S. Levy(8) - 42 * - 118 14 *
David M. Clarke(9) 31,200 - 13.2 88,800 - - 17.9
Lawrence G. Graev(10) - - - - - - -
Donald J. Hofmann, 52,000 5,623 (4) 23.8 148,000 17,837 (4) - 33.4
Jr.(11)
Mathew J. Lori(12) 52,000 5,623 (4) 23.8 148,000 17,837 (4) - 33.4
Douglas E. Bell - - - - 3,423 - *
Ira G. Boots - 2,280 1.0 - 8,054(13) 744 2.2
James M. Kratochvil - 1,196 * - 4,381(14) 391 *
R. Brent Beeler - 1,196 * - 4,381(15) 391 *
All officers and
directors as 83,200 146,071 94.9 236,800 68,014 15,491 83.9
a group (17
persons)
</TABLE>
____________________________
*Less than one percent.
(1)The authorized capital stock of Holding consists of 3,500,000 shares of
capital stock, including 2,500,000 shares of Common Stock, $.01 par value (the
"Holding Common Stock"), and 1,000,000 shares of Preferred Stock, $.01 par
value (the "Holding Preferred Stock"). Of the 2,500,000 shares of Holding
Common Stock, 500,000 shares are designated Class A Voting Common Stock,
500,000 shares are designated Class A Nonvoting Common Stock, 500,000 shares
are designated Class B Voting Common Stock, 500,000 shares are designated Class
B Nonvoting Common Stock, and 500,000 shares are designated Class C Nonvoting
Common Stock. Of the 1,000,000 shares of Holding Preferred Stock, 600,000
shares are designated Series A Senior Cumulative Exchangeable Preferred Stock,
and 200,000 shares are designated Series B Cumulative Preferred Stock.
(2)Address is P. O. Box 847, One Capital Place, Fourth Floor, Grand Cayman,
Cayman Islands, British West Indies. Atlantic Equity Associates International
II, L.P., a Delaware limited partnership ("AEA II"), is the sole general
partner of International and as such exercises voting and/or investment power
over shares of capital stock owned by International, including the shares of
Holding Common Stock held by International (the "International Shares"). Mr.
Buaron is the sole shareholder of Buaron Holdings Ltd. ("BHL"). BHL is the
sole general partner of AEA II. As the general partner of AEA II, BHL may be
deemed to beneficially own the International Shares. BHL disclaims any
beneficial ownership of any shares of capital stock owned by International,
including the International Shares. Through his affiliation with BHL and AEA
II, Mr. Buaron controls the sole general partner of International and therefore
has the authority to control voting and/or investment power over, and may be
deemed to beneficially own, the International Shares. Mr. Buaron disclaims any
beneficial ownership of any of the International Shares.
(3)Address is 380 Madison Avenue, 12th Floor, New York, New York 10017.
(4)Represents warrants to purchase such shares of common stock held by CVCA
which are exercisable within 60 days of the date of this Prospectus.
(5)Address is c/o Aetna Life Insurance Company, Private Equity Group, IG6U, 151
Farmington Avenue, Hartford, Connecticut 06156. Aetna Life Insurance Company
exercises voting and/or investment power over shares of capital stock owned by
BPC Equity, LLC ("BPC Equity"), including shares of Holding Common Stock held
by BPC Equity.
(6)Address is c/o First Atlantic Capital, Ltd., 135 East 57th Street, New York,
New York 10022. Represents shares of Holding Common Stock owned by
International. Mr. Buaron is the sole shareholder of BHL. BHL is the sole
general partner of AEA II. AEA II is the sole general partner of International
and as such, exercises voting and/or investment power over shares of capital
stock owned by International, including the International Shares. Mr. Buaron,
as the sole shareholder and Chief Executive Officer of BHL, controls the sole
general partner of International and therefore has voting and/or investment
power over, and may be deemed to beneficially own, the International Shares.
Mr. Buaron disclaims any beneficial ownership of the International Shares.
(7)Includes 2,541 options granted to Mr. Imbler, which are exercisable within
60 days of the date of this Prospectus.
(8)Address is c/o First Atlantic Capital, Ltd., 135 East 57th Street, New York,
New York 10022.
(9)Address is c/o Aetna Life Insurance Company, Private Equity Group, IG6U, 151
Farmington Avenue, Hartford, Connecticut 06156. Represents shares owned by BPC
Equity. Mr. Clarke is a Managing Director of Aetna, Inc., an affiliate of
Aetna Life Insurance Company, which is a member of BPC Equity. Mr. Clarke
disclaims any beneficial ownership of the shares of Holding Common Stock held
by BPC Equity.
(10)Address is c/o O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New
York, New York 10112.
(11)Address is c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor, New
York, New York 10017. Represents shares owned by CVCA. Mr. Hofmann is a
General Partner of Chase Capital Partners, which is the private equity
investment arm of Chase Manhattan Corporation, which is an affiliate of CVCA.
Mr. Hofmann disclaims any beneficial ownership of the shares of Holding Common
Stock held by CVCA.
(12)Address is c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor, New
York, New York 10017. Represents shares owned by CVCA. Mr. Lori is a
Principal with Chase Capital Partners, which is the private equity investment
arm of Chase Manhattan Corporation, which is an affiliate of CVCA. Mr. Lori
disclaims any beneficial ownership of the shares of Holding Common Stock held
by CVCA.
(13)Includes 1,564 options granted to Mr. Boots which are exercisable within 60
days of the date of this Prospectus.
(14)Includes 977 options granted to Mr. Kratochvil which are exercisable within
60 days of the date of this Prospectus.
(15)Includes 977 options granted to Mr. Beeler which are exercisable within 60
days of the date of this Prospectus.
<PAGE>
CERTAIN TRANSACTIONS
FIRST ATLANTIC
Pursuant to the FACL Management Agreement, First Atlantic provides the Company
with financial advisory and management consulting services in exchange for an
annual fee of $750,000 and reimbursement for out-of-pocket costs and expenses.
In consideration of such services, the Company paid First Atlantic fees and
expenses of approximately $771,200 for fiscal 1997, $787,600 for fiscal 1996
and $816,900 for fiscal 1995. First Atlantic also received a $100,000 advisory
fee in both March and December 1995 for originating, structuring and
negotiating the Sterling Products Acquisition and the Tri-Plas Acquisition,
respectively. In connection with the 1996 Transaction, the FACL Management
Agreement was amended to provide for a fee for services rendered in connection
with certain transactions equal to the lesser of (i) 1% of the total
transaction value and (ii) $1,250,000 for any such transaction consummated plus
out-of-pocket expenses in respect of such transaction, whether or not
consummated. Also in connection with the 1996 Transaction, Holding paid a fee
of $1,250,000 plus reimbursement for out-of-pocket expenses to First Atlantic
for advisory services, including originating, structuring and negotiating the
1996 Transaction. First Atlantic received advisory fees of approximately
$287,500 and $28,700 in January 1997 for originating, structuring and
negotiating the PackerWare Acquisition and the Container Industries
Acquisition, respectively. First Atlantic received advisory fees of
approximately $117,900 and $531,600 in May 1997 and August 1997, respectively,
for originating, structuring and negotiating the Virginia Design Acquisition
and the Venture Packaging Acquisition, respectively. First Atlantic received
advisory fees of approximately $140,000 and $180,000 in July 1998 and October
1998, respectively, for originating, structuring and negotiating the Norwich
Acquisition and the Knight Acquisition, respectively.
Mr. Buaron, the Chairman and a director of Holding and the Company, is the
Chairman and Chief Executive Officer of First Atlantic. As an officer and the
sole stockholder of First Atlantic, Mr. Buaron is entitled to receive any
bonuses paid and any dividends declared by First Atlantic on its capital stock,
including any bonuses paid as a result of, and any dividends paid out of, the
$1,250,000 fee paid by Holding to First Atlantic in connection with the 1996
Transaction or any of the fees paid with respect to the acquisitions described
above. Mr. Graev is also a director of First Atlantic, and Mr. Levy is an
officer of First Atlantic. First Atlantic is engaged by International to
provide certain financial and management consulting services for which it
receives annual fees. First Atlantic and International have completely
distinct ownership and equity structures.
The AEP Fund, a stockholder of Holding prior to the consummation of the 1996
Transaction, received approximately $67.6 million from the sale of its common
stock in Holding and warrants to purchase common stock. First Atlantic is
engaged by the AEP Fund to provide certain financial and management consulting
services for which it receives annual fees. First Atlantic and the AEP Fund
have completely distinct ownership and equity structures. AEA is the sole
general partner of the AEP Fund. Mr. Buaron is the sole shareholder of Buaron
Capital, and Buaron Capital is the managing and sole general partner of AEA.
By virtue of their direct and indirect ownership interests in the AEP Fund, Mr.
Levy and Buaron Capital are entitled to receive a portion of the proceeds from
the sale of the equity interests in Holding ($178,000 and $4,672,000,
respectively).
MANAGEMENT
In connection with the 1996 Transaction, Messrs. Imbler, Bell, Boots,
Kratochvil and Beeler received approximately $5.9 million, $2.5 million, $2.4
million, $1.3 million and $1.3 million, respectively, from their sale of
certain equity interests in Holding. In connection with the 1994 Transaction,
the Company paid a $50.0 million dividend on its common stock to Holding, and
Holding distributed that amount to its holders of equity interests. In
connection therewith, Holding agreed to pay cash bonuses, upon the occurrence
of certain events, to the members of management who held options under
Holding's 1991 Stock Option Plan in amounts equal to the amounts they would
have been entitled to had the shares of common stock underlying their unvested
options been outstanding at the time of the declaration of the $50.0 million
dividend by Holding. As a result of the 1996 Transaction, such bonuses were
paid to Messrs. Imbler, Bell, Boots, Kratochvil and Beeler in the amounts of
approximately $594,000, $238,000, $238,000, $119,000 and $119,000,
respectively.
STOCKHOLDERS AGREEMENTS
In connection with the 1996 Transaction, Holding entered into a Stockholders
Agreement dated as of June 18, 1996 (the "New Stockholders Agreement") with the
Common Stock Purchasers, certain Management Stockholders (as defined herein)
and, for limited purposes thereunder, the Preferred Stock Purchasers. The New
Stockholders Agreement grants the Common Stock Purchasers certain rights and
obligations, including the following: (i) until the occurrence of certain
events specified in the New Stockholders Agreement, to designate the members of
a seven person Board of Directors as follows: (A) one director will be Roberto
Buaron or his designee; (B) International will have the right to designate
three directors (who are currently Messrs. Graev, Imbler and Levy); (C) CVCA
will have the right to designate two directors (who are currently Messrs.
Hofmann and Lori); and (D) the institutional holders (excluding International
and CVCA) will have the right to designate one director (who is currently Mr.
Clarke); (ii) in the case of certain Common Stock Purchasers, to subscribe for
a proportional share of future equity issuances by Holding; (iii) under certain
circumstances and in the case of International or CVCA, to cause the initial
public offering of equity securities of Holding or a sale of Holding subsequent
to the fifth anniversary of the closing of the 1996 Transaction and (iv) under
certain circumstances and in the case of a majority in interest of the
institutional holders, to cause the initial public offering of equity
securities of Holding or a sale of Holding subsequent to the sixth anniversary
of the closing of the 1996 Transaction. Provisions under the New Stockholders
Agreement also (i) prohibit Holding from taking certain actions without the
consent of holders of a majority of voting stock held by CVCA and the
institutional holders other than International (or, following the occurrence of
certain events, International's consent), including certain transactions
between Holding and any subsidiary, on the one hand, and First Atlantic or any
of its affiliates, on the other hand; (ii) obligate Holding to provide certain
Common Stock Purchasers with financial and other information regarding Holding
and to provide access and inspection rights to all Common Stock Purchasers; and
(iii) restrict transfers of equity by the Common Stock Purchasers, subject to
certain exceptions (including for transfers of up to 10% of the equity
(including warrants to purchase equity) held by each Common Stock Purchaser on
the date of the New Stockholders Agreement). Pursuant to the New Stockholders
Agreement, under certain circumstances the Preferred Stock Purchasers (and
their transferees) have tag-along rights with respect to the 1996 Warrants and
the Holding Common Stock issuable upon exercise of the 1996 Warrants. Under
specified circumstances and subject to certain exceptions, the Preferred Stock
Purchasers (and their transferees) are entitled to include a pro rata share of
their Preferred Stock in a transaction (or series of related transactions)
involving the transfer by International, CVCA and the Institutional Holders (as
defined in the New Stockholders Agreement) of more than 50% of the aggregate
amount of securities held by them immediately following the closing of the 1996
Transaction.
The New Stockholders Agreement grants registration rights, under certain
circumstances and subject to specified conditions, to the Common Stock
Purchasers. International and CVCA each have the right, on three occasions, to
demand registration, at Holding's expense, of their shares of Holding Common
Stock. Under certain circumstances, a majority in interest of the
institutional holders (excluding International and CVCA) have the right, on one
occasion, to demand registration, at Holding's expense, of their shares of
Holding Common Stock. The New Stockholders Agreement provides that if Holding
proposes to register any of its securities, either for its own account or for
the account of other stockholders, Holding will be required to notify all
Common Stock Purchasers and to include in such registration the shares of
Holding Common Stock requested to be included by them. All shares of Holding
Common Stock owned by the Common Stock Purchasers requested to be included in a
registration will be subject to cutbacks under certain circumstances in
connection with an underwritten public offering.
The provisions of the New Stockholders Agreement regarding voting rights,
negative covenants, information/inspection rights, the right to force a sale of
Holding, preemptive rights and transfer restrictions generally will expire on
the earlier to occur of (i) the later of (A) the fifth anniversary of the
closing of the 1996 Transaction if an underwritten public offering of equity
securities of Holding resulting in gross proceeds of at least $20.0 million
occurs prior to such fifth anniversary and (B) the occurrence of such
underwritten public offering that occurs subsequent to such fifth anniversary
of the closing of the 1996 Transaction; (ii) the twentieth anniversary of the
closing of the 1996 Transaction; and (iii) a sale of Holding. In addition, the
New Stockholders Agreement provides that certain rights of a Common Stock
Purchaser (to the extent such rights apply to such Common Stock Purchaser) to
designate members of the Board of Directors of Holding and/or to approve
certain actions by Holding will terminate if certain circumstances occur.
Holding is also party to the Amended and Restated Stockholders Agreement dated
June 18, 1996 (the "Management Stockholders Agreement"), with International and
all management shareholders including, among others, Messrs. Imbler, Boots,
Kratochvil and Beeler (collectively, the "Management Stockholders"). The
Management Stockholders Agreement contains provisions (i) limiting transfers of
equity by the Management Stockholders; (ii) requiring the Management
Stockholders to sell their shares as designated by Holding or International
upon the consummation of certain transactions; (iii) granting the Management
Stockholders certain rights of co-sale in connection with sales by
International; (iv) granting Holding rights to repurchase capital stock from
the Management Stockholders upon the occurrence of certain events; and (v)
requiring the Management Stockholders to offer shares to Holding prior to any
permitted transfer.
CHASE SECURITIES, INC.
In connection with the 1996 Transaction, Chase Securities, an affiliate of CVCA
and Messrs. Hofmann and Lori, who are members of the Board of Directors of
Holding and the Company, received a fee of $500,000 for arranging the sale of
$15.0 million of Holding's Common Stock to certain of the Common Stock
Purchasers and the sale of $15.0 million of Holding Preferred Stock to CVCA.
CMIHI, an affiliate of Chase Securities and Messrs. Hofmann and Lori, received
approximately $13.6 million from the sale of equity interests of Holding in the
1996 Transaction.
LEGAL SERVICES
Mr. Graev is the Chairman of the law firm of O'Sullivan Graev & Karabell, LLP,
New York, New York. O'Sullivan Graev & Karabell, LLP provides legal services
to the Company and Holding in connection with certain matters, principally
relating to transactional, securities law, general corporate and litigation
matters. See "Legal Matters."
TRANSACTIONS WITH AFFILIATES
The 1996 Indenture, the New Stockholders Agreement, the 1994 Indenture and the
Credit Facility restrict, and the Indenture will restrict, the Company's and
its affiliates' ability to enter into transactions with their affiliates,
including their officers, directors and principal stockholders.
<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS
HOLDING 1996 NOTES
On June 18, 1996, Holding, as part of a recapitalization, issued 12.50% Senior
Secured Notes due 2006 (the "1996 Offering") for net proceeds, after expenses,
of approximately $100.2 million (or $64.6 million after deducting the amount of
such net proceeds used to purchase marketable securities available for payment
of interest on the notes). These notes were exchanged in October 1996 for the
12.50% Series B Senior Secured Notes due 2006. Interest on the 1996 Notes is
payable semi-annually on June 15 and December 15 of each year. In addition,
from December 15, 1999 until June 15, 2001, Holding may, at its option, pay
interest, at an increased rate of 0.75% per annum, in additional 1996 Notes
valued at 100% of the principal amount thereof.
In connection with the 1996 Notes, $35.6 million was placed in escrow, which
has been invested in U.S. government securities, to pay three years' interest
on the notes. Pending disbursement, the trustee under the 1996 Indenture will
have a first priority lien on the escrow account for the benefit of the holders
of the 1996 Notes. Funds may be disbursed from the escrow account only to pay
interest on the 1996 Notes and, upon certain repurchases or redemptions of the
1996 Notes, to pay principal of and premium, if any, thereon. The balance in
the escrow account as of December 27, 1997 was $18.9 million.
The 1996 Notes rank senior in right of payment to all existing and future
subordinated indebtedness of Holding, including Holding's subordinated
guarantee of the 1994 Notes and the Notes and PARI PASSU in right of payment
with all senior indebtedness of Holding. The 1996 Notes are effectively
subordinated to all existing and future senior indebtedness of Berry, including
borrowings under the Credit Facility, the Nevada Bonds and the South Carolina
Bonds.
BERRY 1994 NOTES
On April 21, 1994, Berry completed an offering of 100,000 units consisting of
$100.0 million aggregate principal amount of 12.25% Berry Plastics Corporation
Senior Subordinated Notes due 2004 and 100,000 warrants to purchase 1.13237
shares of Class A Common Stock, $.00005 par value, of Holding. The 1994 Notes
mature on April 15, 2004 and interest is payable semi-annually on October 15
and April 15 of each year and commenced on October 15, 1994. The 1994 Notes
are unconditionally guaranteed on a senior subordinated basis by the
Guarantors. The net proceeds to Berry from the sale of the 1994 Notes, after
expenses, were $93.0 million.
Berry is not required to make mandatory redemption or sinking fund payments
with respect to the 1994 Notes. Subsequent to April 15, 1999, the 1994 Notes
may be redeemed at the option of Berry, in whole or in part, at redemption
prices ranging from 106.125% in 1999 to 100% in 2002 and thereafter. Upon a
change in control, as defined in the 1994 Indenture, each holder of 1994 Notes
will have the right to require Berry to repurchase all or any part of such
holder's notes at a repurchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued interest.
The 1994 Notes rank PARI PASSU with the Notes and PARI PASSU with or senior in
right of payment to all existing and future subordinated indebtedness of Berry.
The 1994 Notes rank junior in right of payment to all existing and future
Senior Indebtedness of Berry, including borrowings under the Credit Facility,
the Nevada Bonds and the South Carolina Bonds.
The 1994 Indenture contains certain covenants which, among other things, limit
Berry and its subsidiaries' ability to incur debt, merge or consolidate, sell,
lease or transfer assets, make dividend payments and engage in transactions
with affiliates.
CREDIT FACILITY
Concurrent with the Venture Packaging Acquisition, the Company amended its then
existing financing and security agreement (the "Security Agreement") with
NationsBank, N.A. for a senior secured line of credit to increase the
commitments thereunder to an aggregate principal amount of $127.2 million (the
"Credit Facility"). Concurrently with the Norwich Acquisition, the Credit
Facility was amended and increased to $132.6 million (plus an additional
revolving credit facility of <pound-sterling>1.5 million (the "UK Revolver")
and a term loan facility of <pound-sterling>4.5 million (the "UK Term Loan"),
each for NIM Holdings and Norwich). The Credit Facility currently bears a
weighted average interest rate of approximately 7.6%. The indebtedness under
the Credit Facility is guaranteed by Holding and substantially all of its
subsidiaries. The Credit Facility replaced the facility previously provided by
Fleet Capital Corporation.
The Credit Facility provides the Company with (i) a $50.0 million revolving
line of credit, subject to a borrowing base formula and a reserve for certain
obligations under the South Carolina Bonds, (ii) the UK Revolver, subject to a
borrowing base, (iii) a $63.7 million term loan facility, (iv) the UK Term Loan
and (v) a $5.6 million standby letter of credit facility to support the
Company's and its subsidiaries' obligations under the Nevada Bonds. The Credit
Facility also provides for a $5.4 million term loan facility, the proceeds of
which were used to retire in July 1998 the Company's and its subsidiaries'
obligations under the Iowa Bonds, on which Berry Iowa had agreed, pursuant to a
Loan and Trust Agreement with The City of Iowa Falls, Iowa, to pay amounts
sufficient to pay principal, interest and any premium with respect to the Iowa
Bonds. Also, the Credit Facility provides a term loan facility to support the
Company's and its subsidiaries' obligations under the South Carolina Industrial
Development Bonds. In August 1998, in conjunction with the closing and sale of
the Anderson, South Carolina Facility, the Bonds were paid by the Company. The
difference between the repayment of the development bonds and other related
liabilities and the net proceeds from the sale of the facility of approximately
$3.0 million has been financed with borrowing under the term loan facility.
The Company borrowed all amounts available under the term loan facility and the
UK Term Loan to finance the PackerWare Acquisition, the Virginia Design
Acquisition, the Venture Packaging Acquisition and the Norwich Acquisition. At
September 26, 1998, the Company had unused borrowing capacity under the Credit
Facility's revolving line of credit of approximately $40.4 million.
The Credit Facility matures on January 21, 2002 unless previously terminated by
the Company or by the lenders upon an Event of Default as defined in the
Security Agreement. The term loan facility requires periodic payments, varying
in amount, through the maturity of the facility. After giving effect to the
Offering and the application of the proceeds therefrom, such periodic payments
will aggregate $3.8 million for the remainder of fiscal 1998 and $18.9 million
for fiscal 1999. Interest on borrowings under the Credit Facility is based on
either (i) the lender's base rate (which is the higher of the lender's prime
rate and the federal funds rate plus 0.50%) plus an applicable margin of 0.50%
or (ii) LIBOR (adjusted for reserves) plus an applicable margin of 2.0%, at the
Company's option. Following receipt of the quarterly financial statements, the
agent under the Credit Facility has the option to change the applicable
interest rate margin on loans (other than under the UK Revolver and UK Term
Loan) once per quarter to a specified margin determined by the ratio of funded
debt to EBITDA of the Company and its subsidiaries. Notwithstanding the
foregoing, interest on borrowings under the UK Revolver and the UK Term Loan is
based on LIBOR (adjusted for reserves) plus 2.50%.
The Credit Facility contains various covenants which include, among other
things: (i) maintenance of certain financial ratios and compliance with certain
financial tests and limitations, (ii) limitations on the issuance of additional
indebtedness and (iii) limitations on capital expenditures.
NEVADA INDUSTRIAL REVENUE BONDS
The Company is party to a Financing Agreement with the City of Henderson,
Nevada Public Improvement Trust (the "Nevada Issuer"), pursuant to which the
Company has agreed to pay to the Nevada Issuer amounts sufficient to pay
principal, interest and any premium on the Nevada Industrial Revenue Bonds (the
"Nevada Bonds").
The Nevada Bonds bear interest at a variable rate (4.6% at December 27, 1997
and December 28, 1996), require annual principal payments of $0.5 million on
each April 1 until maturity, are collateralized by irrevocable letters of
credit issued by NationsBank under the Credit Facility and mature in April
2007.
<PAGE>
DESCRIPTION OF NOTES
GENERAL
The Old Notes were, and the New Notes will be, issued pursuant to an Indenture
(the "Indenture") between the Company and United States Trust Company of New
York, as trustee (the "Trustee"), and the Old Notes were, and the New Notes
will be, guaranteed, on a senior subordinated basis, by the Guarantors. The
terms of the New Notes are identical in all material respects to the Old Notes,
except that the New Notes have been registered under the Securities Act and,
therefore, will not bear legends restricting their transfer and will not
contain certain provisions providing for an increase in the interest rate on
the Old Notes under certain circumstances relating to the Registration Rights
Agreement, which provisions will terminate upon the consummation of the
Exchange Offer.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). The Notes are subject to all such terms,
and Holders of Notes are referred to the Indenture and the Trust Indenture Act
for a complete statement thereof. The following summary of certain provisions
of the Indenture does not purport to be complete and is qualified in its
entirety by reference to the Indenture, including the definitions therein of
certain terms used below. A copy of the Indenture is available as set forth
under "Available Information." The definitions of certain terms used in the
following summary are set forth below under "- Certain Definitions."
The Notes rank PARI PASSU with the 1994 Notes and PARI PASSU with or senior in
right of payment to all existing and future subordinated Indebtedness of the
Company. The Notes rank junior in right of payment to all existing and future
Senior Indebtedness of the Company, including borrowings under the Credit
Facility, the Nevada Bonds and the South Carolina Bonds. Each Guarantor's Note
Guarantee ranks PARI PASSU with or senior in right of payment to all existing
and future subordinated Indebtedness of such Guarantor and ranks junior in
right of payment to all existing and future Senior Indebtedness of such
Guarantor, including such Guarantor's Guarantee of borrowings under the Credit
Facility, the Nevada Bonds and the South Carolina Bonds.
The terms of the Notes are identical in all material respects to the terms of
the 1994 Notes, except that the 1994 Notes have a priority upon the payment of
proceeds pursuant to an Asset Sale. Since the Notes will be issued pursuant to
a separate indenture from the 1994 Notes, holders of the Notes will vote as a
separate class from holders of the 1994 Notes.
PRINCIPAL, MATURITY AND INTEREST
The Notes are unsecured obligations of the Company, limited in aggregate
principal amount to $100.0 million, of which $25.0 million was issued in the
Offering, and will mature on April 15, 2004. Interest on the Notes accrues at
the rate of 12 1/4% per annum and will be payable semi-annually in arrears on
October 15 and April 15, commencing on October 15, 1998, to Holders of record
on the immediately preceding October 1 and April 1. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance. Additional Notes
("Additional Notes") may be issued from time to time after the Offering,
subject to the provisions of the Indenture described below under the caption
"-Certain Covenants - Incurrence of Indebtedness and Issuance of Disqualified
Stock." The Notes and any Additional Notes subsequently issued will be treated
as a single class for all purposes under the Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase. Interest
is computed on the basis of a 360-day year comprised of twelve 30-day months.
Principal and interest and Liquidated Damages, if any, on the Notes is payable
at the office or agency of the Company maintained for such purpose within the
City and State of New York or, at the option of the Company, payment of
interest and Liquidated Damages, if any, may be made by check mailed to the
Holders of the Notes at their respective addresses set forth in the register of
Holders of Notes. Until otherwise designated by the Company, the Company's
office or agency in New York will be the office of the Trustee maintained for
such purpose. The Notes will be issued in denominations of $1,000 and integral
multiples thereof.
OPTIONAL REDEMPTION
The Notes are not redeemable at the Company's option prior to April 15, 1999.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the applicable redemption date, if redeemed during the twelve-
month period beginning on April 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR Percentage
<S> <C>
1999 106.125%
2000 104.083%
2001 102.042%
2002 and thereafter 100.000%
</TABLE>
MANDATORY REDEMPTION
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of Notes will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase (the "Change
of Control Payment"). Within 10 days following any Change of Control, the
Company will mail a notice to each Holder stating: (1) that the Change of
Control Offer is being made pursuant to the covenant entitled "Change of
Control" and that all Notes tendered will be accepted for payment; (2) the
purchase price and the purchase date, which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed (the "Change of Control
Payment Date"); (3) that any Note not tendered will continue to accrue
interest; (4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control Payment
Date; (5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have such Notes purchased; and (7) that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the
Notes in connection with a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent lawful,
(1) accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Offer, (2) deposit with the Paying Agent an amount equal to
the Change of Control Payment in respect of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the Notes or portions
thereof tendered to the Company. The Paying Agent will promptly mail to each
Holder of Notes so accepted the Change of Control Payment for such Notes, and
the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; PROVIDED that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. Prior to making the Change of Control Payment, but in any event
within 90 days following a Change of Control, the Company shall either repay
all outstanding Designated Senior Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Designated Senior
Indebtedness to permit the repurchase of Notes required by this covenant. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
As noted above, one of the events that constitutes a Change of Control under
the Indenture is a sale, lease or transfer of all or substantially all of
Holding's or the Company's assets. The Indenture is governed by New York law,
and there is no established quantitative definition under New York law of
"substantially all" of the assets of a corporation. Accordingly, if Holding or
the Company were to engage in a transaction in which it disposed of less than
all of their respective assets, a question of interpretation could arise as to
whether such disposition was "substantially all" of their respective assets and
whether the Company was required to make a Change of Control Offer. In such
cases, the Company might not be required to make a Change of Control Offer and
would be permitted, subject to the restrictions contained in the Indenture,
including with respect to Restricted Payments, to find alternative uses for the
proceeds of such sale. Pursuant to the terms of the Indenture, however, the
Company could be required to make an Asset Sale Offer in such circumstances.
Neither the Board of Directors of Holding nor the Trustee may waive the
operation of the Change of Control covenant.
The Credit Facility provides that events similar to a Change of Control will
constitute an event of default thereunder. Upon the occurrence of an event of
default under the Credit Facility, all amounts outstanding thereunder may
become due and payable. All indebtedness of the Company under the Credit
Facility, which may be up to $132.6 million (plus <pound-sterling>1.5 million
under the UK Revolver and <pound-sterling>4.5 million under the UK Term Loan),
is Senior Indebtedness. Accordingly, in the event of an event of default under
the Credit Facility, including with respect to an event similar to a Change of
Control, the subordination provisions contained in the Indenture will prohibit
the Company (if the holders of Senior Indebtedness issue a notice to the
Company to such effect) from making any payment on the Notes until such event
of default is cured or upon the expiration of 179 days (unless the holders of
Senior Indebtedness accelerate the maturity of the Senior Indebtedness). See
"- Subordination."
The provisions of the Indenture may not afford Holders of Notes the right to
require the Company to repurchase the Notes in the event of a highly leveraged
transaction or certain transactions with Holding's management or affiliates,
including a reorganization, restructuring, merger or similar transaction
(including, in certain circumstances, an acquisition of Holding by its
management or affiliates) involving Holding that may adversely affect Holders
of Notes, if such transaction is not a transaction defined as a "Change of
Control." A transaction involving Holding's management or affiliates, or a
transaction involving a recapitalization of Holding, may result in a Change of
Control if it is the type of transaction specified by such definition.
The Change of Control purchase feature of the Notes may in certain
circumstances make more difficult or discourage a takeover of Holding, and,
thus, the removal of incumbent management. The Change of Control purchase
feature, however, is not the result of management's knowledge of any specific
effort to accumulate Holding's stock or to obtain control of Holding by means
of a merger, tender offer, solicitation or otherwise, or part of a plan by
management to adopt a series of anti-takeover provisions. Instead, the Change
of Control purchase feature is a result of negotiations between the Company and
the Initial Purchaser. Management has no present intention to engage in a
transaction involving a Change of Control, although it is possible that Holding
would decide to do so in the future. Subject to the limitations discussed
below, Holding could, in the future, enter into certain transactions including
acquisitions, refinancings or other recapitalizations, that would not
constitute a Change of Control under the Indenture, but that could increase the
amount of indebtedness outstanding at such time or otherwise affect Holding's
capital structure or credit ratings.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the sale,
lease or transfer, in one or a series of related transactions, of all or
substantially all of Holding's or the Company's assets to any person or group
(as such term is used in Section 13(d)(3) of the Exchange Act) (other than the
Principal and his Related Parties (as defined herein)), (ii) the adoption of a
plan relating to the liquidation or dissolution of Holding or the Company,
(iii) the acquisition by any person or group (as such term is used in Section
13(d)(3) of the Exchange Act) (other than by the Principal and his Related
Parties) of a direct or indirect interest in more than 35% of the voting power
of the voting stock of Holding by way of purchase, merger or consolidation or
otherwise if (a) such person or group (as defined above) (other than the
Principal and his Related Parties) owns, directly or indirectly, more of the
voting power of the voting stock of Holding than the Principal and his Related
Parties and (b) such acquisition occurs prior to the Initial Public Offering,
(iv) the acquisition by any person or group (as such term is used in Section
13(d)(3) of the Exchange Act) (other than by the Principal and his Related
Parties) of a direct or indirect interest in more than 50% of the voting power
of the voting stock of Holding by way of purchase, merger or consolidation or
otherwise if such acquisition occurs subsequent to the Initial Public Offering
or (v) the first day on which a majority of the members of the Board of
Directors of Holding are not Continuing Directors.
"CONTINUING DIRECTORS" means, as of any date of determination, any member of
the Board of Directors of Holding who (i) was a member of such Board of
Directors on the Issuance Date or (ii) was nominated for election or elected to
such Board of Directors with the affirmative vote of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"INITIAL PUBLIC OFFERING" means a public offering of the Common Stock of
Holding that first results in the Common Stock of Holding becoming listed for
trading on a Stock Exchange.
"PRINCIPAL" means Roberto Buaron.
"RELATED PARTY" means with respect to the Principal (A) any spouse, sibling or
descendant of such Principal (whether or not such relationship arises from
birth, adoption or marriage or despite such relationship being dissolved by
divorce) or (B) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding a
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
"STOCK EXCHANGE" means the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market.
ASSET SALES
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, conduct an Asset Sale (as defined herein), unless (x) the
Company (or the Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee no later than immediately prior to the consummation of
such proposed Asset Sale with respect to any Asset Sale involving aggregate
payments in excess of $1 million) of the assets sold or otherwise disposed of
and (y) at least 75% of the consideration therefor received by the Company or
such Subsidiary is in the form of cash; PROVIDED, HOWEVER, that the amount of
(A) any liabilities (as shown on the Company's or such Subsidiary's most recent
balance sheet or in the notes thereto), of the Company or any Subsidiary (other
than liabilities that are by their terms subordinated to the Notes or any
Guarantee thereof) that are assumed by the transferee of any such assets and
(B) any notes or other obligations received by the Company or any such
Subsidiary from such transferee that are immediately converted by the Company
or such Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this provision.
Within 180 days after any Asset Sale, the Company may apply the Net Proceeds
from such Asset Sale to either (a) permanently reduce Senior Indebtedness, or
(b) make an investment in another business or capital expenditure or other
long-term/tangible assets, in each case, in the same or a similar line of
business as the Company was engaged in on the Issuance Date. Pending the final
application of any such Net Proceeds, the Company may temporarily reduce Senior
Bank Indebtedness or otherwise invest such Net Proceeds in Cash Equivalents.
Any Net Proceeds from the Asset Sale that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." If the aggregate amount of Excess Proceeds exceeds $5
million, upon completion of the Asset Sale Offer required under the 1994
Indenture, the Company shall make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes, that is an
integral multiple of $1,000, that may be purchased out of the Excess Proceeds,
if any, remaining upon completion of the Asset Sale Offer required under the
1994 Indenture, at an offer price in cash in an amount equal to 101% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase, in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use such deficiency for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased
in the manner described under the caption "Selection and Notice" below. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset to zero. The Indenture will also provide that the Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with an Asset Sale.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition of any
property or assets of the Company or any Subsidiary (including by way of a
sale-and-leaseback) other than sales of inventory in the ordinary course of
business (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company shall be governed by the
provisions of the Indenture described above under the caption "-Change of
Control" and the provisions described below under the caption "- Certain
Covenants - Merger, Consolidation or Sale of Assets"), or (ii) the issuance or
sale of Equity Interests of any of its Subsidiaries, in the case of either
clause (i) or (ii) above, whether in a single transaction or a series of
related transactions, (a) that have a fair market value in excess of $250,000,
or (b) for net proceeds in excess of $250,000. For purposes of this
definition, the term "Asset Sale" shall not include (i) the transfer of assets
by the Company to a Wholly Owned Subsidiary of the Company or by a Wholly Owned
Subsidiary of the Company to the Company or to another Wholly Owned Subsidiary
of the Company, (ii) any Restricted Payment, dividend or purchase or retirement
of Equity Interests permitted under the covenant entitled "Restricted Payments"
or (iii) the issuance or sale of Equity Interests of any Subsidiary of the
Company, PROVIDED that such Equity Interests are issued or sold in
consideration for the acquisition of assets by such Subsidiary or in connection
with a merger or consolidation of another Person into such Subsidiary.
The Credit Facility restricts the Company from purchasing any Notes prior to
the termination thereof and provides that certain change of control events with
respect to Holding and asset sales would constitute a default thereunder. Any
future credit agreements or other agreements relating to Senior Indebtedness to
which the Company becomes a party may contain similar or more restrictive
provisions. In the event a Change of Control or Asset Sale occurs at a time
when the Company is prohibited from purchasing Notes, the Company could seek
the consent of its lenders to the purchase of Notes or could attempt to
refinance the borrowings that contain such prohibition. If the Company does
not obtain such a consent or repay such borrowings, the Company will remain
prohibited from purchasing Notes. In such case, the Company's failure to
purchase tendered Notes would constitute an Event of Default under the
Indenture which would, in turn, constitute an default under the Credit
Facility. In such circumstances, the subordination provisions in the Indenture
would likely restrict payments to the Holders of Notes.
SELECTION AND NOTICE
If less than all of the Notes are to be purchased in an Asset Sale Offer or
redeemed at any time, selection of Notes for purchase or redemption will be
made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or, if the
Notes are not so listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate, PROVIDED that no Notes of $1,000 or
less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the purchase or redemption date to each Holder of
Notes to be redeemed at its registered address. If any Note is to be purchased
or redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be purchased or
redeemed.
A new Note in principal amount equal to the unpurchased or unredeemed portion
of any Note purchased or redeemed in part will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
purchase or redemption date, interest ceases to accrue on Notes or portions
thereof purchased or called for redemption.
SUBORDINATION
The payment of principal of, and premium, if any, interest and Liquidated
Damages, if any, on, the Notes will be subordinated in right of payment, as set
forth in the Indenture, to the prior payment in full of all Senior Indebtedness
of the Company, whether outstanding on the Issuance Date or thereafter
incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities, the holders of Senior Indebtedness of the Company will
be entitled to receive payment in full of all Obligations due in respect of
such Senior Indebtedness (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Indebtedness of the
Company, whether or not such interest was an allowed claim) before the Holders
of Notes will be entitled to receive any payment with respect to the Notes and,
until all such Obligations with respect to Senior Indebtedness of the Company
are paid in full, any distribution to which the Holders of Notes would
otherwise be entitled shall be made to the holders of Senior Indebtedness of
the Company (except that Holders of Notes may receive securities that are
subordinated, at least to the same extent as are the Notes, to Senior
Indebtedness and to any securities issued in exchange for any such Senior
Indebtedness).
The Company also may not make any payment upon or in respect of the Notes
(except in such subordinated securities) if (a) a default in the payment when
due, whether upon acceleration or otherwise, of the principal of, premium, if
any, or interest on any Senior Indebtedness of the Company occurs and is
continuing or (b) any other default occurs and is continuing with respect to
any Designated Senior Indebtedness and the Trustee receives a notice of such
default (a "Payment Blockage Notice") from the Company or from, or on behalf
of, the holders of any such Designated Senior Indebtedness. Payments on the
Notes may and shall be resumed (i) in the case of a payment default, upon the
date on which such default is cured or waived and (ii) in the case of a
nonpayment default, on the earlier of the date on which such nonpayment default
is cured or waived or 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of any such Designated Senior
Indebtedness has been accelerated. No new period of payment blockage may be
commenced within 365 days after the receipt by the Trustee of any prior Payment
Blockage Notice.
The Indenture further requires that the Company promptly notify each
representative of holders of Senior Indebtedness of the Company if payment of
the Notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event of
the insolvency or liquidation of the Company, Holders of Notes may recover
less, ratably, than creditors of the Company who are holders of Senior
Indebtedness or of other indebtedness which is not subordinated to the Notes.
The Indenture provides that holders of Senior Indebtedness are third party
beneficiaries of the subordination provisions of the Indenture and no amendment
thereof shall be effected without the prior written consent of the holders of a
majority of the outstanding principal amount of Senior Indebtedness.
The aggregate amount of Senior Indebtedness of the Company outstanding at
September 26, 1998 would have been approximately $76.8 million. As of
September 26, 1998, all Indebtedness of the Company other than the Senior
Indebtedness was PARI PASSU in right of payment to the Notes, and there would
have been no Indebtedness of the Company subordinated to the Notes. Subject to
certain financial tests, the Indenture does not limit the amount of additional
Indebtedness, including Senior Indebtedness, that the Company and its
Subsidiaries can incur. See "- Certain Covenants."
NOTE GUARANTEES
The Company's obligations under the Notes, including the Company's payment
obligations, are unconditionally guaranteed, jointly and severally (each, a
"Note Guarantee" and, together, the "Note Guarantees"), by the Guarantors.
Rights of Holders of Notes pursuant to each such Note Guarantee are
subordinated to the Senior Indebtedness of each of the Guarantors in the same
manner as the rights of Holders of Notes are subordinated to those of the
Senior Indebtedness of the Company. Accordingly, the Note Guarantee of each
Guarantor is subordinated to the prior payment in full of all Senior
Indebtedness of such Guarantor, which was approximately $307.7 million of
Senior Indebtedness, and the amounts for which such Guarantor will be liable
under its Guarantees issued from time to time with respect to Senior
Indebtedness. As of September 26, 1998, all indebtedness of the Guarantors
other than the Senior Indebtedness was PARI PASSU in right of payment to the
Note Guarantees, and there would have been no Indebtedness of the Guarantors
subordinated to the Note Guarantees. The obligations of each Guarantor under
its Note Guarantee is limited to the extent necessary to insure that it does
not constitute a fraudulent conveyance under applicable law.
The Indenture provides that no Guarantor shall consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person
whether or not affiliated with such Guarantor unless (i) subject to the
provisions of the following paragraph and certain other provisions of the
Indenture, the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of such Guarantor
pursuant to a supplemental indenture in form reasonably satisfactory to the
Trustee, under its Note Guarantee and the Indenture; (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists; and
(iii) in the case of any Guarantor other than Holding, such Guarantor, or any
Person formed by or surviving any such consolidation or merger, (A) will have
Consolidated Net Worth (immediately after giving effect to such transaction),
equal to or greater than the Consolidated Net Worth of such Guarantor
immediately preceding the transaction and (B) will be permitted by virtue of
the Company's pro forma Fixed Charge Coverage Ratio to incur, immediately after
giving effect to such transaction, at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant
entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock."
The Indenture provides that in the event of a sale or other disposition of all
or substantially all of the assets of any Guarantor (other than Holding), by
way of merger, consolidation or otherwise, or a sale or other disposition of
all of the Capital Stock of any Guarantor, then such Guarantor (in the event of
a sale or other disposition, by way of such a merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be released and
relieved of any obligations under its Note Guarantee; PROVIDED that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of the Indenture. See "- Repurchase at the Option of
Holders - Asset Sales."
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any distribution on account of the Company's or any of its Subsidiaries'
Equity Interests (other than: dividends or distributions payable in Equity
Interests of the Person making such dividend or distribution, other than
Disqualified Stock; or dividends or distributions payable to the Company or any
Wholly Owned Subsidiary of the Company that is a Guarantor); (ii) purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Company or any Subsidiary or other Affiliate of the Company (other than any
such Equity Interests owned by the Company or any Wholly Owned Subsidiary of
the Company that is a Guarantor); (iii) purchase, redeem or otherwise acquire
or retire for value any Indebtedness (other than the 1994 Notes, the Notes and
Indebtedness between or among the Company and its Subsidiaries or between or
among such Subsidiaries) that is PARI PASSU with or subordinated to the Notes
or any Note Guarantee; (iv) directly or indirectly make any loan or advance to,
or make any payment to, Holding; or (v) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (v) above
being collectively referred to as "Restricted Payments"), unless, at the time
of such Restricted Payment:
(a)no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;
(b)the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the covenant entitled "Incurrence of
Indebtedness and Issuance of Disqualified Stock;" and
(c)such Restricted Payment, (A) in the case of any Restricted Payment
other than as defined by clause (i) above, together with the aggregate of all
other Restricted Payments made by the Company and its Subsidiaries after April
21, 1994 (including Restricted Payments permitted by the next succeeding
paragraph (other than such Restricted Payments permitted by clauses (iv), (v)
and (vi) of the next succeeding paragraph)) or (B) in the case of any
Restricted Payment defined by clause (i) above, together with the aggregate of
all other Restricted Payments made by the Company and its Subsidiaries after
April 21, 1994 (including Restricted Payments permitted by the next succeeding
paragraph (other than Restricted Payments permitted by clauses (iv) and (v) of
the next succeeding paragraph)) is less than the sum of (x) 50% of the sum of
the Consolidated Net Income and Consolidated Step-Up Depreciation and
Amortization of the Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter that began after April 21, 1994
to the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income plus Consolidated Step-Up
Depreciation and Amortization for such period is a deficit, 100% of such
deficit), plus (y) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since April 21, 1994 of Equity Interests of the
Company or of debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or convertible debt securities)
sold to a Subsidiary of the Company and other than Disqualified Stock or debt
securities that have been converted into Disqualified Stock).
The foregoing provisions do not prohibit (i) the payment of any dividend within
60 days after the date of declaration thereof, if at said date of declaration
such payment would have complied with the provisions of the Indenture; (ii) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
of the Company in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company) of other Equity
Interests of the Company (other than any Disqualified Stock); (iii) the
defeasance, redemption or repurchase of PARI PASSU or subordinated Indebtedness
in a Permitted Refinancing; (iv) a Restricted Payment to Holding pursuant to
the Tax Sharing Agreement as the same may be amended from time to time in a
manner that is not materially adverse to the Company; (v) a Restricted Payment
to Holding to pay its operating and administrative expenses including, without
limitation, directors fees, legal and audit expenses, the Commission compliance
expenses and corporate franchise and other taxes, not to exceed in any fiscal
year $500,000; (vi) a Restricted Payment to Holding to pay management fees not
to exceed $750,000 in any fiscal year of the Company; (vii) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of Holding pursuant to any management equity subscription agreement or stock
option agreement in effect as of April 21, 1994; PROVIDED, HOWEVER, that (a)
the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $1 million and (b) no Default or
Event of Default shall have occurred and be continuing immediately after such
transaction; and (viii) Investments by the Company in joint ventures or similar
projects in a business similar to that conducted by the Company and its
Subsidiaries on the Issuance Date in an aggregate amount not to exceed $1
million.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the covenant entitled "Restricted Payments" were computed, which
calculations may be based upon the Company's latest available financial
statements.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable with respect to
(collectively, "incur" and correlatively, an "incurrence" of) any Indebtedness
(including Acquired Debt) and that the Company will not issue any, and will not
permit any of its Subsidiaries to issue any, shares of Disqualified Stock;
PROVIDED, HOWEVER, that the Company and its Subsidiaries may incur Indebtedness
or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.25 to 1 determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom and including the earnings of
any business acquired by the Company or any of its Subsidiaries with the
proceeds therefrom), as if the additional Indebtedness had been incurred, or
the Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period. In addition, the Indenture provides that each of the
following Indebtedness must be subordinated in right of payment to the Notes or
the Note Guarantees, as the case may be, at least to the same extent as the
Notes are subordinated to Senior Indebtedness: (A) all Indebtedness that does
not provide for all interest payments to be made in cash; (B) all Indebtedness
of the Company to any of its Subsidiaries; and (C) any Indebtedness of the
Company and its Subsidiaries if, at the time of incurrence thereof,
Indebtedness of the Company and the Guarantors that is PARI PASSU in right of
payment to the Notes and the Note Guarantees (including, on a pro forma basis,
the Indebtedness to be incurred) exceeds $100 million other than the 1994 Notes
and the Notes.
The foregoing limitations do not apply to (a) revolving credit Indebtedness and
letters of credit pursuant to the Credit Facility in an aggregate principal
amount not to exceed at any one time outstanding the greater of (i) $60 million
in principal amount (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company thereunder),
less the aggregate amount of all repayments after April 21, 1994 that
permanently reduce the commitment under the Credit Facility, and (ii) the
Borrowing Base; (b) the Existing Indebtedness; (c) the Notes (other than any
Additional Notes) or any Note Guarantee; (d) the incurrence by the Company or
any of its Subsidiaries of Refinancing Indebtedness; PROVIDED, HOWEVER, that
such Refinancing Indebtedness is a Permitted Refinancing; (e) Indebtedness
between or among the Company and any of its Wholly Owned Subsidiaries that are
Guarantors; (f) Indebtedness from the Company to Holding PROVIDED that the
advances evidenced by such Indebtedness are permitted under the covenant
entitled "Restricted Payments;" (g) Hedging Obligations that are incurred for
the purpose of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of the Indenture to
be outstanding; and (h) the incurrence by the Company or its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of this
paragraph) in an aggregate principal amount at any time outstanding not to
exceed the sum of $1 million at any one time.
Notwithstanding anything to the contrary, the Indenture provides that the
Company and its Subsidiaries will not be permitted to incur any additional
Senior Indebtedness unless it is secured.
LIENS
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly (i) create, incur, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired by the Company
or any Subsidiary, or any income or profits therefrom or (ii) assign or convey
any right to receive income therefrom, in any such case to secure any
Indebtedness (other than Senior Indebtedness of the Company or Senior
Indebtedness of a Guarantor permitted to be incurred pursuant to the Indenture)
unless contemporaneously therewith or prior thereto, effective provision is
made (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) whereby the Notes or a Note
Guarantee are secured equally and ratably with such other Indebtedness (or if
such other Indebtedness is subordinated to the Notes or a Note Guarantee, the
Notes or a Note Guarantee, as the case may be, are secured on a basis with the
same relative priority to such other Indebtedness).
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (a)(i) pay dividends or make any other
distributions to the Company or any of its Subsidiaries (A) on its Capital
Stock or (B) with respect to any other interest or participation in, or
measured by, its profits, or (ii) pay any indebtedness owed to the Company or
any of its Subsidiaries, (b) make loans or advances to the Company or any of
its Subsidiaries or (c) transfer any of its properties or assets to the Company
or any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reasons of (i) Existing Indebtedness as in effect on the
Issuance Date, (ii) the Credit Facility as in effect on the Issuance Date, and
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, PROVIDED that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive with respect to
such dividend and other payment restrictions than those contained in the Credit
Facility as in effect on the Issuance Date, (iii) the 1994 Indenture and the
1994 Notes, (iv) the Indenture and the Notes, (v) applicable law, (vi) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, PROVIDED that
the Consolidated Cash Flow of such Person, to the extent of such restriction,
is not taken into account in determining whether such acquisition was permitted
by the terms of the Indenture, (vii) by reason of customary non-assignment
provisions in leases entered into in the ordinary course of business and
consistent with past practices, (viii) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (c) above on the property so acquired, or (ix)
permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Refinancing Indebtedness are no more restrictive
than those contained in the agreements governing the Indebtedness being
refinanced.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Indenture provides that the Company may not consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to another
Person unless (i) the
Company is the surviving Person formed by or surviving any such consolidation
or merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Notes and the Indenture; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) the Company or any
Person formed by or surviving any such consolidation or merger, or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made (A) will have Consolidated Net Worth (immediately after the
transaction) equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the covenant entitled "Incurrence
of Indebtedness and Issuance of Disqualified Stock."
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or Guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Subsidiary with a Person who was not an Affiliate and (b) the Company delivers
to the Trustee (i) with respect to any Affiliate Transaction involving
aggregate payments in excess of $2 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate Transaction
is approved by a majority of the Board of Directors and (ii) with respect to
any Affiliate Transaction involving aggregate payments in excess of $5 million,
an opinion as to the fairness to the Company or such Subsidiary from a
financial point of view issued by an investment banking firm of national
standing; PROVIDED, HOWEVER, that (i) any employment agreement entered into by
the Company or any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, (ii)
transactions between or among the Company and/or its Subsidiaries, (iii)
Restricted Payments permitted by the provisions of the Indenture described
above under the covenant "Restricted Payments" and (iv) the advisory fee being
paid to First Atlantic in connection with the Offering, in each case, shall not
be deemed Affiliate Transactions.
NO SENIOR SUBORDINATED INDEBTEDNESS
The Indenture provides that (i) the Company will not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to any Senior Indebtedness and senior
in any respect in right of payment to the Notes, and (ii) no Guarantor will
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to its Senior
Indebtedness and senior in any respect in right of payment to its Note
Guarantee.
ADDITIONAL GUARANTEES
The Indenture provides that (i) if the Company or any of its Subsidiaries shall
transfer or cause to be transferred, in one or a series of related transactions
(other than a transaction or series of related transactions constituting a
Restricted Payment permitted pursuant to the provisions of the covenant
entitled "Restricted Payments"), any assets, businesses, divisions, real
property or equipment having a book value in excess of $1 million to any
Subsidiary that is not a Guarantor or (ii) if the Company or any of its
Subsidiaries shall acquire another Subsidiary having (a) total assets with a
book value in excess of $1 million or (b) Consolidated Cash Flow in excess of
$1 million, then such transferee or acquired Subsidiary shall execute a Note
Guarantee and deliver an opinion of counsel as to the enforceability of such
Note Guarantee, in accordance with the terms of the Indenture.
REPORTS
Whether or not required by the rules and regulations of the Commission, so long
as any Notes are outstanding, the Company will furnish to the Trustee and to
all Holders of Notes all quarterly and annual financial information that would
be required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants. In addition, whether or not required by the
rules and regulations of the Commission, the Company will file a copy of all
such information and any other information required by Section 13 or 15(d) of
the Exchange Act with the Commission for public availability (unless the
Commission will not accept such a filing) and file such information with the
Trustee and make such information available to investors who request it in
writing. Notwithstanding the foregoing, to the extent permitted under the rules
and regulations of the Commission, the Company may instead supply such
information with respect to Holding.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest and
Liquidated Damages, if any, on the Notes (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment when due of
the principal of or premium, if any, on the Notes (whether or not prohibited by
the subordination provisions of the Indenture); (iii) failure by the Company to
comply with the provisions described under the covenants "Repurchase at the
Option of Holders - Change of Control," "Repurchase at the Option of Holders -
Asset Sales," "Certain Covenants - Restricted Payments" or "Certain Covenants -
Incurrence of Indebtedness and Issuance of Disqualified Stock"; (iv) failure by
the Company or the Guarantors for 60 days after notice to comply with any of
its other agreements in the Indenture or the Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company, Holding or any of their respective Subsidiaries (or the payment of
which is guaranteed by the Company, Holding or any of their respective
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created
after the Issuance Date, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $2 million or more; (vi) failure by the Company,
Holding or any of their respective Subsidiaries to pay final judgments
aggregating in excess of $2 million, which judgments are not paid, discharged
or stayed for a period of 60 days; (vii) except as permitted by the Indenture,
any Note Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect or any
Guarantor (or its successors or assigns), or any Person acting on behalf of any
Guarantor (or its successors or assigns), shall deny or disaffirm its
obligations or shall fail to comply with any obligations under its Note
Guarantee; and (viii) certain events of bankruptcy or insolvency with respect
to the Company, Holding or any of their respective Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately; PROVIDED, HOWEVER, that if any
Indebtedness is outstanding pursuant to the Credit Facility, upon a declaration
of acceleration, the principal and interest on the Notes shall be payable upon
the earlier of (1) the day which is five business days after notice of
acceleration is given to the Company and the lender under the Credit Facility
or (2) the date of acceleration of the Indebtedness under the Credit Facility.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company,
Holding or any of their respective Subsidiaries, all outstanding Notes will
become due and payable without further action or notice. Under certain
circumstances, the Holders of at least a majority in aggregate principal amount
of the outstanding Notes may rescind any acceleration with respect to the Notes
and its consequences. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
In the case of any Event of Default occurring on or after April 15, 1999 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding payment of the premium that the
Company would have had to pay if the Company then had elected to redeem the
Notes pursuant to the optional redemption provisions of the Indenture, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the Notes. If an Event of
Default occurs prior to April 15, 1999 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Notes prior to April
15, 1999, then the premium specified in the Indenture shall also become
immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.
The Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, any Note held by a
non-consenting Holder.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor under the Notes, the Note
Guarantees, the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note and the Note Guarantees waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes and the Note Guarantees. Such waiver may not be effective to waive
liabilities under the Federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its and
the Guarantors' obligations discharged with respect to the outstanding Notes
and the Note Guarantees ("Legal Defeasance") except for (i) the rights of
Holders of outstanding Notes to receive payments in respect of the principal
of, and premium, if any, interest and Liquidated Damages, if any, on such Notes
when such payments are due, (ii) the Company's and the Guarantors' obligations
with respect to the Notes concerning issuing temporary Notes, registration of
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in trust,
(iii) the rights, powers, trusts, duties and immunities of the Trustee, and the
Company's and the Guarantors' obligations in connection therewith and (iv) the
Legal Defeasance provisions of the Indenture. In addition, the Company may, at
its option and at any time, elect to have the obligations of the Company and
the Guarantors released with respect to certain covenants that are described in
the Indenture ("Covenant Defeasance") and thereafter any omission to comply
with such obligations shall not constitute a Default or Event of Default with
respect to the Notes. In the event Covenant Defeasance occurs, certain events
(not including non-payment, bankruptcy, receivership, rehabilitation and
insolvency events) described under "- Events of Default and Remedies" will no
longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, and premium, if any, interest and Liquidated Damages,
if any, on the outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, of such principal or installment of
principal of, or premium, if any, interest or Liquidated Damages, if any, on
the outstanding Notes; (ii) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the IRS a ruling or (b) since
the Issuance Date, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for Federal income tax purposes as a result of
such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for Federal income tax purposes as a result of such Covenant Defeasance
and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
an Event of Default resulting from the incurrence of Indebtedness all or a
portion of the proceeds of which will be used to defease the Notes pursuant to
the terms of the Indenture concurrently with such incurrence) or insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the day on which all applicable preference periods
have run; (v) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (vi) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that after the day on which all applicable preference
periods have run, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (vii) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over the other
creditors of the Company or the Guarantors with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or the Guarantors;
and (viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company is not required to transfer or exchange any Note selected for
redemption. Also, the Company is not required to transfer or exchange any Note
for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next succeeding paragraphs, the Indenture or the
Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for
Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of at
least a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder of Notes): (i)
reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Note or alter or waive the provisions with respect to the
redemption of the Notes, (iii) reduce the rate of or change the time for
payment of interest on any Note, (iv) waive a Default or Event of Default in
the payment of principal of, or premium, if any, interest or Liquidated
Damages, if any, on the Notes (except a rescission of acceleration of the Notes
by the Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration), (v) make any Note payable in money other than that stated in the
Notes, (vi) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or premium, if any, interest or Liquidated Damages, if any, on
the Notes, (vii) waive a redemption payment with respect to any Note, (viii)
make any change to the subordination provisions of the Indenture that adversely
affects Holders, (ix) except pursuant to the terms of the Indenture, release
any Guarantor from its obligations under its Note Guarantee, or change any Note
Guarantee in any manner that would adversely affect Holders, or (x) make any
change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of Notes, the
Company and the Trustee may amend or supplement the Indenture or the Notes to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or any Guarantors' obligations to Holders of the
Notes in the case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes
(including providing for additional Note Guarantees pursuant to the covenant
entitled "Additional Guarantees") or that does not adversely affect the legal
rights under the Indenture of any such Holder, to provide for the issuance of
Additional Notes in accordance with the provisions set forth in the Indenture
or to comply with requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee, should
it become a creditor of the Company, the Guarantors or any Affiliate of the
Company or the Guarantors, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue or
resign.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder of Notes, unless such Holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
BOOK-ENTRY; DELIVERY, FORM AND TRANSFER
The Old Notes were offered and sold to qualified institutional buyers in
reliance on Rule 144A ("Rule 144A Notes"). Except as set forth below, Notes
will be issued in registered, global form in minimum denominations of $1,000
and integral multiples of $1,000 in excess thereof.
The Rule 144A Notes were, and the New Notes will be, represented by one or more
Notes in registered, global form without interest coupons (collectively, the
"Rule 144A Global Notes" or the "Global Notes"). The Global Notes will be
deposited upon issuance with the Trustee as custodian for The Depository Trust
Company, in New York, New York, and registered in the name of DTC or its
nominee, in each case for credit to an account of a direct or indirect
participant in DTC as described below.
Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for
Notes in certificated form except in the limited circumstances described below.
See "- Exchange of Book-Entry Notes for Certificated Notes." Except in the
limited circumstances described below, owners of beneficial interests in the
Global Notes will not be entitled to receive physical delivery of Certificated
Notes (as defined herein).
Rule 144A Notes (including beneficial interests in the Rule 144A Global Notes)
are subject to certain restrictions on transfer and bear a restrictive legend.
In addition, transfers of beneficial interests in the Global Notes will be
subject to the applicable rules and procedures of DTC and its direct or
indirect participants, which may change from time to time.
Initially, the Trustee will act as Paying Agent and Registrar. The Notes may
be presented for registration of transfer and exchange at the offices of the
Registrar.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC is provided
solely as a matter of convenience. These operations and procedures are solely
within the control of the settlement system and are subject to changes by it
from time to time. The Company takes no responsibility for these operations
and procedures and urges investors to contact the system or their participants
directly to discuss these matters.
DTC has advised the Company that DTC is a limited-purpose trust company created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers
and dealers (including the Initial Purchaser), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interests in, and transfers of ownership interests in, each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised the Company that, pursuant to procedures established by
it, (i) upon deposit of the Global Notes, DTC will credit the accounts of
Participants with portions of the principal amount of the Global Notes and (ii)
ownership of such interests in the Global Notes will be shown on, and the
transfer of ownership thereof will be effected only through, records maintained
by DTC (with respect to the Participants) or by the Participants and the
Indirect Participants (with respect to other owners of beneficial interests in
the Global Notes).
Investors in the Rule 144A Global Notes may hold their interests therein
directly through DTC, if they are Participants in such system, or indirectly
through organizations which are Participants in such system. All interests in
a Global Note may be subject to the procedures and requirements of DTC. The
laws of some states require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to such persons will be limited
to that extent. Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants and certain banks, the ability of a
person having beneficial interests in a Global Note to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
"HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of, and premium, if any, Liquidated
Damages, if any, and interest on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered holder
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee will treat the persons in whose names the Notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving such
payments and for any and all other purposes whatsoever. Consequently, neither
the Company, the Trustee nor any agent of the Company or the Trustee has or
will have any responsibility or liability for (i) any aspect of DTC's records
or any Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interest in the Global Notes, or for
maintaining, supervising or reviewing any of DTC's records or any Participant's
or Indirect Participant's records relating to the beneficial ownership
interests in the Global Notes or (ii) any other matter relating to the actions
and practices of DTC or any of its Participants or Indirect Participants. DTC
has advised the Company that its current practice, upon receipt of any payment
in respect of securities such as the Notes (including principal and interest),
is to credit the accounts of the relevant Participants with the payment on the
payment date, in amounts proportionate to their respective holdings in the
principal amount of beneficial interest in the relevant security as shown on
the records of DTC unless DTC has reason to believe it will not receive payment
on such payment date. Payments by the Participants and the Indirect
Participants to the beneficial owners of Notes will be governed by standing
instructions and customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the responsibility of
DTC, the Trustee or the Company. Neither the Company nor the Trustee will be
liable for any delay by DTC or any of its Participants in identifying the
beneficial owners of the Notes, and the Company and the Trustee may
conclusively rely on and will be protected in relying on instructions from DTC
or its nominee for all purposes.
Interests in the Global Notes are expected to be eligible to trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will, therefore, settle in immediately available funds, subject in
all cases to the rules and procedures of DTC and its Participants. See "- Same
Day Settlement and Payment."
Transfers between Participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same day funds.
DTC has advised the Company that it will take any action permitted to be taken
by a holder of Notes only at the direction of one or more Participants to whose
account DTC has credited the interests in the Global Notes and only in respect
of such portion of the aggregate principal amount of the Notes as to which such
Participant or Participants has or have given such direction. However, if
there is an Event of Default under the Notes, DTC reserves the right to
exchange the Global Notes for legended Notes in certificated form, and to
distribute such Notes to its Participants.
Neither the Company nor the Trustee nor any of their respective agents will
have any responsibility for the performance by DTC, or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive Notes in registered certificated
form ("Certificated Notes") if (i) DTC (x) notifies the Company that it is
unwilling or unable to continue as depositary for the Global Notes and the
Company thereupon fails to appoint a successor depositary or (y) has ceased to
be a clearing agency registered under the Exchange Act, (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the
issuance of the Certificated Notes or (iii) there shall have occurred and be
continuing a Default or Event of Default with respect to the Notes. In
addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon request but only upon prior written notice given to the
Trustee by or on behalf of DTC in accordance with the Indenture. In all cases,
Certificated Notes delivered in exchange for any Global Note or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with
its customary procedures) and will bear an applicable restrictive legend, if
any, unless the Company determines otherwise in compliance with applicable law.
EXCHANGE OF CERTIFICATED NOTES FOR BOOK-ENTRY NOTES
Notes issued in certificated form may not be exchanged for beneficial interests
in any Global Note unless the transferor first delivers to the Trustee a
written certificate (in the form provided in the Indenture) to the effect that
such transfer will comply with the appropriate transfer restrictions, if any,
applicable to such Notes.
SAME DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Notes represented by the
Global Notes (including principal, premium, if any, interest and Liquidated
Damages, if any) be made by wire transfer of immediately available funds to the
accounts specified by the Global Note holder. With respect to Notes in
certificated form, the Company will make all payments of principal, premium, if
any, interest and Liquidated Damages, if any, by wire transfer of immediately
available funds to the accounts specified by the Holders thereof or, if no such
account is specified, by mailing a check to each such Holder's registered
address. The Company expects that secondary trading in any certificated Notes
will also be settled in immediately available funds.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference is
made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"ACQUIRED DEBT" means, with respect to any specified Person: (i) Indebtedness
of any other Person existing at the time such other Person merged with or into
or became a Subsidiary of such specified Person, including Indebtedness
incurred in connection with, or in contemplation of, such other Person merging
with or into or becoming a Subsidiary of such specified Person and (ii)
Indebtedness encumbering any asset acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control. Neither Chase Bank, The CIT Group/Equity
Investments, Inc., nor their respective Affiliates will be deemed an Affiliate
of the Company or any of its Subsidiaries for purposes of this definition by
reason of its direct or indirect beneficial ownership of 15% or less of the
Common Stock of Holding or by reason of any employee thereof being appointed to
the Board of Directors of Holding.
"BORROWING BASE" means, as of any date, an amount equal to the sum of (a) 85%
of the face amount of all accounts receivable owned by the Company and its
Subsidiaries as of such date that are not more than 90 days past due, and (b)
65% of the book value (calculated on a FIFO basis) of all inventory owned by
the Company and its Subsidiaries as of such date, all calculated on a
consolidated basis and in accordance with GAAP. To the extent that information
is not available as to the amount of accounts receivable or inventory as of a
specific date, the Company may utilize the most recent available information
for purposes of calculating the Borrowing Base.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is to
be made, the amount of the liability in respect of a capital lease that would
at such time be so required to be capitalized on a balance sheet prepared in
accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, including, without
limitation, with respect to partnerships, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having maturities of not more than six months
from the date of acquisition, (iii) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months from the date of
acquisition and overnight bank deposits, in each case with any lender party to
the Credit Facility or with any domestic commercial bank having capital and
surplus in excess of $500 million, (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Corporation and in each case maturing within six months after the date
of acquisition.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (a) an amount equal
to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing Consolidated
Net Income), plus (b) provision for taxes based on income or profits of such
Person for such period, to the extent such provision for taxes was included in
computing Consolidated Net Income, plus (c) Consolidated Interest Expense of
such Person for such period to the extent such expense was deducted in
computing Consolidated Net Income, plus (d) Consolidated Depreciation and
Amortization Expense of such Person for such period to the extent such expense
was deducted in computing Consolidated Net Income, plus (e) other non-cash
charges (including, without limitation, repricing of stock options, to the
extent deducted in computing Consolidated Net Income; but excluding any non-
cash charge that requires an accrual or reserve for cash expenditures in future
periods or which involved a cash expenditure in a prior period), in each case,
on a consolidated basis and determined in accordance with GAAP.
"CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, with respect to any
Person for any period, the total amount of depreciation and amortization
expense (including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) of such
Person for such period on a consolidated basis as determined in accordance with
GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any
period, the sum of (a) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, to the extent such
expense was deducted in computing Consolidated Net Income (including
amortization of original issue discount, non-cash interest payments, the
interest component of capital leases, and net payments (if any) pursuant to
Hedging Obligations), (b) commissions, discounts and other fees and charges
paid or accrued with respect to letters of credit and bankers' acceptance
financing, and (c) interest actually paid by such Person or its Subsidiaries
under a Guarantee of Indebtedness of any other Person.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; PROVIDED,
that (i) the Net Income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid to the referent Person
or a Wholly Owned Subsidiary thereof that is a Guarantor, (ii) the Net Income
of any Person that is a Subsidiary (other than a Wholly Owned Subsidiary) shall
be included only to the extent of the amount of dividends or distributions paid
to the referent Person or a Wholly Owned Subsidiary thereof that is a
Guarantor, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded and (iv) the cumulative effect of a change in accounting
principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any date, the
sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of Preferred Stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such Preferred Stock, less (x) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
tangible assets of a going concern business made within 16 months after the
acquisition of such business) subsequent to April 21, 1994 in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments), and
(z) all unamortized debt discount and expense and unamortized deferred charges
as of such date, all of the foregoing determined in accordance with GAAP.
"CONSOLIDATED STEP-UP DEPRECIATION AND AMORTIZATION" means, with respect to any
Person for any period, the total amount of depreciation related to the write-up
of assets and amortization of such Person for such period on a consolidated
basis as determined in accordance with GAAP.
"CREDIT FACILITY" means the Second Amended and Restated Financing and Security
Agreement dated as of July 2, 1998, by the Company and NationsBank, N.A.,
providing for up to $132.6 million (plus the <pound-sterling>1.5 million UK
Revolver and the <pound-sterling>4.5 million UK Term Loan) of borrowings,
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
"DEFAULT" means any event that is or with the passage of time or the giving of
notice or both would be an Event of Default.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and
(ii) any other Senior Indebtedness (a) permitted to be incurred under the
Indenture the principal amount of which is $15 million or more and (b)
designated in the instrument creating or evidencing such Senior Indebtedness as
"Designated Senior Indebtedness."
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the Holder thereof, in whole or in part, on or prior to July
15, 2004.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its Subsidiaries
(other than under the Credit Facility) in existence on the Issuance Date, until
such amounts are repaid.
"FIXED CHARGES" means, with respect to any Person for any period, the sum of
(a) Consolidated Interest Expense of such Person for such period, whether paid
or accrued, to the extent such expense was deducted in computing Consolidated
Net Income and (b) the product of (i) all cash dividend payments (and non-cash
dividend payments in the form of securities (other than Disqualified Stock) of
an issuer) on any series of Preferred Stock of such Person, times (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined Federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any period,
the ratio of the Consolidated Cash Flow of such Person for such period to the
Fixed Charges of such Person for such period. In the event that the Company or
any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness
(other than revolving credit borrowings) or issues Preferred Stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation
Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, guarantee or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
For purposes of making the computation referred to above, acquisitions,
dispositions and discontinued operations (as determined in accordance with
GAAP) that have been made by the Company or any of its Subsidiaries, including
all mergers and consolidations, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be calculated on a pro forma basis assuming that all such acquisitions,
dispositions, discontinued operations, mergers and consolidations (and the
reduction of any associated fixed charge obligations resulting therefrom) had
occurred on the first day of the four-quarter reference period.
"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issuance Date.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations guaranteed
by, the United States of America for the payment of which guarantee or
obligations the full faith and credit of the United States of America is
pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTORS" means each of (i) Holding, Berry Iowa, Berry Tri-Plas, Berry
Sterling, AeroCon, PackerWare, Berry Design, Venture Holdings, Venture Midwest,
Venture Southeast, NIM Holdings, Norwich, and Knight and (ii) any other Person
that executes a Note Guarantee in accordance with the provisions of the
Indenture, and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing Capital Lease
Obligations or the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of
the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, and also includes, to the extent not
otherwise included, the Guarantee of any Indebtedness of such Person or any
other Person.
"INVESTMENTS" means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the forms of loans (including
Guarantees), advances or capital contributions (excluding commission, travel
and similar advances to officers, directors, consultants and employees made in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"ISSUANCE DATE" means the closing date for the sale and original issuance of
the Notes.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"NET INCOME" means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of Preferred Stock dividends, excluding, however, any gain (but not loss),
together with any related provision for taxes on such gain (but not loss),
realized in connection with any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions), and excluding any
extraordinary gain (but not loss), together with any related provision for
taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the Company or any
of its Subsidiaries in respect of any Asset Sale, net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that are the subject of such Asset
Sale and any reserve for indemnification or adjustment in respect of the sale
price of such asset or assets.
"OBLIGATIONS" means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"PERMITTED INVESTMENTS" means (a) any Investments in the Company or in a Wholly
Owned Subsidiary of the Company and that is engaged in the same or a similar
line of business as the Company and its Subsidiaries were engaged in on the
Issuance Date and (b) any Investments in Cash Equivalents.
"PERMITTED REFINANCING" means Refinancing Indebtedness if (a) the principal
amount of Refinancing Indebtedness does not exceed the principal amount of
Indebtedness so extended, re-financed, renewed, replaced, defeased or refunded
(plus the amount of premiums, accrued interest and reasonable expenses incurred
in connection therewith); (b) the Refinancing Indebtedness has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (c) the Refinancing Indebtedness is subordinated in
right of payment to the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PREFERRED STOCK" means any Equity Interest with preferential right in the
payment of dividends or liquidation or any Disqualified Stock.
"REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange for, or the
proceeds of which are used to extend, refinance, renew, replace, defease or
refund Indebtedness referred to in clauses (a) and (b) of the covenant entitled
"Incurrence of Indebtedness and Issuance of Disqualified Stock."
"RESTRICTED INVESTMENT" means an Investment other than a Permitted Investment.
"SENIOR BANK INDEBTEDNESS" means the Indebtedness outstanding under the Credit
Facility as such agreement may be restated, further amended, supplemented or
otherwise modified or replaced from time to time hereafter, together with any
refunding or replacement of any such Indebtedness.
"SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and (ii) any other
Indebtedness permitted to be incurred by the Company or a Guarantor, as the
case may be, under the terms of the Indenture, unless the instrument under
which such Indebtedness is incurred expressly provides that it is PARI PASSU
with or subordinated in right of payment to the Notes or a Note Guarantee, as
the case may be. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (w) any liability for Federal, state,
local or other taxes owed or owing by the Company or a Guarantor, as the case
may be, (x) any Indebtedness of the Company or a Guarantor, as the case may be,
to Holding or to any of Holding's other Subsidiaries or other Affiliates, (y)
any trade payables or (z) any Indebtedness that is incurred in violation of the
Indenture.
"SUBSIDIARY" means, with respect to any Person, any corporation, association or
other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
"TAX SHARING AGREEMENT" means that certain Tax Sharing Agreement, as in effect
on the closing date of the Offering, between the Company and Holding.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (a) the sum of the products
obtained by multiplying (x) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (y) the number of
years (calculated to the nearest one-twelfth) that will elapse between such
date and the due date of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such Person all
of the outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person and one or more Wholly
Owned Subsidiaries of such Person.
<PAGE>
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary prepared by O'Sullivan Graev & Karabell, LLP,
special counsel to the Company ("Special Counsel"), of certain United States
Federal income tax considerations relating to the Exchange Offer and to the
purchase, ownership and disposition of the Notes but does not purport to be a
complete analysis of all the potential tax considerations relating thereto. In
the opinion of Special Counsel, and, based upon the assumptions and subject to
the qualifications and limitations set forth herein, this summary fairly
presents the material Federal income tax considerations relevant to the
exchange of Old Notes for New Notes pursuant to the Exchange Offer and to the
ownership of the Notes. This summary is based on the Internal Revenue Code of
1986, as amended, existing, temporary and proposed Treasury Regulations, laws,
rulings and decisions now in effect, all of which are subject to change. Any
such changes may be applied retroactively in a manner that could adversely
affect a holder of the Notes. This summary deals only with holders that will
hold Notes as "capital assets" (within the meaning of Section 1221 of the Code)
and that are (i) citizens or residents of the United States, (ii) corporations,
partnerships and other business entities created or organized under the laws of
the United States, (iii) estates the income of which is subject to United
States Federal income taxation regardless of its source and (iv) trusts if a
court within the United States is able to exercise primary supervision over its
administration and one or more United States persons have the authority to
control all of its substantive decisions. This summary does not address tax
considerations applicable to investors that may be subject to special tax
rules, such as banks, tax-exempt organizations, insurance companies, dealers in
securities or currencies, or persons that will hold Notes as a position in a
hedging transaction, "straddle" or "conversion transaction" for tax purposes.
This summary discusses the principal Federal income tax considerations
applicable to the Exchange Offer, initial purchasers of the Notes who purchase
the Notes at a premium and subsequent purchasers of the Notes. This summary
does not consider the effect of any applicable foreign, state, local or other
tax laws. No ruling from the Internal Revenue Service (the "IRS") will be
sought with respect to the Notes, and the IRS could take a contrary view with
respect to the matters described below.
THE FOLLOWING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS GENERAL
AND, AS DISCUSSED, DOES NOT COVER THE TAX EFFECTS TO ALL INVESTORS IN ALL
SITUATIONS. ACCORDINGLY, INVESTORS CONSIDERING THE EXCHANGE OFFER SHOULD
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED
STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS
WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR
FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
EXCHANGE OF OLD NOTES FOR NEW NOTES
The exchange of Old Notes for New Notes pursuant to the Exchange Offer will not
be considered a taxable exchange for Federal income tax purposes because the
New Notes will not constitute a material modification of the terms of the Old
Notes. Accordingly, such exchange should have no Federal income tax
consequences to holders of Old Notes, and a holder's basis and holding period
in a New Note will be the same as such holder's adjusted tax basis in the Old
Note exchanged therefor.
PAYMENT OF INTEREST
Interest on a Note generally will be includable in the income of a holder as
ordinary income at the time such interest is received or accrued, in accordance
with such holder's method of accounting for United States Federal income tax
purposes.
NOTES PURCHASED AT A PREMIUM
In general, if a holder purchases a Note for an amount in excess of its stated
redemption price at maturity, the holder may elect to treat such excess as
"amortizable bond premium," in which case the amount required to be included in
the holder's income each year with respect to interest on the Note will be
reduced by the amount of amortizable bond premium allocable (based on the
Note's yield to maturity) to such year. The amount of amortizable bond premium
allocable to a holder's taxable year may be determined, in part, by the
Company's right to redeem the Notes. Holders should consult their own tax
advisors with respect to the amortization of bond premium. Any such election
would apply to all bonds (other than bonds the interest on which is excludable
from gross income) held by the holder at the beginning of the first taxable
year to which the election applies or which thereafter are acquired by the
holder, and such election is irrevocable without the consent of the IRS.
OPTIONAL REDEMPTION OR REPAYMENT
The Notes will not have original issue discount ("OID") because they were
issued at a premium. For purposes of determining OID, Treasury Regulations
provide that the holder's right to require redemption of the Notes upon the
occurrence of a Change of Control will not be taken into account unless, based
on all the facts and circumstances as of the issue date, it is significantly
more likely than not that both a Change of Control giving rise to the right to
require repurchase will occur and such right will be exercised. In the event
of a Change of Control, each holder of Notes will have the right to require the
Company to repurchase all or a part of such holder's Notes as described in
"Description of Notes - Repurchase at the Option of holders - Change of
Control." Under the Treasury Regulations discussed above, the Company believes
that the holder's right to require repurchase should not be taken into account
for purposes of calculating OID because a Change of Control and exercise of
such rights are not significantly more likely than not to occur. Treasury
Regulations also provide that the Company will be deemed to exercise its option
to redeem the Notes in a manner that minimizes the yield on the Notes. The
Company may redeem the Notes in certain circumstances, pursuant to the terms of
the Notes. See "Description of the Notes - Optional Redemption." The Company
believes that, although its option to redeem could be deemed exercised for the
purposes of the OID regulations at certain dates, any such deemed exercise
would not result in OID because the original cost of the Notes would exceed any
such deemed redemption price. Therefore, there is no OID.
MARKET DISCOUNT ON RESALE OF NOTES
A holder of a Note should be aware that the purchase or resale of a Note may be
affected by the "market discount" provisions of the Code. The market discount
rules generally provide that if a holder of a Note purchases the Note at a
market discount (i.e., a discount other than at original issue), any gain
recognized upon the disposition of the Note by the holder will be taxable as
ordinary interest income, rather than as capital gain, to the extent such gain
does not exceed the accrued market discount on such Note at the time of such
disposition. "Market discount" generally means the excess, if any, of a Note's
stated redemption price at maturity over the price paid by the holder therefor,
unless a DE MINIMIS exception applies. A holder who acquires a Note at a
market discount also may be required to defer the deduction of a portion of the
amount of interest that the holder paid or accrued during the taxable year on
indebtedness incurred or maintained to purchase or carry such Note, if any.
Any principal payment on a Note acquired by a holder at a market discount will
be included in gross income as ordinary income (generally, as interest income)
to the extent that it does not exceed the accrued market discount at the time
of such payment. The amount of the accrued market discount for purposes of
determining the tax treatment of subsequent payments on, or dispositions of, a
Note is to be reduced by the amounts so treated as ordinary income.
A holder of a Note acquired at a market discount may elect to include market
discount in gross income, for Federal income tax purposes, as such market
discount accrues, either on a straight-line basis or on a constant interest
rate basis. This current inclusion election, once made, applies to all market
discount obligations acquired on or after the first day of the first taxable
year to which the election applies, and may not be revoked without the consent
of the IRS. If a holder of a Note makes such an election, the foregoing rules
regarding the recognition of ordinary interest income on sales and other
dispositions and the receipt of principal payments with respect to such Note,
and regarding the deferral of interest deductions on indebtedness incurred or
maintained to purchase or carry such Note, will not apply.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Upon the sale, exchange or redemption of a Note, a holder generally will
recognize capital gain or loss equal to the difference between (i) the amount
of cash proceeds and the fair market value of any property received on the
sale, exchange or redemption (except to the extent such amount is attributable
to either Liquidated Damages, discussed below, or accrued interest income not
previously included in income which is taxable as ordinary income) and (ii)
such holder's adjusted tax basis in the Note. A holder's adjusted tax basis in
a Note generally will equal the cost of the Note to such holder, adjusted for
amortizable bond premium, if any, if the holder made an election to amortize
such premium. Such capital gain or loss will be long-term capital gain or loss
if the holder's holding period in the Note is more than one year at the time of
sale, exchange or redemption.
LIQUIDATED DAMAGES
The Company believes that Liquidated Damages, if any, described above under
"The Exchange Offer - Purpose and Effect of the Exchange Offer" will be taxable
to the holder as ordinary income in accordance with the holder's method of
accounting for Federal income tax purposes. The IRS may take a different
position, however, which could affect the timing of a holder's income with
respect to Liquidated Damages, if any.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on a Note and payments of the proceeds
of the sale of a Note to certain noncorporate holders, and a 31% backup
withholding tax may apply to such payments if the holder (i) fails to furnish
or certify its correct taxpayer identification number to the payer in the
manner required, (ii) is notified by the IRS that it has failed to report
payments of interest and dividends properly or (iii) under certain
circumstances, fails to certify that it has not been notified by the IRS that
it is subject to backup withholding for failure to report interest and dividend
payments. Any amounts withheld under the backup withholding rules from a
payment to a holder will be allowed as a credit against such holder's United
States Federal income tax and may entitle the holder to a refund, provided that
the required minimum information is furnished to the IRS.
<PAGE>
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the Commission set forth in no-action
letters issued to third parties, the Company believes that the New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by any holder thereof (other than any
such holder that is an "affiliate" of the Company within the meaning of Rule
405 promulgated under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Notes are acquired in the ordinary course of such holder's
business, such holder has no arrangement with any person to participate in the
distribution of such New Notes and neither such holder nor any such other
person is engaging in or intends to engage in a distribution of such New Notes.
Accordingly, any holder who is an affiliate of the Company or any holder using
the Exchange Offer to participate in a distribution of the New Notes will not
be able to rely on such interpretations by the staff to the Commission and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a resale transaction. Notwithstanding the
foregoing, each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with any resale of New Notes received in exchange
for Old Notes where such Old Notes were acquired as a result of market-making
activities or other trading activities (other than Old Notes acquired directly
from the Company). The Company and the Guarantors have agreed that, for a
period of one year from the date of this Prospectus, they will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until April , 1999 (90
days from the date of this Prospectus), all dealers effecting transactions in
the New Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of New Notes by broker-
dealers. New Notes received by broker-dealers for their own account pursuant
to the Exchange Offer may be sold from time to time in one or more transactions
in the over-the-counter market, in negotiated transactions, through the writing
of options on the New Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such broker-
dealer and/or the purchasers of any such New Notes. Any broker-dealer that
resells New Notes that were received by it for its own account pursuant to the
Exchange Offer and any broker-dealer that participates in a distribution of
such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver, and by delivering, a
prospectus as required, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of one year from the date of this Prospectus, the Company will
send a reasonable number of additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company will pay all the
expenses incident to the Exchange Offer (including the expenses of one counsel
for the Holders) other than commissions or concessions of any broker-dealers.
The Company and the Guarantors have agreed to indemnify the Initial Purchaser
and any broker-dealers participating in the Exchange Offer against certain
liabilities, including liabilities under the Securities Act.
This Prospectus has been prepared for use in connection with the Exchange Offer
and may be used by DLJ in connection with offers and sales related to market-
making transactions in the Notes. DLJ may act as principal or agent in such
transactions. Such sales will be made at prices related to prevailing market
prices at the time of sale. The Company will not receive any of the proceeds
of such sales. DLJ has no obligation to make a market in the Notes and may
discontinue its market-making activities at any time without notice, at its
sole discretion. The Company has agreed to indemnify DLJ against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments which DLJ might be required to make in respect thereof.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the Company by
O'Sullivan Graev & Karabell, LLP, New York, New York. Lawrence G. Graev, a
director of the Company, is the Chairman of O'Sullivan Graev & Karabell, LLP.
See "Certain Transactions - Legal Services."
EXPERTS
The consolidated financial statements and schedules of Holding as of December
28, 1996 and December 27, 1997, and for each of the three fiscal years in the
period ended December 27, 1997 included in this Prospectus and the
Registration Statement of which this Prospectus forms a part, have been audited
by Ernst & Young LLP, independent auditors, as stated in their reports
appearing elsewhere herein and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Venture Packaging, Inc. for the years
ended September 30, 1996 and 1995, included in this Prospectus and the
Registration Statement of which this Prospectus forms a part, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report
appearing elsewhere herein and are included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Norwich Injection Moulders Limited for
the years ended October 31, 1997 and 1996, included in this Prospectus and the
Registration Statement of which this Prospectus forms a part, have been audited
by Lovewell Blake, independent auditors, as stated in their report appearing
elsewhere herein and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
INDEX TO FINANCIAL STATEMENTS
PAGE
BPC HOLDING AUDITED FINANCIAL STATEMENTS
Report of Independent Auditors F-2
Consolidated Balance Sheets at December 27, 1997 and December 28, 1996 F-3
Consolidated Statements of Operations for the three years in the period ended
December 27, 1997 F-5
Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the
three years in the period ended December 27, 1997 F-6
Consolidated Statements of Cash Flows for the three years in the period ended
December 27, 1997 F-7
Notes to Consolidated Financial Statements F-8
BPC HOLDING UNAUDITED INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet at September 26, 1998 F-19
Condensed Consolidated Statements of Operations for the Thirteen and Thirty-
Nine Weeks ended September 26, 1998 and September 27, 1997 F-21
Condensed Consolidated Statements of Cash Flows of the Thirteen and Thirty-Nine
Weeks ended September 26, 1998 and September 27, 1997 F-22
Notes to Condensed Consolidated Financial Statements F-23
ADDITIONAL AUDITED FINANCIAL STATEMENTS
Audited Financial Statements of Norwich Injection Moulders Limited for the
years ended October 31, 1997 and 1996 F-27
Audited Consolidated Financial Statements of Venture Packaging, Inc. for the
years ended September 30, 1996 and 1995 F-46
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Stockholders and Board of Directors
BPC Holding Corporation
We have audited the accompanying consolidated balance sheets of BPC Holding
Corporation and subsidiaries as of December 27, 1997 and December 28, 1996, and
the related consolidated statements of operations, changes in stockholders'
equity (deficit) and cash flows for each of the three years in the period ended
December 27, 1997. These financial statements are the responsibility of
Holding's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of BPC
Holding Corporation and subsidiaries at December 27, 1997 and December 28,
1996, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 27, 1997, in conformity
with generally accepted accounting principles.
/S/ERNST & YOUNG LLP
Indianapolis, Indiana
February 13, 1998
F-2
<PAGE>
BPC HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
DECEMBER 27, DECEMBER 28,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,688 $ 10,192
Accounts receivable (less allowance for doubtful
accounts of $1,038 at December 27, 1997 and $618 at 28,385 17,642
December 28, 1996
Inventories:
Finished goods 22,029 9,100
Raw materials and supplies 7,429 4,507
------------ ------------
29,458 13,607
Prepaid expenses and other receivables 1,834 957
Income taxes recoverable 1,167 436
------------ ------------
Total current assets 63,532 42,834
Assets held in trust 19,738 30,188
Property and equipment:
Land 5,811 4,598
Buildings and improvements 33,891 18,290
Machinery, equipment and tooling 122,991 79,043
Automobiles and trucks 1,241 639
Construction in progress 10,357 3,476
------------ ------------
174,291 106,046
Less accumulated depreciation 66,073 50,382
------------ ------------
108,218 55,664
Intangible assets:
Deferred financing and origination fees, net 10,849 9,912
Covenants not to compete, net 3,940 40
Excess of cost over net assets acquired, net 30,303 4,273
Deferred acquisition costs 13 527
------------ ------------
45,105 14,752
Deferred income taxes 2,049 2,003
Other 802 357
------------ ------------
Total assets $239,444 $145,798
============ ============
F-3
</TABLE>
<PAGE>
BPC HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 27, DECEMBER 28,
1997 1996
------------ ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 16,732 $ 12,877
Accrued expenses and other liabilities 7,162 4,676
Accrued interest 3,612 3,286
Employee compensation and payroll taxes 7,489 5,230
Income taxes 55 117
Current portion of long-term debt 7,619 738
------------ ------------
Total current liabilities 42,669 26,924
Long-term debt, less current portion 298,716 215,308
Accrued dividends on preferred stock 3,674 1,116
Other liabilities 3,360 -
------------ ------------
348,419 243,348
Stockholders' equity (deficit):
Class A Preferred Stock; 800,000 shares authorized;
600,000 shares issued and outstanding (net of
discount of $3,062 at December 27, 1997 and $3,355 11,509 11,216
at December 28, 1996)
Class B Preferred Stock; 200,000 shares authorized, 5,000 -
issued and outstanding Class A Common Stock;
$.01 par value:
------------ ------------
Voting; 500,000 shares authorized; 91,000
shares issued and outstanding 1 1
Nonvoting; 500,000 shares authorized; 259,000
shares issued and outstanding 3 3
Class B Common Stock; $.01 par value:
Voting; 500,000 shares authorized; 145,001 shares
issued and outstanding 1 1
Nonvoting; 500,000 shares authorized; 57,788
shares issued and outstanding 1 1
Class C Common Stock; $.01 par value:
Nonvoting; 500,000 shares authorized; 16,981
shares issued and outstanding - -
Treasury stock: 239 shares (22) (22)
Additional paid-in capital 49,374 51,681
Warrants 3,511 3,511
Retained earnings (deficit) (178,353) (163,942)
------------ ------------
Total stockholders' equity (deficit) (108,975) (97,550)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 239,444 $ 145,798
============ ============
F-4
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
BPC HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------
DECEMBER 27, DECEMBER 28, DECEMBER 30,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Net sales $226,953 $151,058 $140,681
Cost of goods sold 180,249 110,110 102,484
Gross margin 46,704 40,948 38,197
Operating expenses:
Selling 11,320 6,950 5,617
General and administrative 11,505 13,769 9,500
Research and development 1,310 858 718
Amortization of intangibles 2,226 524 968
Other expense 4,144 1,578 867
------------ ------------ ------------
Operating income 16,199 17,269 20,527
Other expenses:
Loss on disposal of property and equipment 226 302 127
------------ ------------ ------------
Income before interest and taxes 15,973 16,967 20,400
Interest:
Expense (32,237) (21,364) (14,031)
Income 1,991 1,289 642
------------ ------------ ------------
Income (loss) before income taxes (14,273) (3,108) 7,011
Income taxes 138 239 678
------------ ------------ ------------
Net income (loss) (14,411) (3,347) 6,333
------------ ------------ ------------
Preferred stock dividends (2,558) (1,116) -
------------ ------------ ------------
Net income (loss) attributable to common shareholders $ (16,969) $ (4,463) $ 6,333
============ ============ ============
F-5
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
BPC HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED
STOCK
----------------- -------------- ADDITIONAL DEFERRED RETAINED
CLASS CLASS CLASS CLASS CLASS TREASURY PAID-IN COST- EARNINGS
A B C A B STOCK CAPITAL WARRANTS RESTRICTED (DEFICIT) TOTAL
----- ----- ----- ------- ------ ------- ---------- -------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995(1) $ - $ - $ - $ - $ - $ (58) $ 871 $ 4,124 $ (22) $(43,753) $(38,838)
Net income - - - - - - - - - 6,333 6,333
Amortization of deferred
cost-restricted stock - - - - - - - - 22 - 22
Market value adjustment
- warrants - - - - - - 90 (90) - - -
Purchase vested options
from management - - - - - - - (1) - - (1)
----- ----- ----- ------- ----- -------- ---------- -------- ----------- ---------- ----------
Balance at December 30, 1995(1) - - - - - (58) 960 4,034 - (37,420) (32,484)
Net loss - - - - - - - - - (3,347) (3,347)
Market value adjustment
- warrants - - - - - - (1,145) 9,399 - (8,254) -
Exercise of stock options - - - - - - 1,130 - - - 1,130
Distribution on sale of
equity interests - - - - - 58 (1,424) (13,433) - (114,921) (129,720)
Proceeds from newly issued
equity 4 2 - 14,571 - - 52,797 - - - 67,374
Payment of deferred
compensation - - - - - - 479 - - - 479
Issuance of private warrants - - - (3,511) - - - 3,511 - - -
Accrued dividends on preferred
stock - - - - - - (1,116) - - - (1,116)
Amortization of preferred
stock discount - - - 156 - - - - - - 156
Purchase treasury stock
from management - - - - - (22) - - - - (22)
----- ----- ----- ------- ------ ------- ---------- -------- ----------- ---------- ----------
Balance at December 28, 1996 4 2 - 11,216 - (22) 51,681 3,511 - (163,942) (97,550)
Net loss - - - - - - - - - (14,411) (14,411)
Sale of stock to management - - - - - - 325 - - - 325
Issuance of preferred stock - - - - 5,000 - - - - - 5,000
Accrued dividends on preferred
stock - - - - - - (2,558) - - - (2,558)
Amortization of preferred
stock discount - - - 293 - - (74) - - - 219
----- ----- ----- ------- ------ ------- ---------- -------- ----------- ---------- ----------
Balance at December 27, 1997 $4 $2 $- $11,500 $5,000 $(22) $49,374 - - $(178,353) $(108,975)
===== ===== ===== ======= ====== ======= ========== ======== =========== ========== ==========
</TABLE>
____________________
(1) Old Class A and Class B Common Stock was redeemed in connection with the
1996 Transaction (see Note 9).
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-6
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------------
DECEMBER 27, DECEMBER 28, DECEMBER 30,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (14,411) $ (3,347) $ 6,333
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 16,800 10,807 8,568
Non-cash interest expense 2,005 1,212 950
Amortization 2,226 524 968
Interest funded by assets held in trust 11,255 5,412 -
Non-cash compensation - 358 (215)
Write-off of deferred acquisition costs 515 - 390
Loss on sale of property and equipment 226 302 127
Deferred income taxes - 53 (964)
Changes in operating assets and
liabilities:
Accounts receivable, net (2,290) (1,716) (1,989)
Inventories 2,767 (1,710) 926
Prepaid expenses and other (137) 520 (964)
receivables
Other assets (225) (5) (14)
Accounts payable and accrued expenses (4,516) 1,899 (1,000)
Income taxes payable (61) 117 (147)
------------ ------------ ------------
Net cash provided by operating activities 14,154 14,426 12,969
INVESTING ACTIVITIES
Additions to property and equipment (16,774) (13,581) (11,247)
Proceeds from disposal of property and equipment 1,078 94 20
Acquisitions of businesses (86,406) (1,152) (14,158)
------------ ------------ ------------
Net cash used for investing activities (102,102) (14,639) (25,385)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 85,703 105,000 -
Payments on long-term borrowings (2,584) (500) (500)
Payments on capital lease (237) (217) (198)
Reclassification of cash held for acquisition - - 12,000
Exercise of management stock options - 1,130 -
Proceeds from issuance of common stock 325 52,797 -
Proceeds from issuance of preferred stock
and warrants - - 14,571
Rollover investments and share repurchases - (125,219) -
Assets held in trust - (35,600) -
Net payments to public warrant holders - (4,502) -
Debt issuance costs (2,763) (5,090) (178)
------------ ------------ ------------
Net cash provided by financing activities 80,444 2,370 11,124
------------ ------------ ------------
Net increase(decrease)in cash and cash equivalents (7,504) 2,157 (1,292)
Cash and cash equivalents at beginning of year 10,192 8,035 9,327
------------ ------------ ------------
Cash and cash equivalents at end of year $ 2,688 $ 10,192 $ 8,035
============ ============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, EXCEPT AS OTHERWISE NOTED)
NOTE 1.ORGANIZATION
BPC Holding Corporation ("Holding"), through its subsidiaries Berry Plastics
Corporation ("Berry" or the "Company"), Berry Iowa Corporation ("Berry Iowa"),
Berry Sterling Corporation ("Berry Sterling"), Berry Tri-Plas Corporation
("Berry Tri-Plas"), Berry Plastics Design Corporation ("Berry Design"),
PackerWare Corporation ("PackerWare"), and Venture Packaging, Inc. ("Venture
Packaging") and its subsidiaries Venture Packaging Midwest, Inc. and Venture
Packaging Southeast, Inc., manufactures and markets plastic packaging products
through its facilities located in Evansville, Indiana; Henderson, Nevada; Iowa
Falls, Iowa; Charlotte, North Carolina; York, Pennsylvania; Suffolk, Virginia;
Anderson, South Carolina; Monroeville, Ohio; and Lawrence, Kansas.
On September 16, 1996, Berry announced the consolidation of its Winchester,
Virginia facility with other Company locations, including Charlotte, North
Carolina; Evansville, Indiana; and Iowa Falls, Iowa. In conjunction with the
PackerWare acquisition in January 1997 (see Note 3), the Company also acquired
a manufacturing facility in Reno, Nevada. This facility was closed in 1997,
and its operations were consolidated into the Henderson, Nevada facility.
Holding's fiscal year is a 52/53 week period ending generally on the Saturday
closest to December 31. All references herein to "1997," "1996" and "1995"
relate to the fiscal years ended December 27, 1997, December 28, 1996, and
December 30, 1995, respectively.
NOTE 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION AND BUSINESS
The consolidated financial statements include the accounts of Holding and its
subsidiaries all of which are wholly owned. Intercompany accounts and
transactions have been eliminated in consolidation. Holding, through its
wholly owned subsidiaries, operates in one industry segment. The Company is a
domestic manufacturer and marketer of plastic packaging, with sales
concentrated in four product groups within this market: aerosol overcaps,
rigid open-top containers, plastic drink cups, and housewares/lawn and garden.
The Company's customers are located principally throughout the United States,
without significant concentration in any one region or any one customer. The
Company performs periodic credit evaluations of its customers' financial
condition and generally does not require collateral.
Purchases of various densities of plastic resin used in the manufacture of the
Company's products aggregated approximately $68 million in 1997 (excluding
specialty resins). Dow Chemical Corporation is the principal supplier
(approximately 56%) of the Company's total resin material requirements. The
Company also uses other suppliers such as Union Carbide, Chevron, Phillips and
Equistar (formerly Lyondell and Millennium) to meet its resin requirements.
The Company does not anticipate any material difficulty in obtaining an
uninterrupted supply of raw materials at competitive prices in the near future.
However, should a significant shortage of the supply of resin occur, changes in
both the price and availability of the principal raw material used in the
manufacture of the Company's products could occur and result in financial
disruption to the Company.
The Company is subject to existing and potential federal, state, local and
foreign legislation designed to reduce solid waste in landfills. While the
principal resins used by the Company are recyclable and, therefore, reduce the
Company's exposure to legislation promulgated to date, there can be no
assurance that future legislation or regulatory initiatives would not have a
material adverse effect on the Company. Legislation, if promulgated, requiring
plastics to be degradable in landfills or to have minimum levels of recycled
content would have a significant impact on the Company's business as would
legislation providing for disposal fees or limiting the use of plastic
products.
CASH AND CASH EQUIVALENTS
All highly liquid investments with a maturity of three months or less at the
date of purchase are considered to be cash equivalents.
F-8
<PAGE>
BPC HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
INVENTORIES
Inventories are valued at the lower of cost (first in, first out method) or
market.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed primarily
by the straight-line method over the estimated useful lives of the assets
ranging from three to 25 years.
INTANGIBLE ASSETS
Origination fees relating to the 1994 Notes and 1996 Notes and deferred
financing fees are being amortized using the straight-line method over the
lives of the respective debt agreements.
The costs in excess of net assets acquired represent the excess purchase price
over the fair value of the net assets acquired in the original acquisition of
Berry Plastics and subsequent acquisitions. These costs are being amortized
over a range of 15 to 20 years.
Covenants not to compete relating to agreements made with certain selling
shareholders of acquired companies are being amortized over the respective life
of the agreement.
Holding periodically evaluates the value of intangible assets to determine if
an impairment has occurred. This evaluation is based on various analyses
including reviewing anticipated cash flows.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain amounts on the 1996 and 1995 financial statements have been
reclassified to conform with the 1997 presentation.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, REPORTING COMPREHENSIVE INCOME, and No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION. The Statements will affect the
disclosure requirement for financial statements beginning in 1998. The Company
expects that the new reporting requirements will have no material effect on its
financial position or results of operations.
NOTE 3.ACQUISITIONS
On March 10, 1995, the Company acquired through its newly formed subsidiary,
Berry Sterling Corporation, substantially all of the assets and assumed certain
liabilities of Sterling Products, Inc. for a purchase price of $7.3 million
(the "Sterling Acquisition"). The operations of Berry Sterling Corporation are
included in the Company's operations since the acquisition date using the
purchase method of accounting.
On December 21, 1995, the Company acquired substantially all of the assets and
assumed certain liabilities of Tri-Plas, Inc. through its subsidiary, Berry
Tri-Plas Corporation (formerly Berry-CPI Corporation), for $6.6 million (the
"Tri-Plas Acquisition"). The operations of Berry Tri-Plas are included in the
Company's operations since the acquisition date using the purchase method of
accounting.
F-9
<PAGE>
On January 17, 1997, the Company acquired certain assets and assumed certain
liabilities of Container Industries, Inc. ("Container Industries") of Pacoima,
California for $2.9 million. The purchase was funded out of operating funds.
The operations of Container Industries are included in the Company's operations
since the acquisition date using the purchase method of accounting.
On January 21, 1997, the Company acquired the outstanding stock of PackerWare
Corporation, a Kansas corporation, for aggregate consideration of approximately
$28.1 million and merged PackerWare with a newly formed, wholly owned
subsidiary of the Company (with PackerWare being the surviving corporation).
The purchase was primarily financed through the Credit Facility (see Note 5).
The operations of PackerWare are included in the Company's operations since the
acquisition date using the purchase method of accounting.
On May 13, 1997, Berry Design, a newly formed, wholly owned subsidiary of the
Company, acquired substantially all of the assets and assumed certain
liabilities of Virginia Design Packaging Corp. ("Virginia Design") for
approximately $11.1 million. The purchase was financed through the Credit
Facility (see Note 5). The operations of Berry Design are included in the
Company's operations since the acquisition date using the purchase method of
accounting.
On August 29, 1997, the Company acquired the outstanding common stock of
Venture Packaging for aggregate consideration of $43.7 million and merged
Venture Packaging with a newly formed subsidiary of the Company (with Venture
Packaging being the surviving corporation). The purchase was primarily
financed through the Credit Facility (see Note 5). Additionally, preferred
stock and warrants were issued to certain selling shareholders of Venture
Packaging (see Note 9). The operations of Venture Packaging are included in
the Company's operations since the acquisition date using the purchase method
of accounting.
The pro forma results listed below are unaudited and reflect purchase
accounting adjustments assuming the Sterling Acquisition and the Tri-Plas
Acquisition occurred on January 1, 1995; and the Container Industries,
PackerWare, Virginia Design, and Venture acquisitions occurred on December 31,
1995.
<TABLE>
<CAPTION>
Year Ended
<S> <C> <C> <C>
DECEMBER 27, 1997 December 28, 1996 December 30, 1995
Net sales $ 261,531 $ 257,098 $ 157,263
Income (loss) before income taxes (17,699) (9,932) 4,274
Net income (loss) (17,837) (10,171) 3,859
</TABLE>
The pro forma financial information is presented for informational purposes
only and is not necessarily indicative of the operating results that would have
occurred had the acquisitions been consummated at the above dates, nor are they
necessarily indicative of future operating results. Further, the information
gathered on the acquired companies is based upon unaudited internal financial
information and reflects only pro forma adjustments for additional interest
expense and amortization of the excess of the cost over the underlying net
assets acquired, net of the applicable income tax effect.
NOTE 4.INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 27, December 28,
<S> <C> <C>
1997 1996
Deferred financing and origination fees $ 14,578 $ 12,593
Covenants not to compete 4,598 100
Excess of cost over net assets acquired 32,464 5,029
Deferred acquisition costs 13 527
Accumulated amortization (6,548) (3,497)
------ -------
$ 45,105 $ 14,752
====== =======
</TABLE>
Excess of cost over net assets acquired increased due to the acquisitions of
PackerWare, Container Industries, Virginia Design, and Venture Packaging to the
extent the purchase price exceeded the fair value of the net assets acquired.
F-10
<PAGE>
The increase in covenants not to compete represents agreements entered into
with certain selling shareholders of the acquired companies in 1997.
NOTE 5.LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 27, December 28,
1997 1996
<S> <C> <C> <C> <C>
Holding 12.50% Senior Secured Notes $105,000 $105,000
Berry 12.25% Senior Subordinated Notes 100,000 100,000
Term loans 58,300 -
Revolving line of credit 25,654 -
Nevada Industrial Revenue Bonds 5,000 5,500
Iowa Industrial Revenue Bonds 5,400 5,400
South Carolina Industrial Development Bonds 6,985 -
Capital lease obligation payable through December 547 785
1999
Debt discount (551) (639)
-------- -------
306,335 216,046
Less current portion of long-term debt 7,619 738
-------- -------
$298,716 $215,308
======== =======
</TABLE>
HOLDING 12.50% SENIOR SECURED NOTES
On June 18, 1996, Holding, as part of a recapitalization (see Note 9), issued
12.50% Senior Secured Notes due 2006 (the "1996 Offering") for net proceeds,
after expenses, of approximately $100.2 million (or $64.6 million after
deducting the amount of such net proceeds used to purchase marketable
securities available for payment of interest on the notes). These notes were
exchanged in October 1996 for the 12.50% Series B Senior Secured Notes due 2006
(the "1996 Notes"). Interest is payable semi-annually on June 15 and December
15 of each year. In addition, from December 15, 1999 until June 15, 2001,
Holding may, at its option, pay interest, at an increased rate of 0.75% per
annum, in additional 1996 Notes valued at 100% of the principal amount thereof.
In connection with the 1996 Notes, $35.6 million was placed in escrow, which
has been invested in U.S. government securities, to pay three years' interest
on the notes. Pending disbursement, the trustee will have a first priority
lien on the escrow account for the benefit of the holders of the 1996 Notes.
Funds may be disbursed from the escrow account only to pay interest on the 1996
Notes and, upon certain repurchases or redemptions of the notes, to pay
principal of and premium, if any, thereon. The balance in the escrow account
as of December 27, 1997 is $18.9 million.
The 1996 Notes rank senior in right of payment to all existing and future
subordinated indebtedness of Holding, including Holding's subordinated
guarantee of the 1994 Notes (as defined hereinafter) and PARI PASSU in right of
payment with all senior indebtedness of Holding. The 1996 Notes are
effectively subordinated to all existing and future senior indebtedness of
Berry, including borrowings under the Credit Facility, the Nevada and Iowa
Industrial Revenue Bonds, and the South Carolina Industrial Development Bonds.
BERRY 12.25% SENIOR SUBORDINATED NOTES
On April 21, 1994, Berry completed an offering of 100,000 units consisting of
$100.0 million aggregate principal amount of 12.25% Berry Plastics Corporation
Senior Subordinated Notes, due 2004 (the "1994 Notes") and 100,000 warrants to
purchase 1.13237 shares of Class A Common Stock, $.00005 par value
(collectively the "1994 Transaction"), of Holding. The 1994 Notes mature on
April 15, 2004 and interest is payable semi-annually on October 15 and April 15
of each year and commenced on October 15, 1994. The 1994 Notes are
unconditionally guaranteed on a senior subordinated basis by Holding and all of
Berry's subsidiaries, and there are no nonguarantor subsidiaries. Separate
financial statements of the guarantors are not presented as management does not
believe them to be material to investors. The net proceeds to Berry from the
sale of the notes, after expenses, were $93.0 million.
F-11
<PAGE>
Berry is not required to make mandatory redemption or sinking fund payments
with respect to the 1994 Notes. Subsequent to April 15, 1999, the 1994 Notes
may be redeemed at the option of Berry, in whole or in part, at redemption
prices ranging from 106.125% in 1999 to 100% in 2002 and thereafter. Upon a
change in control, as defined in the indenture entered into in connection with
the 1994 Transaction (the "1994 Indenture"), each holder of notes will have the
right to require Berry to repurchase all or any part of such holder's notes at
a repurchase price in cash equal to 101% of the aggregate principal amount
thereof plus accrued interest.
The 1994 Notes rank PARI PASSU with or senior in right of payment to all
existing and future subordinated indebtedness of Berry. The notes rank junior
in right of payment to all existing and future senior indebtedness of Berry,
including borrowings under the Credit Facility, the Nevada and Iowa Industrial
Revenue Bonds, and the South Carolina Industrial Development Bonds.
The 1994 Indenture contains certain covenants which, among other things, limit
Berry and its subsidiaries' ability to incur debt, merge or consolidate, sell,
lease or transfer assets, make dividend payments and engage in transactions
with affiliates.
CREDIT FACILITY
Concurrent with the PackerWare acquisition, the Company entered into a
financing and security agreement (the "Security Agreement") with NationsBank,
N.A. for a senior secured line of credit in an aggregate principal amount of
$60.0 million (the "Credit Facility"). As a result of the acquisition of
assets of Virginia Design and the acquisition of Venture Packaging, the Credit
Facility was amended and increased to $127.2 million. The indebtedness under
the Credit Facility is guaranteed by Holding and the Company's subsidiaries.
The Credit Facility replaced the facility previously provided by Fleet Capital
Corporation.
The Credit Facility provides the Company with a $50 million revolving line of
credit, subject to a borrowing base formula, a $58.3 million term loan facility
and a $18.9 million standby letter of credit facility to support the Company's
and its subsidiaries' obligations under the Nevada and Iowa Industrial Revenue
Bonds and the South Carolina Industrial Development Bonds. The Company
borrowed all amounts available under the term loan facility to finance the
PackerWare, Virginia Design and Venture Packaging acquisitions. At December
27, 1997, the Company had unused borrowing capacity under the Credit Facility's
borrowing base with respect to the revolving line of credit of approximately
$12.5 million.
The Credit Facility matures on January 21, 2002 unless previously terminated by
the Company or by the lenders upon an Event of Default as defined in the
Security Agreement. The term loan facility requires periodic quarterly
payments, varying in amount, beginning in 1998 through the maturity of the
facility. Interest on borrowings on the Credit Facility will be based on the
lender's base rate plus .5% or LIBOR plus 2.0%, at the Company's option.
The Credit Facility contains various covenants which include, among other
things: (i) maintenance of certain financial ratios and compliance with certain
financial tests and limitations, (ii) limitations on the issuance of additional
indebtedness, and (iii) limitations on capital expenditures.
NEVADA INDUSTRIAL REVENUE BONDS
The Nevada Industrial Revenue Bonds bear interest at a variable rate (4.6% at
December 27, 1997 and December 28, 1996), require annual principal payments of
$0.5 million on April 1, are collateralized by irrevocable letters of credit
issued by NationsBank under the Credit Facility and mature in April 2007.
IOWA INDUSTRIAL REVENUE BONDS
The Iowa Industrial Revenue Bonds bear interest at a variable rate (4.4% and
4.0% at December 27, 1997 and December 28, 1996, respectively), require no
periodic principal payments, are collateralized by irrevocable letters of
credit issued by NationsBank under the Credit Facility and mature in August
1998. The Company plans to refinance these bonds through a term loan under the
Credit Facility.
F-12
<PAGE>
SOUTH CAROLINA INDUSTRIAL DEVELOPMENT BONDS
The South Carolina Industrial Bonds bear interest at a variable rate (4.3% at
December 27, 1997), require semi-annual principal payments of $0.3 million on
April 1 and October 1 with a final balloon payment of $0.9 on April 1, 2010,
and are collateralized by irrevocable letters of credit issued by NationsBank
under the Credit Facility.
OTHER
Future maturities of long-term debt are as follows: 1998, $7,619; 1999,
$17,643; 2000, $13,875; 2001, $13,510; 2002, $43,104 and $211,135 thereafter.
Interest paid was $29,927, $19,744 and $13,432 for 1997, 1996 and 1995,
respectively. Interest capitalized was $341, $225 and $350 for 1997, 1996 and
1995, respectively.
NOTE 6.LEASE AND OTHER COMMITMENTS
Certain property and equipment are leased using capital and operating leases.
Capitalized lease property consisted of manufacturing equipment with a cost of
$1,661 and related accumulated amortization of $831 and $664 at December 27,
1997 and December 28, 1996, respectively. Capital lease amortization is
included in depreciation expense. Total rental expense for operating leases
was approximately $3,332, $2,344, and $1,515 for 1997, 1996, and 1995,
respectively.
Future minimum lease payments for capital leases and noncancellable operating
leases with initial terms in excess of one year are as follows:
<TABLE>
<CAPTION>
AT DECEMBER 28, 1997
CAPITAL LEASES Operating Leases
<S> <C> <C>
1998 $ 301 $ 4,041
1999 301 3,064
2000 - 2,824
2001 - 2,696
2002 - 1,987
Thereafter - 1,921
----- -----
602 $ 16,533
Less: amount representing interest 55 ======
-----
Present value of net minimum lease payments $ 547
=====
</TABLE>
F-13
<PAGE>
NOTE 7.INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of deferred tax liabilities and assets at December 27, 1997 and December 28,
1996 are as follows:
<TABLE>
<CAPTION>
DECEMBER 27, December 28,
1997 1996
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation $ 11,073 $ 2,316
Other - 104
------- -----
Total deferred tax liabilities 11,073 2,420
Deferred tax assets:
Allowance for doubtful accounts 590 331
Inventory 1,391 350
Compensation and benefit accruals 1,198 719
Insurance reserves 338 207
Net operating loss carryforwards 8,372 1,916
Alternative minimum tax (AMT) credit carryforwards 2,049 2,003
------ -----
Total deferred tax assets 13,938 5,526
------ -----
2,865 3,106
Valuation allowance for net deferred tax assets (816) (1,103)
------ -----
Net deferred tax assets $ 2,049 $ 2,003
====== =====
</TABLE>
Income tax expense consists of the following:
<TABLE>
<CAPTION>
DECEMBER 27, 1997 December 28, 1996 December 30, 1995
<S> <C> <C>
Current
Federal $ - $ - $ 1,404
State 138 186 237
Deferred
Federal - 69 (900)
State - (16) (63)
------ ----- ------
Income tax expense $ 138 $ 239 $ 678
====== ===== ======
</TABLE>
Holding has unused operating loss carryforwards of approximately $21.7 million
for federal income tax purposes which begin to expire in 2010. AMT credit
carryforwards are available to Holding indefinitely to reduce future years'
federal income taxes. A tax sharing agreement is in place that allows Holding
to make losses available to Berry.
Income taxes paid during 1997, 1996 and 1995 approximated $47, $528, and
$2,001, respectively.
F-14
<PAGE>
A reconciliation of income tax expense, computed at the federal statutory rate,
to income tax expense, as provided for in the financial statements, is as
follows:
<TABLE>
<CAPTION>
Year Ended
December 27, December 28, December 30,
1997 1996 1995
<S> <C> <C> <C>
Federal income tax expense (benefit) at statutory $(4,853) $(1,057) $2,384
rate
State income tax expense, net of federal benefit 138 112 115
Amortization of goodwill 285 - -
Expenses not deductible for income tax purposes 219 51 19
Change in valuation allowance for net deferred tax 4,298 1,103 (1,869)
assets
Other 51 30 29
------ ------ ------
Income tax expense $ 138 $ 239 $ 678
====== ====== ======
</TABLE>
NOTE 8.EMPLOYEE RETIREMENT PLANS
Berry sponsors a defined contribution 401(k) retirement plan covering
substantially all employees. Contributions are based upon a fixed dollar
amount for employees who participate and percentages of employee contributions
at specified thresholds. Contribution expense for this plan was approximately
$629, $531, and $384 for 1997, 1996 and 1995, respectively.
NOTE 9.STOCKHOLDERS' EQUITY
COMMON STOCK
On June 18, 1996, Holding consummated the transaction described below (the
"1996 Transaction"). BPC Mergerco, Inc. ("Mergerco"), a wholly owned
subsidiary of Holding, was organized by Atlantic Equity Partners International
II, L.P. ("International"), Chase Venture Capital Associates, L.P. ("CVCA"),
and certain other institutional investors to effect the acquisition of a
majority of the outstanding capital stock of Holding. Pursuant to the terms of
a Common Stock Purchase Agreement dated as of June 12, 1996 each of
International, CVCA and certain other equity investors (collectively the
"Common Stock Purchasers") subscribed for shares of common stock of Mergerco.
In addition, pursuant to the terms of a Preferred Stock Purchase Agreement
dated as of June 12, 1996 (the "Preferred Stock Purchase Agreement"), CVCA and
an additional institutional investor (the "Preferred Stock Purchasers")
purchased shares of preferred stock of Mergerco (the "Preferred Stock") and
warrants (the "1996 Warrants") to purchase shares of common stock of Mergerco.
Immediately after the purchase of the common stock, the preferred stock and the
1996 Warrants of Mergerco, Mergerco merged (the "Merger") with and into
Holding, with Holding being the surviving corporation. Upon the consummation of
the Merger: each share of the Class A Common Stock, $.00005 par value, and
Class B Common Stock, $.00005 par value, of Holding and certain privately-held
warrants exercisable for such Class A and Class B Common Stock were converted
into the right to receive cash equal to the purchase price per share for the
common stock into which such warrants were exercisable less the amount of the
nominal exercise price therefor, and all other classes of common stock of
Holding, a majority of which was held by certain members of management, were
converted into shares of common stock of the surviving corporation. In
addition, upon the consummation of the Merger, the holders of the warrants (the
"1994 Warrants") to purchase capital stock of Holding that were issued in
connection with the 1994 Transaction became entitled to receive cash equal to
the purchase price per share for the common stock into which such warrants were
exercisable less the amount of the exercise price therefor. The Company's
common stock shareholders who held common stock immediately preceding the 1996
Transaction retained 78% of the common stock. Additionally, a $2,762 bonus was
paid to management employees who held unvested stock options at the time of the
1994 Transaction which is included in 1996 general and administrative expenses.
The authorized capital stock of Holding consists of 3,500,000 shares of capital
stock, including 2,500,000 shares of Common Stock, $.01 par value (the "Holding
Common Stock"). Of the 2,500,000 shares of Holding Common Stock, 500,000
F-15
<PAGE>
shares are designated Class A voting Common Stock (the "Class A Voting Stock"),
500,000 shares are designated Class A Nonvoting Common Stock (the "Class A
Nonvoting Stock"), 500,000 shares are designated Class B Nonvoting Common Stock
(the "Class B Nonvoting Stock"), and 500,000 shares are designated Class C
Nonvoting Common Stock (the "Class C Nonvoting Stock").
PREFERRED STOCK AND WARRANTS
In connection with the 1996 Transaction, for aggregate consideration of $15.0
million, Mergerco issued units (the "Units") comprised of Series A Senior
Cumulative Exchangeable Preferred Stock, par value $.01 per share (the
"Preferred Stock"), and detachable warrants to purchase shares of Class B
Common Stock (voting and non-voting) constituting 6% of the issued and
outstanding Common Stock of all classes, determined on a fully-diluted basis
(the "Warrants").
Dividends accrue at a rate of 14% per annum, payable quarterly in arrears (each
date of payment, a "Dividend Payment Date") and will accumulate until declared
and paid. Dividends declared and accruing prior to the first Dividend Payment
Date occurring after the sixth anniversary of the issue date (the "Cash
Dividend Date") may, at the option of Holding, be paid in cash in full or in
part or accrue quarterly on a compound basis. Thereafter, all dividends are
payable in cash in arrears. The dividend rate is subject to increase to a rate
of (i) 16% per annum if (and for so long as) Holding fails to declare and pay
dividends in cash for any quarterly period following the Cash Dividend Date and
(ii) 15% per annum if (and for so long as) Holding fails to comply with its
obligations relating to the rights and preferences of the Preferred Stock. If
Holding fails to pay in full, in cash, (a) all accrued and unpaid dividends on
or prior to the twelfth anniversary of the issue date or (b) all accrued
dividends on any Dividend Payment Date following the twelfth anniversary of the
issue date, the holders of Preferred Stock will be permitted to elect a
majority of the Board of Directors of Holding.
The Preferred Stock ranks prior to all other classes of stock of Holding upon
liquidation and is entitled to receive, out of assets available for
distribution, cash in the aggregate amount of $15.0 million, plus all accrued
and unpaid dividends thereon. Subject to the terms of the 1996 Indenture, on
any Dividend Payment Date, Holding has the option of exchanging the Preferred
Stock, in whole but not in part, for Senior Subordinated Exchange Notes, at the
rate of $25 in principal amount of notes for each $25 of liquidation preference
of Preferred Stock held; provided, however, that no shares of Preferred Stock
may be exchanged for so long as any shares of Preferred Stock are held by CVCA
or its affiliates. Upon such exchange, Holding will be required to pay in cash
all accrued and unpaid dividends.
Pursuant to the Preferred Stock Purchase Agreement, the holders of Preferred
Stock and Warrants have unlimited incidental registration rights (subject to
cutbacks under certain circumstances). The exercise price of the Warrants is
$.01 per Warrant and the Warrants are exercisable immediately upon issuance.
All unexercised warrants will expire on the tenth anniversary of the issue
date. The number of shares issuable upon exercise of a Warrant are subject to
anti-dilution adjustments upon the occurrence of certain events.
In conjunction with the Venture Packaging acquisition, Holding authorized and
issued 200,000 shares of Series B Cumulative Preferred Stock to certain selling
shareholders of Venture Packaging. The Preferred Stock has a stated value of
$25 per share, and dividends accrue at a rate of 14.75% per annum and will
accumulate until declared and paid. The Preferred Stock ranks junior to the
Series A Preferred Stock and prior to all other capital stock of Holding. In
addition, Warrants to purchase 9,924 shares of Class B Non-Voting Common Stock
at $108 per share were issued to the same selling shareholders of Venture
Packaging.
STOCK OPTION PLAN
Pursuant to the provisions of the BPC Holding Corporation 1996 Stock Option
Plan (the "Option Plan") which reserved 45,620 shares for future issuance,
Holding has granted options to certain officers and key employees to acquire
shares of Class B Nonvoting Common Stock. During 1997, amendments were
approved to the Option Plan reserving an additional 6,000 shares for future
issuance. These options are subject to various option agreements, which among
other things, set forth the class of stock, option price and performance
thresholds to determine exercisability and vesting requirements. The Option
Plan expires October 3, 2003 or such earlier date on which the Board of
Directors of Holding, in its sole discretion, determines. Option prices range
from $100 to $108 per share.
FASB Statement 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("Statement 123"),
prescribes accounting and reporting standards for all stock-based compensation
plans. Statement 123 provides that companies may elect to continue using
F-16
<PAGE>
existing accounting requirements for stock-based awards or may adopt a new fair
value method to determine their intrinsic value. Holding has elected to
continue following Accounting Principles Board Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES ("APB 25") to account for its employee stock options.
Under APB 25, because the exercise price of Holding's employee stock options
equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized. Pro forma effects on Holding's 1997, 1996
and 1995 consolidated statements of operations using the fair value method
prescribed by Statement 123 have not been disclosed because there is no
material difference between results obtained using this method and using the
criteria set forth in APB 25.
Information related to the Option Plan is as follows:
<TABLE>
<CAPTION>
DECEMBER 27, 1997 DECEMBER 28, 1996
----------------------------- ----------------------------
Weighted Weighted
Number Average Number Average
of Exercise of Exercise
Shares Price Shares Price
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Options outstanding, beginning of year 43,393 $100 - $ -
Options granted 5,425 106 43,768 100
Options exercised - - - -
Options canceled (1,110) 100 (375) 100
------- -------
Options outstanding, end of year 47,708 101 43,393 100
======= =======
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Option price range at end of year $100 - $108 $100
Options exercisable at end of year 13,561 8,679
Options available for grant at year end 3,912 2,227
Weighted average fair value of options
granted during year $106 $100
</TABLE>
The following table summarizes information about the options outstanding at
December 27, 1997:
<TABLE>
<CAPTION>
Weighted
Range of Weighted Average Average Number
Exercise Number Outstanding Remaining Contractual Exercise Exercisable at
Prices at December 27, 1997 Life Price December 27, 1997
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$100 - $108 47,708 4 years $100.72 13,561
</TABLE>
STOCKHOLDERS AGREEMENTS
Holding entered into a new stockholders agreement (the "New Stockholders
Agreement") dated as of June 18, 1996 with the Common Stock Purchasers, certain
management stockholders and, for limited purposes thereunder, the Preferred
Stock Purchasers. The New Stockholders Agreement grants certain rights
including, but not limited to, designation of members of Holding's Board of
Directors, the initiation of an initial public offering of equity securities of
the Company or a sale of Holding. The agreement also restricts certain
transfers of Holding's equity.
Holding entered into an amended and restated agreement with its management
stockholders and International on June 18, 1996. The agreement contains
provisions (i) limiting transfers of equity by the management stockholders;
(ii) requiring the management stockholders to sell their shares as designated
by Holding or International upon the consummation of certain transactions;
(iii) granting the management stockholders certain rights of co-sale in
connection with sales by International; (iv) granting rights to repurchase
capital stock from the management stockholders upon the occurrence of certain
events; and (v) requiring the management stockholders to offer shares to
Holding prior to any permitted transfer.
NOTE 10.RELATED PARTY TRANSACTIONS
The Company is party to a management agreement (the "Management Agreement")
with First Atlantic Capital, Ltd. ("First Atlantic"). In connection with the
1996 Transaction, Holding paid a fee of $1,250 plus reimbursement for out-of-
F-17
<PAGE>
pocket expenses to First Atlantic for advisory services, including originating,
structuring and negotiating the 1996 Transaction. First Atlantic also received
advisory fees of $966 for originating, structuring and negotiating the 1997
acquisitions and a $100 advisory fee in both March and December 1995 for
originating, structuring and negotiating the Sterling Products acquisition and
the Tri-Plas acquisition, respectively.
In consideration of financial advisory and management consulting services, the
Company paid First Atlantic fees and expenses of $771, $788 and $817 for fiscal
1997, 1996, and 1995, respectively.
NOTE 11.FAIR VALUE OF FINANCIAL INSTRUMENTS INFORMATION
The Company's financial instruments generally consist of cash and cash
equivalents and the Company's long-term debt. The carrying amounts of the
Company's financial instruments approximate fair value at December 27, 1997,
except for the 1994 Notes and the 1996 Notes for which the fair value exceed
the carrying value by approximately $10.0 million and $10.5 million,
respectively.
NOTE 12.SUMMARY UNAUDITED FINANCIAL INFORMATION (IN THOUSANDS)
The following summarizes unaudited financial information of Holding's wholly
owned subsidiary, Berry Plastics Corporation and subsidiaries:
<TABLE>
<CAPTION>
DECEMBER 27, DECEMBER 28,
1997 1996
------------ ------------
<S> <C> <C>
CONSOLIDATED BALANCE SHEETS
Current assets $ 62,824 $ 42,445
Property and equipment - net of accumulated depreciation 108,218 55,664
Other noncurrent assets 44,480 12,046
Current liabilities 42,158 26,220
Noncurrent liabilities 205,172 113,113
Equity (deficit) (31,808) (29,177)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------
DECEMBER 27, DECEMBER 28, DECEMBER 30,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales $226,954 $151,058 $140,681
Cost of goods sold 180,249 110,110 102,484
Income (loss) before income taxes (2,493) 6,490 6,861
Net income (loss) (2,631) 5,989 6,183
</TABLE>
F-18
<PAGE>
BPC HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
SEPTEMBER 26, DECEMBER 27,
1998 1997
<S> <C> <C>
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 7,122 $ 2,688
Accounts receivable (less allowance for doubtful
accounts of $844 at September 26, 1998 and $1,038
at December 27, 1997) 35,208 28,385
Inventories:
Finished goods 19,538 22,029
Raw materials and supplies 6,885 7,429
------- -------
26,423 29,458
Prepaid expenses and other receivables 2,427 1,834
Income taxes recoverable 355 1,167
------- -------
Total current assets 71,535 63,532
Assets held in trust 13,121 19,738
Property and equipment:
Land 6,663 5,811
Buildings and improvements 31,298 33,891
Machinery, equipment and tooling 135,190 122,991
Automobiles and trucks 1,341 1,241
Construction in progress 9,052 10,357
------- -------
183,544 174,291
Less accumulated depreciation 78,980 66,073
------- -------
104,564 108,218
Intangible assets:
Deferred financing and origination fees, net 11,249 10,849
Covenants not to compete, net 3,597 3,940
Excess of cost over net assets acquired, net 41,228 30,303
Deferred acquisition costs 163 13
------- -------
56,237 45,105
Deferred income taxes 2,049 2,049
Other 1,015 802
------- -------
Total assets $248,521 $239,444
======= =======
</TABLE>
F-19
<PAGE>
BPC HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(In Thousands of Dollars)
<TABLE>
<CAPTION>
SEPTEMBER 26, DECEMBER 27,
1998 1997
<S> <C> <C>
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 17,383 $ 16,732
Accrued expenses and other liabilities 10,005 7,162
Accrued interest 10,020 3,612
Employee compensation and payroll taxes 10,680 7,489
Income taxes 147 55
Current portion of long-term debt 18,280 7,619
------- -------
Total current liabilities 66,515 42,669
Long-term debt, less current portion 290,111 298,716
Accrued dividends on preferred stock 6,294 3,674
Other liabilities 679 3,360
------- -------
363,599 348,419
Stockholders' equity (deficit):
Class A Preferred Stock; 800,000 shares
authorized; 600,000 shares issued and
outstanding (net of discount of $2,843 at
September 26, 1998 and $3,062 at December 27, 11,728 11,509
1997)
Class B Preferred Stock; 200,000 shares
authorized, issued and outstanding 5,000 5,000
Class A Common Stock; $.01 par value:
Voting; 500,000 shares authorized; 91,000
shares issued 1 1
and outstanding
Nonvoting; 500,000 shares authorized; 259,000
shares 3 3
issued and outstanding
Class B Common Stock; $.01 par value:
Voting; 500,000 shares authorized; 144,936
shares issued 1 1
and outstanding
Nonvoting; 500,000 shares authorized; 58,168
shares 1 1
issued and outstanding
Class C Common Stock; $.01 par value:
Nonvoting; 500,000 shares authorized; 16,960
shares - -
issued and outstanding
Treasury stock: 726 shares (81) (22)
Additional paid-in capital 46,616 49,374
Warrants 3,511 3,511
Retained earnings (deficit) (181,970) (178,353)
Foreign currency translation gain 112 -
------- -------
Total stockholders' equity (deficit) (115,078) (108,975)
------- -------
Total liabilities and stockholders' equity
(deficit) $ 248,521 $ 239,444
======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-20
<PAGE>
BPC HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, SEPTEMBER 27, SEPTEMBER 26, SEPTEMBER 27,
1998 1997 1998 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $68,800 $58,780 $205,116 $164,715
Cost of goods sold 51,066 46,887 151,083 129,054
------- ------- ------- -------
Gross margin 17,734 11,893 54,033 35,661
Operating expenses:
Selling 3,769 2,955 10,881 8,048
General and administrative 4,502 2,889 13,301 8,613
Research and development 488 333 1,231 935
Amortization of intangibles 776 505 2,483 1,129
Other 877 1,042 3,240 2,783
------- ------- ------- -------
Operating income 7,322 4,169 22,897 14,153
Other income and expense:
Loss (gain) on disposal
of property and equipment 62 (1) 492 89
------- ------- ------- -------
Income before interest and
income taxes 7,260 4,170 22,405 14,064
Interest:
Expense (9,083) (8,117) (26,524) (23,667)
Income 259 443 833 1,598
------- ------- ------- -------
Loss before income taxes (1,564) (3,504) (3,286) (8,005)
Income tax expense 306 58 331 151
------- ------- ------- -------
Net loss (1,870) (3,562) (3,617) (8,156)
Preferred stock dividends (837) (710) (2,620) (1,757)
------- ------- ------- -------
Net loss attributable to
common stockholders $ (2,707) $ (4,272) $ (6,237) $ (9,913)
======= ======= ======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-21
<PAGE>
BPC HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, SEPTEMBER 27,
1998 1997
(UNAUDITED)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (3,617) $ (8,156)
Adjustments to reconcile net loss to net cash
provided by
operating activities:
Depreciation 15,466 11,493
Non-cash interest expense 1,335 1,139
Amortization 2,483 1,129
Write off of financing fees - 390
Interest paid from assets held in trust 6,617 5,052
Loss on sale of property and equipment 492 89
Changes in operating assets and liabilities:
Accounts receivable, net (3,590) (8,724)
Inventories 3,492 2,883
Prepaid expenses and other receivables 316 (83)
Accounts payable and accrued expenses 5,935 4,193
Other assets (349) 209
------- -------
Net cash provided by operating activities 28,580 9,614
INVESTING ACTIVITIES
Additions to property and equipment (13,540) (8,795)
Proceeds from disposal of property and equipment 4,452 1,092
Acquisitions of businesses (15,948) (83,529)
------- -------
Net cash used for investing activities (25,036) (91,232)
FINANCING ACTIVITIES
Proceeds from borrowings 42,254 79,296
Payments on borrowings (40,244) (2,991)
Debt issuance costs (1,141) (2,761)
Proceeds from issuance of common stock 80 324
Purchase of stock from management (59) -
------- -------
Net cash provided by financing activities 890 73,868
------- -------
Net increase (decrease) in cash and cash 4,434 (7,750)
equivalents
Cash and cash equivalents at beginning of period 2,688 10,192
------- -------
Cash and cash equivalents at end of period $ 7,122 $ 2,442
======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-22
<PAGE>
BPC HOLDING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of BPC
Holding Corporation and its subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Preparation of the financial statements
require management to make estimates that affect the required amounts of
assets, liabilities, revenues, and expenses. Operating results for the periods
presented are not necessarily indicative of the results that may be expected
for the full fiscal year. The accompanying financial statements include the
results of BPC Holding Corporation ("Holding") and its wholly owned subsidiary,
Berry Plastics Corporation ("Berry"), and its wholly owned subsidiaries:
Venture Packaging, Inc. ("Venture Packaging"), Venture Packaging Midwest, Inc.,
Venture Packaging Southeast, Inc., PackerWare Corporation ("PackerWare"), Berry
Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, Berry
Plastics Design Corporation ("Berry Design"), NIM Holdings Limited ("NIM
Holdings"), Norwich Injection Moulders Limited ("Norwich Moulders"), and
AeroCon, Inc. For further information, refer to the consolidated financial
statements and footnotes thereto included in Holding's and Berry's Form 10-K's
filed with the Securities and Exchange Commission for the year ended December
27, 1997.
Certain amounts on the 1997 financial statements have been reclassified to
conform with the 1998 presentation.
2. ACQUISITIONS
On January 17, 1997, Berry acquired certain assets and assumed certain
liabilities of Container Industries, Inc. ("Container Industries") of Pacoima,
California for $2.9 million. The purchase was funded out of operating funds.
The operations of Container Industries are included in Berry's operations since
the acquisition date using the purchase method of accounting.
On January 21, 1997, Berry acquired the outstanding stock of PackerWare, a
Kansas corporation, for aggregate consideration of approximately $28.1 million
by way of a merger of PackerWare with a newly formed, wholly owned subsidiary
of Berry (with PackerWare being the surviving corporation). The purchase was
primarily financed through the Credit Facility (see Note 3). The operations of
PackerWare are included in Berry's operations since the acquisition date using
the purchase method of accounting.
On May 13, 1997, Berry Design, a newly formed, wholly owned subsidiary of
Berry, acquired substantially all of the assets and assumed certain liabilities
of Virginia Design Packaging Corp. ("Virginia Design") for approximately $11.1
million. The purchase was financed through the Credit Facility (see Note 3).
The operations of Berry Design are included in Berry's operations since the
acquisition date using the purchase method of accounting.
On August 29, 1997, Berry acquired the outstanding common stock of Venture
Packaging for aggregate consideration of $43.7 million by way of a merger of
Venture Packaging with a newly formed subsidiary of Berry (with Venture
Packaging being the surviving corporation). The purchase was primarily
financed through the Credit Facility (see Note 3). Additionally, preferred
stock and warrants were issued to certain selling shareholders of Venture
Packaging. The operations of Venture Packaging are included in Berry's
operations since the acquisition date using the purchase method of accounting.
On July 2, 1998, NIM Holdings, a newly-formed, wholly-owned subsidiary of
Berry, acquired all of the capital stock of Norwich Moulders of Norwich,
England for aggregate consideration of approximately $14.0 million. The
purchase was primarily financed through the Credit Facility (see Note 3). The
operations of Norwich Moulders are included in Berry's operations since the
acquisition date using the purchase method of accounting.
F-23
<PAGE>
The pro forma results listed below are unaudited and reflect purchase
accounting adjustments assuming the Container Industries, PackerWare, Virginia
Design, Venture Packaging and Norwich Moulders acquisitions occurred on
December 29, 1996.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 1997 SEPTEMBER 27, 1997 SEPTEMBER 26, 1998
--------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Net sales $ 72,995 $ 205,008 $ 211,977
Loss before income taxes (3,502) (8,621) (4,873)
Net loss attributable to common
stockholders (4,279) (10,714) (6,144)
</TABLE>
The pro forma financial information is presented for informational purposes
only and is not necessarily indicative of the operating results that would have
occurred had the acquisitions been consummated at the above date, nor are they
necessarily indicative of future operating results. Further, the information
gathered on the acquired companies is based upon unaudited internal financial
information and reflects only pro forma adjustments for additional interest
expense and amortization of the excess of the cost over the underlying net
assets acquired, net of the applicable income tax effect.
3. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 26, DECEMBER 27,
1998 1997
---------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Holding 12.50% Senior Secured Notes $105,000 $105,000
Berry 12.25% Senior Subordinated Notes 125,000 100,000
Term loans 72,340 58,300
Revolving line of credit - 25,654
Nevada Industrial Revenue Bonds 4,500 5,000
Iowa Industrial Revenue Bonds - 5,400
South Carolina Industrial Development Bonds - 6,985
Capital lease obligations 682 547
Debt premium (discount), net 869 (551)
------- -------
308,391 306,335
Less current portion of long-term debt 18,280 7,619
------- -------
$290,111 $298,716
======= =======
</TABLE>
The current portion of long-term debt at September 26, 1998 consists of $17.5
million of quarterly installments on the term loans, $0.5 million of repayments
on the Nevada Industrial Revenue Bonds and the monthly principal payments
related to capital lease obligations.
On August 24, 1998, Berry completed an offering of $25.0 million aggregate
principal amount of 12.25% Series B Senior Subordinated Notes due 2004 (the
"1998 Notes"). The 1998 Notes mature on April 15, 2004 and interest is payable
semi-annually on October 15 and April 15 of each year and commenced on October
15, 1998. The 1998 Notes are unconditionally guaranteed on a senior
subordinated basis by Holding and all of Berry's subsidiaries. The net
proceeds to Berry from the sale of the 1998 Notes, after expenses, were $25.2
million. Berry applied the net proceeds to repay borrowings under Berry's
revolving line of credit.
F-24
<PAGE>
The 1998 Notes rank PARI PASSU with or senior in right of payment to all
existing and future subordinated indebtedness of Berry. The notes rank junior
in right of payment to all existing and future senior indebtedness of Berry,
including borrowings under the Credit Facility and the Nevada Industrial
Revenue Bonds.
Concurrent with the PackerWare acquisition, Berry entered into a financing and
security agreement with NationsBank, N.A. (the "Credit Agreement") for a senior
secured line of credit in an aggregate principal amount of $60.0 million (the
"Credit Facility"). As a result of the acquisition of assets of Virginia
Design and the acquisition of Venture Packaging, the Credit Facility was
amended and increased to $127.2 million. Concurrently with the Norwich
Moulders acquisition, the Credit Facility was again amended and increased to
$132.6 million plus an additional revolving line of credit facility of
<pound-sterling>1.5 million (the "UK Revolver") and a term loan facility of
<pound-sterling>4.5 million (the "UK Term Debt"). The indebtedness under the
Credit Facility is guaranteed by Holding and Berry's subsidiaries. The
indebtedness under the Credit Facility is guaranteed by Holding and Berry's
subsidiaries.
The amended Credit Facility provides the Company with a $50.0 million revolving
line of credit, subject to a borrowing base formula, a $64.4 million term loan
facility; the U.K. Revolver, subject to a borrowing base formula; the UK Term
Debt, and a $4.6 million standby letter of credit facility to support Berry's
obligation under the Nevada Industrial Revenue Bond. The Credit Facility also
provides the Company with a term loan facility which was used to finance the
repayment of the South Carolina Industrial Development Bonds as discussed
below. Based on the borrowing formula as of September 26, 1998, Berry had
approximately $40.4 million of additional available credit under the revolving
line of credit.
The Credit Facility matures on January 21, 2002 unless previously terminated by
Berry or by the lenders upon an Event of Default as defined in the Credit
Agreement. The term loan facility requires periodic quarterly payments,
varying in amount, through the maturity of the facility.
Interest on borrowings on the Credit Facility will be based on the lender's
base rate plus .5% or LIBOR plus 2.0%, at Berry's option. Following receipt of
the financial statements, the applicable interest rate margin can be adjusted
quarterly, excluding the UK Revolver and the UK Term Debt, based on the
Company's ratio of funded debt to EBITDA. The Credit Facility contains various
covenants which include, among other things: (i) maintenance of certain
financial ratios and compliance with certain financial tests and limitations,
(ii) limitations on the issuance of additional indebtedness, and (iii)
limitations on capital expenditures.
On July 30, 1998, the Iowa Industrial Revenue Bonds were repaid by the Company
through borrowings under its term debt as provided in the Credit Facility.
The South Carolina Industrial Development Bonds were repaid by the Company on
August 27, 1998, in conjunction with the closing and sale of the Anderson,
South Carolina facility. The difference between the net proceeds from the sale
of the facility and the repayment of the development bonds and other related
liabilities of approximately $3.0 million has been financed in October 1998
with borrowings under a term loan within the Credit Facility.
4. BERRY PLASTICS CORPORATION SUMMARY FINANCIAL INFORMATION
The following summarizes financial information of Holding's wholly owned
subsidiary, Berry Plastics Corporation, and its subsidiaries.
<TABLE>
<CAPTION>
SEPTEMBER 26, DECEMBER 27,
1998 1997
---------------- -----------------
CONSOLIDATED BALANCE SHEETS (In Thousands)
<S> <C> <C> <C>
Current assets $ 70,555 $ 62,824
Property and equipment - net of accumulated
depreciation 104,564 108,218
Other noncurrent assets 55,472 44,480
Current liabilities 62,801 42,158
Noncurrent liabilities 185,790 205,172
Equity (deficit) (18,000) (31,808)
</TABLE>
F-25
<PAGE>
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, SEPTEMBER 27, SEPTEMBER 26, SEPTEMBER 27,
1998 1997 1998 1997
---------------------------------------------------------------------
STATEMENT OF OPERATIONS (In Thousands)
<S> <C> <C> <C> <C>
Net sales $ 68,800 $ 58,780 $ 205,116 $ 164,715
Cost of goods sold 51,066 46,887 151,083 129,054
Income (loss) before
income taxes 1,652 (399) 6,223 1,014
Net income (loss) 1,346 (404) 5,892 912
</TABLE>
5. RECENT ACCOUNTING PRONOUNCEMENTS
On December 28,1997, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" (FAS 130) which establishes
new rules for the reporting and display of comprehensive income and its
components (net income and "other comprehensive income"). Adoption of the
Statement had no material impact on the Company's financial position.
Comprehensive losses were $1.8 million and $3.5 million for the thirteen weeks
and thirty-nine weeks ended September 26, 1998, respectively.
In June 1997, the Financial Accounting Standards Board issued Statement No.
131, "Disclosure About Segments of an Enterprise and Related Information" ("FAS
131"). FAS 131 establishes requirements for reporting information about
operating segments in annual and interim reports and is effective for the
Company in 1998, but need not be applied to interim financial statements in the
initial year of application. FAS 131 may require a change in the Company's
financial reporting; however, the extent of the change, if any, has not been
determined.
6. SUBSEQUENT TRANSACTION
On October 16, 1998, Knight Plastics, Inc., a newly formed wholly-owned
subsidiary of Berry, acquired substantially all of the assets of the Knight
Engineering and Plastics Division of Courtaulds Packaging Inc. for aggregate
consideration of approximately $18.0 million. The purchase was financed
through the Credit Facility's revolving line of credit.
F-26
<PAGE>
NORWICH INJECTION MOULDERS LIMITED
ACCOUNTS
31ST OCTOBER 1997
CONTENTS
PAGE
Report of the directors 1 - 2
Report of the auditors 3
Profit and loss account 4
Balance sheet 5
Cash flow statement 6
Notes to the accounts 7 - 18
F-27
<PAGE>
Page 1
NORWICH INJECTION MOULDERS LIMITED
DIRECTORS
J E Barlow (Chairman)
A R Sandell (Managing)
T D Johnson
SECRETARY REGISTERED OFFICE
Mrs J Barlow Stanford Tuck Road
North Walsham
Norfolk
AUDITORS
Lovewell Blake
Chartered Accountants
102 Prince of Wales Road
Norwich
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31ST OCTOBER 1997
The directors present herewith the audited accounts for the year ended 31st
October 1997.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare accounts that give a true and
fair view of the state of affairs of the company and of the profit or loss for
its financial year. In doing so the directors are required to:
- - select suitable accounting policies and apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the accounts;
- - prepare the accounts on the going concern basis unless it is inappropriate
to presume that the company will continue in business.
The directors are responsible for maintaining proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the accounts comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
REVIEW OF ACTIVITIES
The company's main activities are unchanged since last year and are principally
those of the production of plastic goods by injection moulding.
In the opinion of the directors the company will be able to maintain its
present level of turnover for the foreseeable future.
The profit for the year has been added to the balance on the profit and loss
account.
F-28
<PAGE>
Page 2
NORWICH INJECTION MOULDERS LIMITED
REPORT OF THE DIRECTORS (CONTINUED)
DIRECTORS
The directors named above held office throughout the year.
In accordance with the articles of association T D Johnson will retire at the
annual general meeting and, being eligible, offers himself for re-election.
The interests of the directors of the company at 31st October 1997 in the
shares of the company, according to the register required to be kept by Section
325 of the Companies Act 1985 were as follows:
31ST OCTOBER 1997 31ST OCTOBER 1996
ORDINARY SHARES ORDINARY SHARES
FULLY PAID FULLY PAID
J E Barlow 60 60
A R Sandell 29 29
T D Johnson 11 11
MARKET VALUE OF INTEREST IN LAND
In the opinion of the directors, the current open market value on an existing
use basis of the freehold land and buildings exceeds the net book value as
shown in the balance sheet at the 31st October 1997 by 80,711.
CLOSE COMPANY PROVISIONS
The company is a close company within the provisions of the Income and
Corporation Taxes Act 1988.
AUDITORS
A resolution to re-appoint Lovewell Blake will be proposed at the annual
general meeting.
By order of the board
J BARLOW
Secretary
22{nd} December 1997
North Walsham
F-29
<PAGE>
Page 3
REPORT OF INDEPENDENT AUDITORS
TO THE DIRECTORS OF
NORWICH INJECTION MOULDERS LIMITED
We have audited the balance sheets of Norwich Injection Moulders Limited as at
31 October 1997 and 31 October 1996, and the related profit and loss accounts
and cash flow statements for each of the two years in the period ended 31
October 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with United Kingdom auditing standards
which do not differ in any significant respect from United States generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Norwich Injection Moulders
Limited at 31 October 1997 and 1996, and the results of its operations and its
cash flows for each of the two years in the period ended 31 October 1997 in
conformity with accounting principles generally accepted in the United Kingdom
which differ in certain respects from those generally accepted in the United
States (see Note 24 of Notes to the Accounts).
/S/ LOVEWELL BLAKE
Chartered Accountants
Norwich, England
22{nd} December 1997, except for Note 24 Differences
between United Kingdom and United States Generally
Accepted Accounting Principles as to which the date is
3{rd} September 1998
F-30
<PAGE>
Page 4
NORWICH INJECTION MOULDERS LIMITED
PROFIT AND LOSS ACCOUNT
(In pound sterling, unless otherwise noted)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED YEAR ENDED
31 OCTOBER 31 OCTOBER
NOTES 1997 1996
Turnover 2 8,117,742 7,308,368
Change in stock of finished goods 5,908 26,405
--------- ---------
8,123,650 7,334,773
Other operating income 3 21,738 6,823
--------- ---------
8,145,388 7,341,596
Raw materials and consumables 3,772,741 3,521,241
Other external charges 677,847 616,428
Staff costs 4 1,510,732 1,421,872
Depreciation 6 441,666 338,363
Other operating charges 537,182 482,605
Interest payable and similar charges 7 103,769 120,943
--------- ---------
7,043,937 6,501,452
--------- ---------
Profit on ordinary
activities before taxation 8 1,101,451 840,144
Tax on profit on ordinary activities 9 261,160 4,618
--------- ---------
Profit on ordinary activities
after taxation * 840,291 835,526
Balance 1st November 1996 2,209,809 1,374,283
--------- ---------
Balance 31st October 1997 3,050,100 2,209,809
========= =========
There are no movements in shareholders funds other than the increase to the
retained profits for the years ended 31st October 1997 and 31st October 1996.
There were no recognised gains or losses other than the profit of
840,291 in the year ended 31st October 1997 and
835,526 in the year ended 31st October 1996.
* A summary of the significant adjustments to the profit on ordinary activities
after taxation (net income) that would be required if US Generally Accepted
Accounting Principles were to be applied instead of those generally accepted
in the United Kingdom is set out in Note 24 of Notes to the Accounts.
</TABLE>
F-31
<PAGE>
Page 5
NORWICH INJECTION MOULDERS LIMITED
BALANCE SHEET
(In pound sterling, unless otherwise noted)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
31 OCTOBER 31 OCTOBER
NOTES 1997 1996
FIXED ASSETS
Tangible assets 10 3,839,712 3,507,176
CURRENT ASSETS
Stock and work in progress 11 342,324 313,971
Debtors 12 1,622,209 1,582,819
Bank balances 510,081 560,087
Cash in hand 464 338
--------- ---------
2,475,078 2,457,215
CREDITORS - AMOUNTS FALLING DUE
WITHIN ONE YEAR 13 2,384,216 2,696,054
--------- ---------
NET CURRENT ASSETS/(LIABILITIES) 90,862 (238,839)
--------- ---------
TOTAL ASSETS LESS
CURRENT LIABILITIES 3,930,574 3,268,337
CREDITORS - AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR 14 880,374 1,058,428
--------- ---------
3,050,200 2,209,909
========= =========
CAPITAL AND RESERVES*
Called up share capital 16 100 100
Profit and loss account 3,050,100 2,209,809
--------- ---------
3,050,200 2,209,909
========= =========
J E BARLOW )
) Directors
A R SANDELL )
The statutory accounts were approved by the board of directors on 22{nd}
December 1997.
* A summary of the significant adjustments to capital and reserves
(shareholders funds) that would be required if US Generally Accepted
Accounting Principles were to be applied instead of those generally accepted
in the United Kingdom is set out in Note 24 of Notes to the Accounts.
</TABLE>
F-32
<PAGE>
Page 6
NORWICH INJECTION MOULDERS LIMITED
CASH FLOW STATEMENT
(In pound sterling, unless otherwise noted)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED YEAR ENDED
31 OCTOBER 31 OCTOBER
NOTES 1997 1996
CASH FLOW FROM OPERATING ACTIVITIES 20 1,520,397 1,443,181
RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE 21 (84,576) (122,884)
TAXATION (193,817) (70,214)
CAPITAL EXPENDITURE
AND FINANCIAL INVESTMENT 21 (980,793) (635,844)
________ ________
Cash inflow before use of
liquid resources and financing 261,211 614,239
FINANCING - Decrease in debt 21 (251,086) (9,564)
- Calls on share capital 21 - 85
________ ________
INCREASE IN CASH IN THE YEAR 22 10,125 604,760
======== ========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
INCREASE IN CASH IN THE YEAR 10,125 604,760
Cash outflow from decrease in debt
and lease financing 21 251,086 9,564
________ ________
MOVEMENT IN NET DEBT IN THE PERIOD 261,211 614,324
NET DEBT AT 1ST NOVEMBER (921,849) (1,536,173)
________ ________
NET DEBT AT 31ST OCTOBER 22 (660,638) (921,849)
======== ========
The significant differences between the cashflow statement presented above and
that required under US Generally Accepted Accountancy Principles are set out in
Note 24 of Notes to the Accounts.
</TABLE>
F-33
<PAGE>
Page 7
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS
(In pound sterling, unless otherwise noted)
1. PRINCIPAL ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The accounts are prepared under the historical cost basis of accounting and
in accordance with applicable UK accounting standards.
(b) DEPRECIATION
Depreciation is provided on fixed assets at rates sufficient to write off,
on a straight line basis, the cost of the assets over their expected useful
lives. It is the company's policy to maintain its freehold property to such
a standard that its residual disposal value will at least equal its book
value and accordingly no provision for depreciation has been made. The
principal annual rates used for this purpose which are consistent with those
of last year are:
Freehold land and buildings Not depreciated
Leasehold property expenditure Over period of the lease
Plant and machinery 10% - 50%
Motor vehicles 20% - 25%
Loose tools Written off on a usage basis
(c) STOCK AND WORK IN PROGRESS
Stock and work in progress are stated at the lower of cost and net
realisable value. In general cost is determined on a first in first out
basis and includes transport and handling costs. In the case of work in
progress cost includes all direct expenditure and production overheads based
on the normal level of activity. Net realisable value is the price at which
stock can be sold in the normal course of business after allowing for the
costs of realisation and, where appropriate, the cost of conversion from
their existing state to a finished condition. Provision is made where
necessary for obsolete, slow moving and defective stock.
(d) FINANCE LEASE AND HIRE PURCHASE CONTRACTS
Assets held under finance leases, other than hire purchase contracts, are
capitalised at their fair value and are depreciated over either the lease
term, or the useful working life of the asset, whichever is the shorter.
Fair value is usually the cost at which the company could have purchased the
asset.
Future rental payments due during the primary lease period are shown as
creditors.
The difference between the total primary lease payments and the fair value
of the asset is treated as a finance charge and is charged to the profit and
loss account on a straight line basis over the primary lease period.
Secondary lease rentals are charged to profit and loss account in the period
in which they are paid.
F-34
<PAGE>
Page 8
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
1. PRINCIPAL ACCOUNTING POLICIES (CONTINUED)
(d) FINANCE LEASE AND HIRE PURCHASE CONTRACTS (CONTINUED)
Assets held under hire purchase contracts are capitalised at their fair
value and are depreciated over their useful working life on the same basis
as set out in note 1(b).
(e) OPERATING LEASES
Operating lease rentals are charged to profit and loss account in the period
in which they are incurred.
(f) DEFERRED TAXATION
Provision is made for deferred taxation where, in the opinion of the
directors, it is likely to be payable in the foreseeable future.
(g) PENSION SCHEME
The company operates defined contribution schemes. The assets of the
schemes are held separately from those of the company in independently
administered funds. The charge in the profit and loss account represents
the contributions payable by the company to the funds for the year.
(h) FOREIGN CURRENCIES
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling on the balance sheet date. Transactions in
foreign currencies are recorded at the rate ruling at the date of the
transaction. Significant differences arising due to exchange fluctuations
have been reflected in the profit and loss account.
2. TURNOVER
The contribution to turnover and profit before taxation arises from the
production of plastic goods by injection moulding.
1997 1996
Geographical analysis of turnover
United Kingdom 7,890,743 7,160,110
Rest of Europe 226,999 148,258
--------- ---------
8,117,742 7,308,368
========= =========
3. OTHER OPERATING INCOME
1997 1996
Training grants 500 2,589
Interest received (gross) 21,238 4,234
--------- ---------
21,738 6,823
========= =========
F-35
<PAGE>
Page 9
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
4. EMPLOYEE INFORMATION
The average number of persons employed by the company during the year
including directors is analysed below:
1997 1996
Manufacturing and packing 57 52
Selling and administration 18 17
Former employees 2 2
--- ---
77 71
=== ===
1997 1996
Staff costs
Wages and salaries paid to the company's
employees 1,313,859 1,264,343
Pensions to former employees 14,905 14,905
Social security costs 139,201 107,619
Pension contributions 42,767 35,005
--------- ---------
1,510,732 1,421,872
========= =========
5. Directors' emoluments
1997 1996
Management remuneration 271,217 363,153
Pension contributions 15,818 16,043
Taxable benefits 27,301 28,608
--------- ---------
314,336 407,804
========= =========
The directors' emoluments disclosed above (excluding pension contributions)
include amounts paid to:
The Highest Paid Director 106,903 137,910
Retirement benefits in respect of the three directors are accruing under a
defined contribution scheme. The contributions paid in respect of the
highest paid director were 5,488 ( 5,583 in
the year ended 31 October 1996).
F-36
<PAGE>
Page 10
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
6. DEPRECIATION
The charge for the year is made up as under:
1997 1996
Depreciation of tangible fixed assets
Owned assets 342,082 193,832
Assets held under finance lease
and hire purchase contracts 116,103 169,931
--------- ---------
458,185 363,763
Profit on sale of tangible
fixed assets (16,519) (25,400)
--------- ---------
441,666 338,363
========= =========
7. INTEREST PAYABLE AND SIMILAR CHARGES
1997 1996
Bank loan and overdraft 63,718 69,425
Finance leases and hire purchase
contracts expiring within five years 40,051 51,518
--------- ---------
103,769 120,943
========= =========
8. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The profit on ordinary activities before taxation is stated after charging
the following amounts:
1997 1996
Hire of equipment 55,698 71,616
Rent of land and buildings 22,080 22,127
Auditors remuneration 3,000 3,000
9. TAX ON PROFIT ON ORDINARY ACTIVITIES
1997 1996
Corporation tax for the year at 30% (1996 30%)
Taxation payable 261,163 193,845
Overprovision in previous year (3) -
Decrease in provision for deferred tax - (189,227)
--------- ---------
261,160 4,618
========= =========
F-37
<PAGE>
Page 11
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
<TABLE>
10. TANGIBLE FIXED ASSETS
<S> <C> <C> <C> <C> <C>
EXPENDITURE
ON SHORT
FREEHOLD LEASEHOLD PLANT AND MOTOR
TOTAL PROPERTY PROPERTY MACHINERY VEHICLES
COST
1st November 1995 3,945,292 1,190,947 298 2,628,349 125,698
Additions 967,725 1,719 - 993,038 32,968
Disposals (168,686) - - (137,011) (31,675)
--------- --------- --------- --------- ---------
31st October 1996 4,744,331 1,192,666 298 3,424,376 126,991
Additions 900,630 26,623 - 779,975 94,032
Disposals (365,688) - - (276,915) (88,773)
--------- --------- --------- --------- ---------
31st October 1997 5,279,273 1,219,289 298 3,927,436 132,250
========= ========= ========= ========= =========
DEPRECIATION
1st November 1995 966,628 - 237 914,846 51,545
Disposals (93,236) - - (70,136) (23,100)
Charge for the year 363,763 - 12 334,547 29,204
--------- --------- --------- --------- ---------
31st October 1996 1,237,155 - 249 1,179,257 57,649
Disposals (255,779) - - (193,173) (62,606)
Charge for the year 458,185 - 12 431,284 26,889
--------- --------- --------- --------- ---------
31st October 1997 1,439,561 - 261 1,417,368 21,932
========= ========= ========= ========= =========
Net book amount
31st October 1997 3,839,712 1,219,289 37 2,510,068 110,318
========= ========= ========= ========= =========
31st October 1996 3,507,176 1,192,666 49 2,245,119 69,342
========= ========= ========= ========= =========
31st October 1995 2,978,664 1,190,947 61 1,713,503 74,153
========= ========= ========= ========= =========
Details of fixed assets held under finance leases and hire purchase
contracts, which are included in the relevant headings in the table above,
are as follows:
1997 1996
Net book value at 31st October 1997 808,682 1,080,707
========= =========
</TABLE>
F-38
<PAGE>
Page 12
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
11. STOCK AND WORK IN PROGRESS
The amounts attributable to the different categories are as follows:
1997 1996
Raw materials 200,506 200,719
Packing materials 9,698 11,492
Finished goods 87,466 81,558
Work in progress 44,654 20,202
--------- ---------
342,324 313,971
========= =========
12. DEBTORS
1997 1996
Trade debtors 1,595,311 1,562,039
Prepayments 26,898 20,780
--------- ---------
1,622,209 1,582,819
========= =========
13. CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR
1997 1996
Bank overdraft (see note (a) below) - 60,005
Bank loan (see note (b) below) 36,664 36,664
--------- ---------
Bank loan and overdraft 36,664 96,669
Trade creditors 1,578,688 1,743,509
Corporation tax payable 1 August 1998
(1996 - 1 August 1997) 261,163 193,820
Taxation and social security payments 163,762 130,944
Hire purchase obligations
(see note (c) below) 254,145 327,177
Accruals 89,794 203,935
--------- ---------
2,384,216 2,696,054
========= =========
(a) Secured by a fixed and floating charge over the other assets of the
company.
(b) Secured by a mortgage on the freehold premises.
(c) Secured on the assets concerned.
F-39
<PAGE>
Page 13
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
14. CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
1997 1996
Bank loan bearing interest at
various rates repayable by quarterly
instalments (see note (a) below) 705,742 742,406
Hire purchase obligations
(see note (b) below) 174,632 316,022
--------- ---------
880,374 1,058,428
========= =========
(a) Secured by a mortgage on the freehold premises
(b) Secured on the assets concerned.
The bank loan above analysed by due dates of repayment
Repayable between one and two years 36,664 36,664
Repayable between two and five years 109,992 109,992
Repayable after more than five years
by instalments 559,086 595,750
--------- ---------
705,742 742,406
========= =========
15. DEFERRED TAXATION
The potential liability for 1997 amounted to 373,364 at 31%
and that for 1996 to 316,866 at 33%. No provision is made
in the accounts.
16. SHARE CAPITAL
1997 1996
AUTHORISED
Ordinary shares of 1 each 100 100
=== ===
CALLED UP SHARE CAPITAL
Shares issued at 1 each 100 100
=== ===
17. LEASING COMMITMENTS
The company leases land and building in Norwich. The lease has an unexpired
term of two years, at a rental of 22,080.
18. CAPITAL EXPENDITURE
1997 1996
Authorised and contracted for 43,652 -
====== ======
F-40
<PAGE>
Page 14
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
19. CONTROLLING INTEREST
Mr J E Barlow owns 60% of the issued share capital of the company and, as
such, controls the company.
20. Notes to cashflow statement
Reconciliation of operating profit to net cash inflow from operating
activities.
1997 1996
Operating profit 1,101,451 840,144
Depreciation 441,666 338,363
Interest payable and similar charges 103,769 120,943
Interest received (21,238) (4,234)
Increase in stocks (28,353) (82,907)
Increase in debtors (39,390) (348,246)
(Decrease)/Increase in creditors (37,508) 579,118
--------- ---------
Net cash inflow from operating activities 1,520,397 1,443,181
========= =========
21. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
1997 1996
Interest received 21,238 4,234
Interest paid (63,598) (73,625)
Interest element of finance lease
rental payments (42,216) (53,493)
--------- ---------
NET CASH (OUTFLOW) FOR RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE (84,576) (122,884)
========= =========
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
1997 1996
Purchase of tangible fixed assets (1,107,221) (736,694)
Proceeds from the sale of fixed assets 126,428 100,850
--------- ---------
NET CASH (OUTFLOW) FOR
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT (980,793) (635,844)
========= =========
F-41
<PAGE>
Page 15
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
21. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
(CONTINUED)
FINANCING 1997 1996
Loans repaid by company (36,664) (36,664)
Hire purchase advances to company 137,700 386,953
Hire purchase and finance lease repayments (352,122) (359,853)
Calls on share capital - 85
--------- ---------
NET CASH (OUTFLOW) FROM FINANCING (251,086) (9,479)
========= =========
<TABLE>
22. ANALYSIS OF CHANGES IN NET DEBT
<S> <C> <C> <C> <C>
AT AT
1ST NOVEMBER CASH OTHER 31ST OCTOBER
1995 FLOWS CHANGES 1996
Cash in hand, at bank 669 559,756 - 560,425
Overdraft (105,009) 45,004 - (60,005)
--------- --------- --------- ---------
(104,340) 604,760 - 500,420
Hire purchase and
finance leases (616,099) (27,100) - (643,199)
Debt due within one year (36,664) 36,664 (36,664) (36,664)
Debt due after one year (779,070) - 36,664 (742,406)
--------- --------- --------- ---------
(1,536,173) 614,324 - (921,849)
========= ========= ========= =========
<S> <C> <C> <C> <C>
AT AT
1ST NOVEMBER CASH OTHER 31ST OCTOBER
1996 FLOWS CHANGES 1997
Cash in hand, at bank 560,425 (49,880) - 510,545
Overdraft (60,005) 60,005 - -
--------- --------- --------- ---------
500,420 10,125 - 510,545
Hire purchase and
finance leases (643,199) 214,422 - (428,777)
Debt due within one year (36,664) 36,664 (36,664) (36,664)
Debt due after one year (742,406) - 36,664 (705,742)
--------- --------- --------- ---------
(921,849) 261,211 - (660,638)
========= ========= ========= =========
</TABLE>
F-42
<PAGE>
Page 16
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
23. Companies Act 1985
These financial statements do not comprise the Company's statutory accounts
within the meaning of section 240 of the Companies Act 1985 of Great
Britain. Statutory accounts for the years ended 31 October 1997 and 1996,
on which the auditors' reports were unqualified, have been delivered to the
Registrar of Companies for Engalnd and Wales.
24. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
The company's accounts are prepared in accordance with accounting principles
generally accepted in the United Kingdom ("UK GAAP") which differ from
United States generally accepted accounting principles ("US GAAP"). The
significant differences applicable to the company are summarised below.
DEPRECIATION OF FREEHOLD PROPERTY
Under UK GAAP, the company does not depreciate its freehold property. Under
US GAAP, depreciation would be provided.
FINANCE LEASES AND HIRE PURCHASE CONTRACTS
Under UK GAAP, the finance charge relating to finance (capital) leases and
hire purchase contracts is charged to the profit and loss account on a
straight line basis. Under US GAAP, such finance charges would be charged
to income over the period of the lease so as to provide a constant rate of
interest on the remaining balance of the capital obligation. It is
considered that the difference between the two methods in this case does not
have a material effect on either the balance sheets as at 31{st} October
1996 and 31{st} October 1997 or the reported results for the years then
ended.
DEFERRED TAXATION
Under UK GAAP, provision for deferred taxation is only made where in the
opinion of the directors it is likely to be payable in the foreseeable
future.
Under US GAAP, deferred taxation is computed for all temporary differences
between the tax and book bases of assets and liabilities. Deferred tax
assets are recognised to the extent their realisation is more likely than
not.
The following is a summary of the significant adjustments to income and
shareholders' funds which would be required if US GAAP were to be applied
instead of UK GAAP.
F-43
<PAGE>
Page 17
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
24. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (CONTINUED).
INCOME
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
31 OCTOBER 31 OCTOBER
1997 1996
Profit on ordinary activities after
taxation as reported in
the profit and loss account 840,291 835,526
Adjustments
Depreciation (22,160) (21,627)
Deferred taxation - methodology (73,260) (250,215)
- on above adjustments 6,648 6,488
--------- ---------
Net income as adjusted to accord with US GAAP
Net income 751,519 570,172
========= =========
SHAREHOLDERS' FUNDS
<S> <C> <C>
YEAR ENDED YEAR ENDED
31 OCTOBER 31 OCTOBER
1997 1996
Capital and reserves as reported 3,050,200 2,209,909
Adjustments
Fixed assets
Tangible assets-freehold property
depreciation (97,427) (75,267)
Deferred taxation - methodology (361,320) (288,060)
- on above adjustments 29,228 22,580
--------- ---------
Shareholders' funds as adjusted to accord
with US GAAP 2,620,681 1,869,162
========= =========
</TABLE>
STATEMENT OF CASH FLOWS
The statement of cash flows prepared under UK GAAP presents substantially
the same information as that required under US GAAP but it differs with
regard to the classification of items within it and as regards the
definition of cash under UK GAAP and cash and cash equivalents under US
GAAP.
Under UK GAAP, cash flows are presented separately for operating activities,
returns on investments and servicing of finance, taxation, capital
expenditure and financial investment and financing. US GAAP require only
three categories of cash flow activity to be reported, operating, investing
and financing. Cash flows from taxation and returns on investments and
servicing shown under UK GAAP would be included within operating activities
under US GAAP. Capital expenditure and financial investment would be
included within investing activities under US GAAP.
F-44
<PAGE>
Page 18
NORWICH INJECTION MOULDERS LIMITED
NOTES TO THE ACCOUNTS (CONTINUED)
24. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (CONTINUED).
STATEMENT OF CASH FLOWS (CONTINUED)
Under UK GAAP, cash is defined as cash in hand and deposits repayable on
demand less bank overdrafts repayable on demand. Under US GAAP, cash and
cash equivalents would not include bank overdrafts but would include cash
deposits repayable within three months at their inception.
The categories of cash flows under US GAAP can be summarised as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
31 OCTOBER 31 OCTOBER
1997 1996
Cash inflow from operating activities 1,242,004 1,250,083
Cash outflow on investing activities (980,793) (635,844)
Cash outflow from financing activities (251,086) (9,479)
(Decrease)/Increase in cash and cash equivalents (49,880) 559,756
Cash and cash equivalents
At 1st November 560,425 669
At 31st October 510 560,425
</TABLE>
F-45
<PAGE>
VENTURE PACKAGING, INC.
Consolidated Financial Statements
for the Years Ended
SEPTEMBER 30, 1996 AND 1995
AND INDEPENDENT AUDITORS' REPORT
F-46
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Venture Packaging, Inc.
Monroeville, Ohio
We have audited the accompanying consolidated balance sheets of Venture
Packaging, Inc. as of September 30, 1996 and 1995, and the related consolidated
statements of operations and retained earnings, and of cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company at September 30, 1996
and 1995, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
Cleveland, Ohio
November 18, 1996
F-47
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1995
- ----------------------------
<TABLE>
<CAPTION>
ASSETS 1996 1995
------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 567,404 $ 184,317
Receivables - net 4,654,981 5,468,229
Inventories 8,693,353 6,613,464
Deferred income taxes 147,777 159,208
Other current assets 316,377 619,595
------------- -------------
Total current assets 14,379,892 13,044,813
------------- -------------
PROPERTY:
Land and improvements 2,106,242 2,043,868
Buildings and improvements 5,301,226 5,273,751
Machinery and equipment 39,115,191 36,477,193
Office furniture and fixtures 1,391,506 1,183,548
Vehicles 325,202 331,461
------------- -------------
Total 48,239,367 45,309,821
Less accumulated depreciation (27,990,408) (24,852,783)
------------- -------------
Property - net 20,248,959 20,457,038
------------- -------------
RESTRICTED INVESTMENTS 1,244,996 2,223,603
DEPOSTIS AND OTHER ASSETS 505,042 619,720
------------- -------------
TOTAL $36,378,889 $36,345,174
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt $8,955,400 $6,801,552
Current portion of long-term debt 892,148 892,148
Trade accounts payable 2,902,476 3,064,472
Accrued liabilities 868,103 1,189,192
------------- -------------
Total current liabilities 13,618,127 11,947,364
LONG-TERM DEBT, LESS CURRENT PORTION 10,384,278 11,332,852
DEFERRED INCOME TAXES 2,126,654 1,843,734
DEFERRED REVENUE 822,468 875,000
------------- -------------
Total liabilities 26,951,527 25,998,950
SHAREHOLDERS' EQUITY:
Capital stock, stated value $100 per share:
authorized - 1,000 shares;
issued and outstanding - 227.715
and 227.965 shares,respectively 22,772 22,797
Additional paid-in capital 10,521 10,616
Retained earnings 9,394,069 10,312,811
------------- -------------
Total shareholders' equity 9,427,362 10,346,224
------------- -------------
TOTAL $36,378,889 $36,345,174
============= =============
</TABLE>
See notes to consolidated financial statements.
F-48
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
- ------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
REVENUES:
Net sales $42,262,349 $41,800,788
Other 944,579 861,155
------------- -------------
Total revenues 43,206,928 42,661,943
COST AND EXPENSES:
Cost of sales 37,747,768 36,108,439
Selling, general and administrative 5,509,215 4,931,505
Interest 1,244,576 849,945
------------- -------------
Total cost and expenses 44,501,559 41,889,889
------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES (1,294,631) 772,054
------------- -------------
PROVISION (BENEFIT) FOR INCOME TAXES:
Federal (447,619) 210,398
State and local 31,600 83,616
------------- -------------
Total provision (benefit) for income taxes (416,019) 294,014
NET INCOME (LOSS) (878,612) 478,040
CASH DIVIDENDS (22,797) (22,846)
CAPITAL STOCK PURCHASED AND RETIRED (17,333) (33,169)
RETAINED EARNINGS, BEGINNING OF YEAR 10,312,811 9,890,786
------------- -------------
RETAINED EARNINGS, END OF YEAR $ 9,394,069 $10,312,811
============= =============
NET INCOME (LOSS) PER SHARE $ (3,857) $ 2,096
============= =============
</TABLE>
See notes to consolidated financial statements.
F-49
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
- ----------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (878,612) $ 478,040
Adjustments to reconcile net income (loss)
to net cash provided from operating activities:
Depreciation 3,168,730 2,545,363
Deferred income taxers 294,351 392,933
Loss on sale of machinery and equipment 31,541
Change in operating assets and liabilities:
Receivables 813,248 (1,515,871)
Inventories (2,079,889) (1,522,459)
Other assets 311,590 (604,354)
Trade accounts payable (161,996) 1,327,190
Accrued liablities (321,089) 148,627
Deferred revenue (52,532) 875,000
------------- -------------
Total cash provided by operating activities 1,125,342 2,124,469
------------- -------------
INVESTING ACTIVITIES:
Capital expenditures (2,949,366) (11,394,621)
Net proceeds from (purchases of)
restricted investments 978,607 (2,223,603)
Proceeds from sale of machinery and equipment 42,953
Other - net 20,526 (20,761)
------------- -------------
Total cash used in investing activities (1,907,280) (13,638,985)
------------- -------------
FINANCING ACTIVITIES:
Net borrowings under line of credit agreement 2,153,848 3,954,585
Proceeds from long-term debt 8,325,000
Payments on long-term debt (948,574) (601,333)
Dividends paid (22,797) (22,846)
Purchase of capital stock (17,452) (33,409)
------------- -------------
Total cash provided by financing activities 1,165,025 11,621,997
------------- -------------
NET INCREASE IN CASH 383,087 107,481
CASH, BEGINNING OF YEAR 184,317 76,836
------------- -------------
CASH, END OF YEAR $ 567,404 $ 184,317
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 989,996 $ 741,183
------------- -------------
Income taxes $ 155,038 $ 192,889
------------- -------------
NONCASH INVESTING AND FINANCING ACTIVITIES:
Short-term borrowings refinanced as
long-term debt $3,900,000
-------------
</TABLE>
See notes to consolidated financial statements.
F-50
<PAGE>
VENTURE PACKAGING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
1. BUSINESS DESCRIPTION
Venture Packaging, Inc. (the "Company"), a Delaware corporation, is a
manufacturer of molded plastic products, primarily food storage containers.
The Company operates plants located in Monroeville, Ohio and Anderson,
South Carolina, and a printing and distribution facility in Chesapeake,
Virginia. The Company sells its products to customers nationwide, which
operate primarily in food processing industries.
To better align its corporate structure with its future growth plans,
Venture Packaging, Inc., an Ohio corporation, reincorporated in the state
of Delaware through an Agreement of Merger and Plan of Reorganization
effective October 1, 1995. The objective of the reincorporation was to
establish a Delaware holding company with two separate operating
subsidiaries for the Midwest and Southeast divisions.
To accomplish the corporate reorganization, Venture Packaging, Inc., an
Ohio corporation, formed the following subsidiaries: Venture Packaging
Southeast, Inc., a South Carolina corporation; Venture Packaging Midwest,
Inc., an Ohio corporation; and Venture Packaging, Inc., a Delaware
corporation. Effective October 1, 1995, substantially all of the Midwest
division assets were assigned to Venture Packaging Midwest, Inc., and
substantially all of the Southeast division assets were assigned to Venture
Packaging Southeast, Inc. Subsequently, Venture Packaging, Inc., the Ohio
corporation was merged with and into Venture Packaging, Inc., the Delaware
corporation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION - The consolidated financial statements include the accounts
of Venture Packaging, Inc. and its wholly-owned subsidiaries Venture
Packaging Southeast, Inc. and Venture Packaging Midwest, Inc. All
significant intercompany transactions and balances have been eliminated in
consolidation.
ESTIMATES - The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
INVENTORIES - Inventories are stated at the lower of cost or market. Cost
is determined using the first-in, first-out (FIFO) method.
PROPERTY - Property is stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.
Maintenance and repairs are charged to expense as incurred.
RESTRICTED INVESTMENTS - Restricted investments represent proceeds from
Industrial Development Bonds (see Note 5) invested in short-term
repurchase agreements, the use of which is restricted to certain capital
expenditures and related costs under the terms of the loan agreement.
F-51
<PAGE>
DEFERRED REVENUE - Deferred revenue relates to government grant revenues
and is being amortized over ten years.
<PAGE>
NET INCOME PER SHARE - Net income per share has been computed by dividing
net income by the weighted average number of shares of capital stock
outstanding during the period.
3. RECEIVABLES
Receivables consist of the following:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Customer accounts $3,626,580 $4,174,511
Affiliate 161,037 78,915
Refundable income taxes 985,364 415,803
Government grants 975,000
Allowances (118,000) (176,000)
------------- -------------
Total $4,654,981 $5,468,229
============= =============
</TABLE>
Sales to the affiliated company totaled approximately $918,000 in fiscal
1996 and $877,000 in fiscal 1995.
4. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Raw Materials $2,841,583 $2,327,719
Finished product 5,545,807 4,072,232
Shipping supplies 305,963 213,513
------------- -------------
Total $8,693,353 $6,613,464
============= =============
</TABLE>
5. DEBT
Short-term debt of $8,955,400 and $6,801,552 at September 30, 1996 and 1995,
respectively, consists of amounts outstanding under a $10,000,000 line of
credit agreement which currently matures December 31, 1996. Interest is
payable monthly at a rate which approximates the bank's prime lending rate.
Long-term debt consists of:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Industrial Development Bonds $7,655,000 $8,325,000
Bank term loans 3,621,426 3,900,000
------------- -------------
Total long-term debt 11,276,426 12,225,000
Less current maturities 892,148 892,148
------------- -------------
Non-current portion $10,384,278 $11,332,852
============= =============
</TABLE>
F-52
<PAGE>
The Industrial Development Bonds are to be repaid in semi-annual
installments through April 1, 2010 with a final balloon payment of
$945,000. Interest is payable quarterly. The bonds have a variable
interest rate, which averaged 3.78% and 4.13% during fiscal 1996 and 1995,
respectively. The interest rate can not exceed 10%. The Company can make
an irrevocable election to convert the interest rate to a fixed rate. The
bondholders may redeem the bonds at their option while the bonds bear
interest at a variable rate; however, the bonds are classified as non-
current due to a remarketing agreement and credit facilities, which permit
the Company to extend the payment for several years. The Company also has
the option to call the bonds.
The bank term loans are to be repaid in equal monthly installments of
principal plus interest. Interest is payable monthly at the bank's prime
lending rate.
The total aggregate principal payments applicable to all long-term debt at
September 30, 1996 is due as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 892,148
1998 1,227,148
1999 1,227,148
2000 1,227,148
2001 1,227,148
Thereafter 5,475,686
-------------
Total $11,276,426
=============
</TABLE>
The credit agreements require, among other things, the maintenance of
minimum tangible net worth, a maximum debt to tangible net worth ratio, a
minimum debt service coverage ratio, and a fixed charge coverage ratio.
The agreements also limit other secured borrowings and the annual amount of
capital expenditures and dividends. The credit agreements are secured by
accounts receivable, inventories, and certain equipment, land and
buildings.
6. INCOME TAXES
The provision (benefit) for income taxes consist of the following:
<TABLE>
<CAPTION>
1996 1995
------------ ----------
<S> <C> <C>
Current provision (benefit) $(710,370) $(98,919)
Deferred provision 294,351 392,933
------------ ----------
Total $(416,019) $294,014
============ ==========
</TABLE>
F-53
<PAGE>
A reconciliation between the federal statutory income tax rate and the
Company's effective tax rate is as follows:
<TABLE>
<CAPTION>
1996 1995
------------ ----------
<S> <C> <C>
Statutory tax rate (34.0)% 34.0%
Effects of:
State and local income taxes 1.6 7.1
Other 0.3 (3.0)
------------ ----------
Effective tax rate (32.1)% 38.1%
============ ==========
</TABLE>
The components of the net deferred income tax liability consist of the
following:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Tax depreciation in excess of book $(2,262,352) $(1,943,974)
Reserves and accruals not currently deductible 82,451 128,297
Net operating loss and credit carryforwards 537,156 95,237
Other - net 13,868 35,914
Valuation allowance (350,000)
------------- -------------
Net deferred tax liability $(1,978,877) $(1,684,526)
------------- -------------
</TABLE>
7. LEASES
The Company leases certain equipment and warehouse facilities under operating
leases. Certain of the operating leases contain renewal options at the end
of the initial lease term. Future minimum rental payments under leases
with initial or remaining noncancellable lease terms in excess of one year
consisted of the following at September 30, 1996:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
SEPTEMBER 30, AMOUNT
<S> <C>
1997 $ 716,680
1998 714,920
1999 704,139
2000 587,594
2001 556,208
Thereafter 554,357
-------------
Total $3,833,898
=============
</TABLE>
Total rent expense under operating leases was approximately $926,000 in
fiscal 1996 and $533,000 in fiscal 1995.
F-54
<PAGE>
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash, receivables, restricted investments, deposits,
accounts payable, accrued expenses, short term debt and long term debt are
reasonable estimates of their fair value. The fair value of the industrial
development bonds was measured using a tax free interest rate.
F-55
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
NO
DEALER, SALES PERSON OR ANY OTHER
PERSON IS AUTHORIZED IN CONNECTION
WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THE
PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITY OTHER
THAN THE SECURITIES OFFERED HEREBY,
NOR DOES IT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED
HEREBY TO ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON.
NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
______________________________
TABLE OF CONTENTS
PAGE
Available Information ii
Summary of Prospectus 1
Risk Factors 11
Company History 17
The Exchange Offer 19
Capitalization 27
Pro Forma Condensed Consolidated
Financial Statements 28
Selected Historical Financial Data 33
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 35
Business 40
Management 48
Principal Stockholders 55
Certain Transactions 57
Description of Certain Indebtedness 60
Description of Notes 63
Material Federal Income Tax
Considerations 85
Plan of Distribution 88
Legal Matters 89
Experts 89
Index to Financial Statements F-1
$25,000,000
BERRY PLASTICS CORPORATION
12 1/4 % SERIES C SENIOR
SUBORDINATED NOTES
DUE 2004
_________________
PROSPECTUS
_________________
, 1999
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate or Articles of Incorporation of the Company and each of the
Guarantors (except Norwich), in each case as amended, provide that the Company
and the Guarantors shall indemnify their respective directors to the fullest
extent permitted under the DGCL, Kansas General Corporation Code, Ohio General
Corporation Law, South Carolina Business Corporation Act and the laws of
England and Wales (collectively, the "Corporation Law"), as applicable.
The Corporation Law provides for indemnification by the Company and each of the
Guarantors of their respective directors and officers. In addition, the By-
laws of each of the Company and each Guarantor require the respective company
to indemnify its current or former directors and officers to the fullest extent
permitted by the applicable Corporation Law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
2.1 Asset Purchase Agreement dated February 12, 1992, among the Company, Berry
Iowa, Berry Carolina, Inc., Genpak Corporation, a New York corporation, and
Innopac International Inc., a public Canadian corporation (filed as Exhibit
10.1 to the Registration Statement on Form S-1 filed on February 24, 1994
(Registration No. 33-75706) (the "Form S-1") and incorporated herein by
reference)
2.2 Asset Purchase Agreement dated December 24, 1994, between the Company and
Berry Plastics, Inc. (filed as Exhibit 10.2 to the Form S-1 and incorporated
herein by reference)
2.3 Asset Purchase Agreement dated March 1, 1995, among Berry Sterling, Sterling
Products, Inc. and the stockholders of Sterling Products, Inc. (filed as
Exhibit 2.3 to the Annual Report on Form 10-K filed on March 31, 1995 (the
"1994 Form 10-K") and incorporated herein by reference)
2.4 Asset Purchase Agreement dated December 21, 1995, among Berry Tri-Plas,
Tri-Plas, Inc. and Frank C. DeVore (filed as Exhibit 2.4 to the Annual Report
on Form 10-K filed on March 28, 1996 (the "1995 Form 10-K") and incorporated
herein by reference)
2.5 Asset Purchase Agreement dated January 23, 1996, between the Company and
Alpha Products, Inc. (filed as Exhibit 2.5 to the 1995 Form 10-K and
incorporated herein by reference)
2.6 Stock Purchase and Recapitalization Agreement dated as of June 12, 1996, by
and among Holding, BPC Mergerco, Inc. ("Mergerco") and the other parties
thereto (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on July
3, 1996 (the "Form 8-K") and incorporated herein by reference)
2.7 Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996, by
and among Holding, Mergerco, Chase Venture Capital Associates, L.P. ("CVCA")
and The Northwestern Mutual Life Insurance Company ("Northwestern") (filed as
Exhibit 2.2 to the Form 8-K and incorporated herein by reference)
2.8 Agreement and Plan of Merger dated as of June 18, 1996, by and between
Holding and Mergerco (filed as Exhibit 2.3 to the Form 8-K and incorporated
herein by reference)
2.9 Certificate of Merger of Mergerco with and into Holding, dated as of June
18, 1996 (filed as Exhibit 2.9 to the Registration Statement on Form S-4 filed
on July 17, 1996 (Registration No. 333-08313) (the "1996 Form S-4") and
incorporated herein by reference)
2.10 Agreement and Plan of Reorganization dated as of January 14, 1997 (the
"PackerWare Reorganization Agreement"), among the Company, PackerWare
Acquisition Corporation, PackerWare Corporation and the shareholders of
PackerWare (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on
February 4, 1997 (the "1997 8-K") and incorporated herein by reference)
II-1
<PAGE>
2.11 Amendment to the PackerWare Reorganization Agreement dated as of January
20, 1997 (filed as Exhibit 2.2 to the 1997 8-K and incorporated herein by
reference)
2.12 Asset Purchase Agreement dated as of January 17, 1997, among the Company,
Container Industries and the shareholders of Container Industries (filed as
Exhibit 2.12 to the Annual Report on Form 10-K for the fiscal year ended
December 28, 1996 (the "1996 Form 10-K") and incorporated herein by reference)
2.13 Agreement and Plan of Reorganization dated as of January 14, 1997, as
amended on January 20, 1997, among the Company, PackerWare Acquisition
Corporation, PackerWare Corporation and the Shareholders of PackerWare
Corporation (filed as Exhibits 2.1 and 2.2 to the Current Report on Form 8-K
filed February 3, 1997 and incorporated herein by reference)
2.14 Asset Purchase Agreement dated May 13, 1997, among the Company, Berry
Design, Virginia Design Packaging Corp. and the shareholders of Virginia Design
Packaging Corp. (filed as Exhibit 2.14 to the Annual Report on Form 10-K for
the fiscal year ended December 27, 1997 (the "1997 Form 10-K") and incorporated
herein by reference)
*2.15 Agreement for the Sale and Purchase of the Entire Issued Share Capital of
Norwich Injection Moulders Limited dated July 2, 1998, among the Company, NIM
Holdings Limited and the persons listed on Schedule 1 thereto
3.1 Amended and Restated Certificate of Incorporation of Holding (filed as
Exhibit 3.1 to the 1996 Form S-4 and incorporated herein by reference)
3.2 By-laws of Holding (filed as Exhibit 3.2 to the Form S-1 and incorporated
herein by reference)
3.3 Certificate of Incorporation of the Company (filed as Exhibit 3.3 to the
Form S-1 and incorporated herein by reference)
3.4 By-laws of the Company (filed as Exhibit 3.4 to the Form S-1 and
incorporated herein by reference)
3.5 Certificate of Incorporation of Berry Iowa (filed as Exhibit 3.5 to the Form
S-1 and incorporated herein by reference)
3.6 By-laws of Berry Iowa (filed as Exhibit 3.6 to the Form S-1 and incorporated
herein by reference)
3.7 Certificate of Incorporation of Berry Tri-Plas (filed as Exhibit 3.7 to the
Form S-1 and incorporated herein by reference)
3.8 By-laws of Berry Tri-Plas (filed as Exhibit 3.8 to the Form S-1 and
incorporated herein by reference)
3.9 Certificate of Amendment to the Certificate of Incorporation of Berry Tri-
Plas (filed as Exhibit 3.9 to the 1996 Form 10-K and incorporated herein by
reference)
3.10 Certificate of Designation, Preferences, and Rights of Series B Cumulative
Preferred Stock of Holding (filed as Exhibit 3.10 to the 1997 Form 10-K and
incorporated herein by reference)
*3.11 Certificate of Incorporation of Berry Sterling
*3.12 By-laws of Berry Sterling
*3.13 Certificate of Incorporation of AeroCon
*3.14 By-laws of AeroCon
II-2
<PAGE>
*3.15 Articles of Incorporation of PackerWare
*3.16 By-laws of PackerWare
*3.17 Certificate of Incorporation of Berry Design
*3.18 By-laws of Berry Design
*3.19 Certificate of Incorporation of Venture Holdings
*3.20 By-laws of Venture Holdings
*3.21 Articles of Incorporation of Venture Midwest
*3.22 Code of Regulations of Venture Midwest
*3.23 Articles of Incorporation for a Statutory Close Corporation of Venture
Southeast
*3.24 By-laws of Venture Southeast
*3.25 Memorandum of Association of NIM Holdings
*3.26 Articles of Association of NIM Holdings
*3.27 Memorandum of Association of Norwich
*3.28 Articles of Association of Norwich
*3.29 Certificate of Incorporation of Knight Plastics
*3.30 By-laws of Knight Plastics
4.1 Form of Indenture between the Company and United States Trust Company of New
York, as Trustee (including the form of Note and Guarantees as Exhibits A and B
thereto respectively) (filed as Exhibit 4.1 to the Form S-1 and incorporated
herein by reference)
4.2 Warrant Agreement between Holding and United States Trust Company of New
York, as Warrant Agent (filed as Exhibit 4.2 to the Form S-1 and incorporated
herein by reference)
4.3 Indenture dated as of June 18, 1996, between Holding and First Trust of New
York, National Association, as Trustee (the "Trustee"), relating to Holding's
Series A and Series B 12.5% Senior Secured Notes Due 2006 (filed as Exhibit 4.3
to the 1996 Form S-4 and incorporated herein by reference)
4.4 Pledge, Escrow and Disbursement Agreement dated as of June 18, 1996, by and
among Holding, the Trustee and First Trust of New York, National Association,
as Escrow Agent (filed as Exhibit 4.4 to the 1996 Form S-4 and incorporated
herein by reference)
4.5 Holding Pledge and Security Agreement dated as of June 18, 1996, between
Holding and First Trust of New York, National Association, as Collateral Agent
(filed as Exhibit 4.5 to the 1996 Form S-4 and incorporated herein by
reference)
4.6 Registration Rights Agreement dated as of June 18, 1996, by and among
Holding and DLJ (filed as Exhibit 4.6 to the 1996 Form S-4 and incorporated
herein by reference)
4.7 BPC Holding Corporation 1996 Stock Option Plan (filed as Exhibit 4.7 to the
1996 Form 10-K and incorporated herein by reference)
II-3
<PAGE>
4.8 Form of Nontransferable Performance-Based Incentive Stock Option Agreement
(filed as Exhibit 4.7 to the 1996 Form 10-K and incorporated herein by
reference)
*4.9 Indenture dated as of August 24, 1998 among the Company, the Guarantors and
United States Trust Company of New York, as trustee
*4.10 Registration Rights Agreement dated as of August 24, 1998 by and among the
Company, the Guarantors and DLJ
***5 Opinion of O'Sullivan Graev & Karabell, LLP (including the consent of such
firm) regarding the legality of the securities being offered
*8 Opinion of O'Sullivan Graev & Karabell, LLP regarding the material United
States Federal income tax consequences to the holders of the securities being
offered
*10.1 Second Amended and Restated Financing and Security Agreement dated as of
July 2, 1998, as amended, by and among the Company, NIM Holdings, Norwich,
Fleet Capital Corporation, General Electric Capital Corporation, Heller
Financial, Inc. and NationsBank, N.A.
10.2 Employment Agreement dated December 24, 1990, as amended, between the
Company and Martin R. Imbler ("Imbler") (filed as Exhibit 10.9 to the Form S-1
and incorporated herein by reference)
10.3 Amendment to Imbler Employment Agreement dated November 30, 1995 (filed as
Exhibit 10.6 to the 1995 Form 10-K and incorporated herein by reference)
10.4 Amendment to Imbler Employment Agreement dated June 30, 1996 (filed as
Exhibit 10.4 to the 1996 Form S-4 and incorporated herein by reference)
10.5 Employment Agreement dated December 24, 1990, as amended, between the
Company and R. Brent Beeler ("Beeler") (filed as Exhibit 10.10 to the Form S-1
and incorporated herein by reference)
10.6 Amendment to Beeler Employment Agreement dated November 30, 1995 (filed as
Exhibit 10.8 to the 1995 Form 10-K and incorporated herein by reference)
10.7 Amendment to Beeler Employment Agreement dated June 30, 1996 (filed as
Exhibit 10.7 to the 1996 Form S-4 and incorporated herein by reference)
10.8 Employment Agreement dated December 24, 1990, as amended, between the
Company and James M. Kratochvil ("Kratochvil") (filed as Exhibit 10.12 to the
Form S-1 and incorporated herein by reference)
10.9 Amendment to Kratochvil Employment Agreement dated November 30, 1995 (filed
as Exhibit 10.12 to the 1995 Form 10-K and incorporated herein by reference)
10.10 Amendment to Kratochvil Employment Agreement dated June 30, 1996 (filed as
Exhibit 10.13 to the 1996 Form S-4 and incorporated herein by reference)
10.11 Employment Agreement dated as of January 1, 1993, between the Company and
Ira G. Boots ("Boots") (filed as Exhibit 10.13 to the Form S-1 and incorporated
herein by reference)
10.12 Amendment to Boots Employment Agreement dated November 30, 1995 (filed as
Exhibit 10.14 to the 1995 Form 10-K and incorporated herein by reference)
10.13 Amendment to Boots Employment Agreement dated June 30, 1996 (filed as
Exhibit 10.16 to the 1996 Form S-4 and incorporated herein by reference)
10.14 Financing Agreement dated as of April 1, 1991, between the City of
Henderson, Nevada Public Improvement Trust and the Company (including exhibits)
(filed as Exhibit 10.17 to the Form S-1 and incorporated herein by reference)
II-4
<PAGE>
*10.15 Letter of Credit of NationsBank, N.A. dated April 16, 1997
10.16 Purchase Agreement dated as of June 12, 1996, between Holding and DLJ
relating to the 12.5% Senior Secured Notes due 2006 (filed as Exhibit 10.22 to
the 1996 Form S-4 and incorporated herein by reference)
10.17 Stockholders Agreement dated as of June 18, 1996, among Holding, Atlantic
Equity Partners International II, L.P., CVCA and the other parties thereto
(filed as Exhibit 10.23 to the 1996 Form S-4 and incorporated herein by
reference)
10.18 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996,
issued to CVCA (Warrant No. 1) (filed as Exhibit 10.24 to the 1996 Form S-4 and
incorporated herein by reference)
10.19 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996,
issued to CVCA (Warrant No. 2) (filed as Exhibit 10.25 to the 1996 Form S-4 and
incorporated herein by reference)
10.20 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996,
issued to The Northwestern Mutual Life Insurance Company (Warrant No. 3) (filed
as Exhibit 10.26 to the 1996 Form S-4 and incorporated herein by reference)
10.21 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996,
issued to The Northwestern Mutual Life Insurance Company (Warrant No. 4) (filed
as Exhibit 10.27 to the 1996 Form S-4 and incorporated herein by reference)
10.22 Amended and Restated Stockholders Agreement dated June 18, 1996, among
Holding and certain stockholders of Holding (filed as Exhibit 10.28 to the 1996
Form S-4 and incorporated herein by reference)
10.23 Second Amended and Restated Management Agreement dated June 18, 1996,
between First Atlantic Capital, Ltd. and the Company (filed as Exhibit 10.29 to
the 1996 Form S-4 and incorporated herein by reference)
10.24 Warrant to purchase Class B Non-Voting Common Stock of BPC Holding
Corporation, dated August 29, 1997, issued to Willard J. Rathbun (filed as
Exhibit 10.30 to the 1997 Form 10-K and incorporated herein by reference)
10.25 Warrant to purchase Class B Non-Voting Common Stock of BPC Holding
Corporation, dated August 29, 1997, issued to Craig Rathbun (filed as Exhibit
10.31 to the 1997 Form 10-K and incorporated herein by reference)
*10.26 Purchase Agreement dated August 19, 1998 among the Company, the
Guarantors and DLJ
*21 List of Subsidiaries
***23.1 Consent of O'Sullivan Graev & Karabell, LLP (included as part of its
opinion filed as Exhibit 5 hereto)
*23.2 Consent of Ernst & Young LLP, independent auditors
*23.3 Consent of Deloitte & Touche LLP, independent auditors
*23.4 Consent of Lovewell Blake, independent auditors
**24 Powers of Attorney
*25 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of United States Trust Company of New York, as Trustee
(separately bound)
II-5
<PAGE>
**27 Financial Data Schedule
*99.1 Form of Letter of Transmittal
*99.2 Form of Notice of Guaranteed Delivery
*99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
*99.4 Form of Letter to Clients
__________
* Filed herewith.
** Previously filed.
*** To be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES
Report of Independent AuditorsS-1
Schedule I - Condensed Financial Information of RegistrantS-2
Schedule II - Valuation and Qualifying AccountsS-6
Schedules other than the above have been omitted because they are either not
applicable or the required information has been disclosed in the financial
statements or notes thereto.
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrants
pursuant to the Corporation Law, the Certificate of Incorporation and By-laws,
or otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrants of expenses incurred or paid by a director,
officer or controlling person of the Registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrants will, unless in the opinion of 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 Securities Act and will be governed by the final adjudication
of such issue.
The Registrants hereby undertake:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(a)To include any prospectus required by Section 10(a)(3) of the Securities
Act;
(b)To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(c)To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2)That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-6
<PAGE>
(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.
The undersigned Registrants hereby undertake that:
(1)For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of that time it was declared effective.
(2)For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
The undersigned registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 23rd day of
December, 1998.
BERRY PLASTICS CORPORATION
By:_______/S/ MARTIN R. IMBLER_______________________
Martin R. Imbler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment No.
1 to the Registration Statement has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature TITLE Date
<S> <C> <C>
* Chairman of the Board of Directors December 29, 1998
Roberto Buaron
* President, Chief Executive Officer and
Martin R. Imbler Director (Principal Executive Officer) December 29, 1998
* Executive Vice President, Chief Financial
James M. Kratochvil Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer) December 29, 1998
* Director
Ira G. Boots December 29, 1998
* Director
David M. Clarke December 29, 1998
* Director
Lawrence G. Graev December 29, 1998
* Director
Donald J. Hofmann December 29, 1998
Roberto Buaron
* President, Chief Executive Officer and
Martin R. Imbler Director (Principal Executive Officer) December 29, 1998
* Executive Vice President, Chief Financial
James M. Kratochvil Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer) December 29, 1998
/s/ James M. Kratochvil Executive Vice President, Chief Financial
James M. Kratochvil Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer) December 29, 1998
/s/ Joseph S. Levy Director
Joseph S. Levy December 29, 1998
</TABLE>
II-23
<PAGE>
BPC HOLDING CORPORATION
REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULES
We have audited the consolidated financial statements of BPC Holding
Corporation as of December 27, 1997 and December 28, 1996, and for each of the
three years in the period ended December 27, 1997, and have issued our report
thereon dated February 13, 1998 (included elsewhere in this Registration
Statement). Our audits also included the financial statement schedules listed
in Item 27(B) of this Registration Statement. These schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion based on our audit.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Indianapolis, Indiana
February 13, 1998
S-1
<PAGE>
BPC HOLDING CORPORATION
(PARENT COMPANY)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 27, 1997 December 28, 1996
(IN THOUSANDS)
Assets
<S> <C> <C>
Cash $ 708 $ 389
Other assets (principally investment in subsidiary) (31,808) (29,177)
Assets held in trust 18,933 30,188
Intangible assets 4,281 4,789
Due from Berry Plastics Corporation 8,095 2,804
Other - 277
------- -------
Total assets $ 209 $ 9,270
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities $ 510 $ 704
Accrued dividends 3,674 1,116
Long-term debt 105,000 105,000
------- -------
Total liabilities 109,184 106,820
Preferred stock 16,509 11,216
Class A common stock 4 4
Class B common stock 2 2
Class C common stock - -
Treasury stock (22) (22)
Additional paid-in capital 49,374 51,681
Warrants 3,511 3,511
Retained earnings (deficit) (178,353) (163,942)
------- --------
Total stockholders' equity (deficit) (108,975) (97,550)
------- --------
Total liabilities and stockholders' equity (deficit) $ 209 $ 9,270
======= ========
</TABLE>
S-2
<PAGE>
BPC HOLDING CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 27, 1997 December 28, 1996 December 30, 1995
(IN THOUSANDS)
Net sales $ - $ - $ -
<S> <C> <C> <C>
Cost of goods sold - - -
Gross profit - - -
Operating expenses 220 3,304 (150)
Other expense 11,560 6,294 -
-------- -------- --------
Income (loss) before income taxes and
equity in net income of subsidiary (11,780) (9,598) 150
Equity in net income (loss) of subsidiary (2,631) 5,989 6,183
-------- -------- --------
Income (loss) before income taxes (14,411) (3,609) 6,333
Income taxes 0 (262) -
-------- -------- --------
Net income (loss) (14,411) (3,347) 6,333
Preferred stock dividends (2,558) (1,116) -
-------- -------- --------
Net income (loss) attributable to common $ (16,969) $ (4,463) $ 6,333
shareholders
======== ======== ========
</TABLE>
S-3
<PAGE>
BPC HOLDING CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------------------------------
December 27, 1997 December 28, 1996 December 30, 1995
------------------- ------------------- ------------------
(In thousands)
<S> <C> <C> <C>
Net income (loss) $ (14,411) $ (3,347) $ 6,333
Adjustments to reconcile net loss provided by
operating activities:
Net loss (income) of subsidiary 2,631 (5,989) (6,183)
Amortization and non cash interest 726 441 -
Interest funded by assets held in trust 11,256 5,412 -
Non-cash compensation - 358 (215)
Changes in operating assets and liabilities (208) 427 66
---------- --------- ---------
Net cash provided by (used for) operating
activities (6) (2,698) 1
Net cash provided by investing activities - - -
Net cash provided by financing activities:
Exercise of management stock options - 1,130 -
Proceeds from senior secured notes - 105,000 -
Proceeds from issuance of common and preferred
stock and warrants 325 67,369 -
Rollover investments and share repurchases - (125,219) -
Assets held in trust - (35,600) -
Net payments to warrant holders - (4,502) -
Debt issuance costs - (5,069) -
Other - (22) (1)
---------- --------- ---------
Net cash from financing activities 325 3,087 -
---------- --------- ---------
Net increase in cash and cash equivalents 319 389 -
Cash and cash equivalents at beginning of year 389 - -
---------- --------- ---------
Cash and equivalents at end of year $ 708 $ 389 $ -
========== ========= =========
</TABLE>
S-4
<PAGE>
Notes to Condensed Financial Statements
(1)BASIS OF PRESENTATION. In the parent company-only financial statements,
Holding's investment in subsidiaries is stated at cost plus equity in
undistributed earnings of subsidiaries since date of acquisition. The parent
company-only financial statements should be read in conjunction with Holding's
consolidated financial statements, which are included beginning on page F-1.
(2)GUARANTEE. Berry had approximately $201.3 million and $111.0 million of
long-term debt outstanding at December 27, 1997 and December 28, 1996,
respectively. Under the terms of the debt agreements, Holding has guaranteed
the payment of all principal and interest.
S-5
<PAGE>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Balance at Charged to Charged to Balance
Description Beginning Costs and Other Accounts- Deductions- at end
of Period Expenses Describe Describe of year
----------------- ------------ ----------- --------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Year ended December 27, 1997:
Allowance for doubtful accounts $ 618 $ 325 $ 358 (2) $ 263 (1) $ 1,038
======= ======= ======= ======= ========
Year ended December 28, 1996:
Allowance for doubtful accounts $ 737 $ 322 $ - $ 441 (1) $ 618
======= ======= ======= ======= ========
Year ended December 30, 1995:
Allowance for doubtful accounts $ 503 $ 216 $ 299 (2) $ 281 (1) $ 737
======= ======= ======= ======= ========
</TABLE>
(1) Uncollectible accounts written off, net of recoveries.
(2) Primarily relates to purchase of accounts receivable and related allowance
through acquisitions.
S-6
<PAGE>
BPC HOLDING CORPORATION
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Selected Historical
Financial Data" and "Experts" and to the use of our report dated February 13,
1998 in the Registration Statement (Form S-4) and related Prospectus of Berry
Plastics Corporation for the registration of $25,000,000 of 12{1}/{4}% Series C
Senior Subordinated Notes due 2004.
/s/ Ernst & Young LLP
Indianapolis, Indiana
December 23, 1998
S-1
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement, relating to $25,000,000
of 12-{1}/{4}% Series C Senior Subordinated Notes due 2004, of Berry Plastics
Corporation on Form S-4 of our report dated November 18, 1996 relating to the
consolidated financial statements of Venture Packaging, Inc. for the years
ended September 30, 1996 and 1995 appearing in the Prospectus, which is part of
this Registration Statement
We also consent to the reference to us under the heading "Experts" in such
prospectus.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
December 29, 1998
S-2
<PAGE>
EXHIBIT 23.4
NORWICH INJECTION MOULDERS LIMITED
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated 22 December 1997 in the Registration Statement (Form S-
4) and related Prospectus of Berry Plastics Corporation for the registration of
$25,000,000 of 12.25% Series C Senior Subordinated Notes due 2004.
/s/ Lovewell Blake
Norwich, England
23 December 1998
S-3
DATE: 2{nd} July 1998
PARTIES:
(1) THE PERSONS whose names and addresses are set out in Schedule 1
(2) NIM HOLDINGS LIMITED (3558202) whose registered office is at Aldwych
House, 81 Aldwych, London WC2B 4HN
(3) BERRY PLASTICS CORPORATION, a Delaware corporation of 101 Oakley
Street, Evansville, Indiana, 47710 0959, USA
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement (including the Schedules):
1.1 the following words and expressions shall have the following
meanings:
<TABLE>
<CAPTION>
EXPRESSION MEANING
"Accounting Standards" all Statements of Standard Accounting Practice
adopted and all Financial Reporting Standards
issued by the Accounting Standards Board or such
body as may be prescribed under section 256(1) of
the Companies Act
<S> <C>
"Accounts" the Company's audited balance sheet as at, and the
profit and loss account for the financial year
ended on, the Accounts Date together with the
directors' report, the auditors' report, cash flow
statements and notes
"Accounts Date" 31{st} October 1997
"Borrowings" any liabilities or indebtedness in respect of:
1) moneys borrowed (including overdrafts) or
raised;
2) any debenture, bond, note or loan stock;
3) the capital element of all leases (whether in
respect of land, buildings, plant, machinery,
equipment or otherwise) entered into primarily
as a method of raising finance or refinancing
the acquisition of the leased asset;
4) receivables sold or discounted;
5) the sale price of any asset to the extent paid
before the time of sale or delivery by the
person liable to effect such sale or delivery
where the advance payment is arranged
primarily as a method of raising finance or
financing or refinancing the manufacture,
assembly, acquisition or holding of the asset
to be sold;
6) the acquisition cost of any asset to the
extent payable after the time of acquisition
or possession where the deferred payment is
arranged primarily as a method of raising
finance or financing or refinancing the
acquisition of the asset acquired
and shall include any fees or prepayment penalties
related to the prepayment of any such liabilities
or indebtedness other than any such penalties
payable in respect of the prepayment of any
capital leases or hire purchase agreements (not
being imposed by the relevant lessor or hirer
pursuant to any change of control provisions in
the relevant agreement or lease) and penalties
related to indebtedness to Barclays Bank Plc which
can/could be avoided by prepayment on 9{th} July
1998
"Business Day" a day (other than a Saturday) on which banks are
open for the transaction of all normal sterling
banking business in the City of London
"CAA 1990" Capital Allowances Act 1990
"Clearing Bank" a bank which is a member of CHAPS and Town
Clearing Company Limited
"Companies Act" the Companies Act 1985
"Company" Norwich Injection Moulders Limited, registered
number (964668)
"Completion" completion of the sale and purchase of the Shares
"Computer System" all computer hardware, software and networks owned
or used by the Company including all arrangements
relating to provision of maintenance and support,
security, disaster recovery, facilities management
bureau and on-line services to the Company
"Disclosure Letter" the letter (together with any schedules and
appendices thereto and any annexures specified in
it) dated the same date as this Agreement from the
Vendors delivered to the Purchaser prior to the
execution of this Agreement and expressed to be
the Disclosure Letter
"Encumbrance" any interest or equity of any person (including,
without limitation, any right to acquire, option
to acquire or right of pre-emption), any mortgage,
charge, pledge, lien, assignment, hypothecation,
security interest, title retention or any other
security agreement or arrangement affecting the
property of any kind (or rights in it) but
excluding any unsecured guarantee or indemnity
"Guarantor" Berry Plastics Corporation
"holding company" the meaning given in section 736 of the Companies
Act
"ICTA" Income and Corporation Taxes Act 1988
"Indebtedness Statment" a statement in the agreed form as to the amount of
the Company's Borrowings and cash balances that
have been taken into account in calculating the
consideration payable under clause 3.1
"Insider" any Vendor, or present director of the Company or
any person who is or was at the relevant time
connected with the Vendor or any such director
"Intellectual Property Rights" all and any rights in patents, petty patents,
utility models, trade or service marks (whether
registered or unregistered), trade names,
copyrights, registered designs, unregistered
design rights, applications for any of the
foregoing and the right to apply for any of the
foregoing in any part of the world, discoveries,
confidential information, know-how and all or any
other intellectual property whether or not
registered or capable of registration
"Management Accounts" the unaudited management accounts of the Company
for the period from the Accounts Date to the
Management Accounts Date
"Management Accounts Date" 31{st} March 1998
"NAV Estimate" an estimate in agreed form of the Net Assets (as
defined in Schedule 9) of the Company on the date
of Completion;
"NAV Escrow" an escrow account to be opened on Completion in
the joint names of the Vendors' Solicitors and the
Purchaser's Solicitors and which is to be dealt
with in accordance with Schedule 12.
"the Pension the Norwich Injection Moulders Limited Executive
Schemes" Pension Plan, the Norwich Injection Moulders
Limited Staff Pension Scheme (also known as the
Norwich Injection Moulders Limited Individual
Pension Scheme) and the Norwich Injection Moulders
Limited Discretionary Pension Plan
"Planning Acts" every law now or (where the context requires)
formerly in force in England and Wales and (in the
case of any law applying to particular localities)
having application to the locality of the Property
in relation to town and country planning and
development control including without prejudice to
the generality of the foregoing the Local
Government Planning and Land Act 1980, the Town &
Country Planning Act 1990, the Planning (Listed
Buildings and Conservation Areas) Act 1990, the
Planning (Consequential Provisions) Act 1990, the
Planning (Hazardous Substances) Act 1990 and the
Planning & Compensation Act 1991 and any order
made thereunder and any amendments made thereto
from time to time in each case prior to the date
hereof
"Property" the property particulars of which are set out in
Schedule 3 (and if more than one each such
property and each and every part of such property)
"Purchaser" NIM Holdings Limited
"Purchaser's Browne Jacobson, Aldwych House, 81 Aldwych, London
Solicitors" WC2B 4HN
"Shares" all of the issued shares in the capital of the
Company
"subsidiary" the meaning given in section 736 of the Companies
Act
"Stocks" stocks (as defined in Statement of Standard
Accounting Practice Number 9) of the Company
including but not limited to raw materials,
components, work in progress, finished goods and
consumables.
"Taxation" the meaning given in Schedule 8
"Taxation Authority" any taxing or other authority, whether of the
United Kingdom of elsewhere, competent to impose
any liability to Taxation
"TCGA" Taxation of Chargeable Gains Act 1992
"Tax Covenant" a deed of covenant in the form set out in Schedule
8
"VATA" Value Added Tax Act 1994
"the Vendors" the persons whose names and addresses are set out
in Schedule 1 (and "Vendor" shall be construed
accordingly)
"Vendors' Solicitors" Eversheds of Holland Court, The Close, Norwich NR1
4DX
"Warranties" the warranties, representations and undertakings
set out in clause 5 and Schedule 4;
</TABLE>
"Warrantors" J E Barlow, TD Johnson and AR Sandell
1.2 section 839 ICTA applies as it applies in that Act to determine
whether one person is connected with another;
1.3 the Schedules form part of this Agreement and shall be of full
force and effect as though their terms were set out in the body
of this Agreement;
1.4 all covenants obligations or liabilities on the part of two or
more persons are given or made jointly and severally;
1.5 any reference to a person shall be construed to include a
reference to a body corporate, unincorporated association and a
partnership;
1.6 headings used in this Agreement are for convenience only and
shall not affect its construction;
1.7 references to clauses or Schedules are (unless otherwise stated
to the contrary) references to clauses of and Schedules to this
Agreement and references to paragraphs are to paragraphs in the
Schedule in which such references appear;
1.8 whenever a document is referred to in this Agreement as being
"in the agreed form" it shall be in the form agreed and
initialled by or on behalf of the Vendors and the Purchaser;
1.9 references to statutory provisions shall be construed as
including:
1.9.1 references to the provisions of any earlier statute which
are directly or indirectly amended, consolidated or re-
enacted by such provisions;
1.9.2 references to those provisions as amended or re-enacted
or modified from time to time prior to the date hereof;
and
1.10 in construing this Agreement the interpretation of general
words shall not be restricted by being followed by words
indicating a particular class of acts, matters or things or
being followed by particular examples.
2 SALE AND PURCHASE
2.1 Each of the Vendors shall sell with full title guarantee and
the Purchaser shall purchase the number of the Shares specified
opposite that Vendor's name in Schedule 1.
2.2 Each of the Shares shall be sold free from any Encumbrance and
with all rights attaching to it including the right for the
Purchaser to receive and retain any dividends or other
distributions declared made or paid after the date of this
Agreement.
2.3 Each of the Vendors waives all rights of pre-emption or any
other right as regards transfer in respect of the Shares
(howsoever conferred).
2.4 The Purchaser shall not be obliged to complete the purchase of
any of the Shares unless the purchase of all of the Shares is
completed simultaneously.
2.5 Completion of the purchase of some of the Shares shall not
affect the rights of the Purchaser with respect to the others.
2.6 Each of the Warrantors hereby terminates the shareholders
agreement relating to the Company among themselves dated 26{th}
July 1996 (as amended by an agreement dated 27{th} February
1998).
3 CONSIDERATION
3.1 The aggregate consideration for the sale of the Shares shall be
<pound-sterling>8,310,823.39 (eight million, three hundred and
ten thousand, eight hundred and twenty three Pounds)
apportioned amongst the Vendors and classes of shares as set
out opposite their names in Schedule 1 but subject to
adjustment after Completion as provided in Schedule 9.
3.2 Subject to clause 3.4 of the said aggregate consideration 90%
of such sum shall be paid on Completion and 10% of such sum
("the Retention Fund") shall be dealt with in accordance with
the provisions set out in Schedule 10.
3.3 The sum of <pound-sterling>8,310,823.39 has been calculated on
the basis of the following formula:
<pound-sterling>8,310,823.39 = <pound-sterling>8,490,000 + x - y
Where:
x = cash in hand and in the bank accounts of the Company as set out
in the
Indebtedness Statement on the date of Completion; and
y = the aggregate of the Company's Borrowings as set out in the
Indebtedness
Statement on the date of Completion.
3.4 If the NAV Estimate is greater than <pound-sterling>3,623,457
the excess shall on Completion be paid by the Purchaser to the
NAV Escrow. If the NAV Estimate is less than
<pound-sterling>3,623,457 the shortfall shall be deducted from
that part of the aggregate consideration payable to the Vendors
on Completion under Clause 3.2 and shall be paid on Completion
into the NAV Escrow. The amount paid into the NAV Escrow shall
be dealt with in accordance with the provisions set out in
Schedule 12.
3.5 Any sum payable to the Vendors either on Completion or in
accordance with the provisions set out in Schedule 10 shall be
paid in cash by way of (either) single banker's draft drawn on
a Clearing Bank in favour of the Vendors' Solicitors or by such
other method as may be agreed between the parties. The
Vendors' Solicitors are authorised to receive the Consideration
on behalf of the Vendors and payment to them will be a good and
sufficient discharge to the Purchaser and the Purchaser will
not be further concerned as to the application of the moneys so
paid.
3.6 If any of the Retention Fund shall become payable to the
Purchaser by way of compensation or indemnity in accordance
with the provisions of Schedule 10 the consideration shall be
abated by the amount so payable and any rights of the Purchaser
to such compensation or indemnity shall be reduced by the
amount of such abatement, but without prejudice to the right of
the Purchaser to recover the excess of any compensation or
indemnity or any costs or expenses from the Vendors to the
extent not recovered out of the Retention Fund.
4 COMPLETION
4.1 The sale and purchase of the Shares will be completed at the
offices of the Vendors' solicitors immediately after both the
signing and exchanging of this Agreement, when:
4.1.1 the Vendors will produce and deliver to the Purchaser:
<PAGE>
(a)duly executed transfers of the Shares in favour of the
Purchaser (or as it shall direct) together with all
relevant share certificates (or in the case of any lost
certificates an indemnity satisfactory to the
Purchaser) and such waivers or consents as the
Purchaser may require to enable it or its nominees to
be registered as the holder of the Shares;
(b)written resignations from James Edward Barlow as a
director of the Company and from Janet Barlow as
company secretary in the form set out in Schedule 5;
(c) a letter from Lovewell Blake resigning their position
as auditors of the Company, acknowledging that they
have no claim whatsoever against the Company and
containing the statement required by section 394 of the
Companies Act;
(d) the certificate of incorporation, any certificates of
incorporation on change of name, the common seal (if
any) and the statutory books and registers of the
Company (in each case complete and up to date);
(e) all papers, books, records, keys, credit cards and
other property (if any) of the Company which is in the
possession or under the control of any person who
resigns as an officer of the Company in accordance with
this clause;
(f) bank statements in respect of each account of the
Company as at 30{th} June 1998 and full bank
reconciliation statements from the date of the bank
statements down to the date of Completion;
(g) duly executed powers of attorney relating to the
exercise of rights in respect of the Shares in the form
set out in Schedule 7;
(h) all the title deed and supporting documents in
relation to the Property;
(i) a duly executed resignation in agreed form from
Pauline Sandell terminating her employment by the
Company;
4.1.2 the Vendors and the Purchaser shall each execute and
exchange copies of the Tax Covenant;
4.1.3 the Vendors and the Purchaser shall each sign the
Indebtedness Statement and exchange the NAV Estimate;
4.1.4 each of the Vendors shall:
<PAGE>
(a)repay and procure that any spouse or child of such
Vendor or any company of which such Vendor (and/or any
such spouse or child) has control, as "control" is
defined in section 840 ICTA, shall repay all monies
owed to the Company whether due for payment or not;
(b) deliver to the Purchaser an acknowledgement in the
form set out in Schedule 6;
4.1.5 the Vendors shall procure that Alan Sandell,Trevor
Johnson and Adrian Atkins shall enter into service
agreements with the Company in the agreed form;
4.1.6 the Vendors shall procure that a duly convened meeting of
the directors of the Company is held at which:
<PAGE>
(a)the transfers referred to in clause 4.1.1 (subject to
stamping if not previously effected) are approved for
registration in the Company's register of members;
(b) any persons nominated by the Purchaser are appointed
as additional directors of the Company and any person
nominated by the Purchaser is appointed as secretary of
the Company;
(c) the resignations of the resigning director and
secretary are accepted; and
(d) all existing instructions to the bankers of the
Company are revoked and new instructions given to such
bankers as the Purchaser may nominate in such form as
the Purchaser shall direct;
4.1.7 the Purchaser will pay in accordance with clause 3 that
part of the Consideration which is payable to the Vendors
on Completion and as regards the Retention Fund and the
NAV Escrow the Purchaser and the Vendors shall take all
such steps and give all such written instructions as are
necessary or desirable to give effect to the provisions of
Schedules 10 and 12 .
5 WARRANTIES
5.1 The Warrantors warrant and represent to the
Purchaser in the terms of the Warranties.
5.2 However, the Purchaser shall not be entitled to
claim that any fact or combination of facts contrary to any of
the Warranties constitutes a breach of any of the Warranties if
and to the extent that such fact or combination of facts has
been fairly disclosed in the Disclosure Letter.
5.3 The Warrantors:
5.3.1 agree that the Purchaser is entering into this Agreement
in reliance upon the Warranties and that, save as provided
in clause 5.2, no information of the Purchaser (whether
actual or constructive) shall affect its right to bring a
claim under the Warranties or shall operate to reduce the
amount recoverable in respect of the Warranties;
5.3.2 undertake to disclose immediately to the Purchaser
anything which comes to the notice of any of them which
shows that the Warranties are or may be untrue or
misleading;
5.3.3 shall indemnify the Purchaser against any reasonable
costs (including legal costs) or expenses which the
Purchaser may incur, either before or after the
commencement of any action, as a result of any of the
Warranties being untrue or misleading; and
5.3.4 agree with the Purchaser to waive any right which any of
them may have in respect of any misrepresentation,
inaccuracy or omission in any information or advice
supplied or given by the Company or its officers and
employees on which or on whom any of the Warrantors may
have relied before agreeing to any term of this Agreement
including, without limitation, the Tax Covenant or
authorising any statement in the Disclosure Letter.
5.4 Without restricting the rights of the Purchaser or
the ability of the Purchaser to claim damages on any basis
available to it, the Warrantors undertake to the Purchaser
that:
5.4.1 if there is a breach of paragraph 7.1 of Schedule 4
(Debtors) the Warrantors shall, (provided that the
Purchaser has used all reasonable endeavours towards
recovery by the Purchaser in the four month period stated
in that paragraph and appropriated any general payment on
account of a debtor's indebtedness to debts to which
paragraph 7.1 relates in priority to other debts) pay on
demand to the Purchaser in cash an amount equal to the
aggregate of the sums (if any) which remain outstanding in
respect of the debts which are the subject of the said
Warranty provided that, upon such payment by the
Warrantors, the Purchaser shall, if requested so to do,
procure the assignment of such debts (to the extent to
which sums remain outstanding in respect of them) to the
Warrantors or such one or more of them as shall have made
payment to the Purchaser in accordance with this clause
5.4.1 (the costs and expenses relating to such assignment
being borne by the assignee(s)); and
5.4.2 if any of the Warranties other than the Warranty in
paragraph 7.1 of Schedule 4, is proved to be untrue or
misleading the Warrantors shall pay on demand to the
Purchaser the amount necessary to put the Company into the
position which would have existed if the Warranty had been
true or not misleading.
5.5 In determining damages in respect of the Warranties
the Purchaser shall not be required to cause the Company to be
wound up or to rely on the limited liability of the Company in
mitigation of its loss, but shall be deemed for this purpose to
be under a duty to maintain the Company as a going concern and
to make good any deficiency in its assets.
5.6 Without prejudice and subject to the provisions of
paragraph 2.6 of Schedule 11, which shall for all purposes take
precedence over the provisions of this clause 5.6. each of the
Warranties shall be construed as a separate and independent
Warranty and (save where expressly provided to the contrary in
this Agreement) shall not be limited or restricted by reference
to or inference from the terms of any other Warranty or any
other term of this Agreement.
5.7 In this Agreement, unless otherwise specified,
where any Warranty refers to the knowledge, information or
belief (or similar expression) of the Warrantors, each
Warrantor is deemed to have such knowledge, information or
belief which that Warrantor would have obtained had that
Warrantor made all due and careful enquiries into the subject
matter of that Warranty and the knowledge, information or
belief of one of the Warrantors shall be imputed to the other
Warrantors.
5.8 The Purchaser acknowledges that:-
5.8.1 this Agreement sets forth the entire agreement between
the parties with respect to the subject matter covered by
it and supersedes and replaces all prior communications,
drafts, representations, warranties, stipulations,
undertakings and agreements of whatsoever nature, whether
oral or written, between the parties relating thereto;
5.8.2 it does not enter into this Agreement in reliance on any
warranty, representation, undertaking, stipulation or
agreement other than those contained in this Agreement;
5.8.3 its only remedies in respect of any fact or matter which
renders any of the Warranties incorrect or is inconsistent
with any of them are in breach of contract in respect of
the Warranties concerned;
5.8.4 it has no right to rescind this Agreement either for
breach of contract or for negligent or innocent
misrepresentation;
5.8.5 without prejudice to the generality of the foregoing, the
Purchaser waives any right or remedy it may have against
the Warrantors, in respect of any statement (whether oral
or written) of fact or opinion whatsoever, including any
untrue or misleading statement, Warranty or
representation, expressed or implied, made to the
Purchaser or its agents, officers or employees during the
negotiation of or otherwise in connection with this
Agreement save for any Warranty, representation or
undertaking expressly contained in this Agreement; and
5.8.6 the Consideration has been agreed by the Vendors and the
Purchaser having regard (inter alia) to the provisions of
this clause 5.8
provided that the provisions of this clause 5.8 shall not
exclude any liability which the Warrantors would otherwise have
to the Purchaser or any right which the Purchaser may have to
rescind this Agreement in respect of any statements made
fraudulently by the Warrantors prior to the execution of this
Agreement.
5.9 Notwithstanding any other provisions of this Agreement the
liability of the Warrantors hereunder shall be limited in
accordance with the provisions of Schedule 11.
<PAGE>
6 RESTRICTIVE COVENANTS
6.1 For the purpose of assuring to the Purchaser the
full benefit of the Company and in consideration of the
agreement of the Purchaser to buy the Shares on the terms of
this Agreement, each of the Warrantors undertakes to the
Purchaser that without the written consent of the Purchaser
(which in the case of Alan R Sandell and Trevor D Johnson shall
be deemed to have been given by the Purchaser for any acts or
omissions required by their service agreements with the
Company) such Warrantor shall not, whether directly or
indirectly and whether alone or in conjunction with, or on
behalf of any other person and whether as partner, shareholder,
director, manager, consultant, agent or employee or in any
other capacity whatsoever:
6.1.1 for a period of five years immediately following the date
of Completion, canvass or solicit orders or facilitate the
canvassing of or the soliciting of orders from any person
who at any time during the 12 months immediately preceding
the date of Completion was:
(a) a customer or client of the Company; or
(b) negotiating with the Company for the supply by the
Company of goods or services
where the orders are for goods or services which are competitive
with those supplied by the Company at any time during the
12 months immediately preceding the date of Completion;
6.1.2 for a period of five years immediately following the date
of Completion, accept the custom of any person who at any
time during the 24 months immediately preceding the date of
Completion was:
(a) a customer or client of the Company; or
(b) negotiating with the Company for the supply by the
Company of goods or services
where the custom involves the supply of goods or services which
are competitive with those supplied by the Company at any
time during the 12 months immediately preceding the date
of Completion;
6.1.3 for a period of five years immediately following the date
of Completion, canvass, solicit or entice away from the
Company any supplier to the Company who had supplied goods
and/or services to the Company at any time during the 12
months immediately preceding the date of Completion if
such solicitation or enticement causes or would cause such
supplier to cease supplying, or materially to reduce its
supply of, those goods and/or services to the Company;
6.1.4 for a period of 5 years immediately following the date of
Completion work or be engaged or (save as the holder of
shares or other securities in any company which are
quoted, listed or otherwise dealt in on a recognised stock
exchange or other securities market and which confer not
more than 1 per cent of the votes which could be cast at a
general meeting of the company concerned) concerned or
interested in or provide technical, commercial or
professional advice to any trade or business which
operates in the United Kingdom and which manufactures or
supplies goods and/or services which are competitive with
those supplied by the Company at any time during the 12
months immediately preceding the date of Completion;
6.1.5 for a period of five years immediately following the date
of Completion, canvass, solicit or entice away from the
Company any person employed in a managerial, supervisory,
technical, sales or administrative post by, or who was a
consultant to, the Company at the date of Completion or at
any time during the period of six months immediately
preceding the date of Completion;
6.1.6 for a period of 5 years immediately following the date of
Completion in connection with any business carried on by
such Warrantor use the words "Injection" or "Moulders" or
for a period of 10 years immediately following the date of
Completion use the name "Norwich", in conjunction with
either "Injection" or "Moulders" or any colourable
imitation thereof or any names or words similar to or
likely to be confused therewith; or
6.1.7 attempt, or knowingly assist or procure any other person,
to do any of the foregoing things.
6.2 For the purposes of this clause, "Confidential
Information" means trade secrets or confidential information
belonging or relating to the Company and including, without
limitation, information or secrets relating to business or
manufacturing methods and processes, development plans, inventions,
research and development activities, designs, drawings, sources and
supplies of materials used, the identity of customers and potential
customers, prices, margins, special arrangements with customers of
and suppliers to the Company, pricing strategy and marketing
strategy, product and future product details, computer systems and
computer software. Each of the Warrantors undertakes to the
Purchaser that such Warrantor shall not divulge or communicate to
any other person (other than to any officer or employee of the
Company who needs that knowledge in the discharge of duties)
Confidential Information, shall not use or attempt to use any such
Confidential Information for the Warrantor's own benefit or for the
benefit of any other person and shall use all reasonable endeavours
to prevent the publication or disclosure of any Confidential
Information.
6.3 Each of the Warrantors acknowledges that each of
the undertakings contained in clauses 6.1 and 6.2 is reasonable and
for the proper protection of the business of the Company and further
acknowledges that damages may not be an adequate remedy to the
Purchaser for breach of those undertakings.
6.4 The restrictions on the Warrantors contained in
clause 6.2 shall not apply to any information which is or becomes
generally available to the public on a non-confidential basis
through no act or default on the part of any Warrantor.
6.5 Each undertaking contained in clauses 6.1 and 6.2
shall be construed as a separate undertaking and if any one or more
of such undertakings or any part of an undertaking is held to be
against the public interest or unlawful or in any way an
unreasonable restraint of trade, the remaining undertakings or
remaining part of the undertaking shall continue in full force and
effect and shall bind the Warrantors.
7 GUARANTEE
7.1 In consideration of the Vendors entering into this
Agreement with the Purchaser the Guarantor hereby irrevocably
and unconditionally, as a primary obligor, undertakes and
guarantees the due and punctual payment of all sums now or
subsequently payable by the Purchaser to the Vendors under this
Agreement or the Tax Covenant when the same shall become due
and undertakes with the Vendors that if the Purchaser shall
default in the payment of any sum under this Agreement or under
the Tax Covenant the Guarantor will forthwith on demand by the
Vendors pay such sum to the Vendors.
7.2 The guarantee undertaking contained in clause 7.1
is a continuing guarantee and shall remain in force until all
sums payable by the Purchaser under this Agreement have been
fully paid.
7.3 The Guarantor shall not be discharged by time or
any other concessions given to the Purchaser or any third party
by the Vendors or by anything the Vendors may do or omit to do
or by any other dealing or thing which, but for this provision,
would or might discharge the Guarantor.
8 COSTS
Each party hereto shall pay its own costs and expenses of and incidental
to the negotiation preparation and execution of this Agreement and
all documents ancillary to this Agreement, except where otherwise
expressly stated in this Agreement.
9 ANNOUNCEMENTS
No party shall make or permit any person connected with it to make any
announcement disclosure or statement concerning the material terms
and conditions of this sale and purchase on or after Completion
except as required by law or the rules of any exchange or other body
to which such party is subject, or with the written approval of the
other parties, such approval not to be unreasonably withheld or
delayed, but the Purchaser and its investors and affiliates shall be
entitled to notify customers, suppliers and other persons having
business relationships with it or the Company of the fact of the
sale and purchase and to notify its shareholders, financiers and
potential investors of the financial terms of the sale and purchase.
10 INTEREST
If any of the Warrantors become liable to pay the Purchaser or the
Company any sum pursuant to this Agreement, whether a liquidated sum
or by way of damages or otherwise, such Vendor shall be liable to
pay interest on such sum from the due date for payment at the annual
rate of 2% above the base lending rate from time to time of Royal
Bank of Scotland Plc accruing on a daily basis until payment is
made, whether before or after judgment.
<PAGE>
11 NOTICES
11.1 In order to be effective, any notice, demand or
other communication to be served under or pursuant to this
Agreement shall be in writing and shall be served upon any
party to this Agreement by:
11.1.1 posting by first class post (for inland mail); or
11.1.2 posting by airmail (for overseas mail); or
11.1.3 delivery by hand; or
11.1.4 sending by facsimile transmission
to the party to be served at its address or facsimile number given
below or at such other address or number in the United Kingdom
as it may from time to time notify in writing to the other
parties to this Agreement as being the recipient's address or
number for service provided that in the case of a company it
may instead (at the option of the sender) be addressed to its
registered office and in the case of the Vendors, notice may be
served at the address of the Vendors' Solicitors (marked for
the attention of A Croome Esq):
The Purchaser : NIM Holdings Limited
Address: C/o Berry Plastics Corporation, 101 Oakley Street,
Evansville, Indiana 47710-0959, USA
Facsimile Number: 00 1 812 421 9604
Marked for the attention of: Martin R. Imbler
with copies to: i.) Berry Plastics Corporation,
101 Oakley Street
Evansville
Indiana 47710-0959
USA
Facsimile No: 00 1 812 421 9604
Attention: Martin R.Imbler
ii) First Atlantic Capital Ltd
135 East 57{th} Street
29{th} Floor
New York, New York 10022
USA
Facsimile No: 00 1 212 750 0954
Attention: Roberto Buaron
but so that any notice served by facsimile transmission shall
be confirmed by the sender in writing served not later than the
second Business Day after the date of the facsimile
transmission.
11.2 A notice or demand given in accordance with clause
11 shall be deemed to have given or made as follows
11.2.1 if served by hand shall be deemed duly served when left
at the address for service unless such delivery occurs on
a day which is not a Business Day or after 5pm on a
Business Day, in which case it shall be deemed duly served
on the next following Business Day; or
11.2.2 if served by inland mail it shall be deemed duly served
on the second Business Day or if by overseas mail the
fifth Business Day after posting; and
11.2.3 if sent by facsimile transmission it shall be deemed to
have been served at the time of transmission (provided
that where such transmission occurs on a day which is not
a Business Day or after 5pm on a Business Day, service
will be deemed to occur on the next following Business
Day)
and in proving service of the same it shall be sufficient to prove,
in the case of a letter, that such letter was properly stamped
or franked first class or airmail (as relevant) addressed and
placed in the post and, in the case of a facsimile
transmission, that such facsimile was transmitted to the
facsimile number of the addressee referred to above.
11.3 Any demand, notice or communication will be deemed
to have been given to the personal representatives of a
deceased Vendor notwithstanding that no grant of representation
has been made in respect of such Vendor's estate, if the notice
is addressed either:
11.3.1 to the deceased Vendor by name; or
11.3.2 to such Vendor's personal representatives by title
either at the proper address of the Vendor pursuant to
Clause 11.1 or at such other address as may have been
notified by them in writing to the sender as being their
address for service,
and is otherwise served in accordance with the foregoing provisions.
11.4 The Guarantor irrevocably appoints the Purchaser's
Solicitors as its agent to accept service of legal proceedings
in connection with all matters arising out of this Agreement
and the transactions contemplated by it.
<PAGE>
12 GENERAL
12.1 This Agreement shall be binding on and shall continue for the
benefit of each party's successors (as the case may be).
12.2 Notwithstanding Completion each of the agreements, covenants,
obligations, warranties, indemnities and undertakings contained
in this Agreement shall, except in so far as fully performed at
Completion, continue in full force and effect.
12.3 None of the rights of the Purchaser arising out of this
Agreement shall be varied or restricted by the giving of any
time or other indulgence to any person but shall only be
affected by a specific waiver or release by the Purchaser and
any such waiver or release shall be specific to the matters and
the Vendor to whom it relates, shall not be deemed to be a
waiver of any subsequent breach or default and shall in no way
affect the other terms of this Agreement.
12.4 All the rights and remedies expressly provided for by this
Agreement shall not exclude any rights or remedies provided by
law.
12.5 This Agreement may be executed in any number of counterparts by
the different parties hereto or on separate counterparts, each
of which when executed and delivered shall constitute one and
the same instrument.
12.6 Any variation of this Agreement shall be binding only if it is
recorded in a written document signed by or on behalf of all the
parties.
12.7 The Vendors may not assign in whole or in part the benefit or
burden of this Agreement. The Purchaser may assign the benefit
of the Warranties and of the Tax Covenant.
13 GOVERNING LAW
This Agreement shall be governed by and construed in all respects in
accordance with English law and the parties submit to the exclusive
jurisdiction of the English Courts.
IN WITNESS of these matters this document has been executed as a deed and
delivered on the date set out at the beginning of this Agreement.
<PAGE>
SCHEDULE 1
THE VENDORS
<TABLE>
<CAPTION>
Name and Address NUMBER AND CLASS OF SHARES TO BE SOLD
"B" 1p "C" 1P "D" 1P AMOUNT OF CONSIDERATION
Ordinary ORDINARY ORDINARY RECEIVABLE
<S> <C> <C> <C> <C>
James Edward BARLOW
Coppertops
Colby Road
Banningham
Norwich
Norfolk NR11 7DY 106 4,394 439,400 45% of the consideration
referred to in clause 3.3
Trevor David JOHNSON
Thorpe Row Farm House
Herne Lane, Thorpe Row
Dereham
Norfolk NR19 1QE
1,100 - - 11% of the consideration
referred to in clause 3.3
Alan Robert SANDELL
Scarrow Barn
Thurgarton
Norwich
Norfolk NR11 7HR 44 1,356 135,600 14% of the consideration
referred to in clause 3.3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
James Edward Barlow and Jan
Barlow (As Trustees)
Coppertops
Colby Road
Banningham
Norwich 15% of the consideration
Norfolk NR11 7DY 1,500 - - referred to in clause 3.3
<S> <C> <C> <C> <C>
Alan SANDELL and Pauline
SANDELL (As Trustees)
Scarrow Barn
Thurgarton
Norwich
Norfolk NR11 7HR
1,500 - - 15% of the consideration
referred to in clause 3.3
</TABLE>
<PAGE>
SCHEDULE 2
DETAILS OF THE COMPANY
<TABLE>
<CAPTION>
<S> <C> <S>
Name of Company : Norwich Injection Moulders Limited
Registered number : 964668
Registered office : Stanford Tuck Road
North Walsham
Norfolk NR28 0JY
Date of incorporation : 23 October 1969
Place of incorporation : England and Wales
Status of Company : private company limited by shares
Authorised share capital : <pound-sterling>5,850, divided into 4,250 "B" ordinary shares
of 1p each, 5,750 "C" ordinary shares of 1p each
and 575,000 "D" ordinary shares of 1p each
Issued share capital : as authorised share capital above
Directors' full names : James Edward BARLOW
Trevor David JOHNSON
Alan Robert SANDELL
Secretary's full name : Janet BARLOW
Accounting reference date: 31 October
Auditors : Lovewell Blake
Bankers : Barclays Bank Plc
Bank accounts - details:
Charges, mortgages: 1. Debenture dated 23 March 1992 with Barclays
Bank plc over the undertaking and all property and
assets present and future including goodwill, book
debts uncalled capital, buildings, fixtures, fixed
plant and machinery
2. Chattels Mortgage dated 29 December 1994 with
Forward Trust limited over one new Uniloy Model
54-3 injection blow moulding machine Serial
Number: 4583.
3. Chattels mortgage dated 4 March 1996 with
Forward Trust Limited over one new MMC 4 Rotary
Indexing Type Lining Machine Serial Number: 104-
337
VAT registration number: 105 6096 87
</TABLE>
<PAGE>
SCHEDULE 3
PARTICULARS OF THE PROPERTY
<TABLE>
<CAPTION>
1.
<S> <C>
TENURE Freehold
DESCRIPTION Land in North Walsham Industrial Estate, Norfolk
registered with title no. NK 89303
MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at
Schedule 2
LEASES/LICENCES TO WHICH SUBJECT None
EXISTING USE Light Industrial
2.
TENURE Leasehold
DESCRIPTION 25 Concorde Road, Norwich
MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at
Schedule 2
LEASES/LICENCES TO WHICH SUBJECT Underlease dated 17 October 1997 made between Norwich
Injection Moulders Limited (1) and Norwich City
Council (2)
EXISTING USES Light Industrial. Current use restricted by licence
to underlet and change of use dated 29 September
1997.
</TABLE>
<TABLE>
<CAPTION>
3.
<S> <C>
TENURE Freehold
DESCRIPTION Land at North Walsham Industrial Estate, Norfolk
(registered with title No.NK215741)
MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at
Schedule 2
LEASES/LICENCES TO WHICH SUBJECT None
EXISTING USE Undeveloped
</TABLE>
<PAGE>
SCHEDULE 4
WARRANTIES
(CLAUSE 5)
1 SCHEDULES 1 & 2; CAPITAL
1.1 The information contained in Schedules 1 and 2 is true,
complete and accurate in all respects.
1.2 The Shares are fully paid and the Vendors are the only holders
of Shares.
1.3 There are no agreements or arrangements in force which grant to
any person any right to call for the allotment or issue of any
share or loan capital of the Company or to convert any stock or
security into share capital of the Company.
1.4 The Company does not have any interest, nor at any time in the
period of six years ended on the date of this Agreement has it
had any interest, in the share or loan capital of any body
corporate.
1.5 There is not, nor is there any agreement or arrangement to
create, any Encumbrance affecting any of the Shares and no
claim has been made by any person to be entitled to any of the
foregoing.
1.6 None of the Vendors or the Company has received any application
or notice of any intended application for the rectification of
the register of members of the Company.
2 ACCOUNTS
2.1 The Accounts and the audited accounts of the Company for the
preceding financial period:
2.1.1 comply with the Companies Act;
2.1.2 have been prepared in accordance with the historical cost
convention, with generally accepted accounting principles
and practices in the United Kingdom and all applicable
Accounting Standards and all applicable abstracts issued
by the Urgent Issues Task Force Committee of the
Accounting Standards Board;
2.1.3 have been prepared using the same bases and policies as
were used in preparing the audited accounts of the Company
in respect of the three financial years immediately
preceding that to which the Accounts relate;
2.1.4 show a true and fair view of the state of affairs of the
Company as at the Accounts Date and of its results for the
financial year ended on the Accounts Date;
2.1.5 attribute a value to the Stocks which does not exceed the
lower of cost or net realisable value as at the Accounts
Date, after wholly writing off all redundant and obsolete
Stocks and writing down appropriately any damaged or slow
moving Stocks; and
2.1.6 are not affected by any extraordinary or exceptional item
(save as disclosed in the Accounts).
2.2 The results shown by the audited profit and loss accounts of
the Company for the two financial years immediately preceding
that to which the Accounts relate have not (save as disclosed
therein) been affected by any extraordinary or exceptional item
rendering the profits or losses for the period covered by those
accounts unusually high or low.
2.3 The Management Accounts:
2.3.1 have been prepared on a basis consistent with the
Company's management accounts prepared since the Accounts
Date ; and
2.3.2 have been carefully prepared using accounting policies
consistent with those used in the preparation of the
Accounts .
3 VENDORS' CAPACITY
The Vendors have the necessary power and authority to enter into and
perform this Agreement and sell and transfer or procure the transfer
of the Shares and this Agreement constitutes valid and binding
obligations of the Vendors in accordance with its terms.
4 INSIDERS' INTERESTS
4.1 There is not outstanding and there has not at any time during
the period of three years ended on the date of this Agreement
been:
4.1.1 any loan, guarantee or indemnity given by the Company in
favour of any Insider or in favour of any other person in
respect of any liability of any Insider;
4.1.2 any loan, guarantee or indemnity given by any Insider in
favour of the Company or in favour of any other person in
respect of any liability of the Company; or
4.1.3 any other contract to which the Company is or was a party
and in which any Insider is or was interested in any way
whatsoever (excluding any contract of employment between
the Company and any of its officers details of which are
set out in the Disclosure Letter).
4.2 No Insider has any interest, direct or indirect, in any trade
or business which competes with the Company's business.
5 INFORMATION SUPPLIED
5.1 The specific disclosures contained in paragraphs 4.1.3 to 25.36
of the Disclosure Letter are not misleadingand have been
carefully and diligently prepared .
5.2 The documents annexed to the Disclosure Letter are complete and
accurate copies of the original document of which they purport
to be a copy.
5.3 The Warrantors have not deliberately concealed any fact or
circumstance relating to the affairs of the Company which they
believe would influence the decision of the Purchaser to enter
into this Agreement.
6 RECORDS
6.1 The accounting records of the Company are up to date and fully
comply with the provisions of sections 221 and 222 of the
Companies Act.
6.2 The Company's records systems and information, and the means of
access to them, are exclusively owned by it and under its
direct control.
7 DEBTORS
7.1 Except to the extent to which provision or reserve has been
made in the Accounts or is made in the Completion Accounts
referred to in Schedule 9, all debts owed to the Company which
are reflected in the Accounts or which have arisen since the
Accounts Date, either have been realised in full or will be
realised in full in the normal course of collection not later
than four months from the date of Completion. The amount of
approximately <pound-sterling>40,000 payable by Sanmex as
referred to at paragraph 7.1 of the Disclosure Letter will be
paid in full by no later than 30{th} April 1999.
7.2 None of the debts recorded in the books of the Company have
been outstanding for more than four months from its due date of
payment.
7.3 The Company has not made any loan or other arrangement with any
person as a result of which it is, or may be, owed any money
other than trade debts incurred in the ordinary course of
business and cash at bank.
7.4 None of the debts of the Company have been the subject of any
factoring or, invoice discounting, by the Company and the
Company is not entitled to the benefit of any debt otherwise
than as the original creditor.
8 STOCKS
8.1 The amount of Stocks held by the Company:
8.1.1 is not abnormally high or low in relation to the current
trading requirements of the Company; and
8.1.2 is adequate for the Company's present requirements.
8.2 The Stocks held by the Company:
8.2.1 are not obsolete or slow moving, except to the extent
they are written off in the Accounts;
8.2.2 which were given a value in drawing up the Accounts and
which are still held by the Company do not have a
realisable value which is less than that which was
ascribed to them in drawing up the Accounts;
8.2.3 are in good condition and fit for their purpose;
8.2.4 insofar as they consist of finished goods and packaging,
comply with all representations and warranties, whether
express or implied, including those as to their
specification, conformity with description and fitness for
purpose;
8.2.5 insofar as they consist of finished goods, comply with
all legal and regulatory requirements, including those of
the United Kingdom and the European Union;
8.2.6 are in the beneficial ownership of the Company free from
any Encumbrance;
8.2.7 do not include goods which have been returned by a
customer; and
8.2.8 do not include goods, or components for goods, which are
not sold in the ordinary course of the Company's business.
8.3 Since the Accounts Date:
8.3.1 the amount of Stocks has not abnormally increased or
decreased;
8.3.2 there have been no price reductions or discounts on the
sale of Stocks; and
8.3.3 Stocks have not been realised at less than they were
reflected in the Accounts.
9 PLANT AND THE COMPUTER SYSTEM
9.1 The plant, machinery, tools, vehicles, equipment and furniture
used in connection with the business of the Company:
9.1.1 are in a safe state of repair and condition and
satisfactory working order and have been regularly and
properly maintained;
9.1.2 are not surplus to the requirements of the Company's
business;
9.1.3 are capable and to the best of the Warrantors knowledge,
information and belief will (subject to normal wear and
tear) remain capable throughout the respective periods of
time during which they are each written down to a nil
value (in accordance with the rates of depreciation
adopted in the Accounts) of meeting the needs for which
they were designed or purchased;
9.1.4 are legally and beneficially owned by the Company free
from any Encumbrance;
9.1.5 are not the subject of any agreement for lease, hire,
hire purchase or sale on deferred terms;
9.1.6 are in the possession or under the control of the
Company;
9.1.7 are situated in the United Kingdom; and
9.1.8 are completely and accurately recorded in the plant
register, a copy of which is annexed to the Disclosure
Letter.
9.2 Full details of all elements of the Computer System, including
all licences and service agreements relating to it to which the
Company is a party have been disclosed to the Purchaser in the
Disclosure Letter.
9.3 The Computer System:
9.3.1 is in full operating order without material downtime or
errors and is fulfilling present requirements of the
Company and will to the best of the Warrantors knowledge,
information and belief fulfil the foreseeable requirements
of the Company;
9.3.2 has adequate security, back-ups, duplication, hardware
and software support and maintenance (including emergency
cover) and trained personnel to ensure, as judged by
reference to the business of the Company as carried on at
Completion:
9.3.2.1 that breaches of security, errors and breakdowns
are kept to a minimum; and
9.3.2.2 that no material disruption will be caused to the
Company or any material part in the event of a breach
of security, error or breakdown.
9.4 The acquisition of the Company by the Purchaser shall not
affect the rights of the Company to have full and unrestricted
access to use each element of the Computer System in the manner
in which such element has been used prior to Completion.
9.5 The Company is not in breach of any arrangements pursuant to
which any element of the Computer System has been made
available by any third party. In addition, the Company has not
received notice of and the Warrantors are not aware of any
circumstances which would enable any third party to terminate
such arrangements.
9.6 A true copy of the Company's internal Millennium compliance
review is disclosed at disclosure document number Volume 3, XI
A (a).
10 INTELLECTUAL PROPERTY
10.1 All Intellectual Property Rights used or required by the
Company in connection with its business are in full force and
effect.
10.2 As regards the Intellectual Property Rights owned by or
licensed to the Company:
10.2.1 details of them are set out in the Disclosure Letter;
10.2.2 they are in the sole beneficial ownership of the
Company;
10.2.3 each of them is valid and enforceable; and
10.2.4 where registerable, the Company is registered as the
sole proprietor.
10.3 The Company has not carried on and does not carry on its
business in such a way as to infringe any Intellectual Property
Rights or moral rights of any person.
10.4 The Company has not received any notices from any third party
in the last three years alleging any infringement of such
party's Intellectual Property Rights.
10.5 The Company has not served on any third party in the last three
years any notice alleging infringement of the Company's
Intellectual Property Rights.
10.6 None of the Intellectual Property Rights owned or licensed by
the Company are being (or are threatened to be) used, claimed,
opposed or attacked by any person or are subject to any claim
or potential claim for compensation pursuant to sections 40 and
41 of the Patents Act 1977 or otherwise.
10.7 No right or licence has been granted (or agreement to grant
right or licence made) under which any person is or will be
permitted to use in any manner or do anything which would or
might otherwise infringe any of the Intellectual Property
Rights owned by the Company.
10.8 The Disclosure Letter contains full details of all licences and
other agreements relating to Intellectual Property Rights to
which the Company is a party. Such agreements are valid,
subsisting and enforceable in accordance with their terms and
the Company is not in breach of any of their provisions.
10.9 The Company is not aware of any, nor to the information,
knowledge and belief of any of the Vendors is there any, breach
of any of the agreements referred to at paragraph 10.6 by any
of the other parties thereto.
11 PROPERTY
11.1 The Property comprises all the properties owned, occupied or
otherwise used by the Company and the particulars of the
Property shown in Schedule 3 are true, complete (insofar as
they relate to the headings in Schedule 3), and accurate in all
respects.
11.2 The written replies given by the Vendors' Solicitors to the
Purchaser's Solicitors' written enquiries concerning the
Property are true complete and accurate in all respects.
11.3 The Company is the legal and beneficial owner of the Property
and the Company has a good and marketable title to the Property
for the estate and interest stated in Schedule 3 and has vacant
possession of the Property.
11.4 There is not and, for so long as the Company has had an
interest in the Property, has not been in relation to the
Property in force any policy relating to defective title or
restrictive covenant indemnity and to the knowledge,
information or belief of the Warrantors no such policy has been
in force prior to the Company having had an interest in the
Property.
11.5 The Property and its deeds are free from any mortgage,
debenture, charge, rent-charge, lien or other encumbrance
securing the repayment of monies or other obligation or
liability of any person.
11.6 The Property is not subject to any outgoings other than
uniform business rates, water rates and insurance premiums and
(where appropriate) rent and service charges.
11.7 There are no current proposals for any increase in the rateable
value of the Property and no appeal has been lodged or is
pending in respect of the rateable value.
11.8 All buildings on the Property have been occupied (within the
meaning of section 65(2) Local Government Finance Act 1988)
continuously since completion of their construction and used
for the purpose for which they were constructed or for which
they have been adapted or converted and all rates have been
paid in full up to the date of this Agreement.
11.9 To the best of the Warrantors' knowledge, information and
belief, the Property is not affected byany covenants,
reservations, conditions, exceptions, stipulations, easements,
profits a prendre, wayleaves, licences, franchises, grants,
restrictions, overriding interests, rights of common or other
rights vested in third parties or any contract to create or
claim made by any person to be entitled to any of the
foregoing.
11.10 To the best of the Warrantors' knowledge, information and
belief there is not any outstanding breach or alleged breach of
any such matter referred to in paragraph 11.9..
11.11 There is not, nor has there been within the 3 years prior to
the date of this Agreement any dispute or complaint whether
actual or threatened with any neighbour, tenant, landlord or
other person relating to the extent, use, enjoyment or
occupation of the Property or with respect to boundary walls
and fences or any means of access to the Property or with
regard to any actual or alleged agreement, or other matter
described in paragraph 11.9 affecting or relating to the
Property.
11.12 The Property is not subject to any option, right of pre-
emption whether exercisable by the Vendors, the Company, a
tenant of the Property or otherwise and the Property is not
subject to any contract to dispose of any interest therein
which has not been completed.
11.13 The use of the Property for the purposes stated in Schedule 3
corresponds to the use to which it is in fact put or (where the
Property is not presently in use) to the use to which it was
last in fact put.
11.14 To the best of the Warrantors' knowledge, information and
belief, planning permission has been obtained or is deemed to
have been granted for the purposes of the Planning Acts with
respect to the construction of all buildings and other
structures on the Property and the present use of the Property
and the use of plant and machinery in connection with such use
and no permission has been given on a temporary or personal
basis or subject to any conditions which may affect the
continued occupation and use of the Property for its present
use and no permission has been suspended or called in and no
application for planning permission is awaiting a decision.
11.15 To the best of the Warrantors' knowledge, information and
belief building regulation consents have been obtained with
respect to all works of construction, alterations and
improvements to the Property.
11.16 To the best of the Warrantors' knowledge, information and
belief compliance is being made and has at all times been made
during the Company's period of ownership in all respects with
planning permissions, orders, and regulations issued under the
Planning Acts and building regulation consents and bye-laws for
the time being in force with respect to the Property.
11.17 All development charges, monetary claims and liabilities under
the Planning Acts or other such legislation have been
discharged and no such liability contingent or otherwise is
outstanding.
11.18 All necessary Industrial Development Certificates have been
obtained with respect to the Property.
11.19 To the best of the Warrantors' knowledge, information and
belief compliance has been made with all applicable statutory
and bye-law requirements with respect to the Property including
without limitation with the requirements as to fire
precautions, under Public Health Acts 1936 - 1961, Control of
Pollution Act 1974, regulations made under the Health and
Safety at Work etc Act 1974, the Highways Act 1980, the
Buildings Act 1984 and the Water Industry Act 1991.
11.20 To the best of the Warrantors' knowledge, information and
belief there is no outstanding and unobserved or unperformed
obligation with respect to the Property necessary to comply
with the requirements (whether formal or informal) of any
competent body exercising statutory or delegated powers.
11.21 To the best of the Warrantors' knowledge, information and
belief the Property is not affected by any requirement relating
to it or its use which although not registered in the Register
of Local Land Charges is capable of registration in that
Register.
11.22 To the best of the Warrantors' knowledge, information and
belief there are not in force or required to be in force any
licences, whether under the Licensing Act 1964 or otherwise,
which apply to the Property.
11.23 To the best of the Warrantors' knowledge, information and
belief there are no compulsory purchase notices, orders or
resolutions affecting the Property nor to the best of such
knowledge, information and belief are there any circumstances
likely to lead to any being made.
11.24 To the best of the Warrantors' knowledge, information and
belief there are no closing, demolition or clearance orders,
enforcement notices or stop notices affecting the Property nor
to the best of the Warrantors' knowledge, information and
belief are there any circumstances likely to lead to any being
made.
11.25 To the best of the Warrantors' knowledge, information and
belief the Property is not:
11.25.1 listed as being of special historic or architectural
importance or located in an area which is designated as a
Conservation Area under section 69 Planning (Listing
Buildings and Conservation Areas) Act 1990;
11.25.2 located in an area or subject to circumstances
rendering it particularly susceptible to flooding;
11.25.3 located in an area affected by mining, clay working,
brine pumping subsidence or limestone mining subsidence;
11.25.4 located in an area affected by underground railways and
is not bounded by overground railways; and
11.25.5 bounded or crossed by any river, stream, canal or
drain.
11.26 There are appurtenant to the Property all rights and easements
necessary for their present use and enjoyment and in
particular:
11.26.1 every means of access to the Property is obtained
directly from roads which have been taken over by the
local or other highway authority and which are
maintainable at the public expense and no means of access
to any of the Property is shared with any other party nor
subject to restriction nor to rights of determination by
any other party; and
11.26.2 the Property is served by water, drainage, electricity
and gas services all of which are connected to the mains
by media located entirely on or under the Property the
passage and provision of such services is uninterrupted
and there is no likely interruption of such passage or
provision.
11.27 To the best of the Warrantors' knowledge, information and
belief, without making any enquiry or commissioning any survey
all of the buildings on the Property are in good and
substantial condition and are fit for the purposes for which
they are presently used.
11.28 The Disclosure Letter fully and accurately sets out details of
all insurance policies relating to the Property.
11.29 The Property is insured at normal premium rates in its full
reinstatement value and against third party and public
liabilities to an adequate extent, no additional premiums are
payable or anticipated and there are no unusual exclusions
excesses or conditions imposed upon such policies.
11.30 All premiums payable in respect of insurance policies relating
to the Property which have become due have been duly paid and
to the best of the Warrantors' knowledge, information and
belief, no circumstances have arisen which would vitiate or
permit the insurers to avoid such policies or alter the terms
on which such policies are issued or to increase the premiums
payable and there are no interests noted on such policies.
11.31 There is annexed to the Disclosure Letter the details of all
leases, tenancies or other rights of occupation in respect of
the Property whether granted by or to the Company and any
contract to grant the same including but without limitation:
11.31.1 details of any lease superior to that held by the
Company known to the Warrantors and of any sub-lease or
other right of occupation granted by any tenant of the
Company or other occupant of the Property of which the
Warrantors are aware;
11.31.2 all provisions relating to use, alterations, repairs,
decorations, sharing of facilities, assignment,
underletting, parting with or sharing of possession and
termination;
11.31.3 details of any side letters, collateral contracts,
licences, consents, waivers or approvals given by the
Company (or to the best of the Warrantors' knowledge,
information and belief its predecessors in title) in
respect of any covenant or other obligation;
11.31.4 details of any waiver or the reservation of the right
of waiver of the exempt treatment of the Property for
Value Added Tax whether by the Company or by any landlord
of the Company (as appropriate); and
11.31.5 details of any rights to break or renew the term.
11.32 In respect of such leases, tenancies or other rights of
occupation as referred to in paragraph 11.31:
11.32.1 all rents, insurance premiums, service charges and
other amounts payable by or (as the case may be)
receivable by the Company are fully paid up-to-date;
11.32.2 to the best of the Warrantors' knowledge, information
and belief (without having made any enquiry or having
commissioned any survey or physical inspection) there is
no breach or alleged breach of any covenant or other
provision nor any exercise of any right of restraint,
forfeiture or entry whether by any of the Vendors the
Company or any other party;
11.32.3 to the best of the Warrantors' knowledge, information
and belief no obligation necessary to comply with any
notice or other requirement given by the landlord under
any leases of the Property is outstanding and unobserved
or unperformed;
11.32.4 there are no rent reviews under any of the leases or
tenancies in progress.
11.33 The Company has not at completion any actual, contingent or
future ascertained or unascertained liability to any person
firm or company in respect of or relating to any lease and/or
licence of any of the Property.
11.34 The Company has not at any time assigned or otherwise disposed
of any property comprised in a lease which is not a New
Tenancy for the purposes of the Landlord and Tenant (Covenants)
Act 1995.
11.35 The Company is not a guarantor under the terms of an
Authorised Guarantee Agreement entered into pursuant to the
Landlord and Tenant (Covenants) Act 1995.
11.36 Since 1st January 1996 whenever the Company has assigned or
otherwise disposed of any reversionary interest in a leasehold
property a release from the landlord's covenants has been
obtained from the tenant or tenants pursuant to the Landlord
and Tenant (Covenants) Act 1995.
12 EMPLOYEES
12.1 Full particulars are set out in the Disclosure Letter of:
12.1.1 the identities, dates of commencement of employment (or
appointment to office) dates of birth and remuneration of
all the employees and officers of the Company;
12.1.2 the terms of any existing contracts of service with the
directors of the Company;
12.1.3 the terms of all existing contracts with employees of
the Company whose emoluments exceed <pound-sterling>25,000
per annum or, in the case of fluctuating amounts, have
exceeded an average of <pound-sterling>25,000 per annum
over the three financial years ending on the Accounts
Date;
12.1.4 all terms of employment of general application;
12.1.5 the terms of all consultancy agreements with the
Company; and
12.1.6 the number of employees of the Company.
12.2 No amounts are owing to any present or former officers or
employees of the Company except for salary which has accrued in
respect of the calendar month in which this Agreement is
executed or for business expenses incurred during the same
month.
12.3 There are no agreements or other arrangements (whether or not
legally binding) between the Company and any trade union or
other body representing employees and the Company has not
entered into any recognition agreement with a trade union nor
has it done any act which might be construed as such.
12.4 There is no agreement or understanding (contractual or
otherwise) between the Company and any employee or ex employee
with respect to:
12.4.1 his or her employment;
12.4.2 ceasing to be employed; or
12.4.3 retirement
12.5 which is not included in the written terms of the employee's
employment or previous employment (as the case may be).
12.6 During the period to which the Accounts relate and since the
Accounts Date, no change has been made in the terms of
employment of any employee or officer of the Company.
12.7 No negotiations for any increase in the emoluments or benefits
of any officer or employee of the Company are current.
12.8 All subsisting contracts of service to which the Company is a
party are terminable by the Company without compensation (other
than under the Employment Rights Act 1996 by giving the minimum
period of notice specified in section 86 of that Act).
12.9 The Company is not, and has not within the twelve months
preceding the date of this Agreement been, involved in any
industrial dispute and there are no facts known to the
Warrantors which suggest that there may be an industrial
dispute involving the Company.
12.10 No past or present employee or officer of the Company has any
claim against the Company for loss of office or arising out of
the termination of his office or employment (including any
redundancy payment) and there is no event which would or might
give rise to any such claim.
12.11 Details of any claims made in the six years prior to the date
of this Agreement for compensation for alleged injury or
illness caused in the course of employment with the Company are
set out in the Disclosure Letter.
12.12 The Company has not established, nor is intending or
negotiating to establish, any share or share option scheme or
arrangement, or profit sharing bonus, commission, or other
incentive scheme for all or any of its employees.
12.13 There is no early retirement scheme applicable to any employee
of the Company.
12.14 The Company has neither introduced nor intends to introduce
any short time working scheme or any redundancy scheme under
which payments greater than those required by statute may be
payable.
12.15 None of the products or services supplied by the Company are
produced or provided by outworkers.
12.16 The Company has not acquired any undertaking or part of one
such that the Transfer of Undertakings (Protection of
Employment) Regulations 1981 apply, or may apply, thereto.
12.17 The Company has in relation to each of its employees (and, so
far as is relevant, to each of its former employees) complied
with the requirements of all statutes, regulations, codes of
conduct and collective agreements;
13 PENSIONS
13.1 Other than the Pension Schemes there are no agreements,
arrangements, customs or practices (whether legally enforceable
or not) in operation at the date of this Agreement for the
payment of or contribution towards any pensions, allowances,
lump sums or other like benefits on retirement or on death or
during periods of sickness or disablement for the benefit of
any Insider or employee or former employee of the Company or
for the benefit of the dependants of any such persons nor has
any proposal been announced to establish any such agreement or
arrangement.
13.2 Full details of the Pension Schemes are included in or attached
to the Disclosure Letter including, without limitation:
13.2.1 copies of all current agreements trust deeds and rules;
13.2.2 copies of the current explanatory booklets issued to
employees of the Company who are or may become members of
the Pension Schemes;
13.2.3 copies of any announcement to employees of the Company
relating to pension matters, in respect of benefit
improvements or other amendments not yet incorporated into
the documentation of the Pension Schemes;
13.2.4 particulars of the assets of the Pension Schemes by
reference to the categories listed in Schedule 3 of the
Occupational Pension Schemes (Disclosure of Information)
Regulations 1986 including particulars of any self
investment; and
13.2.5 a list of the Pension Schemes' active members, with all
particulars relevant to their membership of the Pension
Schemes and necessary to establish their entitlement to
benefits.
13.3 No discretion or power has been exercised under the Pension
Schemes in respect of employees or directors, former employees
and former directors of the Company to:
13.3.1 augment benefits;
13.3.2 admit to membership a director or employee who would not
otherwise have been eligible for admission to membership;
13.3.3 provide in respect of a member a benefit which would not
otherwise be provided in respect of such member; or
13.3.4 pay a contribution into it which would not otherwise
have been paid.
13.4 The Pension Schemes hold no securities issued by, properties
leased to or occupied by and has made no loans which are at the
date of this Agreement outstanding to, the Company or any
Insider.
13.5 There are no charges over any of the assets of the Pension
Schemes.
13.6 All members of the Pension Scheme have received full formal
written notification of all changes to the benefit structure of
the Pension Scheme made since it was established.
13.7 There has been no breach of the trusts of the Pension Schemes
and to the best of the Warrantors' knowledge, information and
belief there are no actions, suits or claims (other than
routine claims for benefits) outstanding pending or threatened
against the trustees or administrator of the Pension Schemes or
against any of the Vendors or the Company or any other employer
which participates in the Pension Schemes in respect of any
act, event, omission or other matter arising out of or in
connection with the Pension Schemes and to the knowledge,
information and belief of the Warrantors there are no
circumstances which may give rise to any such claim.
13.8 The Pension Schemes are approved by the Board of Inland Revenue
for the purposes of Chapter I of Part XIV of ICTA and to the
knowledge, information or belief of the Warrantors there are no
circumstances which might give the Inland Revenue reason to
withdraw such approval.
13.9 The Pension Schemes are not contracted-out schemes for the
purposes of the Pension Schemes Act 1993.
13.10 All contributions which are payable by the Company in
accordance with the provisions of the Pension Schemes and all
contributions due from its members have been duly made and to
the best of the Warrantors' knowledge, information and belief
the Company has fulfilled all its obligations under it.
13.11 The benefits which are prospectively and contingently payable
under the provisions of the Pension Schemes are solely such as
can be provided by the funds available for each of its members.
13.12 No augmentations to existing benefits have been made under the
provisions of the Pension Schemes and no additional benefits
have been granted without its actuary's confirmation in each
case that such augmentation or addition can be borne by it
within the existing funding rate without detriment to the
benefit of its other members or the payment of any additional
contributions which its actuary considers necessary to secure
such augmented or additional benefits.
13.13 The Pension Schemes have been administered in accordance with:
13.13.1 the preservation requirements within the meaning of
section 69 Pension Schemes Act 1993;
13.13.2 the equal access requirements within the meaning of
section 118 Pension Schemes Act 1993;
13.13.3 all relevant provisions of the Pensions Act 1995 and
any regulation made pursuant to that Act; and
13.13.4 all relevant provisions of the law of the European
Communities.
13.14 Each of the Pension Schemes is a "relevant ear-marked scheme"
and "wholly insured" as defined in Regulation 1 of the
Occupational Pension Schemes (Scheme Administration)
Regulations 1996 and Regulation 10 of the Occupational Pension
Schemes (Investment) Regulations 1996 respectively.
13.15 The pensions as currently paid by the Company to Mr and Mrs
Morrison, details of which are contained in the Disclosure
Letter, satisfy in full the Company's obligation to pay
pensions to Mr and Mrs Morrison pursuant to the agreements
between the Company and Mr and Mrs Morrison dated 25{th}
November 1983 and 1{st} June 1987 subject to an obligation to
pay to Mrs Morrison a sum equal to four ninth's of the pension
currently paid to Mr Morrison for such period as she shall
survive him.
14 CONTRACTS AND CUSTOMERS
14.1 The Company is not, a party to any contract, transaction, or
arrangement which:
14.1.1 is a contract of an unusually or abnormally onerous
nature, or outside the ordinary and proper course of
business;
14.1.2 is otherwise than by way of bargain at arm's length;
14.1.3 is of a long-term nature (that is, unlikely to have been
fully performed, in accordance with its terms, more than
six months after the date on which it was entered into or
undertaken);
14.1.4 is considered by the Warrantors to be likely to result
in a loss to the Company;
14.1.5 cannot based on the Company's existing capability
readily be fulfilled or performed by the Company on time
or without undue or unusual expenditure of money or
effort;
14.1.6 involves payment by or to the Company by reference to
fluctuations in the index of retail prices, or any other
index, or in the rate of exchange for currency;
14.1.7 provides for payment to or by the Company in any
currency other than Sterling;
14.1.8 is a forward contract or option for the sale or purchase
of any commodity or currency;
14.1.9 involves or is likely to involve an aggregate
consideration payable by the Company in excess of
<pound-sterling>100,000 or involves the supply of goods
and services by the Company with a net sales value in
excess of <pound-sterling>75,000;
14.1.10 restricts its freedom to engage in any activity or
business or confines its activity or business to a
particular place;
14.1.11 is a guarantee or contract of indemnity by virtue of
which it is under any actual or contingent liability;
14.1.12 by reason of the sale of the Shares or any provision of
this Agreement, gives any other contracting party the
right to terminate or vary the contract or create or
increase any obligation or liability of the Company;
14.1.13 is a distributorship or agency contract or arrangement
whether or not legally binding;
14.1.14 means that the Company is, or has agreed to become, a
member of any joint venture, consortium or partnership or
other unincorporated association;
14.1.15 involves the Company in any actual or contingent
liability in respect of property which it has previously
occupied or in which it had an interest including without
limitation in respect of any leasehold land assigned or
disposed of by it;
14.1.16 involves the Company in the payment of a finder's fee
or commission relating to the sale of the Shares; or
14.1.17 requires the consent of any third party to the sale of
the Shares.
14.2 The Company is not party to any contract where:
14.2.1 notice of termination has been given or received by the
Company or which the Warrantors have (without having made
any enquiry) reason to believe will be terminated (or not
renewed on any renewal date or the expiry of a fixed term)
by any other party to it; and
14.2.2 the liability or prospective liability of the Company is
guaranteed by any person.
14.3 The Company is not in breach of any contract to which it is a
party, and to the best of the Warrantors' knowledge,
information and belief no other party to any such contract is
in breach of it. To the knowledge, information or belief of the
Warrantors there are no grounds for the termination,
rescission, avoidance or repudiation of any contract by the
Company or any other party to any such contract.
14.4 No offer, quote or tender given or made by the Company outside
of the ordinary course of its business on or before the date of
this Agreement is capable of giving rise to a contract by the
unilateral act of a third party.
14.5 The Company has not accepted any obligation (other than an
obligation arising under statute to service, repair or maintain
or take back any goods or products that would apply after the
goods or products have been delivered by it.
14.6 The Company has not waived the rights under any contract to
which the Company is now a party.
14.7 In the period of twelve months prior to the date of this
Agreement, no customer of the Company providing income of more
than <pound-sterling>250,000 in such period:
14.7.1 has ceased to trade with the Company;
14.7.2 has materially reduced the amount of business which it
carries on with the Company; or
14.7.3 has materially changed the terms on which it carries on
business with the Company,
and no indication has been received by the Company or the Vendors
that there will or is likely to be any such cessation,
reduction or change.
14.8 In the period of twelve months prior to the date of this
Agreement, no substantial supplier of the Company:
14.8.1 has ceased to trade with the Company;
14.8.2 has materially reduced the amount of business which it
carries on with the Company; or
14.8.3 has materially changed the terms on which it carries on
business with the Company,
and no indication has been received by the Company or the
Warrantors that there will or is likely to be any such
cessation, reduction or change.
15 INSURANCE
15.1 The Disclosure Letter sets out full details of the Company's
insurance policies in effect in relation to its business and
assets.
15.2 The Company has at all times effected such insurances as are
required by law.
15.3 All premiums due in relation to the Company's insurances
detailed in the Disclosure Letter have been paid and to the
best of the Warrantors' knowledge, information and belief there
are no circumstances which might lead to any liability under
such insurance being avoided by the insurers or the premiums
being increased.
15.4 There is no claim outstanding under any policy of insurance nor
to the knowledge, information or belief of any of the
Warrantors are there circumstances likely to give rise to a
claim.
16 FINANCE AND WORKING CAPITAL
16.1 The total amount borrowed by the Company from its bankers does
not exceed its facilities and the total amount borrowed by the
Company from whatsoever source does not exceed any limitation
on its borrowing contained in its articles of association, or
in any debenture or loan stock, trust deed or other document.
16.2 Full and accurate details of all overdrafts, loans or other
financial facilities outstanding or available to the Company
are set out in the Disclosure Letter. Nothing has been done
whereby the continuance of any such facilities in full force
and effect might be affected or prejudiced.
16.3 The Disclosure Letter contains a statement of all the bank
accounts of the Company
16.4 No circumstances have arisen which could, with the giving of
notice or lapse of time or both, entitle a provider of finance
to the Company (other than on a normal overdraft facility) to
call in the whole or any part of the monies advanced or to
alter the terms of a facility or to enforce a security and no
provider of finance to the Company on overdraft facility has
demanded repayment or indicated that the existing facility will
be withdrawn or reduced or not renewed or that any terms
thereof will be altered to the disadvantage of the Company.
16.5 The Company has not engaged in any borrowing or financing
transaction or arrangement which does not appear as borrowings
in its statutory accounts.
16.6 No grants, subsidies and allowances have been applied for or
received by the Company from any government, authority, body or
agency (whether supra national, national, regional or local)
which may at any time be repaid or repayable.
17 COMPANY LAW AND AUTHORITIES
17.1 The memorandum and articles of association of the Company in
the form annexed to the Disclosure Letter are complete and
accurate and have embodied in them or annexed to them copies of
all resolutions and agreements as are referred to in section
380 of the Companies Act, and all amendments to them (if any)
were duly and properly made.
17.2 The register of members and the other statutory books of the
Company are up to date, have been properly kept and contain an
accurate and complete record of the matters with which they
should deal and no notice that any of them is incorrect or
should be rectified has been received by the Company or any of
the Vendors.
17.3 All such resolutions, returns and other documents required to
be delivered to the Registrar of Companies have been duly
delivered and are true and accurate and no such resolutions,
returns or other documents have been filed in the period of 14
days prior to the date of this Agreement.
17.4 None of the activities of the Company is ultra vires the
Company.
17.5 No person is or has been a shadow director, as defined by the
Companies Act, of the Company for any period who has not for
all purposes been a director throughout the same period.
17.6 No power of attorney given by the Company is in force.
18 INSOLVENCY, ETC.
18.1 No order has been made or petition presented or resolution
passed for the winding up of the Company or for an
administration order in respect of the Company.
18.2 No administrative receiver and/or manager has been appointed to
the Company's business or assets or any part thereof.
18.3 No distress, execution or other process which remains
undischarged has been levied on the assets of the Company.
18.4 The Company has not stopped payment to its creditors and is not
insolvent within the meaning of section 123 of the Insolvency
Act 1986 and the Company has not received a written demand in
accordance with section 123(1)(a) of the Insolvency Act 1986.
18.5 No voluntary arrangement has been approved under Part I of the
Insolvency Act 1986 and no compromise or arrangement has been
sanctioned under section 425 of the Companies Act in respect of
the Company.
18.6 No disqualification order has at any time been made pursuant to
the provisions of the Company Directors Disqualification Act
1986 against any officer of the Company or any person who is
not such an officer who takes part in the management of the
Company.
18.7 The Company has not been a party to any transaction at an
undervalue for the purpose of section 238 or section 239 of the
Insolvency Act 1986 nor has it given or to the best of the
Warrantors knowledge, information and belief received any
preference for the purposes of section 239 or section 340 of
the Insolvency Act 1986, in either case within a period of 2
years ending on the date of this Agreement.
18.8 To the knowledge, information or belief of the Warrantors there
are no facts which are likely to give rise to any of the events
or circumstances referred to in paragraphs 18.1 to 18.7.
19 LEGAL COMPLIANCE
19.1 Neither the Company, nor any of its officers, agents or
employees (during the course of their duties in relation to the
Company) have committed, or omitted to do, any act or thing the
commission or omission of which is, in contravention of any
act, order, regulation or the like in the United Kingdom the
European Union or anywhere else the Company carries on its
business and which is lilely to have a material adverse effect
on the Company.
19.2 Without limiting the generality of the foregoing, the Company
has not done or omitted to do any act or thing in contravention
of the provisions of the Restrictive Trade Practices Acts 1976
and 1977, the Fair Trading Act 1973, the Competition Act 1980,
Articles 85 and 86 of the Treaty of Rome, the Resale Prices Act
1976, the Trade Descriptions Act 1968, the Consumer Credit Act
1974, the Consumer Protection Act 1987, the Companies Act, the
Financial Services Act 1986 and the Banking Act 1987 and which
is likely to have a material adverse effect on the Company
19.3 There has not been within the six years prior to the date of
this Agreement and there is not to the best of the Warrantors'
knowledge, information and belief pending or in existence any
investigation or enquiry by, or on behalf of, any governmental
or other body into the affairs of the Company.
20 LICENCES
The Company has all licences and consents required for the carrying on of
its business and is not in breach of the terms or conditions of such
licences and consents and there are no pending or (to the knowledge,
information or belief of the Warrantors) threatened proceedings
which might in any material adverse way affect such licences and
consents. To the knowledge, information or belief of the
Warrantors there is no reason why any of them should be suspended,
threatened or revoked or be invalid. Copies of all such licences
and consents are attached to the Disclosure Letter.
21 DEFAULT
Since the Accounts Date to the best of the Warrantors' knowledge
information and belief the Company has not manufactured, sold or
supplied or agreed to manufacture, sell or supply any products
and/or services which were, at the date of sale or have since proved
to be, in any respect faulty, defective or dangerous, or which did
not on the date of sale comply in any respect with any warranties or
representations, expressly or impliedly made by it, or with
customers' specifications or with all applicable statutes,
regulations, orders or standards.
22 LITIGATION
22.1 Apart from normal debt collection for amounts not exceeding an
aggregate of
<pound-sterling>10,000, neither the Company nor any person for
whose acts or defaults in the matter it may be contractually or
vicariously liable is involved in any civil criminal or
arbitration proceedings or reference of any dispute to an
expert and to the knowledge, information or belief of the
Warrantors (i) no such proceeding is pending or threatened
against the Company or any such person and (ii) there are no
facts likely to give rise to such proceedings or reference.
22.2 There is no unsatisfied judgment or unfulfilled order
outstanding against the Company and the Company is not party to
any undertaking or assurance given to a court, tribunal or any
other person in connection with the determination or settlement
of any claim or proceedings.
23 EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:
23.1 the business of the Company has been carried on in the ordinary
and usual course and in the same manner, including nature and
scope, as in the financial year ended on the Accounts Date;
23.2 there has been no material adverse change in the financial or
trading position or prospects of the Company including, without
limitation, any decrease in turnover (whether by value or by
volume) or in the gross or net profits margins, or in
liabilities (actual or contingent) or expenses (direct or
indirect) of the Company as compared with the corresponding
months in the financial year ended on the Accounts Date;
23.3 there has been no reduction in the value of the net assets of
the Company determined in accordance with the same accounting
policies as those applied in the Accounts (on the basis that
each of the assets of the Company is valued at a figure no
greater than the value attributed to it in the Accounts or, in
the case of any of the said assets acquired by the Company
after the Accounts Date, at a figure no greater than cost);
23.4 the business has not been adversely affected by the loss of any
contract or customer or source or supply or by any other factor
not affecting similar businesses to a like extent;
23.5 the Company has not acquired, or agreed to acquire, any
tangible asset, single Intellectual Property Right or
investment having a value in excess of <pound-sterling>25,000
or tangible assets (excluding Stocks), Intellectual Property
Rights, or investments having an aggregate value in excess of
<pound-sterling>40,000;
23.6 the Company has not disposed of, or agreed to dispose of, any
tangible asset (excluding Stocks), any single Intellectual
Property Right or investment either having a value reflected in
the Accounts in excess of <pound-sterling>15,000 or acquired
since the Accounts Date;
23.7 the Company has not borrowed any money or raised any money in
the nature of borrowings except for borrowings on overdraft in
the ordinary course of business from Barclays Bank Plc within
the Company's existing overdraft facility with that bank as set
out in the Disclosure Letter;
23.8 no distributions within the meaning of section 209 ICTA have
been declared paid or made save as provided for in the
Accounts;
23.9 no items of Stocks, which are reflected in the Accounts as
finished goods or items purchased for resale and which are
still held by the Company, have been sold for less than their
value as reflected in the Accounts;
23.10 no debtor has been released by the Company on terms that the
debtor pays less than the face value of the debt, no debt has
been subordinated, written down or written off, provided
against (in whole or in part), factored or assigned, the
Company has not agreed to do any of the foregoing and no debt
in excess of <pound-sterling>5,000 has proved to be
irrecoverable;
23.11 no provision or reserve included in the Accounts has proved to
be inadequate in the light of subsequent circumstances and
there are no circumstances known to the Warrantors which
indicate that any such provision or reserve may prove to be
inadequate;
23.12 the Company has not changed its accounting reference date;
23.13 no payment has been made by the Company to, or benefit
conferred (directly or indirectly) on, any of the Vendors or
any Insider, save as specified in the Disclosure Letter; and
23.14 the Company has not incurred any fees or expenses in
connection with the transaction contemplated by this Agreement
and has incurred no liability to KPMG in connection with such
transaction or to Lovewell Blake other than, in the case of
Lovewell Blake work carried out in its capacity as the
Company's auditor.
24 EFFECTS OF THIS AGREEMENT
24.1 To the knowledge, information or belief of the Vendors without
having made any enquiry the acquisition of the Shares will not
affect the Company's relationship with its suppliers and
customers.
24.2 No brokers or finders fee is payable by the Company to any
party in respect of the transaction contemplated by this
Agreement.
25 TAXATION
RETURNS, DEDUCTIONS, DISPUTES
25.1 In the six years preceding the Accounts Date the Company has
duly and punctually paid all Taxation which it has become
liable to pay and is under no liability to pay any penalty,
interest, surcharge or fine in connection with any Taxation.
25.2 In the six years preceding the Accounts Date the Company has
within any applicable time limits made all such returns,
carried out all necessary registrations, provided all
information requested by any Taxation Authority by means of
full and accurate disclosure of all facts and material
circumstances and maintained all such records in relation to
Taxation as are required to be made or provided or maintained
by the Company.
25.3 In the six years preceding the Accounts Date the Company has
properly operated any and all systems of deduction of Taxation
on payments which it has made or has been treated as having
made to its employees and payment of National Insurance
contributions and social security contributions and has
complied with all its reporting obligations to all Taxation
Authorities or other appropriate authorities in all
jurisdictions and in connection with the benefits provided for
existing or former officers employees and directors of the
Company.
25.4 The Company is not involved in any dispute in relation to
Taxation and there are no circumstances known to the Warrantors
likely to give rise to such dispute.
25.5 In the six years preceding the Accounts Date no Taxation
Authority has investigated the Company or given notification
that it intends to commence investigation and there are no
circumstances known to the Warrantors likely to give rise to an
investigation.
25.6 In the six years preceding the Accounts Date the Company has
made all deductions in respect of or on account of any Taxation
from any payments made by it which it is obliged to make and
has accounted in full (where payment has already become due) to
the relevant Taxation Authority for all amounts so deducted.
25.7 There is set out in the Disclosure Letter with express
reference to this warranty full details of all matters relating
to Taxation in respect of which the Company (whether alone or
jointly with any other person) has an outstanding entitlement
or obligation:
25.7.1 to make any claim (including a supplementary claim) for
relief from Taxation or to make any claim for repayment of
any amount of tax paid or to make any election for one
type of relief or one basis system or method of taxation
as opposed to another where such claim or election is
taken into account in the preparation of the Accounts;
25.7.2 to make any appeal (including a further appeal) against
an assessment to Taxation; and
25.7.3 to make any application for the postponement of payment
of Taxation.
BASE VALUES, CAPITAL GAINS
25.8 The Company has sufficient records relating to past events to
calculate the liability to Taxation or relief which would arise
on any disposal or on the realisation of any asset owned at the
Accounts Date or acquired since that date but before
Completion.
25.9 The value attributed to each asset of the Company in, or for
the purposes of, the Accounts as at the Accounts Date is such
that on any disposal thereof for a consideration equal to such
value (and disregarding any right to claim any allowance or
relief) no liability to Taxation in respect of any gain
(including any gain deemed to arise for Taxation purposes) will
arise.
25.10 No liability to Taxation will arise on the disposal by the
Company of any asset acquired since the Accounts Date for a
consideration equal to the consideration actually given for the
acquisition.
25.11 The Company has not made a claim under sections 152-158 (roll
over relief), 175 (replacement of business assets by members of
a group), 247 (roll over relief on compulsory acquisition)
TCGA.
25.12 The Company has not since the Accounts Date appropriated any
asset forming part of its trading stock for any purpose.
25.13 No election has been made under section 35(5) TCGA (assets
held on 31 March 1982) in respect of any assets of the Company.
STAMP DUTY
25.14 There is no instrument which is necessary to establish the
Company's title to any right or asset which is liable to stamp
duty but which has not been duly stamped or which would attract
stamp duty if brought within the relevant jurisdiction.
25.15 The Company is not and has never been part of a group of
companies as defined in section 170 TCGA
TAXATION LIABILITIES AND RELIEFS
25.16 To the best of the Warrantors' knowledge, information and
belief other than as provided for or noted in the Accounts no
event transaction act or omission has occurred which could
result in the Company becoming liable to pay or to bear or to
make reimbursement or indemnity in respect of any Taxation
which is primarily or directly chargeable against or
attributable to any person firm or company other than the
Company.
25.17 The Company has not been party to any transaction or
arrangement which could give rise to a liability to Taxation
where the consideration received or given by the Company was
or, in respect of any transaction or arrangement entered into
before the date of this Agreement, will be greater or less than
that which would have been received or given if the transaction
had been carried out on an arm's length basis.
25.18 The Company is not liable to Taxation (and has not been and
will not be denied any relief) by reason of any interest or
other payment by the Company being treated by any Taxation
Authority as a distribution or other such similar payment.
25.19 The Disclosure Letter contains full details of all claims for
the set-off of the Company's advance corporation tax ("ACT")
against the Company's liability to corporation tax made within
the last six years and the Company is not liable to make any
payment for ACT surrendered or otherwise made available to it.
25.20 The Company has not:
25.20.1 been a party to, involved in, or connected with any
exchange of securities whether or not (by virtue of
section 135 TCGA) section 127 TCGA applied to the
exchange;
25.20.2 carried out or been involved in or connected with any
reorganisation or scheme of reconstruction or amalgamation
whether or not (by virtue of section 126 or 136 TCGA)
section 127 TCGA applied to such reorganisation or scheme
of reconstruction or amalgamation;
25.20.3 carried out or been involved in or connected with any
scheme of reconstruction or amalgamation involving a
transfer of business assets whether or not section 139
TCGA applied to the transfer;
25.20.4 made or received any exempt distribution within the
meaning of section 213 ICTA, and has at no time been a
relevant company in relation to an exempt distribution for
the purposes of that section or concerned in an exempt
distribution for the purposes of section 214 ICTA; or
25.20.5 made a purchase of its own shares to which section
219(1) ICTA applies.
VALUE ADDED TAX
25.21 The Company is registered for the purposes of value added tax
and has not been required by the Commissioners of Customs &
Excise to give security under paragraph 4 (power to require
security and production of evidence) of Schedule 11 VATA
(administration collection and enforcement).
25.22 The Company has maintained and obtained accounts, records,
invoices and other documents (as the case may be) appropriate
or requisite for the purposes of value added tax which are
complete, correct and up to date.
25.23 The Company has not at any time been treated as a member of
any group of companies for the purposes of section 43 VATA
(group of companies) and has not applied for treatment as such
a member.
25.24 The Company has never received a surcharge liability notice
under section 59 VATA (default surcharge) or a penalty
liability notice under section 64 VATA (persistent
misdeclarations).
25.25 The Company is not, nor in the two years prior to Completion
has been, in arrears with any payments or returns or
notifications under any statutory provisions, directions,
conditions or notices relating to value added tax, or liable to
forfeiture or penalty or interest or surcharge or to the
operation of any penalty, interest or surcharge provision.
25.26 The Company has not made any supplies that are exempt supplies
or would be exempt supplies if supplied within the United
Kingdom.
25.27 The Disclosure Letter sets out full details of any claim for
bad debt relief under section 36 VATA (bad debts) made and
which remain outstanding or which may be made by the Company
and if written off would give rise to a right to claim relief.
25.28 The Company is not and has not agreed to become an agent,
manager or factor for the purposes of section 47 VATA (agents)
of any person who is not resident in the United Kingdom.
25.29 The Company has not incurred any liability in respect of value
added tax (whether to H.M. Customs and Excise or to any other
person) by reason of the provisions of paragraph 2(1) Schedule
10 VATA and there are no circumstances whereby the Company
could become so liable as a result of a person making an
election under that paragraph.
25.30 Neither the Company nor any relevant associate (within the
meaning of paragraph 3(7) Schedule 10 VATA) has made any
election under paragraph 2(1) Schedule 10 VATA in respect of
any land in, over or in respect of which the Company has any
interest, right or licence to occupy and the Company is not
aware of any intention to make such an election.
25.31 There is set out in the Disclosure Letter with express
reference to this warranty full details of any agreement or
arrangement regarding group registration for value added tax
which the Company has entered into.
GIFTS
25.32 There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to the assets of the
Company or the shares of the Company and neither the assets nor
the shares are subject to any Inland Revenue charge as
mentioned in section 237 Inheritance Tax Act 1984.
25.33 No person has the power under section 212 Inheritance Tax Act
1984 to raise any capital transfer tax or inheritance tax by
the sale or mortgage of or by a terminable charge on any of the
Company's assets.
CAPITAL ALLOWANCES
25.34 There are set out in the Disclosure Letter details of all
capital allowances, first year allowances and industrial
building allowances claimed in respect of the accounting period
of the Company ended on the Accounts Date in respect of each
asset or pool of assets for which separate computations of
capital allowances first year allowances or industrial
buildings allowances as appropriate are required to be made or,
as a result of any election, are made.
25.35 The book value of each of the assets or pool of assets of the
Company in or adopted for the purpose of the Accounts does not
exceed the written down value of such asset or pool of assets
for the purposes of CAA 1990.
25.36 No balancing charge pursuant to CAA 1990 (or other legislation
relating to any capital allowances) will be made on the Company
on any disposal of any or all such assets for a consideration
equal to or less than the value of such asset or assets in the
Accounts.
25.37 The Company has not incurred any expenditure on the provision
of any capital allowance bearing asset for leasing.
25.38 The Company has not made any election under section 37 CAA
1990 (short life assets) nor is it taken to have made any such
election under section 37(8)(c) CAA 1990.
25.39 No transaction has been entered into by virtue of which
sections 75 (restrictions on capital allowances) or 157 CAA
1990 (connected parties) are applicable.
25.40 Since the Accounts Date nothing has happened as a result of
which:
25.40.1 there may be made against the Company a balancing
charge under the Capital Allowances Act 1968 or under the
CAA 1990;
25.40.2 any disposal value may be brought into account under
section 24 CAA 1990 (writing down allowances and balancing
adjustments);
25.40.3 there may be any recovery of excess relief within
sections 46 or 47 CAA 1990 (recovery of excess relief); or
25.40.4 a relevant event may occur within the meaning of
section 138 CAA 1990 (scientific research).
25.41 There is not and to the best of the Warrantors' knowledge,
information and belief there are no circumstances which could
give rise to any dispute between the Company and any other
person as to the entitlement to capital allowances under
sections 51 - 59 CAA 1990 (fixtures).
25.42 None of the assets for which a capital allowance has been made
to the Company or has been claimed by the Company has been
disposed of or ceased to be used for the purpose of its trade
since the Accounts Date.
25.43 None of the assets, expenditure on which has qualified for a
capital allowance under the CAA 1990 Part I (industrial
buildings), has at any time since such expenditure was incurred
been used otherwise than as an industrial building or structure
as defined in section 18 CAA 1990.
25.44 In the six years preceding the Accounts Date the Company has
complied with sections 203 - 203L ICTA (pay as you earn) and
the regulations made thereunder in respect of all payments
within the meaning of those sections and with the Social
Security (Contributions) Regulations 1979 in respect of all
earnings which are subject to those regulations.
25.45 No officer or employee of the Company participates in any
scheme of the Company approved under Schedule 9 ICTA (approved
share option and profit sharing schemes) or is a beneficiary or
potential beneficiary of a qualifying employee share ownership
trust of the Company as defined in Schedule 5 Finance Act 1989
(employee share ownership trusts).
25.46 The Company has not issued shares to which Part III, Chapter
II Finance Act 1988 (unapproved employee share schemes)
applies.
25.47 No remuneration for or in respect of the services of a
director or an employee has been paid to any person other than
the director or employee.
25.48 The Company has not since the Accounts Date entered into or
been a party to any transaction which will or may give rise to
a liability to Taxation other than any Taxation arising in the
ordinary course of business.
25.49 The Company is not under any obligation to make any payment of
interest or other similar type of payment which will not be
wholly allowable as a deduction in computing its taxable
profits in the accounting period (or other relevant period) in
which such amount is treated as an expense in the accounts of
the Company or (if earlier) in which such amount is paid.
25.50 The Company is not liable and has not been liable to Taxation
in any jurisdiction other than the United Kingdom.
25.51 The Company is and at all times has been resident in the
United Kingdom for the purposes of Taxation and has not been
resident outside the United Kingdom for any double Taxation
arrangements.
25.52 The Company has not made any repayment of share capital or
issued any share capital as paid up otherwise than by the
receipt of new consideration.
25.53 The Company is not and has never been a close investment
holding company within the meaning of section 13A ICTA (close
investment holding companies).
26 ENVIRONMENT
26.1 In this paragraph:
26.1.1 "Environmental Law" means all laws (whether statutory or
common, civil or criminal), regulations, codes of
practice, circulars, guidance notes and the like (whether
in the United Kingdom or elsewhere but having force in the
United Kingdom) concerning:
26.1.2 the control and prevention of pollution of land,
water or the atmosphere;
26.1.3 the release, discharge, spillage, deposit, emission
or other escape of Hazardous Substances;
26.1.4 noise, odour or other nuisances;
26.1.5 the production, transportation, storage, treatment,
recycling or disposal of waste; and
26.1.6 the conditions of the workplace and the protection
of human health and life;
26.2.1 "Environmental Licences" means all permits, licences,
authorisations, consents or other approvals required by
any Environmental Law to be obtained in connection with
the carrying on of the business, activities and operations
of the Company or the use of any Relevant Property;
26.2.2 "Hazardous Substance" means any natural or artificial
substance (whether in solid or liquid form or in the form
of a gas or vapour) which may either alone or in
combination with any other substance be harmful to man or
to the life or health of any other living organisms or to
the environment; and
26.2.3 "Relevant Property" means any premises now or previously
owned, leased, occupied, or controlled by the Company.
26.3 There are annexed to the Disclosure Letter copies
of the Environmental Licenses obtained by the Company.
26.4 The Company has obtained all requisite
Environmental Licences and has at all times complied with the
terms and conditions of those licences and to the best of the
Warrantors' knowledge, information and belief without undue
effort and expenditure on the part of the Company, can continue
to so comply.
26.5 The Company has at all times complied with all
applicable Environmental Law.
26.6 The Company has not received any notice or other
communication from which it appears that it may be or is
alleged to be in violation of any Environmental Law or
Environmental Licence, or that any Environmental Licence may be
subject to modification, suspension or revocation and there are
no circumstances known to the Warrantors likely to give rise to
any such violation or modification, suspension or revocation.
26.7 The Company has not used, disposed of, generated,
stored, transported, dumped, released, deposited or buried or
emitted any Hazardous Substance at, on, from or under any
Relevant Property.
26.8 So far as the Warrantors are aware without having
commissioned any environmental survey or audit in respect of
Relevant Property no other person has used, disposed of,
generated, stored, transported, dumped, released, deposited,
buried or emitted any Hazardous Substance at, on, from or under
any Relevant Property.
26.9 The Company has not disposed of any Hazardous
Substance in such a way that its disposal constituted, a breach
of any Environmental Law.
26.10 Full details of any environmental assessment, audit, review or
investigation conducted by or on behalf of the Company are
contained in or annexed to the Disclosure Letter.
26.11 To the knowledge, information or belief of the Warrantors, but
without having made any enquiries the warranties in paragraphs
26.3 to 26.8 inclusive would be true if they were given in
respect of any other person who owns or occupies or carries on
business on property which adjoins the Property and if they
related to activities carried on by such person on such
property.
26.12 Full details are set out in the Disclosure Letter of :
26.12.1 any remedial work, including the cost of that work,
carried out at any Relevant Property to ensure compliance
with any Environmental Law; and
26.12.2 all expenditure which to the knowledge, information or
belief of the Vendors is now required to be incurred by
the Company to comply with any applicable Environmental
Law or any condition attaching to any Environmental
Licence.
<PAGE>
SCHEDULE 5
FORM OF RESIGNATION OF DIRECTOR/SECRETARY
(clause 4.1.1(c))
To : The Directors
Norwich Injection Moulders Limited 1998
Dear Sirs
NORWICH INJECTION MOULDERS LIMITED ("THE COMPANY")
I hereby resign from my office as Director/the Secretary of the Company
and acknowledge that I have no claim whatsoever against the Company in
respect of loss of office or employment, redundancy or unfair dismissal
save in respect of accrued remuneration of the current month and that I
have no other claim or right of action against the Company whatsoever.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's Signature:
Name:
Address:
<PAGE>
SCHEDULE 6
FORM OF ACKNOWLEDGEMENT
(CLAUSE 4.1.4 (B))
To : The Directors
NIM Holdings Limited
1998
Dear Sirs
NORWICH INJECTION MOULDERS LIMITED ("THE COMPANY")
In consideration of your today agreeing to complete the purchase of the
entire issued share capital of the Company I/we hereby acknowledge that:
1. I/we and the persons who are connected with me/us have no claim
against the Company save in respect of salary to date for the
current month; and
2. there are no agreements or arrangements under or as a result of
which the Company has any actual, contingent or future obligation to
or in respect of me/us or any persons who are connected with me/us
including, without limitation, any obligation under any guarantee
entered into by the Company.
Section 839 Income and Corporation Taxes Act 1988 applies as it applies
in that Act to determine whether one person is connected with another.
IN WITNESS of these matters this document is executed as a deed and
delivered on the date stated at the beginning of this document.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's signature:
Name:
Address:
<PAGE>
SCHEDULE 7
FORM OF POWER OF ATTORNEY
(clause 4.1.1.(g))
THIS POWER OF ATTORNEY is made the day of 1998
by [NAME] ("the Grantor")
RECITAL:
The Grantor is the registered holder of [NUMBER AND DESCRIPTION] shares
("the Shares") in the capital of Norwich Injection Moulders Limited ("the
Company") and has sold the Shares.
1 GRANT
The Grantor irrevocably appoints [NEWCO LIMITED] ("the Purchaser") to be
its attorney to do all or any of the matters and things set out in
paragraph 4 of this Power.
2 IRREVOCABLE APPOINTMENT
This Power of Attorney is executed to secure the interest of the
Purchaser in the Shares and shall accordingly be irrevocable.
3 RATIFICATION AND NON INTERFERENCE
The Grantor undertakes:
3.1 to ratify everything done by the Purchaser under this power of
attorney; and
3.2 not to exercise or attempt to exercise any rights attached to
the Shares which are exercisable by the Purchaser under this
power of attorney.
4 MATTERS COVERED
The matters and things referred to in paragraph 1 are:
4.1 to exercise all voting and other rights attaching to the
Shares;
4.2 to execute a form of proxy in favour of such person or persons
as the Purchaser thinks fit to attend and vote as the Grantor's
proxy at any general meeting of the members or any separate
class meeting of any class of members of the Company in respect
of the Shares in such manner as the Purchaser may decide;
4.3 to exercise all rights to call for or requisition any such
general or separate class meeting of the Company;
4.4 to consent to the convening and holding of any such general or
separate class meeting of the Company and the passing of the
resolutions to be submitted at any such meeting on short
notice; and
4.5 to settle the terms of and consent and agree to any resolutions
of the Company dealt with by written resolution whether
pursuant to the Company's articles of association, the
Companies Act 1985 or otherwise howsoever.
5. CESSATION
This Power of Attorney shall cease to have any effect on the
earlier of the shares being registered as held by the Purchaser
in the Company's register of members or the expiry of 12 months
from the date hereof.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's Signature:
Name:
Address:
<PAGE>
SCHEDULE 8
Tax Covenant
DATE: 1998
PARTIES:
(1) THE PERSONS whose names and addresses are set out in the Schedule to
this Deed (together referred to as the "Warrantors")
(2) NIM HOLDINGS LIMITED ("the Purchaser" which expression shall be
deemed to include its successors in title and assigns) whose
registered office is at Aldwych House, 81 Aldwych, London, WC2B 4HN.
RECITAL:
This Deed is entered into pursuant to an agreement of the same date as
this ("the Agreement") between the Vendors (1) and the Purchaser (2)
whereby the Vendors have agreed to sell and the Purchaser has agreed to
purchase the whole of the share capital of Norwich Injection Moulders
Limited (registered number 964668) (the "Company") on the terms and
conditions set out therein.
IT IS AGREED as follows:
1. INTERPRETATION
In this Deed:
1.1the following words and expressions shall have the same meanings as in
the Agreement:
<TABLE>
<CAPTION>
"Accounts"
<S> <C>
"Accounts Date"
"Auditors"
"Business Day"
"Completion"
"Completion Accounts"
"Completion Accounts Date"
"ICTA"
"Net Assets"
"Shares"
"TCGA"
"Vendors"
the following words and expressions shall have the following meanings
"Saving" means the reduction or elimination of any
liability of the Company to make an actual
payment of Taxation in respect of which the
Warrantors would not have been liable under
clause 2, by the use of any Relief arising as a
result of a Taxation Liability or other
liability in respect of which the Warrantors
have made a payment under clause 2
</TABLE>
1.2 "Claim" means any notice demand assessment letter or other document
issued or action taken by or on behalf of any authority, body or
person whether in the United Kingdom or elsewhere, including but not
limited to the United Kingdom Inland Revenue and Customs and Excise
Authorities, whereby it appears that the Company is or may be
subject to a Taxation Liability (as defined below);
1.3 "Event" means any event whatsoever including but not limited to any
transaction, action or omission whether or not the Company is a
party thereto, the death of any person, the earning, accrual or
receipt of any income, profits, or gains, the incurring for any
Taxation purpose of any loss or expenditure, the declaration, paying
or making of any dividend or other distribution, any change in the
residence of any person for any Taxation purpose, and the entry into
and/or Completion of the Agreement and any Event which is deemed to
have occurred or is treated as having occurred for the purposes of
Taxation Legislation provided such Taxation Legislation was in force
at Completion;
1.4 "Purchaser's Group" means the Purchaser and any companies within the
same group of companies as the Purchaser for the purposes of section
170 of TCGA at the time when the matter falls to be considered for
the purposes of this Deed;
1.5 "Surrender Agreement" means an agreement such as is described in
clause 1.9.5;
1.6 "Relief" means any relief, allowance, exemption, set off or
deduction in profits, income or gains of any description or credit
against, or right to repayment of, Taxation including repayment
supplement granted by or pursuant to any Taxation Legislation;
1.7 "Taxation" means:
1.7.1 all taxes, duties, charges, levies, deductions or withholdings
whenever imposed and whether of the United Kingdom or elsewhere
including without limitation income tax, (including income tax
required to be deducted or withheld from or accounted for in
respect of any payment) capital gains tax, inheritance tax,
corporation tax, advance corporation tax, liabilities in
respect of the Pay As You Earn system, any charge to tax
arising pursuant to section 419 ICTA, stamp duty, stamp duty
reserve tax, value added tax, customs duties, excise duties,
other import duties, withholding tax, national insurance,
social security and other similar contributions;
1.7.2 any interest, penalty, fine and surcharge related to or
arising in connection with any of the matters specified in the
preceding sub-paragraphs;
1.8 "Taxation Legislation" means any statute, statutory instrument,
regulation or legislative provision wheresoever enacted providing
for, imposing or relating to Taxation and shall include any statute,
enactment, law, statutory instrument, order, regulation or provision
which amends extends consolidates or replaces the same or which has
been amended extended consolidated or replaced by the same;
1.9 "Taxation Liability" means any liability of the Company to make a
payment of or in respect of Taxation whether or not the same is the
primary liability of the Company and whether or not the Company has
or may have a right of reimbursement against any other person and
shall further include:
1.9.1 any Taxation which is assessed on any person other than
the Company whether or not the Taxation is assessed in the
name of the Company or the Purchaser and which, or an
amount equivalent to which, is recoverable by that person
from the Company pursuant to the provisions of the
Taxation Legislation;
1.9.2 the loss or set-off of any Relief which was treated as an
asset of the Company in the Accounts (where but for such
set off the Company would have had an actual liability to
Taxation in respect of which the Purchaser would have been
able to have made a claim against the Vendors under this
Deed);
1.9.3 the loss or set-off of any Relief which was taken into
account in computing any provision for deferred tax which
appears in the Accounts or would have appeared in the
Accounts but for the presumed availability of such Relief
(a "Notional Taxation Liability");
1.9.4 the set-off of any Relief available to the Company or any
member of the Purchaser's Group, which Relief arises
principally as a result of an Event after Completion, in
circumstances where but for such set-off there would have
been a Taxation Liability in respect of which the
Warrantors would have been liable to make a payment under
clause 2 of this Deed: and, for the purposes of clauses
1.9.2, 1.9.3, and 1.9.4, the amount of the Relief so set-
off or which would otherwise have been obtained shall be
treated for the purposes of this Deed as a Taxation
Liability of the Company provided that if such Relief
would operate as a deduction from or as a set-off against
income, profits or gains the Taxation Liability which is
deemed to have arisen shall be equal to the amount of
Taxation which would, on the basis of the rates of
Taxation current at the date of such set-off, have
otherwise been saved; provided also that the Taxation
Liability which arises or is deemed to arise pursuant to
this clause 1.9.4 shall not exceed the liability of the
Warrantors to make a payment under this Deed which would
have resulted had such a Relief not been set-off.
1.9.5 the liability of the Company under any agreement entered
into on or before Completion to make a payment to another
person in respect of Reliefs surrendered or otherwise made
available to the Company under Part X, Ch IV ICTA or in
respect of advance corporation tax surrendered or
otherwise made available to the Company;
1.9.6 any inheritance tax which:
1.9.6.1 is at Completion a charge on any of the Shares or
assets of the Company or gives rise to a power to
sell, mortgage or charge any of the Shares or assets
of the Company; or
1.9.6.2 after Completion becomes a charge on or gives rise
to a power of sale, mortgage or charge over any of
the Shares or assets of the Company; and, for the
purposes of clauses 1.9.6.1 and 1.9.6.2, in
determining whether such a charge on or such a power
over any of the Shares or assets of the Company
exists at any time the fact that any inheritance tax
is not yet payable or may be paid by instalments
shall be disregarded and the total liability for such
Taxation shall be treated as falling due, and a
charge or power of sale as arising in relation to
that total liability, on the date of the chargeable
transfer in respect of which such Taxation becomes
payable or arises and the provisions of section 213
of the Inheritance Tax Act 1984 shall not apply
thereto;
1.9.6.3 arises as a result of a transfer of value
occurring on or before Completion (whether or not in
conjunction with the death of any person whenever
occurring) which increased or decreased the value of
the estate of a Company;
1.10 a reference to income or profits or gains earned, accrued,
received or arising shall include income or profits or gains
deemed pursuant to any Taxation Legislation to have been or
treated or regarded as earned, accrued, received or arising;
1.11 any reference to a transaction or Event occurring in the
ordinary course of business of the Company shall specifically
exclude any of the following Events:
1.11.1 any distribution within the meaning of Part VI ICTA
(company distributions, tax credits) or within Section 418
ICTA (expenses treated as distributions);
1.11.2 any event in respect of which the consideration (if any)
actually received is different from the consideration
deemed to have been received for any Taxation purpose;
1.11.3 any Event which gives rise to a Taxation Liability in
respect of deemed (as opposed to actual) income, profits
or gains;
1.11.4 a disposal or deemed disposal of capital assets;
1.11.5 the Company ceasing, or being deemed to cease, to be a
member of any group of companies or associated with any
other company for any Taxation purpose;
1.11.6 any Event which gives rise to a Taxation Liability under
Section 126 and Schedule 23 Finance Act 1995 (obligations
imposed on UK representatives);
1.11.7 any Event which gives rise to a Taxation Liability under
Part XVII ICTA (tax avoidance);
1.11.8 any Event which gives rise to a Taxation Liability
primarily chargeable against or attributable wholly or
partly to or recoverable wholly or partly from any other
person;
1.11.9 an Event in respect of which a Taxation Liability arises
as a result of a failure by the Company to deduct or
account for Taxation; and
1.11.10 the release or waiver of all or part of a debt.
1.12 headings used in this Deed are for convenience only and shall
not affect its construction;
1.13 references to clauses are (unless otherwise indicated to the
contrary) references to clauses of this Deed;
1.14 any reference to a person shall be construed to include a
reference to a body corporate, unincorporated association and
a partnership;
1.15 references to any statute or statutory provisions shall,
unless the context requires otherwise, be construed as
including references to a corresponding earlier statute or the
corresponding provisions of any earlier corresponding statute
(whether repealed or not) which is directly or indirectly
amended, consolidated, extended or which is replaced by such
provisions, or re-enacted in such provisions; and
1.16 in construing this Deed the interpretation of general words
shall not be restricted by being followed by words indicating
a particular class of acts, matters or things or being
followed by particular examples.
2 COVENANT TO PAY
2.1 Subject to clause 3 the Warrantors hereby jointly and severally
covenant with the Purchaser that the Warrantors will pay to the
Purchaser an amount equal to:
2.1.1 any Taxation Liability arising as a result of, or by
reference to, any Event which occurred on or before, or
was pursuant to any Taxation Legislation in force at
Completion deemed to occur on or before, Completion or in
respect of, or with reference to, any income profits or
gains earned, accrued or received on or before, or in
respect of a period ending on or before, Completion;
2.1.2 any Notional Tax Liability of the Company;
2.1.3 any Taxation Liability which arises under section 132
Finance Act 1988 (liability of other persons for unpaid
tax) or sections 190 or 191 TCGA (tax on one group member
recoverable from another) as a result of the combined
effect of two or more Events the first of which occurred
on or before Completion;
2.1.4 any Taxation Liability which arises with respect to the
period prior to Completion by reference to any supplies
made or deemed to be made for the purposes of value added
tax by any member of a VAT group other than the Company or
to the late payment of any value added tax by the
representative member of the VAT group or to any return
required to be submitted by the representative member of
the VAT group;
2.1.5 any Taxation Liability arising from any such payment or
deemed payment as constitutes a chargeable payment for the
purposes of section 214 ICTA (chargeable payments
connected with exempt distributions) which occurs or is
deemed to occur after Completion;
2.1.6 any Taxation Liability which falls within clause 1.9.5;
2.1.7 all reasonable losses, payments, claims, demands,
expenses, and other liabilities incurred by the Company or
incurred by any member of the Purchaser's Group:
2.1.7.1 arising out of or in connection with any Claim;
2.1.7.2 in connection with any Taxation Liability referred
to in clauses 2.1.1 to 2.1.6; or
2.1.7.3 in connection with any action reasonably taken to
avoid resist or settle any Taxation Liability
referred to in clauses 2.1.1 to 2.1.6 or otherwise
taking or defending any action under this Deed and
2.1.8 any Taxation Liability which arises as a result of the
declaration by the Company of a stock dividend on the
22{nd} May 1998;
2.2 The Purchaser shall be entitled to make a claim under this Deed in
respect of a Taxation Liability notwithstanding that such Taxation
Liability has been paid or discharged whether before or after
Completion.
3 LIMITATIONS ON COVENANT
Subject to 3.16 below the Covenant in clause 2 shall not apply to any
Taxation Liability or other liability to the extent that such
Taxation Liability or other liability:
3.1 is the subject of a specific reserve or specific provision in
the Accounts or the Completion Accounts;
3.2 arises or is increased as a result of a change in legislation
or Taxation Legislation (including but not limited to an
increase in rates of Taxation) occurring after Completion;
3.3 was discharged on or before the Completion Accounts Date and
the discharge of such Taxation Liability or other liability was
taken account of in the balance sheet of the Accounts or the
Completion Accounts;
3.4 is for an amount in respect of which payment has already been
received by the Purchaser or the Company whether from the
Warrantors or a third party (other than the Purchaser or any
other member of the same group of companies as the Purchaser);
3.5 would not have arisen but for a change in the published
practice of any authority or body first announced after
Completion;
3.6 would not have arisen but for a voluntary act, transaction or
omission of the Company after Completion:
3.6.1 otherwise than pursuant to a legally binding obligation
entered into by the Company on or before Completion or
imposed on the Company by any Taxation Legislation coming
into force before Completion;
3.6.2 which the Purchaser was aware or ought reasonably to have
been aware would give rise to the Taxation Liability or
other Liability in question;
3.6.3 otherwise than in the ordinary course of business of the
Company; and
3.6.4 other than with the clearly expressed consent or at the
request of any of the Warrantors;
3.7 relates to any fine, penalty, surcharge or interest arising by
reason of any failure or
delay on the part of the Company in paying over to the relevant
tax authority
any payment made
hereunder by the Warrantors or in keeping preserving,
maintaining or submitting any account records form return or
computation after Completion;
3.8 would not have arisen or would have been reduced but for a
failure or omission on the part of the Purchaser or the Company
to make any election or claim any Relief the making or claiming
of which was taken into account in computing any
provision or reserve for tax
in the Accounts; and which was specifically disclosed against
warranty 25.34 of Schedule 4 to the Agreement;
3.9 arises by reason of a voluntary disclaimer by the Company after
Completion of the whole or any part of any allowance to which
it is entitled under Part II of the Capital Allowances Act 1990
or by reason of the revocation by the Company after Completion
of any claim for relief made (whether provisionally or
otherwise) prior to Completion; and which was specifically
disclosed against warranty 25.34 of Schedule 4 to the
Agreement;
3.10 would not have arisen but for a cessation of or any change in
the nature or conduct of any trade carried on by the Company
being a cessation or change occurring on or after Completion;
3.11 arises or is increased (and in either case only to the extent
if any that it so arises or as the case may be, is increased)
as a direct result of any failure by the Purchaser or the
Company to comply with any of their respective obligations
under the terms of this Deed;
3.12 would not have been a liability borne by the Warrantors had
paragraphs 1 and 2.1 to 2.4 inclusive of Schedule 11 of the
Agreement been set out in full in this Deed and the words " the
Tax Covenant" had been replaced by the words "this Deed" and
the words "this Agreement" had been replaced by the words "the
Agreement";
3.13 arises or is increased as a result of any change in the
accounting policy or practice or in the accounting reference
date of the Company after Completion;
3.14 is a balancing charge arising pursuant to the Capital
Allowances Act 1990 on any disposal by the Company after
Completion other than a disposal of assets to which any of
section 36,37 or 38A of the said Act apply; or
3.15 results from the provision or reserve for corporation tax in
the accounts prepared pursuant to Schedule 9 being insufficient
by reason of the effective tax rate being higher than 28%. For
this purpose the effective tax rate is the corporation tax
charge for the accounting period (relating to the profits of
such period) during which 30{th} June 1998 falls, divided by
the profit before tax in the audited accounts for the same
accounting period, expressed as a percentage;
3.16 none of the limitations in this clause 3 other than clauses
3.1, 3.4 3.7 and the limitation created by reference in clause
3.12 to paragraphs 1 and 2.4 only of Schedule 11 to the
Agreement shall apply to any Taxation Liability under clauses
2.1.8.
4 DEDUCTIONS AND WITHHOLDINGS
4.1 All sums payable by the Warrantors under this Deed will be paid
free and clear of all deductions or withholdings whatsoever,
whether or not arising from any set-off or counterclaim unless
the deduction or withholding is required by law. If any such
deduction or withholding is required by law, the Warrantors
shall be obliged to pay such additional amount as shall be
required to ensure that the net amount received hereunder by
the Purchaser after such deduction or withholding has been made
will equal the amount which would have been received by the
recipient had no such deduction or withholding been required by
law.
4.2 If any sum payable by the Warrantors under this Deed shall be
subject to Taxation in the hands of the recipient, otherwise
than by a withholding or a deduction referred to in clause 4.1
the Warrantors shall pay such an additional amount to ensure
that the net receipt of the Purchaser is the same as if the
amount of tax so payable were treated as a withholding or
deduction under the terms of clause 4.1
5 DUE DATE FOR PAYMENT
5.1 The Warrantors shall make payment under clause 2 on the date
following five Business Days after service of a notice
containing a written demand in respect of a Claim for which the
Warrantors are liable under this Deed, save that in any case
involving the Company in making an actual payment of Taxation
or an actual payment pursuant to a Surrender Agreement the
Warrantors shall make payment on the later of:
5.1.1 the date previously referred to in clause 5.1; and
5.1.2 the date falling five clear Business Days before the
Company is finally due to make such payment.
5.2 The Warrantors shall make payment in respect of any liability
under clause 4.1 on the date on which the Warrantors are liable
to make the deductions or withholdings and in respect of any
liability under clause 4.2, on the date falling five Business
Days after service of a notice containing a written demand for
such payment.
5.3 Any sums not paid on a date established by reference to the
preceding provisions of clause 5 ("the Due Date") shall bear
interest at the annual rate of two per centum (2%) above the
base lending rate from time to time of Barclays Bank Plc
whether before or after judgment, accruing on a daily basis
until payment is made and compounded at three monthly
intervals. Such interest shall be paid within five clear
Business Days of a demand for such by the Purchaser.
6 CONDUCT OF CLAIMS
6.1 Each of the following provisions of this clause 6 shall apply
to regulate the conduct of claims under this Deed, provided
that the provisions of this clause, other than clause 6.2,
shall not take effect if in respect of any Claim which is
notified to the Warrantors in accordance with clause 6.2 it
reasonably appears to the Purchaser that the Vendors or the
Company (in the case of the Company prior to Completion) has
committed acts or omissions which may constitute fraud or
wilful default; and further provided that the Warrantors shall
not take any action in resisting a Claim which the Purchaser or
the Company (after consultation with the Vendors) reasonably
considers would prejudice any right or interest of any of them
or of the Purchaser's Group.
6.2 The Purchaser shall give written notice to the Warrantors of
any Claim in respect of a Taxation Liability for which the
Warrantors could become liable under this Deed as soon as
reasonably practicable provided that failure to give such
notice shall not reduce, extinguish or otherwise affect the
liability of the Warrantors to the Purchaser.
6.3 Subject to clause 6.4, on service of a written notice of their
intention on the Purchaser by the Warrantors within the period
of ten Business Days following service of a notice under clause
6.2 the Warrantors shall:
6.3.1 at their own expense and subject to the provisions of
this Deed be entitled to resist any such Claim in the name
of the Company or the Purchaser; and
6.3.2 as soon as reasonably practicable at their own expense be
provided with or have made available to them by the
Company all information and documents relating to the
Company as are reasonably necessary for the purpose of
such resistance and the Purchaser undertakes to procure
such provision by the Company provided that, for the
avoidance of doubt, this Purchaser's undertaking shall
continue for the period during which the Warrantors are
resisting the Claim.
6.4 The Warrantors shall not be entitled to resist or continue to
resist a Claim under clause 6.3 beyond the giving of notice of
intention to make an appeal against a Claim or, if necessary to
avoid the expiration of any period described by clause 6.6.5
below, the making of an appeal unless:
6.4.1 the Company or the Purchaser (as the case may be) is
first indemnified and secured to its reasonable
satisfaction against all reasonable costs and expenses
which may be properly incurred in relation to any such
Claim;
6.4.2 the Company and the Purchaser are at all times kept fully
informed of all matters relating thereto and are each
supplied with a copy of all correspondence, advice and
documents relating thereto;
6.4.3 the appointment of professional advisers in respect
thereof is approved in advance by the Purchaser, such
approval not to be unreasonably withheld or delayed;
6.4.4 all communication, written or otherwise, relating thereto
intended to be sent to the Inland Revenue, H.M. Customs
and Excise or other statutory or governmental authority or
body is approved in advance by the Purchaser, such
approval not to be reasonably withheld or delayed; and
6.4.5 any proposed settlement or compromise of such Claim or
any step to be taken in the conduct of such dispute which
might affect the amount thereof or the future Taxation
Liability of the Company or the Purchaser or any member of
the Purchaser's Group is approved by the Purchaser in
advance such approval not to be reasonably withheld or
delayed.
6.5 Notwithstanding the terms of clause 6.3 the Company shall not
be obliged to appeal any decision beyond the first appellate
body unless the Warrantors have produced to the Purchaser an
opinion of a senior Counsel of not less than 10 years'
standing, and practising in the relevant area of law that it
would be reasonable to lodge such an appeal.
6.6 The Company or the Purchaser (as the case may be) shall be at
liberty without reference to and to the exclusion of the
Warrantors to admit, compromise, settle, discharge or otherwise
deal with any Claim after whichever is the earliest of:
6.6.1 the expiry of a period of ten Business Days following the
service of notice of that Claim on the Warrantors pursuant
to clause 6.2 (whether or not such notice was given as
soon as reasonably practical) if during that period the
Warrantors have not notified the Purchaser (as the case
may be) of their wish to resist the Claim;
6.6.2 the service of notice on the Purchaser by the Warrantors
to the effect that they do not wish to resist the Claim;
6.6.3 the expiry of a period of ten Business Days following the
service of notice by the Purchaser (stating such
reasonable steps as the Purchaser wishes the Warrantors to
take to properly and effectively resist the claim) on the
Warrantors (they having taken over the conduct of a Claim)
to the effect that the Warrantors are not properly and
effectively conducting the resistance of that Claim if
during that period the Warrantors do not take such steps
as notified by the Purchaser as are reasonably practicable
during that period;
6.6.4 the failure by the Warrantors to satisfy in any material
respect any of the provisions of clause 6.4; and
6.6.5 if appropriate, the expiration of any period prescribed
by the Taxation Legislation for the making of an appeal
against the Claim and/or Taxation Liability in question
provided that notice was given by the Purchaser pursuant
to clause 6.2 (with respect to such Claim or Taxation
Liability) not less than ten clear Business Days prior to
such expiration
but, for the avoidance of doubt, not otherwise.
6.7 The Warrantors shall be bound to accept for the purposes of
this Deed any admission, compromise, settlement or discharge of
any Taxation Liability and the outcome of any proceedings
relating thereto, properly made or arrived at in accordance
with the provisions of clause 6.6.
7 SAVINGS
7.1 If (at the Warrantors' request and expense) the Auditors
determine that the Company has obtained a Saving, the Purchaser
will as soon as reasonably practicable thereafter repay to the
Warrantors the lesser of:-
7.1.1 the amount of the Saving (as determined by the Auditors);
and
7.1.2 the amount paid by the Warrantors under clause 2 in
respect of the Liability to Taxation or other liability
which gave rise to the Saving less any part of that amount
previously repaid to the Warrantors under any provision of
this Deed or otherwise.
7.2 In determining whether the Company has obtained a Saving, the
Auditors will act as experts and not as arbitrators and their
determination will (in the absence of manifest error) be
conclusive and binding on the parties
8 RECOVERY FROM OTHER PERSONS
8.1 If, in the event of any payment becoming due from the
Warrantors pursuant to clause 2 the Company either is
immediately entitled at the due date for the making of that
payment to recover from any other person (including without
limitation any taxation authority but excluding the Purchaser,
and any other member of the same group of companies as the
Purchaser) any amount in respect of Taxation Liability or other
liability of the Company in respect of which the Warrantors
have made or are liable to make a payment under clause 2, or at
some subsequent date becomes entitled to make such recovery the
Purchaser shall account to the Warrantors for, or in a case
where payment has not been made under this deed any payment due
from the Warrantors shall be reduced by the lesser of:-
8.1.1 the amount so recovered (less any losses, costs, damages
and expenses reasonably incurred by the Company, the
Purchaser or any other member of the same group of
companies as the Purchaser as a result of the recover of
that amount); and
8.1.2 the amount paid or payable by the Warrantors under clause
2 in respect of the Taxation Liability or other liability
in question less any part of such amount previously repaid
to the Warrantors under any provision of this Deed or
otherwise.
8.2 If the Purchaser becomes aware that the Company is entitled to
recover any amount mentioned in clause 8.1, the Purchaser will
as soon as reasonably practicable give notice of that fact to
the Warrantors and provided that the Warrantors indemnify and
secure the Company, the Purchaser and all other members of the
same group of companies as the Purchaser to the reasonable
satisfaction of the Purchaser against all costs and expenses
which may be incurred thereby, the Purchaser will procure that
the Company, at the Warrantors' cost and expense, takes such
action as the Warrantors may reasonably request to effect such
recovery.
8.3 The action which the Warrantors may request the Company to take
under clause does not include:
8.3.1 any action which the Purchaser after consulting with the
Warrantors reasonably considers to be materially
prejudicial to the business or Taxation affairs of the
Company, the Purchaser or any other member of the same
group of companies as the Purchaser or to which the
Purchaser objects on any other reasonable ground; or
8.3.2 allowing the Warrantors to undertake the conduct of any
action necessary to effect recovery of the amount in
question.
8.3.3 If the amount mentioned in clause 8.1.1 exceeds the
amount mentioned in clause 8.1.2, the amount of the excess
shall be set against (and so shall reduce or eliminate)
any liability of the Warrantors under clause 2 which
arises after such recovery.
9 OVER PROVISIONS
9.1 If (at the request and expense of the Warrantors) the Auditors
certify that any provision in the Accounts or the Completion
Accounts for any Taxation has proved to be an over-provision
the Purchaser shall as soon as reasonably practicable
thereafter repay to the Warrantors the lesser of:
9.1.1 the amount over-provided (as certified by the Auditors);
and
9.1.2 the aggregate amount (if any) paid by the Warrantors
under clause 2 prior to the certification of the over-
provision less any part of such amount previously repaid
to the Warrantors under any provision of this Deed or
otherwise.
9.2 If upon certification of an over-provision by the Auditors
pursuant to clause 9.1, the amount mentioned in clause 9.1 .1
exceeds the amount mentioned in clause 9.1.2, the amount of the
excess shall be set against (and so shall reduce or eliminate)
any liability of the Warrantors under clause 2 which arises
after such certification, as and when such liability arises.
9.3 Upon the Company or the Purchaser becoming aware that there has
or probably has been an over-provision within the meaning of
clause 9.1, the Purchaser shall as soon as reasonably
practicable give notice of that fact to the Warrantors.
9.4 In certifying any over-provision pursuant to clause 9.1, the
Auditors shall act as experts and not as arbitrators and their
certificate shall (in the absence of manifest error) be
conclusive and binding on all concerned.
10 SECTION 767A INDEMNITY
10.1 The Purchaser covenants with and undertakes to the Warrantors
to pay to the relevant taxation authority on behalf of the
Warrantors an amount equal to any Taxation which is assessed
under section 767A ICTA on any of the Vendors by reason of
Taxation assessed on the Company for an accounting period
beginning before Completion being unpaid other than any
Taxation the liability for which falls upon the Warrantors
pursuant to clause 2 subject to Clause 3.
10.2 The covenant contained in clause 10.1 will apply to any
reasonable costs and expenses incurred by the Warrantors in
connection with any such Taxation such amount to be paid to the
Warrantors.
10.3 The due date for payment of any amount payable pursuant to
clause 10.1 will be the later of the date falling five Business
Days before the party assessed under section 767A ICTA is
obliged to pay the corporation tax in question and the date
falling five Business Days after the Warrantors have served
notice on the Purchaser demanding such payment. Any such
payment not made on or before the due date for payment pursuant
to this clause will carry interest at the rate of two per cent
above the base lending rate of Barclays Bank plc from the due
date to the date of payment.
11 REPAYMENTS OF TAXATION
11.1 If the Company or any member of the Purchaser's Group receives
any repayment of Taxation which relates to a period prior to
the Accounts Date and which has not been taken into account in
the Accounts, and which does not arise as a result of the set-
off or utilisation of a relief which arises principally as a
result of an Event occurring after Completion including without
limitation both an actual repayment and a credit to be offset
against any other liability to Taxation, (other than a
liability to Taxation for which the Warrantors would be liable
under this Deed) the Purchaser will as soon as is reasonably
practicable thereafter repay to the Warrantors the lesser of:
11.1.1 the amount of the repayment of Taxation; and
11.1.2 the aggregate amount (if any) paid by the Warrantors
under Clause 2 less any part of that amount previously
paid to the Warrantors under any provision of this Deed or
otherwise.
11.2 If upon receipt of a repayment of Taxation pursuant to Clause
11.1 the amount mentioned in Clause 11.1.1exceeds the amount
mentioned in 11.1.2 the excess will be set against (and so will
reduce or eliminate) any liability of the Warrantors under
Clause 2 then outstanding or which arises after such
determination, in the latter case as and when such liability
arises.
12 VENDOR PROTECTION
12.1 If any potential claim shall arise by reason of a liability of
the Company which is contingent only, then the Warrantors shall
not be under any obligation to make any payment in respect of
such claim until such time as the contingent liability ceases
to be contingent and becomes actual.
12.2 The Purchaser confirms to the Warrantors that it is not aware
at the date of this Deed, after discussion with its accountants
and solicitors, of any matter or thing which in its reasonable
opinion will or may give rise to any claim under this Deed;
provided for the avoidance of doubt that a matter shall not be
deemed to be known to the Purchaser by reason of it being known
to any of the Warrantors.
13 GENERAL
All payments by the Warrantors under this Deed will be treated as
repayments by the Warrantors of the consideration paid for the
Shares pursuant to the Agreement, provided that this clause 13 will
not operate in any way to limit the liability of the Warrantors
under this Deed.
14 SEVERABILITY
In the event that any liability of the Warrantors under this Deed shall
be found to be void but would be valid if the application thereof to
a particular Claim or Taxation Liability were limited or deleted or
omitted, such liability shall apply with such modification as may be
necessary to make it valid and effective.
15 NOTICES
The provisions of clause 11 of the Agreement (Notices) shall apply to
this Deed.
16 MISCELLANEOUS
16.1 All the rights and remedies expressly provided for by this Deed
shall not exclude any rights or remedies provided by law.
16.2 None of the rights of the Purchaser arising out of this Deed
shall be varied or restricted by the giving of any time or
other indulgence to any person but shall only be affected by a
specific waiver or release by the Purchaser and any such waiver
or release shall be specific to the matters to which and the
Vendor to whom it relates, shall not be deemed to be a waiver
of any subsequent breach or default and shall in no way affect
the other terms of this Deed.
17 GOVERNING LAW
This Deed shall be governed by and construed in all respects in
accordance with English law and the parties submit to the exclusive
jurisdiction of the English Courts.
IN WITNESS of these matters this document has been executed as a deed and
delivered on the date set out at the beginning of this deed.
<PAGE>
SCHEDULE
The Warrantors
NAME AND ADDRESS
James Edward BARLOW
Coppertops
Colby Road
Banningham
Norwich
Norfolk NR11 7DY
Trevor David JOHNSON
Thorpe Row Farm House
Herne Lane
Thorpe Row
Dereham
Norfolk NR19 1QE
Alan Robert SANDELL
Scarrow Barn
Thurgaton
Norwich
Norfolk NR11 7HR
<PAGE>
SIGNED AS A DEED by )
JAMES EDWARD BARLOW )
in the presence of: )
Witness's signature:
Name:
Address:
SIGNED AS A DEED by )
TREVOR DAVID JOHNSON )
in the presence of: )
Witness's signature:
Name:
Address:
SIGNED AS A DEED by )
ALAN ROBERT SANDELL )
in the presence of: )
Witness's signature:
Name:
Address:
EXECUTED AS A DEED by )
NIM HOLDINGS LIMITED )
acting by: )
Director _______________________
Director ________________________
<PAGE>
SCHEDULE 9
ADJUSTMENT OF CONSIDERATION
1. INTERPRETATION
In this Schedule the following expressions have the following
meanings:-
EXPRESSION MEANING
"the Completion Accounts" the accounts prepared in accordance with
paragraph 2
"Net Assets" means (subject to the provisions of
paragraph 2) the aggregate value of all
fixed and current assets of the Company
(excluding the cash in hand and at bank set
out in the Indebtedness Statement) minus
the aggregate value of all of the Company's
liabilities and provisions (including
provisions in accordance with SSAP 18 in
respect of contingent liabilities) and
excluding the Company's Borrowings set out
in the Indebtedness Statement
"the Provisional Consideration" the aggregate consideration for the
Shares of
<pound-sterling>8,310,823.39 as stated in
clause 3
"the Purchaser's Accountants" Ernst & Young
"the Vendors' Accountants" KPMG
2. COMPLETION ACCOUNTS
2.1 The parties shall procure that forthwith after Completion (to
the extent not already done), accounts for the Company shall be
prepared and reported on in accordance with the provisions of
this Schedule.
2.2 The Completion Accounts shall consist of a balance sheet of the
Company as at the close of business on the day before the date
of Completion.
2.3 The Completion Accounts shall (subject as hereinafter
provided):-
2.3.1 be prepared as if the period from the Accounts Date to
the date of Completion were a financial period of the
Company;
2.3.2 be prepared in accordance with the historical cost
convention, with generally accepted accounting
principles in the United Kingdom and all applicable
Accounting Standards;
2.3.3 show a true and fair view of the assets and
liabilities of the Company as at the date of Completion
and of the profits of the Company for the period ended
on the date of Completion; and
2.3.4 adopt bases and policies of accounting applied for the
purposes of the Accounts.
2.4 In preparing the Completion Accounts:-
2.4.1 a physical stock take shall be carried out on the date of
Completion;
2.4.2 provision shall be made for corporation tax at the rate
of 28% of the profit before tax of the Company for the
period from the Accounts Date to 30{th} June 1998 and
(subject to paragraph 2.4.3 below) no further provision
for corporation tax shall be made;
2.4.3 to the extent that it is not capable of being set off
against the liability of the Company for corporation
tax for the current financial year or any previous
financial year, full provision shall be made for the
advance corporation tax payable on any distribution
declared or paid before Completion;
2.4.4 provision shall only be made for the pension
payable by the Company to Mr and Mrs Morrison to the
extent that payment thereof is overdue at Completion;
and
2.4.5 any fees of Ernst & Young in connection with any of
the matters contemplated by this Agreement including
compliance with chapter VI of the Companies Act shall
be ignored.
3. PROCEDURE
3.1 The Purchaser shall procure that within 60 days after the date
of Completion the Purchaser's Accountants shall deliver a final
draft of the Completion Accounts to the Vendors' Accountants
for consideration on behalf of the Vendors. Unless the
Vendors' Accountants shall notify the Purchaser's Accountants
in writing within 21 days after receipt of such draft that they
do not accept that such draft complies with paragraph 2 the
Vendors shall be deemed to have accepted such draft as
complying with paragraph 2.
3.2 If within the period of 21 days referred to in paragraph 3.1
the Vendors' Accountants shall notify the Purchaser's
Accountants in writing that they do not accept that the said
draft complies with paragraph 2 then the Purchaser's
Accountants and the Vendors' Accountants shall use their best
endeavours to reach agreement upon the adjustments required to
the said draft to meet the objections of the Vendors'
Accountants.
3.3 When the Vendors' Accountants accept or are deemed to accept
that the said draft complies with paragraph 2 and certifying
the Purchaser's Accountants shall sign a report to the effect
that the Completion Accounts comply with paragraph 2 and
certifying Net Assets and any Completion Accounts /Net Assets
so reported on /certified shall be the Completion Accounts /Net
Assets for the purposes of this Agreement and shall be final
and binding on the parties.
3.4 In the event that the Vendors' Accountants and the Purchaser's
Accountants are unable to reach agreement as aforesaid any
matter in dispute shall be referred to the decision of a single
independent chartered accountant or an independent firm of
chartered accountants (in either case, "the Independent
Accountant") to be agreed upon between the Vendors and the
Purchaser within a period of 30 days after expiry of the 21 day
period referred to in paragraph 3.2 or (in default of such
agreement) to be selected (at the instance of either of them)
by the President for the time being of the Institute of
Chartered Accountants in England and Wales. The Independent
Accountant (whose costs shall be paid as the Independent
Accountant shall direct) shall act as expert (and not as
arbitrator) and the decision of the Independent Accountant in
respect of such disputed matters shall(in the absence of
manifest error) be final and binding on the parties. In giving
such decision the Independent Accountant shall state what
adjustments (if any) are to be made to the said draft in order
that it shall comply with paragraph 2.
4. ADJUSTMENT OF CONSIDERATION
4.1 When the Completion Accounts have become final and binding
(whether under paragraph 3.3 or by virtue of a decision of the
Independent Accountant) the Provisional Consideration shall
forthwith:-
4.1.1 be increased by the amount (if any) by which the Net
Assets are greater than <pound-sterling>3,623,457; or
(as the case may be); or
4.1.2 be reduced by the amount (if any) by which the Net
Assets are less than <pound-sterling>3,623,457.
4.2 The amount of any increase or reduction in the Provisional
Consideration shall be paid by the Purchaser or the Vendors (as
the case may be) within 14 days after the Completion Accounts
have become final and binding as aforesaid and any amount not
paid when due shall carry interest on the amount to be paid at
the annual rate of two per cent above the base lending rate
from time to time of Barclays Bank Plc from the date of
Completion until the date of actual payment (as well after
judgment as before).
5. Subject to the due performance of paragraph 4 the Purchaser shall
have no claim against the Vendors under the Agreement in respect of
any liability or deficiency to the extent that the same is taken
into account in the Completion Accounts but (save as aforesaid)
preparation and acceptance of the Completion Accounts by the
Purchaser shall be without prejudice to any claim which the
Purchaser may have against the Vendors in respect of any breach of
the Warranties.
6. All sums payable under this Schedule shall be paid in cash by way of
a banker's draft drawn on a Clearing Bank (and in case of sums
payable to the Vendors shall be paid to the Vendors' Solicitors and
payment to them will be a good and sufficient discharge to the
Purchaser and the Purchaser will not be concerned as to the
application of moneys so paid).
<PAGE>
SCHEDULE 10
PROVISIONS REGARDING RETENTION FUND
1. The Retention Fund shall be paid on Completion by the Purchaser to
the Vendors' solicitors and Purchaser's solicitors jointly ("the
Retention Fund Holder") who shall hold the Retention Fund on trust
for the Vendors and Purchaser on the following terms and be
irrevocably instructed by the Vendors and the Purchaser:-
1.1 to place the Retention Fund in a deposit account in the
name of the Retention Fund Holder with Cheltenham &
Gloucester and, subject to paragraphs 1.3 and 1.4, to
retain the same in such account;
1.2 subject as provided in paragraph 1.3 and 1.4, to pay the
Retention Fund to the Vendors' Solicitors in accordance
with clause 1.4 at the expiration of 18 months from the
date of Completion;
1.3 to pay one half of the amount originally paid into the
Retention Fund to the Vendors' Solicitors on the first
anniversary of Completion (or if that is not a Business
Day on the first Business Day thereafter) provided that no
payment shall be made out of the Retention Fund pursuant
to this paragraph 1.3 if, prior to the first anniversary
of the date of Completion, the Retention Fund Holder shall
have received written notice from the Purchaser
certifying that it has made a claim for compensation or
indemnity under the Warranties or Tax Covenant from the
Vendors which it is entitled to bring in accordance with
the provisions of the Agreement, containing details of the
subject matter and amount of such claim and a summary of
the breach alleged to give rise to such claim, if as a
result of the payment to the Vendors' Solicitors, the
balance of the Retention Fund after such payment would not
exceed the amount claimed by the Purchaser. In such case,
the amount to be paid to the Vendors' Solicitors on the
first anniversary of Completion (or if that is not a
Business Day on the first Business Day thereafter) shall
be such amount, (if any) as results in the balance
remaining in the Retention Fund being equal to the amount
of the Purchaser's claim or claims for compensation or
indemnity;
1.4 if at any time or from time to time prior to the
expiration of the said period of 18 months the Retention
Fund Holder shall receive written notice from the
Purchaser certifying that any claim for compensation or
indemnity under the Warranties or Tax Covenant has been
admitted by the Vendors including any payment to the
Purchaser pursuant to paragraph 4 of Schedule 9
(Adjustment of Consideration), or awarded by any Court of
competent jurisdiction from which there is no appeal or
from which no appeal is made within applicable time limits
to pay to the Purchaser the amount so admitted or awarded
(including any costs which may be admitted or awarded in
favour of the Purchaser) and/or (as the case may be)
retain the amount in dispute pending the determination or
award in respect of the claim, and, subject thereto, to
pay the balance, if any, of the Retention Fund to the
Vendors' Solicitors as aforesaid;
1.5 where (i) a claim has been notified pursuant to paragraph
1.3 resulting in more than half of the Retention Fund
being retained beyond the first anniversary of Completion
and (ii) the amount of the Purchaser's claim is awarded,
determined or agreed at less than the amount originally
notified, to pay (forthwith upon such award, determination
or agreement being communicated to them in writing by the
Vendors and Purchaser jointly, the giving of such
communication not to be unreasonably withheld or delayed
following any such award, determination or agreement) to
the Vendors Solicitors the difference between the sum
released to the Vendors' Solicitors on the first
anniversary of Completion and the sum which would then
have been released had the Purchaser's original claim been
for the lesser amount awarded determined or agreed;
1.6 to pay any interest received by the Retention Fund Holder
on the Retention Fund (less any tax thereon for which the
Retention Fund Holder may be accountable and any charges
and expenses incurred by the Retention Fund Holder) to the
Vendors and/or to the Purchaser in accordance with
paragraph 1.4 at the expiration of the period referred to
in paragraph 1.2 in proportion to the amounts (other than
in respect of costs) paid to them under this Schedule
provided that to the extent that any amount payable to the
Purchaser by the Retention Fund Holder incorporates
interest on the amount of compensation or indemnity
claimed such claim for compensation or indemnity shall be
disregarded in calculating the proportion of interest
earned on the Retention Fund that is payable to the
Vendors and/or to the Purchaser.
<PAGE>
SCHEDULE 11
LIMITATION OF LIABILITY
1. In this Schedule "the Vendors" means the Vendors in their capacities
as such and also as Warrantors and under the Tax Covenant as
covenantors and "claim" means any claim which would (but for the
provisions of this Schedule) be capable of being made against the
Vendors (or any of them) in respect of any liability for breach of
the Warranties and/or under the Tax Covenant.
2. Notwithstanding the provisions of this Agreement and of the Tax
Covenant:
2.1 the aggregate liability of the Vendors in respect of all
claims shall be limited to the aggregate consideration
paid by the Purchaser for the the Shares pursuant to this
Agreement;
2.2 the Vendors will be under no liability in respect of any
claim where the amount for which the Vendors would be
liable under such claim is less than <pound-sterling>1,000;
2.3 the Vendors will be under no liability in respect of any
claim (of or greater than the amount specified in paragraph
2.2) unless the amount of their liability in respect of
such claim is (when aggregated with their liability in
respect of any other such claim or claims made by the
Purchaser) in excess of <pound-sterling>62,500 in which
event the Vendors will (subject to the other provisions of
this Agreement) be liable for the whole amount of such
liability and not merely for the excess;
2.4 the Vendors will be under no liability in respect of any
claim unless written particulars of the claim (giving full
details of the specific matter in respect of which such
claim is made) shall have been given to the Vendors within
a period of 18 months from the date of this Agreement or
(in the case only of any claim relating to Taxation) on or
before 31 December 2004;
2.5 the Vendors will have no liability in respect of any
claim:
2.5.1 to the extent that it arises or is increased as a
result of an increase in rates of taxation after the
Accounts Date, or the passing of any legislation (or
making of any subordinate legislation) with
retrospective effect or any provision or reserve in
the Accounts being insufficient by reason of any
increase in rates of taxation after the Accounts
Date;
2.5.2 if it would not have arisen but for anything
voluntarily done or (where the omission could
reasonably have been avoided) omitted to be done
after Completion by the Purchaser or the Company or
any of their respective agents or successors in title
which the Purchaser or the Company, as the case may
be, would not have done or omitted to do if it did
not have the benefit of the Warranties or the Tax
Covenant;
2.5.3 to the extent that it relates to any loss for which
the Purchaser or the Company is indemnified by
insurance, or for which it would have been so
indemnified if at the relevant time there had been
maintained valid and adequate insurance cover of a
type in force in relation to the Company at the date
of this Agreement;
2.5.4 to the extent that it relates to:
2.5.4.1 any matter specifically provided for, or
specifically disclosed, in the Accounts and in
such case only to the extent of such provision
or disclosure; or
2.5.4.2 any liability for Taxation arising out of the
ordinary course of business of the Company after
the Accounts Date;
2.5.5 to the extent that it arises as a result of any
change in the accounting policy or practice or in the
accounting reference date of the Company after
Completion;
2.5.6 to the extent that the amount of the claim
corresponds to an increase in the value of the assets
of the Purchaser or the Company resulting from the
reduction in its liability to Taxation.
2.6 payment of any claim shall to the extent of such payment
satisfy and preclude any other claim which is capable of
being made in respect of the same subject matter;
Provided always that sub-paragraphs 2.1, 2.2, and 2.3 above
shall be of no effect with regard to paragraph 1, 3, 4 and 7.1
of Schedule 4.
3. Upon the Purchaser becoming aware that matters have arisen which
will or are likely to give rise to a claim, the Purchaser will:
3.1 as soon as reasonably practicable notify the Vendors in
writing of the potential claim and of the matters which
will or are likely to give rise to such claim;
3.2 not make any admission of liability, agreement or
compromise with any person, body or authority in relation
to the potential claim without prior consultation with the
Vendors;
3.3 at all times disclose in writing to the Vendors all
information and documents relating to the potential claim
or the matters which will or are likely to give rise to
such claim and, if requested by the Vendors, give the
Vendors and their professional advisers reasonable access
to the personnel of the Purchaser and/or the Company as the
case may be and to any relevant premises, chattels,
accounts, documents and records within the power,
possession or control of the Purchaser and/or the Company
to enable the Vendors and their professional advisers to
interview such personnel, and to examine such claim,
premises, chattels, accounts, documents and records and to
take copies or photographs thereof at their own expense;
and
3.4 where the claim relates to breach of the Warranties take
such action as the Vendors may reasonably require
(including the appointment of solicitors nominated by the
Vendors) to avoid, resist, contest or compromise the
potential claim or the matters which will or are likely to
give rise to such claim, subject to the Purchaser being
indemnified to its reasonable satisfaction against costs
and expenses incurred in taking such action.
4. Nothing herein shall in any way diminish the Purchaser's or the
Company's common law duty to mitigate its loss.
5. If any potential claim shall arise by reason of a liability of the
Company which is contingent only, then the Vendors shall not be
under any obligation to make any payment in respect of such claim
until such time as the contingent liability ceases to be contingent
and becomes actual provided that this paragraph shall not operate to
limit the Vendors' liability in respect of any contingent claim
notified within the time limits specified in paragraph 2.4 above.
6. The provisions of this Schedule apply notwithstanding any other
provision of this Agreement or its Schedules to the contrary and
will not cease to have effect in consequence of any rescission or
termination by the Purchaser of any other provisions of this
Agreement but shall not apply in respect of any claim based on the
fraud, dishonesty or wilful misstatement or wilful omission by or on
behalf of any of the Vendors.
<PAGE>
SCHEDULE 12
PROVISION RELATING TO NAV ESCROW
1. The amount payable pursuant to clause 3.4 into the NAV Escrow shall
be paid on Completion to the Vendors' Solicitors and Purchaser's
Solicitors jointly (the `Escrow Agent') who shall hold the NAV
Escrow on trust for the Vendors and the Purchaser and shall be
irrevocably instructed by the Vendors and the Purchaser:
1.1 to place the NAV Escrow in a deposit account in the name of the
Escrow Agent with Cheltenham & Gloucester and deal with it as
follows:
1.1.2 if the NAV Estimate is greater than
<pound-sterling>3,623,457 the NAV Escrow shall be dealt
with as follows:
a) if the Net Assets are equal to or exceed the NAV
Estimate, the NAV Escrow shall be paid to the
Vendors;
b) if the Net Assets exceed <pound-sterling>3,623,457
but are less than the NAV Estimate, the amount of
such excess shall be paid to the Vendors and the
balance shall be paid to the Purchaser;
c) if the Net Assets are less than
<pound-sterling>3,623,457, the NAV Escrow shall be
paid to the Purchaser;
1.1.3 If the NAV Estimate is less than <pound-sterling>3,623,457
the NAV Escrow shall be dealt with as follows:
a) if the Net Assets are less than or equal to the NAV
Estimate, the NAV Escrow shall be paid to the
Purchaser;
b) if the Net Assets exceed the NAV Estimate but are
less than <pound-sterling>3,623,457, the amount of
such excess shall be paid to the Vendors and the
balance shall be paid to the Purchaser;
c) if the Net Assets are more than
<pound-sterling>3,623,457 the NAV Escrow shall be paid
to the Vendors.
1.2 to make payments out of the NAV Escrow on the date on which
payment of any increase or reduction in the Provisional
Consideration (as defined in Schedule 9) is due to be made
under paragraph 4.2 of Schedule 9.
1.3 to pay any interest received by the Escrow Agent on the NAV
Escrow (less any tax thereon for which the Escrow Agent may be
accountable and any charges and expenses incurred by the Escrow
Agent) to the Vendors and/or the Purchaser in accordance with
paragraph 1.1 on the date it makes payment under paragraph 1.2
in proportion to the amounts paid to them under this Schedule.
2. The provisions of this Schedule and of clause 3.4 shall operate
without prejudice to the provisions of Schedule 9 and clause
3.1.
<PAGE>
SCHEDULE 13
COVENANT RELATING TO ASBESTOS RELATED CLAIMS
1. INTERPRETATION
In this Schedule the following expressions have the following
meanings:
Expression Meaning
<TABLE>
<CAPTION>
"Asbestos Liability" Any liability incurred by the Company in consequence
of:
<S> <C>
i) Any claim by any individual that he has
suffered damage to his health by reason of
exposure to asbestos incorporated in the
Concorde Road Property or
ii) Any legal requirement arising after the
date hereof that the Company remove and dispose
of any such asbestos incorporated in the
Concorde Road Property to the extent that the
Company is unable to require Norwich City
Council or any other tenant of the Concorde Road
Property to effect and or pay for such removal
and disposal.
"Concorde Road The Company's leasehold property at 25 Concorde Road,
Property" Norwich as more particularly referred to in Schedule 3.
2. COVENANT
2.1 The Warrantors warrant and represent to the Purchaser that:
2.1.1 the Company has not itself and to the best of the
Warrantors' information or belief, no other party has done
any act likely to disrupt any asbestos incorporated in the
Company's leasehold property at 25 Concorde Road, Norwich;
and
<S> <C>
2.1.2 the Company has not received notice of any claim from any
person alleging injury, loss or damage suffered as a
result of exposure to asbestos.
2.2 The Warrantors joint and severally covenant to pay to the Purchaser
an amount equal to any Asbestos Liability.
<S> <C>
2.3 The provisions of paragraphs 2.1, 2.2, 2.3, 2.5.2, 2.5.3, 2.6, 3, 5
and 6 of Schedule 11 shall apply to the Warrantors' obligations
under paragraphs 2.1 and 2.2 of this Schedule as if set out in this
Schedule in full and subject also to the proviso that the
Warrantors shall be under no liability in respect of any claim
under the above covenant and representation unless written
particulars of the claim and giving full details of the Asbestos
Liability shall have been given to the Warrantors on or before 31{st}
December 2004.
2.4 The said provisions of Schedule 11 shall apply as though:
2.4.1 the reference therein to "the Vendors" were to "the
Warrantors";
<S> <C>
2.4.2 "claim" meant any claim which but for the provisions of that
Schedule would be capable of being made under this para. 2;
and
2.4.3 the words "or the representation and covenant set out in
paras. 2.1 and 2.2 of Schedule 13" were added at the end of
para. 2.5.2 of Schedule 11.
</TABLE>
3. UNDERTAKING BY PURCHASER
The Purchaser undertakes to procure that the Company uses reasonable
endeavours to require Norwich City Council or any other tenant for
the time being of the Concorde Road Property to effect and or pay
for any such removal and disposal as is referred to in the
definition of Asbestos Liability above.
<PAGE>
ATTESTATIONS
SIGNED AS A DEED by )
JAMES EDWARD BARLOW )
in the presence of: ) SGD. J.E BARLOW
Witness's signature: sgd. A.G Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by )
ALAN ROBERT SANDELL )
in the presence of: ) SGD. A. R. SANDELl
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by )
TREVOR DAVID JOHNSON )
in the presence of: ) SGD. T.D. JOHNSON
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by )
JAN BARLOW BY HER ATTORNEY)
in the presence of ) SGD. J. E. BARLOW
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
SIGNED AS A DEED by )
PAULINE SANDELL BY HER ATTORNEY)
in the presence of ) SGD J. E. BARLOW
Witness's signature: sgd. AG Evans
Name: AG Evans
Address: Eversheds, Norwich
<PAGE>
EXECUTED AS A DEED by )
NIM HOLDINGS LIMITED )
acting by: )
Director SGD. J KRATOCHVIl
Director SGD. M IMBLEr
EXECUTED AS A DEED by ) SGD. J KRATOCHVIL
BERRY PLASTICS CORPORATION )
acting by: ) SGD. M IMBLER
<PAGE>
DATED 2{ND} JULY 1998
JE BARLOW AND OTHERS (1)
NIM HOLDINGS LIMITED (2)
BERRY PLASTICS CORPORATION (3)
___________________________________________
AGREEMENT FOR THE SALE AND PURCHASE
OF THE ENTIRE ISSUED
SHARE CAPITAL OF
NORWICH INJECTION MOULDERS LIMITED
______________________________________________
CONFORMED COPY
Ref: MO2/18485.2.1
Browne Jacobson
Aldwych House
81 Aldwych
London
WC2B 4HN
Telephone: (0171) 404 1546
Fax: (0171) 836 3882
DX: 37960 Kingsway
Email : [email protected]
<PAGE>
INDEX
<TABLE>
<CAPTION>
CLAUSES PAGE NO.
<S> <C> <C>
21. Interpretation 1
Sale and Purchase 7
Consideration 8
Completion 9
Warranties 11
Restrictive Covenants 13
Guarantee 15
Costs 16
Announcements 16
Interest 16
Notices 16
General 18
Governing Law 19
SCHEDULES
<S> <C> <C>
The Vendors 20
Details of the Company 22
Particulars of the Property 24
Warranties:
22. Schedules 1 & 2; Capital 26
<S> <C> <C> <C>
23. Accounts 26
24. Vendors' Capacity 27
25. Insiders' Interests 27
26. Information Supplied 28
27. Records 28
28. Debtors 28
29. Stocks 28
30. Plant and the Computer System 29
31. Intellectual Property 31
32. Property 32
33. Employees 37
34. Pensions 39
35. Contracts and Customers 41
36. Insurance 44
37. Finance and Working Capital 44
38. Company Law and Authorities 45
39. Insolvency, etc. 45
40. Legal Compliance 46
41. Licences 47
42. Default 47
43. Litigation 47
44. Events since the Accounts Date 47
45. Effects of this Agreement 49
46. Taxation 49
47. Environment 55
Form of Resignations 58
<S> <C> <C>
Form of Acknowledgement 59
Form of Power of Attorney 60
Tax Covenant 62
9 Adjustment of Consideration 80
10 Provision Regarding Retention Fund 84
11 Limitation of Liability 86
12 Provisions regarding NAV Escrow 89
13 Covenant relating to Asbestos related 91
claims
</TABLE>
CERTIFICATE OF INCORPORATION
OF
BERRY STERLING CORPORATION
_________________________________
ARTICLE I
---------
NAME
----
The name of the corporation (herein called the "Corporation") is
BERRY STERLING CORPORATION.
ARTICLE II
----------
REGISTERED OFFICE AND AGENT
---------------------------
The address of the registered office of the Corporation in the
State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover,
County of Kent, Delaware. The name of the registered agent of the
Corporation at such address is The Prentice-Hall Corporation System, Inc.
ARTICLE III
-----------
PURPOSE
-------
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "Delaware Statute").
ARTICLE IV
----------
CAPITAL STOCK
-------------
The total number of shares of all classes of stock which the
Corporation has authority to issue is 10,000 shares, all of which are
shares of Common Stock, par value $.01 per share.
ARTICLE V
---------
INCORPORATOR
------------
The name and mailing address of the incorporator is as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Reinena L. Davis c/o O'Sullivan Graev & Karabell,
LLP30 Rockefeller Plaza
41st FloorNew York, New York 10112
</TABLE>
ARTICLE VI
----------
DIRECTORS
---------
The number of directors of the Corporation shall be such as from
time to time shall be fixed in the manner provided in the By-laws of the
Corporation. The election of directors of the Corporation need not be by
ballot unless the By-laws so require.
ARTICLE VII
-----------
MANAGEMENT OF THE CORPORATION
-----------------------------
A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to 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 Statute, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Delaware Statute is amended
after the date of incorporation of the Corporation to authorize corporate
action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware Statute, as so
amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE VIII
------------
CREDITORS MEETINGS
------------------
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of the Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
the Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case
may be, agree on any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
<PAGE>
IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
Delaware Statute, DO HEREBY CERTIFY, under penalties of perjury, that this
is my act and deed and that the facts hereinabove stated are truly set
forth and, accordingly, I have hereunto set my hand as of the ____ day of
February, 1995.
__________________________________
REINENA L. DAVIS
BY-LAWS OF
BERRY STERLING CORPORATION
ARTICLE I
OFFICES
1.1 REGISTERED OFFICE.
- -----------------------
The registered office of Berry Sterling Corporation (the
"Corporation"), in the State of Delaware shall be at 32 Loockerman
Square, Suite L-100, City of Dover, County of Kent, Delaware 19904, and
the registered agent in charge thereof shall be The Prentice-Hall
Corporation System.
1.2 OTHER OFFICES.
- -------------------
The Corporation may also have an office or offices at any other
place or places within or outside the State of Delaware.
ARTICLE II
MEETING OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
2.1 ANNUAL MEETINGS.
- ---------------------
The annual meeting of the stockholders for the election of
directors, and for the transaction of such other business as may properly
come before the meeting, shall be held at such place, date and hour as
shall be fixed by the Board of Directors (the "Board") and designated in
the notice or waiver of notice thereof, except that no annual meeting
need be held if all actions, including the election of directors,
required by the General Corporation Law of the State of Delaware (the
"Delaware Statute") to be taken at a stockholders' annual meeting are
taken by written consent in lieu of meeting pursuant to Section 10 of
this Article II.
2.2 SPECIAL MEETINGS.
- ----------------------
A special meeting of the stockholders for any purpose or purposes
may be called by the Board, the Chairman, the President or the record
holders of at least a majority of the issued and outstanding shares of
Common Stock of the Corporation, to be held at such place, date and hour
as shall be designated in the notice or waiver of notice thereof.
2.3 NOTICE OF MEETINGS.
- ------------------------
Except as otherwise required by statute, the Certificate of
Incorporation of the Corporation (the "Certificate") or these By-laws,
notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not
less than 10 nor more than 60 days before the day on which the meeting is
to be held, by delivering written notice thereof to him personally, or
by mailing a copy of such notice, postage prepaid, directly to him at his
address as it appears in the records of the Corporation, or by
transmitting such notice thereof to him at such address by telegraph,
cable or other telephonic transmission. Every such notice shall state
the place, the date and hour of the meeting, and, in case of a special
meeting, the purpose or purposes for which the meeting is called. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy, or who
shall, in person or by attorney thereunto authorized, waive such notice
in writing, either before or after such meeting. Except as otherwise
provided in these By-laws, neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders need be specified in any
such notice or waiver of notice. Notice of any adjourned meeting of
stockholders shall not be required to be given, except when expressly
required by law.
2.4 QUORUM.
- ------------
At each meeting of the stockholders, except where otherwise provided
by the Certificate or these By-laws, the holders of a majority of the
issued and outstanding shares of Common Stock of the Corporation entitled
to vote at such meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority in interest of the stockholders present in person or
represented by proxy and entitled to vote, or, in the absence of all the
stockholders entitled to vote, any officer entitled to preside at, or act
as secretary of, such meeting, shall have the power to adjourn the
meeting from time to time, until stockholders holding the requisite
amount of stock to constitute a quorum shall be present or represented.
At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally called.
2.5 ORGANIZATION.
- ------------------
(a) Unless otherwise determined by the Board, at each meeting
of the stockholders, one of the following shall act as chairman of the
meeting and preside thereat, in the following order of precedence:
(i) the Chairman;
(ii) the President;
(iii) any director, officer or stockholder of the
Corporation designated by the Board to act as chairman of such
meeting and to preside thereat if the Chairman or the President
shall be absent from such meeting; or
(iv) a stockholder of record who shall be chosen chairman
of such meeting by a majority in voting interest of the stockholders
present in person or by proxy and entitled to vote thereat.
(b) The Secretary or, if he shall be presiding over such
meeting in accordance with the provisions of this Section 5 or if he
shall be absent from such meeting, the person (who shall be an Assistant
Secretary, if an Assistant Secretary has been appointed and is present)
whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
2.6 ORDER OF BUSINESS.
- -----------------------
The order of business at each meeting of the stockholders shall be
determined by the chairman of such meeting, but such order of business
may be changed by a majority in voting interest of those present in
person or by proxy at such meeting and entitled to vote thereat.
2.7 VOTING.
- ------------
Except as otherwise provided by law, the Certificate or these By-
laws, at each meeting of the stockholders, every stockholder of the
Corporation shall be entitled to one vote in person or by proxy for each
share of Common Stock of the Corporation held by him and registered in
his name on the books of the Corporation on the date fixed pursuant to
Section 7 of Article VI as the record date for the determination of
stockholders entitled to vote at such meeting. Persons holding stock in
a fiduciary capacity shall be entitled to vote the shares so held. A
person whose stock is pledged shall be entitled to vote, unless, in the
transfer by the pledgor on the books of the Corporation, he has expressly
empowered the pledgee to vote thereon, in which case only the pledgee or
his proxy may represent such stock and vote thereon. If shares or other
securities having voting power stand in the record of two or more
persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or if two or
more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary shall be given written notice to the
contrary and furnished with a copy of the instrument or order appointing
them or creating the relationship wherein it is so provided, their acts
with respect to voting shall have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all; and
(c) if more than one votes, but the vote is evenly split on
any particular matter, such shares shall be voted in the manner provided
by law.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section 7
shall be a majority or even-split in interest. The Corporation shall not
vote directly or indirectly any share of its own capital stock. Any vote
of stock may be given by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney thereunto authorized, delivered to the
secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted
after three years from its date, unless said proxy provides for a longer
period. At all meetings of the stockholders, all matters (except where
other provision is made by law, the Certificate or these By-laws) shall
be decided by the vote of a majority in interest of the stockholders
present in person or by proxy at such meeting and entitled to vote
thereon, a quorum being present. Unless demanded by a stockholder
present in person or by proxy at any meeting and entitled to vote
thereon, the vote on any question need not be by ballot. Upon a demand
by any such stockholder for a vote by ballot upon any question, such
vote by ballot shall be taken. On a vote by ballot, each ballot shall be
signed by the stockholder voting, or by his proxy, if there be such
proxy, and shall state the number of shares voted.
2.8 INSPECTION.
- ----------------
The chairman of the meeting may at any time appoint one or more
inspectors to serve at any meeting of the stockholders. Any inspector
may be removed, and a new inspector or inspectors appointed, by the Board
at any time. Such inspectors shall decide upon the qualifications of
voters, accept and count votes, declare the results of such vote, and
subscribe and deliver to the secretary of the meeting a certificate
stating the number of shares of stock issued and outstanding and entitled
to vote thereon and the number of shares voted for and against the
question, respectively. The inspectors need not be stockholders of the
Corporation, and any director or officer of the Corporation may be an
inspector on any question other than a vote for or against his election
to any position with the Corporation or on any other matter in which he
may be directly interested. Before acting as herein provided, each
inspector shall subscribe an oath faithfully to execute the duties of an
inspector with strict impartiality and according to the best of his
ability.
2.9 LIST OF STOCKHOLDERS.
- --------------------------
It shall be the duty of the Secretary or other officer of the
Corporation who shall have charge of its stock ledger to prepare and
make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose
germane to any such meeting, during ordinary business hours, for a period
of at least 10 days prior to such meeting, either at a place within the
city where such meeting is to be held, which place shall be specified in
the notice of the meeting or, if not so specified, at the place where the
meeting is to be held. Such list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING.
- ----------------------------------------------
Any action required by the Delaware Statute to be taken at any
annual or special meeting of the stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and
without a vote, by a consent in writing, as permitted by the Delaware
Statute.
ARTICLE III
BOARD OF DIRECTORS
3.1 GENERAL POWERS.
- --------------------
The business, property and affairs of the Corporation shall be
managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by law or by the Certificate directed or required to be exercised
or done by the stockholders.
3.2 NUMBER AND TERM OF OFFICE.
- -------------------------------
The number of directors shall be fixed from time to time by the
Board. Directors need not be stockholders. Each director shall hold
office until his successor is elected and qualified, or until his earlier
death or resignation or removal in the manner hereinafter provided.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
At each meeting of the stockholders for the election of directors at
which a quorum is present, the persons receiving the greatest number of
votes, up to the number of directors to be elected, of the stockholders
present in person or by proxy and entitled to vote thereon shall be the
directors; PROVIDED, HOWEVER, that for purposes of such vote no
stockholder shall be allowed to cumulate his votes. Unless an election
by ballot shall be demanded as provided in Section 7 of Article II,
election of directors may be conducted in any manner approved at such
meeting.
3.4 RESIGNATION, REMOVAL AND VACANCIES.
- ----------------------------------------
(a) Any director may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, upon receipt thereof; unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
(b) Any director or the entire Board may be removed, with or
without cause, at any time by vote of the holders of a majority of the
shares then entitled to vote at an election of directors or by written
consent of the stockholders pursuant to Section 10 of Article II.
(c) Vacancies occurring on the Board for any reason may be
filled by vote of the stockholders or by the stockholders' written
consent pursuant to Section 10 of Article II, or by vote of the Board or
by the directors' written consent pursuant to Section 6 of this Article
III. If the number of directors then in office is less than a quorum,
such vacancies may be filled by a vote of a majority of the directors
then in office.
3.5 MEETINGS.
- --------------
(A) ANNUAL MEETINGS. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of
organization and the transaction of other business, unless it shall have
transacted all such business by written consent pursuant to Section 6 of
this Article III.
(B) OTHER MEETINGS. Other meetings of the Board shall be held
at such times and places as the Board, the Chairman, the President or any
director shall from time to time determine.
(C) NOTICE OF MEETINGS. Notice shall be given to each
director of each meeting, including the time, place and purpose of such
meeting. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least
two days before the date on which such meeting is to be held, or shall be
sent to him at such place by telegraph, cable, wireless or other form of
recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held,
but notice need not be given to any director who shall attend such
meeting. A written waiver of notice, signed by the person entitled
thereto, whether before or after the time of the meeting stated therein,
shall be deemed equivalent to notice.
(D) PLACE OF MEETINGS. The Board may hold its meetings at
such place or places within or outside the State of Delaware as the Board
may from time to time determine, or as shall be designated in the
respective notices or waivers of notice thereof.
(E) QUORUM AND MANNER OF ACTING. A majority of the total
number of directors then in office shall be present in person at any
meeting of the Board in order to constitute a quorum for the transaction
of business at such meeting, and the vote of a majority of those
directors present at any such meeting at which a quorum is present shall
be necessary for the passage of any resolution or act of the Board,
except as otherwise expressly required by law or these By-laws. In the
absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum
shall be present.
(F) ORGANIZATION. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in
the following order of precedence:
(i) the Chairman;
(ii) the President (if a director); or
(iii) any director designated by a majority of the
directors present.
The Secretary or, in the case of his absence, an Assistant Secretary, if
an Assistant Secretary has been appointed and is present, or any person
whom the chairman of the meeting shall appoint shall act as secretary of
such meeting and keep the minutes thereof.
3.6 DIRECTORS' CONSENT IN LIEU OF MEETING.
- -------------------------------------------
Any action required or permitted to be taken at any meeting of the
Board may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall
be signed by all the directors then in office and such consent is filed
with the minutes of the proceedings of the Board.
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT.
- ----------------------------------------------------------------------
Any one or more members of the Board may participate in a meeting of
the Board by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each
other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
3.8 COMMITTEES.
- ----------------
The Board may, by resolution or resolutions passed by a majority of
the whole Board, designate one or more committees, each such committee to
consist of one or more directors of the Corporation, which to the extent
provided in said resolution or resolutions shall have and may exercise
the powers of the Board in the management of the business and affairs of
the Corporation and may authorize the seal of the Corporation to be
affixed to all papers which may require it, such committee or committees
to have such name or names as may be determined from time to time by
resolution adopted by the Board. A majority of all the members of any
such committee may determine its action and fix the time and place of its
meetings, unless the Board shall otherwise provide. The Board shall have
power to change the members of any such committee at any time, to fill
vacancies and to discharge any such committee, either with or without
cause, at any time.
ARTICLE IV
OFFICERS
4.1 EXECUTIVE OFFICERS.
- ------------------------
The principal officers of the Corporation shall be a Chairman, if
one is appointed (and any references to the Chairman shall not apply if a
Chairman has not been appointed), a President, a Secretary, and a
Treasurer, and may include such other officers as the Board may appoint
pursuant to Section 3 of this Article IV. Any two or more offices may be
held by the same person.
4.2 AUTHORITY AND DUTIES.
- --------------------------
All officers, as between themselves and the Corporation, shall have
such authority and perform such duties in the management of the
Corporation as may be provided in these By-laws or, to the extent so
provided, by the Board.
4.3 OTHER OFFICERS.
- --------------------
The Corporation may have such other officers, agents and employees
as the Board may deem necessary, including one or more Assistant
Secretaries, one or more Assistant Treasurers and one or more Vice
Presidents, each of whom shall hold office for such period, have such
authority, and perform such duties as the Board, the Chairman, or the
President may from time to time determine. The Board may delegate to any
principal officer the power to appoint and define the authority and
duties of, or remove, any such officers, agents, or employees.
4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL.
- ---------------------------------------------
(a) All officers shall be elected or appointed by the Board
and shall hold office for such term as may be prescribed by the Board.
Each officer shall hold office until his successor has been elected or
appointed and qualified or until his earlier death or resignation or
removal in the manner hereinafter provided. The Board may require any
officer to give security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, at the time it is accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be
necessary to make it effective.
(c) All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board or by the
stockholders of the Corporation with or without cause.
4.5 VACANCIES.
- ---------------
If the office of Chairman, President, Secretary or Treasurer becomes
vacant for any reason, the Board shall fill such vacancy, and if any
other office becomes vacant, the Board may fill such vacancy. Any
officer so appointed or elected by the Board shall serve only until such
time as the unexpired term of his predecessor shall have expired, unless
reelected or reappointed by the Board.
4.6 THE CHAIRMAN.
- ------------------
The Chairman shall give counsel and advice to the Board and the
officers of the Corporation on all subjects concerning the welfare of the
Corporation and the conduct of its business and shall perform such other
duties as the Board may from time to time determine. Unless otherwise
determined by the Board, he shall preside at meetings of the Board and of
the Stockholders at which he is present.
4.7 THE PRESIDENT.
- -------------------
The President shall be the chief executive officer of the
Corporation. The President shall have general and active management and
control of the business and affairs of the Corporation subject to the
control of the Board and shall see that all orders and resolutions of the
Board are carried into effect. The President shall from time to time
make such reports of the affairs of the Corporation as the Board of
Directors may require and shall perform such other duties as the Board
may from time to time determine.
4.8 THE SECRETARY.
- -------------------
The Secretary shall, to the extent practicable, attend all meetings
of the Board and all meetings of the stockholders and shall record all
votes and the minutes of all proceedings in a book to be kept for that
purpose. He may give, or cause to be given, notice of all meetings of
the stockholders and of the Board, and shall perform such other duties as
may be prescribed by the Board, the Chairman or the President, under
whose supervision he shall act. He shall keep in safe custody the seal
of the Corporation and affix the same to any duly authorized instrument
requiring it and, when so affixed, it shall be attested by his signature
or by the signature of the Treasurer or, if appointed, an Assistant
Secretary or an Assistant Treasurer. He shall keep in safe custody the
certificate books and stockholder records and such other books and
records as the Board may direct, and shall perform all other duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
4.9 THE TREASURER.
- -------------------
The Treasurer shall have the care and custody of the corporate funds
and other valuable effects, including securities, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as may
be designated by the Board. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board, taking proper vouchers
for such disbursements, shall render to the Chairman, President and
directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation and shall perform all other duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
5.1 EXECUTION OF DOCUMENTS.
- ----------------------------
The Board shall designate, by either specific or general resolution,
the officers, employees and agents of the Corporation who shall have the
power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and
other documents for and in the name of the Corporation, and may authorize
such officers, employees and agents to delegate such power (including
authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation; unless so designated or expressly
authorized by these By-laws, no officer, employee or agent shall have any
power or authority to bind the Corporation by any contract or engagement,
to pledge its credit or to render it liable pecuniarily for any purpose
or amount.
5.2 DEPOSITS.
- --------------
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation or otherwise
as the Board or Treasurer, or any other officer of the Corporation to
whom power in this respect shall have been given by the Board, shall
select.
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS.
- ---------------------------------------------------------------
The Board shall designate the officers of the Corporation who shall
have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the
powers and rights which the Corporation may have as the holder of stock
or other securities in any other corporation, and to vote or consent with
respect to such stock or securities. Such designated officers may
instruct the person or persons so appointed as to the manner of
exercising such powers and rights, and such designated officers may
execute or cause to be executed in the name and on behalf of the
Corporation and under its corporate seal or otherwise, such written
proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise its powers
and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
6.1 CERTIFICATES FOR SHARES.
- -----------------------------
Every owner of stock of the Corporation shall be entitled to have a
certificate certifying the number and class of shares owned by him in
the Corporation, which shall be in such form as shall be prescribed by
the Board. Certificates shall be numbered and issued in consecutive
order and shall be signed by, or in the name of, the Corporation by the
Chairman, the President or any Vice President, and by the Treasurer (or
an Assistant Treasurer, if appointed) or the Secretary (or an Assistant
Secretary, if appointed). In case any officer or officers who shall have
signed any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates
may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate had
not ceased to be such officer or officers of the Corporation.
6.2 RECORD.
- ------------
A record in one or more counterparts shall be kept of the name of
the person, firm or corporation owning the shares represented by each
certificate for stock of the Corporation issued, the number of shares
represented by each such certificate, the date thereof and, in the case
of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name shares of stock stand on the
stock record of the Corporation shall be deemed the owner thereof for all
purposes regarding the Corporation.
6.3 TRANSFER AND REGISTRATION OF STOCK.
- ----------------------------------------
(a) The transfer of stock and certificates which represent the
stock of the Corporation shall be governed by Article 8 of Subtitle 1 of
Title 6 of the Delaware Code (the Uniform Commercial Code), as amended
from time to time.
(b) Registration of transfers of shares of the Corporation
shall be made only on the books of the Corporation upon request of the
registered holder thereof, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and upon the surrender of the certificate or certificates
for such shares properly endorsed or accompanied by a stock power duly
executed.
6.4 ADDRESSES OF STOCKHOLDERS.
- -------------------------------
Each stockholder shall designate to the Secretary an address at
which notices of meetings and all other corporate notices may be served
or mailed to him, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon him by mail directed to him
at his post-office address, if any, as the same appears on the share
record books of the Corporation or at his last known post-office address.
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.
- ------------------------------------------------
The holder of any shares of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of the certificate
therefor, and the Board may, in its discretion, cause to be issued to him
a new certificate or certificates for such shares, upon the surrender of
the mutilated certificates or, in the case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction, and the
Board may, in its discretion, require the owner of the lost or destroyed
certificate or his legal representative to give the Corporation a bond in
such sum and with such surety or sureties as it may direct to indemnify
the Corporation against any claim that may be made against it on account
of the alleged loss or destruction of any such certificate.
6.6 REGULATIONS.
- -----------------
The Board may make such rules and regulations as it may deem
expedient, not inconsistent with these By-laws, concerning the issue,
transfer and registration of certificates for stock of the Corporation.
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
- -------------------------------------------------------------
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board may fix a record date,
which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board, and which record date
shall be not more than 60 nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date
for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board, and which date shall be not more than 10 days after
the date upon which the resolution fixing the record date is adopted by
the Board. If no record date has been fixed by the Board, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board is
required by the Delaware Statute, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its registered
office in this State, its principal place of business or an officer or
agent of the Corporation having custody of the book in which proceedings
of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
fixed by the Board and prior action by the Board is required by the
Delaware Statute, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board adopts the resolution
taking such prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
ARTICLE VII
SEAL
The Board may provide a corporate seal, which shall be in the form
of a circle and shall bear the full name of the Corporation, the year of
incorporation of the Corporation and the words and figures "Corporate
Seal - Delaware."
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be the calendar year unless
otherwise determined by the Board.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
9.1 INDEMNIFICATION.
- ---------------------
(a) As provided in the Charter, to the fullest extent
permitted by the Delaware Statute as the same exists or may hereafter be
amended, a director of this Corporation shall not be liable to the
Corporation or its stockholders for breach of fiduciary duty as a
director.
(b) Without limitation of any right conferred by paragraph (a)
of this Section 1, each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director,
officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity while serving as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware Statute, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than permitted prior thereto),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes or amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer or employee and shall inure to the benefit of the
indemnitee's heirs, testators, intestates, executors and administrators;
PROVIDED, HOWEVER, that such person acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and with respect to a criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; PROVIDED
FURTHER, HOWEVER, that no indemnification shall be made in the case of an
action, suit or proceeding by or in the right of the Corporation in
relation to matters as to which it shall be adjudged in such action, suit
or proceeding that such director, officer, employee or agent is liable to
the Corporation, unless a court having jurisdiction shall determine that,
despite such adjudication, such person is fairly and reasonably entitled
to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided
in Section 1(c) of this Article IX with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) initiated by
such indemnitee was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article IX
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of
expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an
advancement of expenses incurred by an indemnitee in his or her capacity
as a director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to
the Corporation of an undertaking (hereinafter an "undertaking"), by or
on behalf of such indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which
there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses
under this Section or otherwise.
(c) If a claim under Section (b) of this Article IX is not
paid in full by the Corporation with 60 days after a written claim has
been received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be 20
days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms
of any undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought
by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met the
applicable standard of conduct set forth in the Delaware Statute.
Neither the failure of the Corporation (including the Board, independent
legal counsel, or the stockholders) to have made a determination prior to
the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware Statute, nor an actual
determination by the Corporation (including the Board, independent legal
counsel, or the stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In
any suit brought by the indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to
be indemnified, or to such advancement of expenses, under this Section or
otherwise shall be on the Corporation.
(d) The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
the Charter, agreement, vote of stockholders or disinterested directors
or otherwise.
9.2 INSURANCE.
- ---------------
The Corporation may purchase and maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer,
employee or agent of the Corporation or any person who is or was serving
at the request of the Corporation as a director, officer, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware Statute.
ARTICLE X
AMENDMENT
Any by-law (including these By-laws) may be adopted, amended or
repealed by the vote of the holders of a majority of the shares then
entitled to vote or by the stockholders' written consent pursuant to
Section 10 of Article II, or by the vote of the Board or by the
directors' written consent pursuant to Section 6 of Article III.
* * * * *
* * *
*
<PAGE>
BERRY STERLING CORPORATION
BY-LAWS
TABLE OF CONTENTS
PAGE
ARTICLE I OFFICES .................................................. 1
1.1 Registered Office............................................. 1
1.2 Other Offices................................................. 1
ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU
OF MEETING.......................................................... 1
2.1 Annual Meetings............................................... 1
2.2 Special Meetings.............................................. 1
2.3 NOTICE OF MEETINGS............................................ 1
2.4 Quorum........................................................ 2
2.5 ORGANIZATION.................................................. 2
2.6 Order of Business............................................. 2
2.7 VOTING........................................................ 3
2.8 Inspection.................................................... 3
2.9 LIST OF STOCKHOLDERS.......................................... 4
2.10 Stockholders' Consent in Lieu of Meeting..................... 4
ARTICLE III BOARD OF DIRECTORS...................................... 4
3.1 General Powers................................................ 4
3.2 Number and Term of Office..................................... 4
3.3 ELECTION OF DIRECTORS......................................... 4
3.4 Resignation, Removal and Vacancies............................ 5
3.5 MEETINGS...................................................... 5
3.6 Directors' Consent in Lieu of Meeting......................... 6
3.7 Action by means of Conference Telephone or Similar
Communications Equipment...................................... 6
3.8 Committees.................................................... 6
ARTICLE IV OFFICERS................................................. 6
4.1 Executive Officers............................................ 6
4.2 Authority and Duties.......................................... 7
4.3 OTHER OFFICERS................................................ 7
4.4 Term of Office, Resignation and Removal....................... 7
4.5 VACANCIES..................................................... 7
4.6 The Chairman.................................................. 7
4.7 THE PRESIDENT................................................. 7
4.8 The Secretary................................................. 8
4.9 THE TREASURER................................................. 8
ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC............. 8
5.1 Execution of Documents........................................ 8
5.2 Deposits...................................................... 8
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS.................................................. 9
ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............ 9
6.1 Certificates for Shares....................................... 9
6.2 Record........................................................ 9
6.3 TRANSFER AND REGISTRATION OF STOCK............................ 9
6.4 Addresses of Stockholders..................................... 10
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.................... 10
6.6 Regulations................................................... 10
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD....... 10
ARTICLE VII SEAL.................................................... 11
Article VIII Fiscal Year............................................ 11
ARTICLE IX INDEMNIFICATION AND INSURANCE............................ 11
9.1 Indemnification............................................... 11
9.2 Insurance..................................................... 13
ARTICLE X AMENDMENT................................................. 13
<PAGE>
____________________
BERRY STERLING CORPORATION
Incorporated under the laws
of the State of Delaware
_____________________
___________________________
BY-LAWS
___________________________
As adopted on February 13, 1995
CERTIFICATE OF INCORPORATION
OF
AEROCON, INC.
____________________________________
ARTICLE I
---------
NAME
----
The name of the corporation (herein called the "Corporation") is
AeroCon, Inc.
ARTICLE II
----------
REGISTERED OFFICE AND AGENT
---------------------------
The address of the registered office of the Corporation in the
State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover,
County of Kent, Delaware. The name of the registered agent of the
Corporation at such address is The Prentice-Hall Corporation System, Inc.
ARTICLE III
-----------
PURPOSE
-------
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "Delaware Statute").
ARTICLE IV
----------
CAPITAL STOCK
-------------
The total number of shares of all classes of stock which the
Corporation has authority to issue is 10,000 shares, all of which are
shares of Common Stock, par value $.01 per share.
ARTICLE V
---------
INCORPORATOR
------------
The name and mailing address of the incorporator is as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Reinena L. Davis c/o O'Sullivan Graev & Karabell,
LLP30 Rockefeller Plaza
41st FloorNew York, New York 10112
</TABLE>
ARTICLE VI
----------
DIRECTORS
----------
The number of directors of the Corporation shall be such as from
time to time shall be fixed in the manner provided in the By-laws of the
Corporation. The election of directors of the Corporation need not be by
ballot unless the By-laws so require.
ARTICLE VII
-----------
MANAGEMENT OF THE CORPORATION
-----------------------------
A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to 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 Statute, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Delaware Statute is amended
after the date of incorporation of the Corporation to authorize corporate
action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware Statute, as so
amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE VIII
------------
CREDITORS MEETINGS
------------------
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of the Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
the Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case
may be, agree on any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
<PAGE>
IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
Delaware Statute, DO HEREBY CERTIFY, under penalties of perjury, that this
is my act and deed and that the facts hereinabove stated are truly set
forth and, accordingly, I have hereunto set my hand as of the 14th day of
February, 1995.
_________________________________
Reinena L. Davis
BY-LAWS OF
AEROCON, INC.
ARTICLE I
OFFICES
-------
1.1 REGISTERED OFFICE.
- -----------------------
The registered office of AeroCon, Inc. (the "Corporation"), in the
State of Delaware shall be at 32 Loockerman Square, Suite L-100, City of
Dover, County of Kent, Delaware 19904, and the registered agent in charge
thereof shall be The Prentice-Hall Corporation System.
1.2 OTHER OFFICES.
- -------------------
The Corporation may also have an office or offices at any other
place or places within or outside the State of Delaware.
ARTICLE II
MEETING OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
2.1 ANNUAL MEETINGS.
- ---------------------
The annual meeting of the stockholders for the election of
directors, and for the transaction of such other business as may properly
come before the meeting, shall be held at such place, date and hour as
shall be fixed by the Board of Directors (the "Board") and designated in
the notice or waiver of notice thereof, except that no annual meeting
need be held if all actions, including the election of directors,
required by the General Corporation Law of the State of Delaware (the
"Delaware Statute") to be taken at a stockholders' annual meeting are
taken by written consent in lieu of meeting pursuant to Section 10 of
this Article II.
2.2 SPECIAL MEETINGS.
- ----------------------
A special meeting of the stockholders for any purpose or purposes
may be called by the Board, the Chairman, the President or the record
holders of at least a majority of the issued and outstanding shares of
Common Stock of the Corporation, to be held at such place, date and hour
as shall be designated in the notice or waiver of notice thereof.
2.3 NOTICE OF MEETINGS.
- ------------------------
Except as otherwise required by statute, the Certificate of
Incorporation of the Corporation (the "Certificate") or these By-laws,
notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not
less than 10 nor more than 60 days before the day on which the meeting is
to be held, by delivering written notice thereof to him personally, or
by mailing a copy of such notice, postage prepaid, directly to him at his
address as it appears in the records of the Corporation, or by
transmitting such notice thereof to him at such address by telegraph,
cable or other telephonic transmission. Every such notice shall state
the place, the date and hour of the meeting, and, in case of a special
meeting, the purpose or purposes for which the meeting is called. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy, or who
shall, in person or by attorney thereunto authorized, waive such notice
in writing, either before or after such meeting. Except as otherwise
provided in these By-laws, neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders need be specified in any
such notice or waiver of notice. Notice of any adjourned meeting of
stockholders shall not be required to be given, except when expressly
required by law.
2.4 QUORUM.
- ------------
At each meeting of the stockholders, except where otherwise provided
by the Certificate or these By-laws, the holders of a majority of the
issued and outstanding shares of Common Stock of the Corporation entitled
to vote at such meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority in interest of the stockholders present in person or
represented by proxy and entitled to vote, or, in the absence of all the
stockholders entitled to vote, any officer entitled to preside at, or act
as secretary of, such meeting, shall have the power to adjourn the
meeting from time to time, until stockholders holding the requisite
amount of stock to constitute a quorum shall be present or represented.
At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally called.
2.5 ORGANIZATION.
- ------------------
(a) Unless otherwise determined by the Board, at each meeting
of the stockholders, one of the following shall act as chairman of the
meeting and preside thereat, in the following order of precedence:
(i) the Chairman;
(ii) the President;
(iii) any director, officer or stockholder of the
Corporation designated by the Board to act as chairman of such
meeting and to preside thereat if the Chairman or the President
shall be absent from such meeting; or
(iv) a stockholder of record who shall be chosen chairman
of such meeting by a majority in voting interest of the stockholders
present in person or by proxy and entitled to vote thereat.
(b) The Secretary or, if he shall be presiding over such
meeting in accordance with the provisions of this Section 5 or if he
shall be absent from such meeting, the person (who shall be an Assistant
Secretary, if an Assistant Secretary has been appointed and is present)
whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
2.6 ORDER OF BUSINESS.
- -----------------------
The order of business at each meeting of the stockholders shall be
determined by the chairman of such meeting, but such order of business
may be changed by a majority in voting interest of those present in
person or by proxy at such meeting and entitled to vote thereat.
2.7 VOTING.
- ------------
Except as otherwise provided by law, the Certificate or these By-
laws, at each meeting of the stockholders, every stockholder of the
Corporation shall be entitled to one vote in person or by proxy for each
share of Common Stock of the Corporation held by him and registered in
his name on the books of the Corporation on the date fixed pursuant to
Section 7 of Article VI as the record date for the determination of
stockholders entitled to vote at such meeting. Persons holding stock in
a fiduciary capacity shall be entitled to vote the shares so held. A
person whose stock is pledged shall be entitled to vote, unless, in the
transfer by the pledgor on the books of the Corporation, he has expressly
empowered the pledgee to vote thereon, in which case only the pledgee or
his proxy may represent such stock and vote thereon. If shares or other
securities having voting power stand in the record of two or more
persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or if two or
more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary shall be given written notice to the
contrary and furnished with a copy of the instrument or order appointing
them or creating the relationship wherein it is so provided, their acts
with respect to voting shall have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all; and
(c) if more than one votes, but the vote is evenly split on
any particular matter, such shares shall be voted in the manner provided
by law.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section 7
shall be a majority or even-split in interest. The Corporation shall not
vote directly or indirectly any share of its own capital stock. Any vote
of stock may be given by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney thereunto authorized, delivered to the
secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted
after three years from its date, unless said proxy provides for a longer
period. At all meetings of the stockholders, all matters (except where
other provision is made by law, the Certificate or these By-laws) shall
be decided by the vote of a majority in interest of the stockholders
present in person or by proxy at such meeting and entitled to vote
thereon, a quorum being present. Unless demanded by a stockholder
present in person or by proxy at any meeting and entitled to vote
thereon, the vote on any question need not be by ballot. Upon a demand
by any such stockholder for a vote by ballot upon any question, such
vote by ballot shall be taken. On a vote by ballot, each ballot shall be
signed by the stockholder voting, or by his proxy, if there be such
proxy, and shall state the number of shares voted.
2.8 INSPECTION.
- ----------------
The chairman of the meeting may at any time appoint one or more
inspectors to serve at any meeting of the stockholders. Any inspector
may be removed, and a new inspector or inspectors appointed, by the Board
at any time. Such inspectors shall decide upon the qualifications of
voters, accept and count votes, declare the results of such vote, and
subscribe and deliver to the secretary of the meeting a certificate
stating the number of shares of stock issued and outstanding and entitled
to vote thereon and the number of shares voted for and against the
question, respectively. The inspectors need not be stockholders of the
Corporation, and any director or officer of the Corporation may be an
inspector on any question other than a vote for or against his election
to any position with the Corporation or on any other matter in which he
may be directly interested. Before acting as herein provided, each
inspector shall subscribe an oath faithfully to execute the duties of an
inspector with strict impartiality and according to the best of his
ability.
2.9 LIST OF STOCKHOLDERS.
- --------------------------
It shall be the duty of the Secretary or other officer of the
Corporation who shall have charge of its stock ledger to prepare and
make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose
germane to any such meeting, during ordinary business hours, for a period
of at least 10 days prior to such meeting, either at a place within the
city where such meeting is to be held, which place shall be specified in
the notice of the meeting or, if not so specified, at the place where the
meeting is to be held. Such list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING.
- ----------------------------------------------
Any action required by the Delaware Statute to be taken at any
annual or special meeting of the stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and
without a vote, by a consent in writing, as permitted by the Delaware
Statute.
ARTICLE III
BOARD OF DIRECTORS
3.1 GENERAL POWERS.
- --------------------
The business, property and affairs of the Corporation shall be
managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by law or by the Certificate directed or required to be exercised
or done by the stockholders.
3.2 NUMBER AND TERM OF OFFICE.
- -------------------------------
The number of directors shall be fixed from time to time by the
Board. Directors need not be stockholders. Each director shall hold
office until his successor is elected and qualified, or until his earlier
death or resignation or removal in the manner hereinafter provided.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
At each meeting of the stockholders for the election of directors at
which a quorum is present, the persons receiving the greatest number of
votes, up to the number of directors to be elected, of the stockholders
present in person or by proxy and entitled to vote thereon shall be the
directors; PROVIDED, HOWEVER, that for purposes of such vote no
stockholder shall be allowed to cumulate his votes. Unless an election
by ballot shall be demanded as provided in Section 7 of Article II,
election of directors may be conducted in any manner approved at such
meeting.
3.4 RESIGNATION, REMOVAL AND VACANCIES.
- ----------------------------------------
(a) Any director may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, upon receipt thereof; unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
(b) Any director or the entire Board may be removed, with or
without cause, at any time by vote of the holders of a majority of the
shares then entitled to vote at an election of directors or by written
consent of the stockholders pursuant to Section 10 of Article II.
(c) Vacancies occurring on the Board for any reason may be
filled by vote of the stockholders or by the stockholders' written
consent pursuant to Section 10 of Article II, or by vote of the Board or
by the directors' written consent pursuant to Section 6 of this Article
III. If the number of directors then in office is less than a quorum,
such vacancies may be filled by a vote of a majority of the directors
then in office.
3.5 MEETINGS.
- --------------
(A) ANNUAL MEETINGS. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of
organization and the transaction of other business, unless it shall have
transacted all such business by written consent pursuant to Section 6 of
this Article III.
(B) OTHER MEETINGS. Other meetings of the Board shall be held
at such times and places as the Board, the Chairman, the President or any
director shall from time to time determine.
(C) NOTICE OF MEETINGS. Notice shall be given to each
director of each meeting, including the time, place and purpose of such
meeting. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least
two days before the date on which such meeting is to be held, or shall be
sent to him at such place by telegraph, cable, wireless or other form of
recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held,
but notice need not be given to any director who shall attend such
meeting. A written waiver of notice, signed by the person entitled
thereto, whether before or after the time of the meeting stated therein,
shall be deemed equivalent to notice.
(D) PLACE OF MEETINGS. The Board may hold its meetings at
such place or places within or outside the State of Delaware as the Board
may from time to time determine, or as shall be designated in the
respective notices or waivers of notice thereof.
(E) QUORUM AND MANNER OF ACTING. A majority of the total
number of directors then in office shall be present in person at any
meeting of the Board in order to constitute a quorum for the transaction
of business at such meeting, and the vote of a majority of those
directors present at any such meeting at which a quorum is present shall
be necessary for the passage of any resolution or act of the Board,
except as otherwise expressly required by law or these By-laws. In the
absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum
shall be present.
(F) ORGANIZATION. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in
the following order of precedence:
(i) the Chairman;
(ii) the President (if a director); or
(iii) any director designated by a majority of the
directors present.
The Secretary or, in the case of his absence, an Assistant Secretary, if
an Assistant Secretary has been appointed and is present, or any person
whom the chairman of the meeting shall appoint shall act as secretary of
such meeting and keep the minutes thereof.
3.6 DIRECTORS' CONSENT IN LIEU OF MEETING.
- -------------------------------------------
Any action required or permitted to be taken at any meeting of the
Board may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall
be signed by all the directors then in office and such consent is filed
with the minutes of the proceedings of the Board.
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT.
- ----------------------------------------------------------------------
Any one or more members of the Board may participate in a meeting of
the Board by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each
other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
3.8 COMMITTEES.
- ----------------
The Board may, by resolution or resolutions passed by a majority of
the whole Board, designate one or more committees, each such committee to
consist of one or more directors of the Corporation, which to the extent
provided in said resolution or resolutions shall have and may exercise
the powers of the Board in the management of the business and affairs of
the Corporation and may authorize the seal of the Corporation to be
affixed to all papers which may require it, such committee or committees
to have such name or names as may be determined from time to time by
resolution adopted by the Board. A majority of all the members of any
such committee may determine its action and fix the time and place of its
meetings, unless the Board shall otherwise provide. The Board shall have
power to change the members of any such committee at any time, to fill
vacancies and to discharge any such committee, either with or without
cause, at any time.
ARTICLE IV
OFFICERS
4.1 EXECUTIVE OFFICERS.
- ------------------------
The principal officers of the Corporation shall be a Chairman, if
one is appointed (and any references to the Chairman shall not apply if a
Chairman has not been appointed), a President, a Secretary, and a
Treasurer, and may include such other officers as the Board may appoint
pursuant to Section 3 of this Article IV. Any two or more offices may be
held by the same person.
4.2 AUTHORITY AND DUTIES.
- --------------------------
All officers, as between themselves and the Corporation, shall have
such authority and perform such duties in the management of the
Corporation as may be provided in these By-laws or, to the extent so
provided, by the Board.
4.3 OTHER OFFICERS.
- --------------------
The Corporation may have such other officers, agents and employees
as the Board may deem necessary, including one or more Assistant
Secretaries, one or more Assistant Treasurers and one or more Vice
Presidents, each of whom shall hold office for such period, have such
authority, and perform such duties as the Board, the Chairman, or the
President may from time to time determine. The Board may delegate to any
principal officer the power to appoint and define the authority and
duties of, or remove, any such officers, agents, or employees.
4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL.
- ---------------------------------------------
(a) All officers shall be elected or appointed by the Board
and shall hold office for such term as may be prescribed by the Board.
Each officer shall hold office until his successor has been elected or
appointed and qualified or until his earlier death or resignation or
removal in the manner hereinafter provided. The Board may require any
officer to give security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, at the time it is accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be
necessary to make it effective.
(c) All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board or by the
stockholders of the Corporation with or without cause.
4.5 VACANCIES.
- ---------------
If the office of Chairman, President, Secretary or Treasurer becomes
vacant for any reason, the Board shall fill such vacancy, and if any
other office becomes vacant, the Board may fill such vacancy. Any
officer so appointed or elected by the Board shall serve only until such
time as the unexpired term of his predecessor shall have expired, unless
reelected or reappointed by the Board.
4.6 THE CHAIRMAN.
- ------------------
The Chairman shall give counsel and advice to the Board and the
officers of the Corporation on all subjects concerning the welfare of the
Corporation and the conduct of its business and shall perform such other
duties as the Board may from time to time determine. Unless otherwise
determined by the Board, he shall preside at meetings of the Board and of
the Stockholders at which he is present.
4.7 THE PRESIDENT.
- -------------------
The President shall be the chief executive officer of the
Corporation. The President shall have general and active management and
control of the business and affairs of the Corporation subject to the
control of the Board and shall see that all orders and resolutions of the
Board are carried into effect. The President shall from time to time
make such reports of the affairs of the Corporation as the Board of
Directors may require and shall perform such other duties as the Board
may from time to time determine.
4.8 THE SECRETARY.
- -------------------
The Secretary shall, to the extent practicable, attend all meetings
of the Board and all meetings of the stockholders and shall record all
votes and the minutes of all proceedings in a book to be kept for that
purpose. He may give, or cause to be given, notice of all meetings of
the stockholders and of the Board, and shall perform such other duties as
may be prescribed by the Board, the Chairman or the President, under
whose supervision he shall act. He shall keep in safe custody the seal
of the Corporation and affix the same to any duly authorized instrument
requiring it and, when so affixed, it shall be attested by his signature
or by the signature of the Treasurer or, if appointed, an Assistant
Secretary or an Assistant Treasurer. He shall keep in safe custody the
certificate books and stockholder records and such other books and
records as the Board may direct, and shall perform all other duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
4.9 THE TREASURER.
- -------------------
The Treasurer shall have the care and custody of the corporate funds
and other valuable effects, including securities, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as may
be designated by the Board. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board, taking proper vouchers
for such disbursements, shall render to the Chairman, President and
directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation and shall perform all other duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
5.1 EXECUTION OF DOCUMENTS.
- ----------------------------
The Board shall designate, by either specific or general resolution,
the officers, employees and agents of the Corporation who shall have the
power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and
other documents for and in the name of the Corporation, and may authorize
such officers, employees and agents to delegate such power (including
authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation; unless so designated or expressly
authorized by these By-laws, no officer, employee or agent shall have any
power or authority to bind the Corporation by any contract or engagement,
to pledge its credit or to render it liable pecuniarily for any purpose
or amount.
5.2 DEPOSITS.
- --------------
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation or otherwise
as the Board or Treasurer, or any other officer of the Corporation to
whom power in this respect shall have been given by the Board, shall
select.
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS.
- ---------------------------------------------------------------
The Board shall designate the officers of the Corporation who shall
have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the
powers and rights which the Corporation may have as the holder of stock
or other securities in any other corporation, and to vote or consent with
respect to such stock or securities. Such designated officers may
instruct the person or persons so appointed as to the manner of
exercising such powers and rights, and such designated officers may
execute or cause to be executed in the name and on behalf of the
Corporation and under its corporate seal or otherwise, such written
proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise its powers
and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
6.1 CERTIFICATES FOR SHARES.
- -----------------------------
Every owner of stock of the Corporation shall be entitled to have a
certificate certifying the number and class of shares owned by him in
the Corporation, which shall be in such form as shall be prescribed by
the Board. Certificates shall be numbered and issued in consecutive
order and shall be signed by, or in the name of, the Corporation by the
Chairman, the President or any Vice President, and by the Treasurer (or
an Assistant Treasurer, if appointed) or the Secretary (or an Assistant
Secretary, if appointed). In case any officer or officers who shall have
signed any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates
may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate had
not ceased to be such officer or officers of the Corporation.
6.2 RECORD.
- ------------
A record in one or more counterparts shall be kept of the name of
the person, firm or corporation owning the shares represented by each
certificate for stock of the Corporation issued, the number of shares
represented by each such certificate, the date thereof and, in the case
of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name shares of stock stand on the
stock record of the Corporation shall be deemed the owner thereof for all
purposes regarding the Corporation.
6.3 TRANSFER AND REGISTRATION OF STOCK.
- ----------------------------------------
(a) The transfer of stock and certificates which represent the
stock of the Corporation shall be governed by Article 8 of Subtitle 1 of
Title 6 of the Delaware Code (the Uniform Commercial Code), as amended
from time to time.
(b) Registration of transfers of shares of the Corporation
shall be made only on the books of the Corporation upon request of the
registered holder thereof, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and upon the surrender of the certificate or certificates
for such shares properly endorsed or accompanied by a stock power duly
executed.
6.4 ADDRESSES OF STOCKHOLDERS.
- -------------------------------
Each stockholder shall designate to the Secretary an address at
which notices of meetings and all other corporate notices may be served
or mailed to him, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon him by mail directed to him
at his post-office address, if any, as the same appears on the share
record books of the Corporation or at his last known post-office address.
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.
- ------------------------------------------------
The holder of any shares of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of the certificate
therefor, and the Board may, in its discretion, cause to be issued to him
a new certificate or certificates for such shares, upon the surrender of
the mutilated certificates or, in the case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction, and the
Board may, in its discretion, require the owner of the lost or destroyed
certificate or his legal representative to give the Corporation a bond in
such sum and with such surety or sureties as it may direct to indemnify
the Corporation against any claim that may be made against it on account
of the alleged loss or destruction of any such certificate.
6.6 REGULATIONS.
- -----------------
The Board may make such rules and regulations as it may deem
expedient, not inconsistent with these By-laws, concerning the issue,
transfer and registration of certificates for stock of the Corporation.
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
- -------------------------------------------------------------
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board may fix a record date,
which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board, and which record date
shall be not more than 60 nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date
for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board, and which date shall be not more than 10 days after
the date upon which the resolution fixing the record date is adopted by
the Board. If no record date has been fixed by the Board, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board is
required by the Delaware Statute, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its registered
office in this State, its principal place of business or an officer or
agent of the Corporation having custody of the book in which proceedings
of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
fixed by the Board and prior action by the Board is required by the
Delaware Statute, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board adopts the resolution
taking such prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
ARTICLE VII
SEAL
The Board may provide a corporate seal, which shall be in the form
of a circle and shall bear the full name of the Corporation, the year of
incorporation of the Corporation and the words and figures "Corporate
Seal - Delaware."
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be the calendar year unless
otherwise determined by the Board.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
9.1 INDEMNIFICATION.
- ---------------------
(a) As provided in the Charter, to the fullest extent
permitted by the Delaware Statute as the same exists or may hereafter be
amended, a director of this Corporation shall not be liable to the
Corporation or its stockholders for breach of fiduciary duty as a
director.
(b) Without limitation of any right conferred by paragraph (a)
of this Section 1, each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director,
officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity while serving as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware Statute, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than permitted prior thereto),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes or amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer or employee and shall inure to the benefit of the
indemnitee's heirs, testators, intestates, executors and administrators;
PROVIDED, HOWEVER, that such person acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and with respect to a criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; PROVIDED
FURTHER, HOWEVER, that no indemnification shall be made in the case of an
action, suit or proceeding by or in the right of the Corporation in
relation to matters as to which it shall be adjudged in such action, suit
or proceeding that such director, officer, employee or agent is liable to
the Corporation, unless a court having jurisdiction shall determine that,
despite such adjudication, such person is fairly and reasonably entitled
to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided
in Section 1(c) of this Article IX with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) initiated by
such indemnitee was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article IX
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of
expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an
advancement of expenses incurred by an indemnitee in his or her capacity
as a director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to
the Corporation of an undertaking (hereinafter an "undertaking"), by or
on behalf of such indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which
there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses
under this Section or otherwise.
(c) If a claim under Section (b) of this Article IX is not
paid in full by the Corporation with 60 days after a written claim has
been received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be 20
days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms
of any undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought
by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met the
applicable standard of conduct set forth in the Delaware Statute.
Neither the failure of the Corporation (including the Board, independent
legal counsel, or the stockholders) to have made a determination prior to
the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware Statute, nor an actual
determination by the Corporation (including the Board, independent legal
counsel, or the stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In
any suit brought by the indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to
be indemnified, or to such advancement of expenses, under this Section or
otherwise shall be on the Corporation.
(d) The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
the Charter, agreement, vote of stockholders or disinterested directors
or otherwise.
9.2 INSURANCE.
- ---------------
The Corporation may purchase and maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer,
employee or agent of the Corporation or any person who is or was serving
at the request of the Corporation as a director, officer, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware Statute.
ARTICLE X
AMENDMENT
Any by-law (including these By-laws) may be adopted, amended or
repealed by the vote of the holders of a majority of the shares then
entitled to vote or by the stockholders' written consent pursuant to
Section 10 of Article II, or by the vote of the Board or by the
directors' written consent pursuant to Section 6 of Article III.
* * * * *
* * *
*
<PAGE>
AEROCON, INC.
BY-LAWS
TABLE OF CONTENTS
PAGE
ARTICLE I OFFICES.................................................... 1
1.1 Registered Office.............................................. 1
1.2 Other Offices.................................................. 1
ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU
OF MEETING........................................................... 1
2.1 Annual Meetings................................................ 1
2.2 Special Meetings............................................... 1
2.3 NOTICE OF MEETINGS............................................. 1
2.4 Quorum......................................................... 2
2.5 ORGANIZATION................................................... 2
2.6 Order of Business.............................................. 2
2.7 VOTING......................................................... 2
2.8 Inspection..................................................... 3
2.9 LIST OF STOCKHOLDERS........................................... 4
2.10 Stockholders' Consent in Lieu of Meeting...................... 4
ARTICLE III BOARD OF DIRECTORS....................................... 4
3.1 General Powers................................................. 4
3.2 Number and Term of Office...................................... 4
3.3 ELECTION OF DIRECTORS.......................................... 4
3.4 Resignation, Removal and Vacancies............................. 4
3.5 MEETINGS....................................................... 5
3.6 Directors' Consent in Lieu of Meeting.......................... 6
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT.......................................................... 6
3.8 Committees..................................................... 6
ARTICLE IV OFFICERS.................................................. 6
4.1 Executive Officers............................................. 6
4.2 Authority and Duties........................................... 6
4.3 OTHER OFFICERS................................................. 7
4.4 Term of Office, Resignation and Removal........................ 7
4.5 VACANCIES...................................................... 7
4.6 The Chairman................................................... 7
4.7 THE PRESIDENT.................................................. 7
4.8 The Secretary.................................................. 8
4.9 THE TREASURER.................................................. 8
ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.............. 8
5.1 Execution of Documents......................................... 8
5.2 Deposits....................................................... 8
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS......................................................... 9
ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............. 9
6.1 Certificates for Shares........................................ 9
6.2 Record......................................................... 9
6.3 TRANSFER AND REGISTRATION OF STOCK............................. 9
6.4 Addresses of Stockholders...................................... 10
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES..................... 10
6.6 Regulations.................................................... 10
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD........ 10
ARTICLE VII SEAL..................................................... 11
Article VIII Fiscal Year............................................. 11
ARTICLE IX INDEMNIFICATION AND INSURANCE............................. 11
9.1 Indemnification................................................ 11
9.2 Insurance...................................................... 13
ARTICLE X AMENDMENT.................................................. 13
<PAGE>
____________________
AEROCON, INC.
Incorporated under the laws
of the State of Delaware
_____________________
___________________________
BY-LAWS
___________________________
As adopted on February 14, 1995
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PACKERWARE CORPORATION
____________________________
PackerWare Corporation, a Kansas corporation (the
"Corporation"), does hereby certify that:
FIRST: The present name of the Corporation is "PackerWare
Corporation," which is the name under which the Corporation was
originally incorporated. The date of filing of the original Articles of
Incorporation of the Corporation with the Secretary of State of the State
of Kansas was October 31, 1968.
SECOND: These Amended and Restated Articles of Incorporation
(the "Restated Articles") amend and restate in their entirety the present
Articles of Incorporation of the Corporation. These Restated Articles
have been duly adopted and approved by the Board of Directors of the
Corporation by unanimous written consent in lieu of a meeting thereof and
by the sole shareholder of the Corporation by written consent in
accordance with the provisions of Sections 17-6301(f), 17-6602 and 17-
6605 of the General Corporation Code of the State of Kansas.
THIRD: These Restated Articles shall become effective
immediately upon their filing with the Secretary of State of the State of
Kansas.
FOURTH: Upon the filing with the Secretary of State of the
State of Kansas of these Restated Articles, the Articles of Incorporation
of the Corporation shall be amended and restated in their entirety to
read as set forth on EXHIBIT A attached hereto.
* * *
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Amended and Restated
Articles of Incorporation to be duly executed this _____ day of January,
1997.
By:
______________________________________
James M. Kratochvil
Vice President, Chief Financial Officer,
Secretary and Treasurer
ATTEST:
_____________________________
Joseph S. Levy
Vice President and Assistant
Secretary
STATE OF )
) SS
COUNTY OF )
On this _______day of January, 1997, before me personally
appeared James M. Kratochvil, being first duly sworn and to me known to
be the person described in and who executed the foregoing Amended and
Restated Articles of Incorporation of PackerWare Corporation, and
acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
notarial seal, the day and year last above mentioned.
My Commission expires:
Notary Public
STATE OF )
) SS
COUNTY OF )
On this ______ day of January, 1997, before me personally
appeared Joseph S. Levy, being first duly sworn and to me known to be the
person described in and who executed the foregoing Amended and Restated
Articles of Incorporation of PackerWare Corporation, and acknowledged
that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
notarial seal, the day and year last above mentioned.
My Commission expires:
____________________________ _______________________________
Notary Public
<PAGE>
EXHIBIT A
---------
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PACKERWARE CORPORATION
____________________________
ARTICLE FIRST
-------------
The name of the corporation (herein called the "Corporation")
is PACKERWARE CORPORATION.
ARTICLE SECOND
--------------
The address of the registered office of the Corporation in the
State of Kansas is 534 South Kansas Avenue, Suite 1108, City of Topeka,
County of Shawnee, Kansas. The name of the registered agent of the
Corporation at such address is Corporation Service Company.
ARTICLE THIRD
-------------
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Code of the State of Kansas (the "Kansas Statute").
ARTICLE FOURTH
--------------
The total number of shares of all classes of stock which the
Corporation has authority to issue is 10,000 shares, all of which are
shares of Common Stock, par value $.01 per share. There shall be no
preferences, qualifications, limitations, or restrictions whatsoever, nor
any special or relative rights with respect to the shares.
ARTICLE FIFTH
-------------
The number of directors of the Corporation shall be such as
from time to time shall be fixed in the manner provided in the By-laws of
the Corporation. The election of directors of the Corporation need not
be by ballot unless the By-laws so require.
ARTICLE SIXTH
-------------
A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to 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 17-6424 of
the Kansas Statute, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Kansas Statute is amended
after the date of incorporation of the Corporation to authorize corporate
action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Kansas
Statute, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE SEVENTH
---------------
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Kansas may, on the application
in a summary way of the Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
the Corporation under the provisions of Section 17-6901 of the Kansas
Statute or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions
of Section 17-6808 of the Kansas Statute order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree on any compromise or arrangement
and to any reorganization of the Corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
the Corporation, as the case may be, and also on the Corporation.
* * * *
BY-LAWS OF
PACKERWARE CORPORATION
ARTICLE I
OFFICES
-------
1.1 REGISTERED OFFICE.
- -----------------------
The registered office of PackerWare Corporation (the "Corporation"),
in the State of Kansas shall be at 534 South Kansas Avenue, Suite 1108,
City of Topeka, County of Shawnee, Kansas 66603, and the registered agent
in charge thereof shall be the Corporation Service Company.
1.2 OTHER OFFICES.
- -------------------
The Corporation may also have an office or offices at any other
place or places within or outside the State of Kansas.
ARTICLE II
MEETING OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
--------------------------
2.1 ANNUAL MEETINGS.
- ---------------------
The annual meeting of the stockholders for the election of
directors, and for the transaction of such other business as may properly
come before the meeting, shall be held at such place, date and hour as
shall be fixed by the Board of Directors (the "Board") and designated in
the notice or waiver of notice thereof, except that no annual meeting
need be held if all actions, including the election of directors,
required by the General Corporation Code of the State of Kansas (the
"Kansas Statute") to be taken at a stockholders' annual meeting are taken
by written consent in lieu of meeting pursuant to Section 10 of this
Article II.
2.2 SPECIAL MEETINGS.
- ----------------------
A special meeting of the stockholders for any purpose or purposes
may be called by the Board, the Chairman, the President or the record
holders of at least a majority of the issued and outstanding shares of
Common Stock of the Corporation, to be held at such place, date and hour
as shall be designated in the notice or waiver of notice thereof.
2.3 NOTICE OF MEETINGS.
- ------------------------
Except as otherwise required by statute, the Articles of
Incorporation of the Corporation (the "Articles") or these By-laws,
notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not
less than 10 nor more than 60 days before the day on which the meeting is
to be held, by delivering written notice thereof to him personally, or
by mailing a copy of such notice, postage prepaid, directly to him at his
address as it appears in the records of the Corporation, or by
transmitting such notice thereof to him at such address by telegraph,
cable or other telephonic transmission. Every such notice shall state
the place, the date and hour of the meeting, and, in case of a special
meeting, the purpose or purposes for which the meeting is called. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy, or who
shall, in person or by attorney thereunto authorized, waive such notice
in writing, either before or after such meeting. Except as otherwise
provided in these By-laws, neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders need be specified in any
such notice or waiver of notice. Notice of any adjourned meeting of
stockholders shall not be required to be given, except when expressly
required by law.
2.4 QUORUM.
- ------------
At each meeting of the stockholders, except where otherwise provided
by the Articles or these By-laws, the holders of a majority of the issued
and outstanding shares of Common Stock of the Corporation entitled to
vote at such meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority in interest of the stockholders present in person or
represented by proxy and entitled to vote, or, in the absence of all the
stockholders entitled to vote, any officer entitled to preside at, or act
as secretary of, such meeting, shall have the power to adjourn the
meeting from time to time, until stockholders holding the requisite
amount of stock to constitute a quorum shall be present or represented.
At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally called.
2.5 ORGANIZATION.
- ------------------
(a) Unless otherwise determined by the Board, at each meeting
of the stockholders, one of the following shall act as chairman of the
meeting and preside thereat, in the following order of precedence:
(i) the Chairman;
(ii) the President;
(iii) any director, officer or stockholder of the Corporation
designated by the Board to act as chairman of such meeting and to preside
thereat if the Chairman or the President shall be absent from such
meeting; or
(iv) a stockholder of record who shall be chosen chairman of
such meeting by a majority in voting interest of the stockholders present
in person or by proxy and entitled to vote thereat.
(b) The Secretary or, if he shall be presiding over such
meeting in accordance with the provisions of this Section 5 or if he
shall be absent from such meeting, the person (who shall be an Assistant
Secretary, if an Assistant Secretary has been appointed and is present)
whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
2.6 ORDER OF BUSINESS.
- -----------------------
The order of business at each meeting of the stockholders shall be
determined by the chairman of such meeting, but such order of business
may be changed by a majority in voting interest of those present in
person or by proxy at such meeting and entitled to vote thereat.
2.7 VOTING.
- ------------
Except as otherwise provided by law, the Articles or these By-laws,
at each meeting of the stockholders, every stockholder of the Corporation
shall be entitled to one vote in person or by proxy for each share of
Common Stock of the Corporation held by him and registered in his name on
the books of the Corporation on the date fixed pursuant to Section 7 of
Article VI as the record date for the determination of stockholders
entitled to vote at such meeting. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held. A person whose
stock is pledged shall be entitled to vote, unless, in the transfer by
the pledgor on the books of the Corporation, he has expressly empowered
the pledgee to vote thereon, in which case only the pledgee or his proxy
may represent such stock and vote thereon. If shares or other securities
having voting power stand in the record of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common,
tenants by the entirety or otherwise, or if two or more persons have the
same fiduciary relationship respecting the same shares, unless the
Secretary shall be given written notice to the contrary and furnished
with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting
shall have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all; and
(c) if more than one votes, but the vote is evenly split on
any particular matter, such shares shall be voted in the manner provided
by law.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section 7
shall be a majority or even-split in interest. The Corporation shall not
vote directly or indirectly any share of its own capital stock. Any vote
of stock may be given by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney thereunto authorized, delivered to the
secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted
after three years from its date, unless said proxy provides for a longer
period. At all meetings of the stockholders, all matters (except where
other provision is made by law, the Articles or these By-laws) shall be
decided by the vote of a majority in interest of the stockholders present
in person or by proxy at such meeting and entitled to vote thereon, a
quorum being present. Unless demanded by a stockholder present in person
or by proxy at any meeting and entitled to vote thereon, the vote on any
question need not be by ballot. Upon a demand by any such stockholder
for a vote by ballot upon any question, such vote by ballot shall be
taken. On a vote by ballot, each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and shall
state the number of shares voted.
2.8 INSPECTION.
- ----------------
The chairman of the meeting may at any time appoint one or more
inspectors to serve at any meeting of the stockholders. Any inspector
may be removed, and a new inspector or inspectors appointed, by the Board
at any time. Such inspectors shall decide upon the qualifications of
voters, accept and count votes, declare the results of such vote, and
subscribe and deliver to the secretary of the meeting a certificate
stating the number of shares of stock issued and outstanding and entitled
to vote thereon and the number of shares voted for and against the
question, respectively. The inspectors need not be stockholders of the
Corporation, and any director or officer of the Corporation may be an
inspector on any question other than a vote for or against his election
to any position with the Corporation or on any other matter in which he
may be directly interested. Before acting as herein provided, each
inspector shall subscribe an oath faithfully to execute the duties of an
inspector with strict impartiality and according to the best of his
ability.
2.9 LIST OF STOCKHOLDERS.
- --------------------------
It shall be the duty of the Secretary or other officer of the
Corporation who shall have charge of its stock ledger to prepare and
make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose
germane to any such meeting, during ordinary business hours, for a period
of at least 10 days prior to such meeting, either at a place within the
city where such meeting is to be held, which place shall be specified in
the notice of the meeting or, if not so specified, at the place where the
meeting is to be held. Such list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING.
- ----------------------------------------------
Any action required by the Kansas Statute to be taken at any annual
or special meeting of the stockholders of the Corporation, or any action
which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote,
by a consent in writing, as permitted by the Kansas Statute.
ARTICLE III
BOARD OF DIRECTORS
------------------
3.1 GENERAL POWERS.
- --------------------
The business, property and affairs of the Corporation shall be
managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by law or by the Articles directed or required to be exercised or
done by the stockholders.
3.2 NUMBER AND TERM OF OFFICE.
- -------------------------------
The number of directors shall be fixed from time to time by the
Board. Directors need not be stockholders. Each director shall hold
office until his successor is elected and qualified, or until his earlier
death or resignation or removal in the manner hereinafter provided.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
At each meeting of the stockholders for the election of directors at
which a quorum is present, the persons receiving the greatest number of
votes, up to the number of directors to be elected, of the stockholders
present in person or by proxy and entitled to vote thereon shall be the
directors; PROVIDED, HOWEVER, that for purposes of such vote no
stockholder shall be allowed to cumulate his votes. Unless an election
by ballot shall be demanded as provided in Section 7 of Article II,
election of directors may be conducted in any manner approved at such
meeting.
3.4 RESIGNATION, REMOVAL AND VACANCIES.
- ----------------------------------------
(a) Any director may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, upon receipt thereof; unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
(b) Any director or the entire Board may be removed, with or
without cause, at any time by vote of the holders of a majority of the
shares then entitled to vote at an election of directors or by written
consent of the stockholders pursuant to Section 10 of Article II.
(c) Vacancies occurring on the Board for any reason may be
filled by vote of the stockholders or by the stockholders' written
consent pursuant to Section 10 of Article II, or by vote of the Board or
by the directors' written consent pursuant to Section 6 of this Article
III. If the number of directors then in office is less than a quorum,
such vacancies may be filled by a vote of a majority of the directors
then in office.
3.5 MEETINGS.
- --------------
(A) ANNUAL MEETINGS. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of
organization and the transaction of other business, unless it shall have
transacted all such business by written consent pursuant to Section 6 of
this Article III.
(B) OTHER MEETINGS. Other meetings of the Board shall be held
at such times and places as the Board, the Chairman, the President or any
director shall from time to time determine.
(C) NOTICE OF MEETINGS. Notice shall be given to each
director of each meeting, including the time, place and purpose of such
meeting. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least
two days before the date on which such meeting is to be held, or shall be
sent to him at such place by telegraph, cable, wireless or other form of
recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held,
but notice need not be given to any director who shall attend such
meeting. A written waiver of notice, signed by the person entitled
thereto, whether before or after the time of the meeting stated therein,
shall be deemed equivalent to notice.
(D) PLACE OF MEETINGS. The Board may hold its meetings at
such place or places within or outside the State of Kansas as the Board
may from time to time determine, or as shall be designated in the
respective notices or waivers of notice thereof.
(E) QUORUM AND MANNER OF ACTING. A majority of the total
number of directors then in office shall be present in person at any
meeting of the Board in order to constitute a quorum for the transaction
of business at such meeting, and the vote of a majority of those
directors present at any such meeting at which a quorum is present shall
be necessary for the passage of any resolution or act of the Board,
except as otherwise expressly required by law or these By-laws. In the
absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum
shall be present.
(F) ORGANIZATION. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in
the following order of precedence:
(i) the Chairman;
(ii) the President (if a director); or
(iii) any director designated by a majority of the directors
present.
The Secretary or, in the case of his absence, an Assistant Secretary, if
an Assistant Secretary has been appointed and is present, or any person
whom the chairman of the meeting shall appoint shall act as secretary of
such meeting and keep the minutes thereof.
3.6 DIRECTORS' CONSENT IN LIEU OF MEETING.
- -------------------------------------------
Any action required or permitted to be taken at any meeting of the
Board may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall
be signed by all the directors then in office and such consent is filed
with the minutes of the proceedings of the Board.
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT.
- ----------------------------------------------------------------------
Any one or more members of the Board may participate in a meeting of
the Board by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each
other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
3.8 COMMITTEES.
- ----------------
The Board may, by resolution or resolutions passed by a majority of
the whole Board, designate one or more committees, each such committee to
consist of one or more directors of the Corporation, which to the extent
provided in said resolution or resolutions shall have and may exercise
the powers of the Board in the management of the business and affairs of
the Corporation and may authorize the seal of the Corporation to be
affixed to all papers which may require it, such committee or committees
to have such name or names as may be determined from time to time by
resolution adopted by the Board. A majority of all the members of any
such committee may determine its action and fix the time and place of its
meetings, unless the Board shall otherwise provide. The Board shall have
power to change the members of any such committee at any time, to fill
vacancies and to discharge any such committee, either with or without
cause, at any time.
ARTICLE IV
OFFICERS
--------
4.1 EXECUTIVE OFFICERS.
- ------------------------
The principal officers of the Corporation shall be a Chairman, if
one is appointed (and any references to the Chairman shall not apply if a
Chairman has not been appointed), a President, a Secretary, and a
Treasurer, and may include such other officers as the Board may appoint
pursuant to Section 3 of this Article IV. Any two or more offices may be
held by the same person.
4.2 AUTHORITY AND DUTIES.
- --------------------------
All officers, as between themselves and the Corporation, shall have
such authority and perform such duties in the management of the
Corporation as may be provided in these By-laws or, to the extent so
provided, by the Board.
4.3 OTHER OFFICERS.
- --------------------
The Corporation may have such other officers, agents and employees
as the Board may deem necessary, including one or more Assistant
Secretaries, one or more Assistant Treasurers and one or more Vice
Presidents, each of whom shall hold office for such period, have such
authority, and perform such duties as the Board, the Chairman, or the
President may from time to time determine. The Board may delegate to any
principal officer the power to appoint and define the authority and
duties of, or remove, any such officers, agents, or employees.
4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL.
- ---------------------------------------------
(a) All officers shall be elected or appointed by the Board
and shall hold office for such term as may be prescribed by the Board.
Each officer shall hold office until his successor has been elected or
appointed and qualified or until his earlier death or resignation or
removal in the manner hereinafter provided. The Board may require any
officer to give security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, at the time it is accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be
necessary to make it effective.
(c) All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board or by the
stockholders of the Corporation with or without cause.
4.5 VACANCIES.
- ---------------
If the office of Chairman, President, Secretary or Treasurer becomes
vacant for any reason, the Board shall fill such vacancy, and if any
other office becomes vacant, the Board may fill such vacancy. Any
officer so appointed or elected by the Board shall serve only until such
time as the unexpired term of his predecessor shall have expired, unless
reelected or reappointed by the Board.
4.6 THE CHAIRMAN.
- ------------------
The Chairman shall give counsel and advice to the Board and the
officers of the Corporation on all subjects concerning the welfare of the
Corporation and the conduct of its business and shall perform such other
duties as the Board may from time to time determine. Unless otherwise
determined by the Board, he shall preside at meetings of the Board and of
the Stockholders at which he is present.
4.7 THE PRESIDENT.
- -------------------
The President shall be the chief executive officer of the
Corporation. The President shall have general and active management and
control of the business and affairs of the Corporation subject to the
control of the Board and shall see that all orders and resolutions of the
Board are carried into effect. The President shall from time to time
make such reports of the affairs of the Corporation as the Board of
Directors may require and shall perform such other duties as the Board
may from time to time determine.
4.8 THE SECRETARY.
- -------------------
The Secretary shall, to the extent practicable, attend all meetings
of the Board and all meetings of the stockholders and shall record all
votes and the minutes of all proceedings in a book to be kept for that
purpose. He may give, or cause to be given, notice of all meetings of
the stockholders and of the Board, and shall perform such other duties as
may be prescribed by the Board, the Chairman or the President, under
whose supervision he shall act. He shall keep in safe custody the seal
of the Corporation and affix the same to any duly authorized instrument
requiring it and, when so affixed, it shall be attested by his signature
or by the signature of the Treasurer or, if appointed, an Assistant
Secretary or an Assistant Treasurer. He shall keep in safe custody the
certificate books and stockholder records and such other books and
records as the Board may direct, and shall perform all other duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
4.9 THE TREASURER.
- -------------------
The Treasurer shall have the care and custody of the corporate funds
and other valuable effects, including securities, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as may
be designated by the Board. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board, taking proper vouchers
for such disbursements, shall render to the Chairman, President and
directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation and shall perform all other duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
----------------------------------------------
5.1 EXECUTION OF DOCUMENTS.
- ----------------------------
The Board shall designate, by either specific or general resolution,
the officers, employees and agents of the Corporation who shall have the
power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and
other documents for and in the name of the Corporation, and may authorize
such officers, employees and agents to delegate such power (including
authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation; unless so designated or expressly
authorized by these By-laws, no officer, employee or agent shall have any
power or authority to bind the Corporation by any contract or engagement,
to pledge its credit or to render it liable pecuniarily for any purpose
or amount.
5.2 DEPOSITS.
- --------------
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation or otherwise
as the Board or Treasurer, or any other officer of the Corporation to
whom power in this respect shall have been given by the Board, shall
select.
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS.
- ----------------------------------------------------------------
The Board shall designate the officers of the Corporation who shall
have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the
powers and rights which the Corporation may have as the holder of stock
or other securities in any other corporation, and to vote or consent with
respect to such stock or securities. Such designated officers may
instruct the person or persons so appointed as to the manner of
exercising such powers and rights, and such designated officers may
execute or cause to be executed in the name and on behalf of the
Corporation and under its corporate seal or otherwise, such written
proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise its powers
and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
---------------------------------------------
6.1 CERTIFICATES FOR SHARES.
- -----------------------------
Every owner of stock of the Corporation shall be entitled to have a
certificate certifying the number and class of shares owned by him in
the Corporation, which shall be in such form as shall be prescribed by
the Board. Certificates shall be numbered and issued in consecutive
order and shall be signed by, or in the name of, the Corporation by the
Chairman, the President or any Vice President, and by the Treasurer (or
an Assistant Treasurer, if appointed) or the Secretary (or an Assistant
Secretary, if appointed). In case any officer or officers who shall have
signed any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates
may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate had
not ceased to be such officer or officers of the Corporation.
6.2 RECORD.
- ------------
A record in one or more counterparts shall be kept of the name of
the person, firm or corporation owning the shares represented by each
certificate for stock of the Corporation issued, the number of shares
represented by each such certificate, the date thereof and, in the case
of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name shares of stock stand on the
stock record of the Corporation shall be deemed the owner thereof for all
purposes regarding the Corporation.
6.3 TRANSFER AND REGISTRATION OF STOCK.
- ----------------------------------------
(a) The transfer of stock and certificates which represent the
stock of the Corporation shall be governed by Section 17-6425 of the
Kansas Statute, as amended from time to time.
(b) Registration of transfers of shares of the Corporation
shall be made only on the books of the Corporation upon request of the
registered holder thereof, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and upon the surrender of the certificate or certificates
for such shares properly endorsed or accompanied by a stock power duly
executed.
6.4 ADDRESSES OF STOCKHOLDERS.
- -------------------------------
Each stockholder shall designate to the Secretary an address at
which notices of meetings and all other corporate notices may be served
or mailed to him, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon him by mail directed to him
at his post-office address, if any, as the same appears on the share
record books of the Corporation or at his last known post-office address.
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.
- ------------------------------------------------
The holder of any shares of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of the certificate
therefor, and the Board may, in its discretion, cause to be issued to him
a new certificate or certificates for such shares, upon the surrender of
the mutilated certificates or, in the case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction, and the
Board may, in its discretion, require the owner of the lost or destroyed
certificate or his legal representative to give the Corporation a bond in
such sum and with such surety or sureties as it may direct to indemnify
the Corporation against any claim that may be made against it on account
of the alleged loss or destruction of any such certificate.
6.6 REGULATIONS.
- -----------------
The Board may make such rules and regulations as it may deem
expedient, not inconsistent with these By-laws, concerning the issue,
transfer and registration of certificates for stock of the Corporation.
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
- -------------------------------------------------------------
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board may fix a record date,
which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board, and which record date
shall be not more than 60 nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date
for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board, and which date shall be not more than 10 days after
the date upon which the resolution fixing the record date is adopted by
the Board. If no record date has been fixed by the Board, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board is
required by the Kansas Statute, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in this
State, its principal place of business or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail,
return receipt requested. If no record date has been fixed by the Board
and prior action by the Board is required by the Kansas Statute, the
record date for determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of business on
the day on which the Board adopts the resolution taking such prior
action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
ARTICLE VII
RECORDS
-------
7.1 RECORDS.
- -------------
The corporation shall keep at its registered office, or principal
place of business, original and duplicate books in which shall be
recorded the number of its subscribed shares, in the names of and the
number of shares for which payment has been made and by whom, the
transfer of its shares with the date of transfer, the amount of its
assets and liabilities, the names and places of residence of its
officers, and such other or additional records, statements, lists and
information as may be required by law.
7.2 INSPECTION OF RECORDS.
- ---------------------------
A shareholder or director who demands and is entitled to inspect the
records of the corporation pursuant to any statutory or other legal right
shall be privileged to inspect such records only during the usual and
customary hours of business and in a manner that will not unduly
interfere with the regular conduct of the business of the corporation. A
shareholder or director may delegate his or her right of inspection to an
attorney or other agent on the condition, to be enforced at the option of
the corporation, that the shareholder/director and attorney/agent agree
to furnish to the corporation, promptly when completed, a true and
correct copy of every report resulting from the inspection made by the
attorney/agent. No shareholder or director shall use, permit to be used,
or acquiesce in the use by others of, any information thus obtained to
the competitive detriment of the corporation, nor shall he or she furnish
or permit to be furnished any information thus obtained to any competitor
or prospective competitor of the corporation. As a condition precedent
to any shareholder's or director's inspection of the records of the
corporation, the corporation may require the shareholder or director to
indemnify the corporation against any loss or damage that may be suffered
by it arising out of or resulting from any unauthorized disclosure made
or permitted to be made by such shareholder or director of information
obtained in the course of such inspection.
ARTICLE VIII
SEAL
----
The Board may provide a corporate seal, which shall be in the
form of a circle and shall bear the full name of the Corporation, the
year of incorporation of the Corporation and the words and figures
"Corporate Seal - Kansas."
ARTICLE IX
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be the calendar year
unless otherwise determined by the Board.
ARTICLE X
INDEMNIFICATION AND INSURANCE
-----------------------------
10.1 INDEMNIFICATION.
- ---------------------
(a) As provided in the Articles, to the fullest extent
permitted by the Kansas Statute as the same exists or may hereafter be
amended, a director of this Corporation shall not be liable to the
Corporation or its stockholders for breach of fiduciary duty as a
director.
(b) Without limitation of any right conferred by paragraph (a)
of this Section 1, each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director,
officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity while serving as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Kansas Statute, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than permitted prior thereto),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes or amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer or employee and shall inure to the benefit of the
indemnitee's heirs, testators, intestates, executors and administrators;
PROVIDED, HOWEVER, that such person acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and with respect to a criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; PROVIDED
FURTHER, HOWEVER, that no indemnification shall be made in the case of an
action, suit or proceeding by or in the right of the Corporation in
relation to matters as to which it shall be adjudged in such action, suit
or proceeding that such director, officer, employee or agent is liable to
the Corporation, unless a court having jurisdiction shall determine that,
despite such adjudication, such person is fairly and reasonably entitled
to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided
in Section 1(c) of this Article X with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) initiated by
such indemnitee was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article X
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of
expenses"); PROVIDED, HOWEVER, that, if the Kansas Statute requires, an
advancement of expenses incurred by an indemnitee in his or her capacity
as a director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to
the Corporation of an undertaking (hereinafter an "undertaking"), by or
on behalf of such indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which
there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses
under this Section or otherwise.
(c) If a claim under Section (b) of this Article X is not paid
in full by the Corporation with 60 days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be 20
days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms
of any undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought
by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met the
applicable standard of conduct set forth in the Kansas Statute. Neither
the failure of the Corporation (including the Board, independent legal
counsel, or the stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Kansas Statute, nor an actual
determination by the Corporation (including the Board, independent legal
counsel, or the stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In
any suit brought by the indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to
be indemnified, or to such advancement of expenses, under this Section or
otherwise shall be on the Corporation.
(d) The rights to indemnification and to the advancement of
expenses conferred in this Article X shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
the Articles, agreement, vote of stockholders or disinterested directors
or otherwise.
10.2 INSURANCE.
- ---------------
The Corporation may purchase and maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer,
employee or agent of the Corporation or any person who is or was serving
at the request of the Corporation as a director, officer, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Kansas Statute.
ARTICLE XI
AMENDMENT
---------
Any by-law (including these By-laws) may be adopted, amended or
repealed by the vote of the holders of a majority of the shares then
entitled to vote or by the stockholders' written consent pursuant to
Section 10 of Article II, or by the vote of the Board or by the
directors' written consent pursuant to Section 6 of Article III.
* * * * *
* * *
*
<PAGE>
____________________
PACKERWARE CORPORATION
Incorporated under the laws
of the State of Kansas
_____________________
___________________________
BY-LAWS
___________________________
As adopted on January 21, 1997
<PAGE>
PACKERWARE CORPORATION
BY-LAWS
TABLE OF CONTENTS
PAGE
ARTICLE I OFFICES.................................................... 1
1.1 Registered Office.......................................... 1
1.2 Other Offices.............................................. 1
ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF
MEETING................................................. 1
2.1 Annual Meetings............................................ 1
2.2 Special Meetings........................................... 1
2.3 Notice of Meetings......................................... 1
2.4 Quorum..................................................... 2
2.5 Organization............................................... 2
2.6 Order of Business.......................................... 3
2.7 Voting..................................................... 3
2.8 Inspection................................................. 4
2.9 List of Stockholders....................................... 4
2.10 Stockholders' Consent in Lieu of Meeting................... 4
ARTICLE III BOARD OF DIRECTORS....................................... 4
3.1 General Powers............................................. 4
3.2 Number and Term of Office.................................. 5
3.3 Election of Directors...................................... 5
3.4 Resignation, Removal and Vacancies......................... 5
3.5 Meetings................................................... 5
3.6 Directors' Consent in Lieu of Meeting...................... 6
3.7 Action by Means of Conference Telephone or Similar
Communications Equipment............................... 6
3.8 Committees................................................. 6
ARTICLE IV OFFICERS.................................................. 7
4.1 Executive Officers......................................... 7
4.2 Authority and Duties....................................... 7
4.3 Other Officers............................................. 7
4.4 Term of Office, Resignation and Removal.................... 7
4.5 Vacancies.................................................. 8
4.6 The Chairman............................................... 8
4.7 The President.............................................. 8
4.8 The Secretary.............................................. 8
4.9 The Treasurer.............................................. 9
ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.............. 9
5.1 Execution of Documents..................................... 9
5.2 Deposits................................................... 9
5.3 Proxies with Respect to Stock or Other Securities of Other
Corporations........................................... 9
ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............. 10
6.1 Certificates for Shares.................................... 10
6.2 Record..................................................... 10
6.3 Transfer and Registration of Stock......................... 10
6.4 Addresses of Stockholders.................................. 10
6.5 Lost, Destroyed and Mutilated Certificates................. 11
6.6 Regulations................................................ 11
6.7 Fixing Date for Determination of Stockholders of Record.... 11
ARTICLE VII RECORDS.................................................. 12
7.1 Records.................................................... 12
7.2 Inspection of Records...................................... 12
ARTICLE VIII SEAL.................................................... 13
Article IX Fiscal Year............................................... 13
ARTICLE X INDEMNIFICATION AND INSURANCE.............................. 13
10.1 Indemnification............................................ 13
10.2 Insurance.................................................. 15
ARTICLE XI AMENDMENT................................................. 15
CERTIFICATE OF INCORPORATION
OF
BERRY PLASTICS DESIGN CORPORATION
____________________________
ARTICLE FIRST
-------------
The name of the corporation (herein called the "Corporation") is
BERRY PLASTICS DESIGN CORPORATION.
ARTICLE SECOND
--------------
The address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, City of Wilmington, County of New
Castle, Delaware, 19805. The name of the registered agent of the
Corporation at such address is The Prentice-Hall Corporation System, Inc.
ARTICLE THIRD
-------------
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "Delaware Statute").
ARTICLE FOURTH
--------------
The total number of shares of all classes of stock which the
Corporation has authority to issue is 10,000 shares, all of which are
shares of Common Stock, par value $.01 per share.
ARTICLE FIFTH
-------------
The name and mailing address of the incorporator are as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
- ---- ---------------
<S> <C>
Michael S. Hubner c/o O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
41st Floor
New York, New York 10112
</TABLE>
ARTICLE SIXTH
-------------
The number of directors of the Corporation shall be such as from
time to time shall be fixed in the manner provided in the By-laws of the
Corporation. The election of directors of the Corporation need not be by
ballot unless the By-laws so require.
ARTICLE SEVENTH
---------------
A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to 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 Statute, or (iv) for any transaction from which the director
derived any improper personal benefit. If the Delaware Statute is amended
after the date of incorporation of the Corporation to authorize corporate
action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware Statute, as so
amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE EIGHTH
--------------
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of the Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
the Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case
may be, agree on any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
-1-
<PAGE>
IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
Delaware Statute, DO HEREBY CERTIFY, under penalties of perjury, that this
is my act and deed and that the facts hereinabove stated are truly set
forth and, accordingly, I have hereunto set my hand as of the 2nd day of
May, 1997.
_________________________________
Michael S. Hubner
-2-
BY-LAWS OF
BERRY PLASTICS DESIGN CORPORATION
ARTICLE I
OFFICES
-------
1.1 REGISTERED OFFICE.
- -----------------------
The registered office of Berry Plastics Design Corporation (the
"Corporation"), in the State of Delaware shall be at 32 Loockerman
Square, Suite L-100, City of Dover, County of Kent, Delaware 19904, and
the registered agent in charge thereof shall be The Prentice-Hall
Corporation System.
1.2 OTHER OFFICES.
- -------------------
The Corporation may also have an office or offices at any other
place or places within or outside the State of Delaware.
ARTICLE II
MEETING OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
--------------------------
2.1 ANNUAL MEETINGS.
- ---------------------
The annual meeting of the stockholders for the election of
directors, and for the transaction of such other business as may properly
come before the meeting, shall be held at such place, date and hour as
shall be fixed by the Board of Directors (the "Board") and designated in
the notice or waiver of notice thereof, except that no annual meeting
need be held if all actions, including the election of directors,
required by the General Corporation Law of the State of Delaware (the
"Delaware Statute") to be taken at a stockholders' annual meeting are
taken by written consent in lieu of meeting pursuant to Section 10 of
this Article II.
2.2 SPECIAL MEETINGS.
- ----------------------
A special meeting of the stockholders for any purpose or purposes
may be called by the Board, the Chairman, the President or the record
holders of at least a majority of the issued and outstanding shares of
Common Stock of the Corporation, to be held at such place, date and hour
as shall be designated in the notice or waiver of notice thereof.
2.3 NOTICE OF MEETINGS.
- ------------------------
Except as otherwise required by statute, the Certificate of
Incorporation of the Corporation (the "Certificate") or these By-laws,
notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not
less than 10 nor more than 60 days before the day on which the meeting is
to be held, by delivering written notice thereof to him personally, or
by mailing a copy of such notice, postage prepaid, directly to him at his
address as it appears in the records of the Corporation, or by
transmitting such notice thereof to him at such address by telegraph,
cable or other telephonic transmission. Every such notice shall state
the place, the date and hour of the meeting, and, in case of a special
meeting, the purpose or purposes for which the meeting is called. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy, or who
shall, in person or by attorney thereunto authorized, waive such notice
in writing, either before or after such meeting. Except as otherwise
provided in these By-laws, neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders need be specified in any
such notice or waiver of notice. Notice of any adjourned meeting of
stockholders shall not be required to be given, except when expressly
required by law.
2.4 QUORUM.
- ------------
At each meeting of the stockholders, except where otherwise provided
by the Certificate or these By-laws, the holders of a majority of the
issued and outstanding shares of Common Stock of the Corporation entitled
to vote at such meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority in interest of the stockholders present in person or
represented by proxy and entitled to vote, or, in the absence of all the
stockholders entitled to vote, any officer entitled to preside at, or act
as secretary of, such meeting, shall have the power to adjourn the
meeting from time to time, until stockholders holding the requisite
amount of stock to constitute a quorum shall be present or represented.
At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally called.
2.5 ORGANIZATION.
- ------------------
(a) Unless otherwise determined by the Board, at each meeting
of the stockholders, one of the following shall act as chairman of the
meeting and preside thereat, in the following order of precedence:
(i) the Chairman;
(ii) the President;
(iii) any director, officer or stockholder of the
Corporation designated by the Board to act as chairman of such
meeting and to preside thereat if the Chairman or the President
shall be absent from such meeting; or
(iv) a stockholder of record who shall be chosen chairman
of such meeting by a majority in voting interest of the stockholders
present in person or by proxy and entitled to vote thereat.
(b) The Secretary or, if he shall be presiding over such
meeting in accordance with the provisions of this Section 5 or if he
shall be absent from such meeting, the person (who shall be an Assistant
Secretary, if an Assistant Secretary has been appointed and is present)
whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
2.6 ORDER OF BUSINESS.
- -----------------------
The order of business at each meeting of the stockholders shall be
determined by the chairman of such meeting, but such order of business
may be changed by a majority in voting interest of those present in
person or by proxy at such meeting and entitled to vote thereat.
2.7 VOTING.
- ------------
Except as otherwise provided by law, the Certificate or these By-
laws, at each meeting of the stockholders, every stockholder of the
Corporation shall be entitled to one vote in person or by proxy for each
share of Common Stock of the Corporation held by him and registered in
his name on the books of the Corporation on the date fixed pursuant to
Section 7 of Article VI as the record date for the determination of
stockholders entitled to vote at such meeting. Persons holding stock in
a fiduciary capacity shall be entitled to vote the shares so held. A
person whose stock is pledged shall be entitled to vote, unless, in the
transfer by the pledgor on the books of the Corporation, he has expressly
empowered the pledgee to vote thereon, in which case only the pledgee or
his proxy may represent such stock and vote thereon. If shares or other
securities having voting power stand in the record of two or more
persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or if two or
more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary shall be given written notice to the
contrary and furnished with a copy of the instrument or order appointing
them or creating the relationship wherein it is so provided, their acts
with respect to voting shall have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all; and
(c) if more than one votes, but the vote is evenly split on
any particular matter, such shares shall be voted in the manner provided
by law.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section 7
shall be a majority or even-split in interest. The Corporation shall not
vote directly or indirectly any share of its own capital stock. Any vote
of stock may be given by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney thereunto authorized, delivered to the
secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted
after three years from its date, unless said proxy provides for a longer
period. At all meetings of the stockholders, all matters (except where
other provision is made by law, the Certificate or these By-laws) shall
be decided by the vote of a majority in interest of the stockholders
present in person or by proxy at such meeting and entitled to vote
thereon, a quorum being present. Unless demanded by a stockholder
present in person or by proxy at any meeting and entitled to vote
thereon, the vote on any question need not be by ballot. Upon a demand
by any such stockholder for a vote by ballot upon any question, such
vote by ballot shall be taken. On a vote by ballot, each ballot shall be
signed by the stockholder voting, or by his proxy, if there be such
proxy, and shall state the number of shares voted.
2.8 INSPECTION.
- ----------------
The chairman of the meeting may at any time appoint one or more
inspectors to serve at any meeting of the stockholders. Any inspector
may be removed, and a new inspector or inspectors appointed, by the Board
at any time. Such inspectors shall decide upon the qualifications of
voters, accept and count votes, declare the results of such vote, and
subscribe and deliver to the secretary of the meeting a certificate
stating the number of shares of stock issued and outstanding and entitled
to vote thereon and the number of shares voted for and against the
question, respectively. The inspectors need not be stockholders of the
Corporation, and any director or officer of the Corporation may be an
inspector on any question other than a vote for or against his election
to any position with the Corporation or on any other matter in which he
may be directly interested. Before acting as herein provided, each
inspector shall subscribe an oath faithfully to execute the duties of an
inspector with strict impartiality and according to the best of his
ability.
2.9 LIST OF STOCKHOLDERS.
- --------------------------
It shall be the duty of the Secretary or other officer of the
Corporation who shall have charge of its stock ledger to prepare and
make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose
germane to any such meeting, during ordinary business hours, for a period
of at least 10 days prior to such meeting, either at a place within the
city where such meeting is to be held, which place shall be specified in
the notice of the meeting or, if not so specified, at the place where the
meeting is to be held. Such list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING.
- ----------------------------------------------
Any action required by the Delaware Statute to be taken at any
annual or special meeting of the stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and
without a vote, by a consent in writing, as permitted by the Delaware
Statute.
ARTICLE III
BOARD OF DIRECTORS
------------------
3.1 GENERAL POWERS.
- --------------------
The business, property and affairs of the Corporation shall be
managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by law or by the Certificate directed or required to be exercised
or done by the stockholders.
3.2 NUMBER AND TERM OF OFFICE.
- -------------------------------
The number of directors shall be fixed from time to time by the
Board. Directors need not be stockholders. Each director shall hold
office until his successor is elected and qualified, or until his earlier
death or resignation or removal in the manner hereinafter provided.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
At each meeting of the stockholders for the election of directors at
which a quorum is present, the persons receiving the greatest number of
votes, up to the number of directors to be elected, of the stockholders
present in person or by proxy and entitled to vote thereon shall be the
directors; PROVIDED, HOWEVER, that for purposes of such vote no
stockholder shall be allowed to cumulate his votes. Unless an election
by ballot shall be demanded as provided in Section 7 of Article II,
election of directors may be conducted in any manner approved at such
meeting.
3.4 RESIGNATION, REMOVAL AND VACANCIES.
- ----------------------------------------
(a) Any director may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, upon receipt thereof; unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
(b) Any director or the entire Board may be removed, with or
without cause, at any time by vote of the holders of a majority of the
shares then entitled to vote at an election of directors or by written
consent of the stockholders pursuant to Section 10 of Article II.
(c) Vacancies occurring on the Board for any reason may be
filled by vote of the stockholders or by the stockholders' written
consent pursuant to Section 10 of Article II, or by vote of the Board or
by the directors' written consent pursuant to Section 6 of this Article
III. If the number of directors then in office is less than a quorum,
such vacancies may be filled by a vote of a majority of the directors
then in office.
3.5 MEETINGS.
- --------------
(A) ANNUAL MEETINGS. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of
organization and the transaction of other business, unless it shall have
transacted all such business by written consent pursuant to Section 6 of
this Article III.
(B) OTHER MEETINGS. Other meetings of the Board shall be held
at such times and places as the Board, the Chairman, the President or any
director shall from time to time determine.
(C) NOTICE OF MEETINGS. Notice shall be given to each
director of each meeting, including the time, place and purpose of such
meeting. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least
two days before the date on which such meeting is to be held, or shall be
sent to him at such place by telegraph, cable, wireless or other form of
recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held,
but notice need not be given to any director who shall attend such
meeting. A written waiver of notice, signed by the person entitled
thereto, whether before or after the time of the meeting stated therein,
shall be deemed equivalent to notice.
(D) PLACE OF MEETINGS. The Board may hold its meetings at
such place or places within or outside the State of Delaware as the Board
may from time to time determine, or as shall be designated in the
respective notices or waivers of notice thereof.
(E) QUORUM AND MANNER OF ACTING. A majority of the total
number of directors then in office shall be present in person at any
meeting of the Board in order to constitute a quorum for the transaction
of business at such meeting, and the vote of a majority of those
directors present at any such meeting at which a quorum is present shall
be necessary for the passage of any resolution or act of the Board,
except as otherwise expressly required by law or these By-laws. In the
absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum
shall be present.
(F) ORGANIZATION. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in
the following order of precedence:
(i) the Chairman;
(ii) the President (if a director); or
(iii) any director designated by a majority of the
directors present.
The Secretary or, in the case of his absence, an Assistant Secretary, if
an Assistant Secretary has been appointed and is present, or any person
whom the chairman of the meeting shall appoint shall act as secretary of
such meeting and keep the minutes thereof.
3.6 DIRECTORS' CONSENT IN LIEU OF MEETING.
- -------------------------------------------
Any action required or permitted to be taken at any meeting of the
Board may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall
be signed by all the directors then in office and such consent is filed
with the minutes of the proceedings of the Board.
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT.
- ----------------------------------------------------------------------
Any one or more members of the Board may participate in a meeting of
the Board by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each
other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
3.8 COMMITTEES.
- ----------------
The Board may, by resolution or resolutions passed by a majority of
the whole Board, designate one or more committees, each such committee to
consist of one or more directors of the Corporation, which to the extent
provided in said resolution or resolutions shall have and may exercise
the powers of the Board in the management of the business and affairs of
the Corporation and may authorize the seal of the Corporation to be
affixed to all papers which may require it, such committee or committees
to have such name or names as may be determined from time to time by
resolution adopted by the Board. A majority of all the members of any
such committee may determine its action and fix the time and place of its
meetings, unless the Board shall otherwise provide. The Board shall have
power to change the members of any such committee at any time, to fill
vacancies and to discharge any such committee, either with or without
cause, at any time.
ARTICLE IV
OFFICERS
--------
4.1 EXECUTIVE OFFICERS.
- ------------------------
The principal officers of the Corporation shall be a President, a
Secretary, and a Treasurer, and may include such other officers as the
Board may appoint pursuant to Section 3 of this Article IV. Any two or
more offices may be held by the same person.
4.2 AUTHORITY AND DUTIES.
- --------------------------
All officers, as between themselves and the Corporation, shall have
such authority and perform such duties in the management of the
Corporation as may be provided in these By-laws or, to the extent so
provided, by the Board.
4.3 OTHER OFFICERS.
- --------------------
The Corporation may have such other officers, agents and employees
as the Board may deem necessary, including one or more Assistant
Secretaries, one or more Assistant Treasurers and one or more Vice
Presidents, each of whom shall hold office for such period, have such
authority, and perform such duties as the Board, the Chairman, or the
President may from time to time determine. The Board may delegate to any
principal officer the power to appoint and define the authority and
duties of, or remove, any such officers, agents, or employees.
4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL.
- ---------------------------------------------
(a) All officers shall be elected or appointed by the Board
and shall hold office for such term as may be prescribed by the Board.
Each officer shall hold office until his successor has been elected or
appointed and qualified or until his earlier death or resignation or
removal in the manner hereinafter provided. The Board may require any
officer to give security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, at the time it is accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be
necessary to make it effective.
(c) All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board or by the
stockholders of the Corporation with or without cause.
4.5 VACANCIES.
- ---------------
If the office of President, Secretary or Treasurer becomes vacant
for any reason, the Board shall fill such vacancy, and if any other
office becomes vacant, the Board may fill such vacancy. Any officer so
appointed or elected by the Board shall serve only until such time as the
unexpired term of his predecessor shall have expired, unless reelected or
reappointed by the Board.
4.6 THE PRESIDENT.
- -------------------
The President shall be the chief executive officer of the
Corporation. The President shall have general and active management and
control of the business and affairs of the Corporation subject to the
control of the Board and shall see that all orders and resolutions of the
Board are carried into effect. The President shall from time to time
make such reports of the affairs of the Corporation as the Board of
Directors may require and shall perform such other duties as the Board
may from time to time determine.
4.7 THE SECRETARY.
- -------------------
The Secretary shall, to the extent practicable, attend all meetings
of the Board and all meetings of the stockholders and shall record all
votes and the minutes of all proceedings in a book to be kept for that
purpose. He may give, or cause to be given, notice of all meetings of
the stockholders and of the Board, and shall perform such other duties as
may be prescribed by the Board, the Chairman or the President, under
whose supervision he shall act. He shall keep in safe custody the seal
of the Corporation and affix the same to any duly authorized instrument
requiring it and, when so affixed, it shall be attested by his signature
or by the signature of the Treasurer or, if appointed, an Assistant
Secretary or an Assistant Treasurer. He shall keep in safe custody the
certificate books and stockholder records and such other books and
records as the Board may direct, and shall perform all other duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
4.8 THE TREASURER.
- -------------------
The Treasurer shall have the care and custody of the corporate funds
and other valuable effects, including securities, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as may
be designated by the Board. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board, taking proper vouchers
for such disbursements, shall render to the Chairman, President and
directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation and shall perform all other duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
----------------------------------------------
5.1 EXECUTION OF DOCUMENTS.
- ----------------------------
The Board shall designate, by either specific or general resolution,
the officers, employees and agents of the Corporation who shall have the
power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and
other documents for and in the name of the Corporation, and may authorize
such officers, employees and agents to delegate such power (including
authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation; unless so designated or expressly
authorized by these By-laws, no officer, employee or agent shall have any
power or authority to bind the Corporation by any contract or engagement,
to pledge its credit or to render it liable pecuniarily for any purpose
or amount.
5.2 DEPOSITS.
- --------------
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation or otherwise
as the Board or Treasurer, or any other officer of the Corporation to
whom power in this respect shall have been given by the Board, shall
select.
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS.
- ----------------------------------------------------------------
The Board shall designate the officers of the Corporation who shall
have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the
powers and rights which the Corporation may have as the holder of stock
or other securities in any other corporation, and to vote or consent with
respect to such stock or securities. Such designated officers may
instruct the person or persons so appointed as to the manner of
exercising such powers and rights, and such designated officers may
execute or cause to be executed in the name and on behalf of the
Corporation and under its corporate seal or otherwise, such written
proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise its powers
and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
---------------------------------------------
6.1 CERTIFICATES FOR SHARES.
- -----------------------------
Every owner of stock of the Corporation shall be entitled to have a
certificate certifying the number and class of shares owned by him in
the Corporation, which shall be in such form as shall be prescribed by
the Board. Certificates shall be numbered and issued in consecutive
order and shall be signed by, or in the name of, the Corporation by the
Chairman, the President or any Vice President, and by the Treasurer (or
an Assistant Treasurer, if appointed) or the Secretary (or an Assistant
Secretary, if appointed). In case any officer or officers who shall have
signed any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates
may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate had
not ceased to be such officer or officers of the Corporation.
6.2 RECORD.
- ------------
A record in one or more counterparts shall be kept of the name of
the person, firm or corporation owning the shares represented by each
certificate for stock of the Corporation issued, the number of shares
represented by each such certificate, the date thereof and, in the case
of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name shares of stock stand on the
stock record of the Corporation shall be deemed the owner thereof for all
purposes regarding the Corporation.
6.3 TRANSFER AND REGISTRATION OF STOCK.
- ----------------------------------------
(a) The transfer of stock and certificates which represent the
stock of the Corporation shall be governed by Article 8 of Subtitle 1 of
Title 6 of the Delaware Code (the Uniform Commercial Code), as amended
from time to time.
(b) Registration of transfers of shares of the Corporation
shall be made only on the books of the Corporation upon request of the
registered holder thereof, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and upon the surrender of the certificate or certificates
for such shares properly endorsed or accompanied by a stock power duly
executed.
6.4 ADDRESSES OF STOCKHOLDERS.
- -------------------------------
Each stockholder shall designate to the Secretary an address at
which notices of meetings and all other corporate notices may be served
or mailed to him, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon him by mail directed to him
at his post-office address, if any, as the same appears on the share
record books of the Corporation or at his last known post-office address.
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.
- ------------------------------------------------
The holder of any shares of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of the certificate
therefor, and the Board may, in its discretion, cause to be issued to him
a new certificate or certificates for such shares, upon the surrender of
the mutilated certificates or, in the case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction, and the
Board may, in its discretion, require the owner of the lost or destroyed
certificate or his legal representative to give the Corporation a bond in
such sum and with such surety or sureties as it may direct to indemnify
the Corporation against any claim that may be made against it on account
of the alleged loss or destruction of any such certificate.
6.6 REGULATIONS.
- -----------------
The Board may make such rules and regulations as it may deem
expedient, not inconsistent with these By-laws, concerning the issue,
transfer and registration of certificates for stock of the Corporation.
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
- -------------------------------------------------------------
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board may fix a record date,
which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board, and which record date
shall be not more than 60 nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date
for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board, and which date shall be not more than 10 days after
the date upon which the resolution fixing the record date is adopted by
the Board. If no record date has been fixed by the Board, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board is
required by the Delaware Statute, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its registered
office in this State, its principal place of business or an officer or
agent of the Corporation having custody of the book in which proceedings
of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
fixed by the Board and prior action by the Board is required by the
Delaware Statute, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board adopts the resolution
taking such prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
ARTICLE VII
SEAL
----
The Board may provide a corporate seal, which shall be in the
form of a circle and shall bear the full name of the Corporation, the
year of incorporation of the Corporation and the words and figures
"Corporate Seal - Delaware."
ARTICLE VIII
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be the calendar year
unless otherwise determined by the Board.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
-----------------------------
9.1 Indemnification.
- ---------------------
(a) As provided in the Charter, to the fullest extent
permitted by the Delaware Statute as the same exists or may hereafter be
amended, a director of this Corporation shall not be liable to the
Corporation or its stockholders for breach of fiduciary duty as a
director.
(b) Without limitation of any right conferred by paragraph (a)
of this Section 1, each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director,
officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity while serving as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware Statute, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than permitted prior thereto),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes or amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer or employee and shall inure to the benefit of the
indemnitee's heirs, testators, intestates, executors and administrators;
PROVIDED, HOWEVER, that such person acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and with respect to a criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; PROVIDED
FURTHER, HOWEVER, that no indemnification shall be made in the case of an
action, suit or proceeding by or in the right of the Corporation in
relation to matters as to which it shall be adjudged in such action, suit
or proceeding that such director, officer, employee or agent is liable to
the Corporation, unless a court having jurisdiction shall determine that,
despite such adjudication, such person is fairly and reasonably entitled
to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided
in Section 1(c) of this Article IX with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) initiated by
such indemnitee was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article IX
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of
expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an
advancement of expenses incurred by an indemnitee in his or her capacity
as a director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to
the Corporation of an undertaking (hereinafter an "undertaking"), by or
on behalf of such indemnitee, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which
there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses
under this Section or otherwise.
(c) If a claim under Section (b) of this Article IX is not
paid in full by the Corporation with 60 days after a written claim has
been received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be 20
days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms
of any undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In (i) any suit brought
by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met the
applicable standard of conduct set forth in the Delaware Statute.
Neither the failure of the Corporation (including the Board, independent
legal counsel, or the stockholders) to have made a determination prior to
the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware Statute, nor an actual
determination by the Corporation (including the Board, independent legal
counsel, or the stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In
any suit brought by the indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to
be indemnified, or to such advancement of expenses, under this Section or
otherwise shall be on the Corporation.
(d) The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
the Charter, agreement, vote of stockholders or disinterested directors
or otherwise.
9.2 INSURANCE.
- ---------------
The Corporation may purchase and maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer,
employee or agent of the Corporation or any person who is or was serving
at the request of the Corporation as a director, officer, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware Statute.
ARTICLE X
AMENDMENT
---------
Any by-law (including these By-laws) may be adopted, amended or
repealed by the vote of the holders of a majority of the shares then
entitled to vote or by the stockholders' written consent pursuant to
Section 10 of Article II, or by the vote of the Board or by the
directors' written consent pursuant to Section 6 of Article III.
* * * * *
* * *
*
<PAGE>
____________________
BERRY PLASTICS DESIGN CORPORATION
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
_____________________
___________________________
BY-LAWS
___________________________
As adopted on May 2, 1997
<PAGE>
BERRY PLASTICS DESIGN CORPORATION
BY-LAWS
TABLE OF CONTENTS
PAGE
1.1 Registered Office......................................... 1
1.2 Other Offices............................................. 1
ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF
MEETING................................................ 1
2.1 Annual Meetings........................................... 1
2.2 Special Meetings.......................................... 1
2.3 Notice of Meetings........................................ 1
2.4 Quorum.................................................... 2
2.5 Organization.............................................. 2
2.6 Order of Business......................................... 3
2.7 Voting.................................................... 3
2.8 Inspection................................................ 4
2.9 List of Stockholders...................................... 4
2.10 Stockholders' Consent in Lieu of Meeting.................. 4
ARTICLE III BOARD OF DIRECTORS...................................... 5
3.1 General Powers............................................ 5
3.2 Number and Term of Office................................. 5
3.3 Election of Directors..................................... 5
3.4 Resignation, Removal and Vacancies........................ 5
3.5 Meetings.................................................. 5
3.6 Directors' Consent in Lieu of Meeting..................... 6
3.7 Action by Means of Conference Telephone or Similar
Communications Equipment............................... 7
3.8 Committees................................................ 7
ARTICLE IV OFFICERS................................................. 7
4.1 Executive Officers........................................ 7
4.2 Authority and Duties...................................... 7
4.3 Other Officers............................................ 7
4.4 Term of Office, Resignation and Removal................... 8
4.5 Vacancies................................................. 8
4.6 The President............................................. 8
4.7 The Secretary............................................. 8
4.8 The Treasurer............................................. 9
ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC............. 9
5.1 Execution of Documents.................................... 9
5.2 Deposits.................................................. 9
5.3 Proxies with Respect to Stock or Other Securities of Other
Corporations........................................... 9
ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............ 10
6.1 Certificates for Shares................................... 10
6.2 Record.................................................... 10
6.3 Transfer and Registration of Stock........................ 10
6.4 Addresses of Stockholders................................. 11
6.5 Lost, Destroyed and Mutilated Certificates................ 11
6.6 Regulations............................................... 11
6.7 Fixing Date for Determination of Stockholders of Record... 11
ARTICLE VII SEAL.................................................... 12
Article VIII Fiscal Year............................................ 12
ARTICLE IX INDEMNIFICATION AND INSURANCE............................ 12
9.1 Indemnification........................................... 12
9.2 Insurance................................................. 14
ARTICLE X AMENDMENT................................................. 14
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VENTURE PACKAGING, INC.
(A DELAWARE CORPORATION)
Pursuant to Section 103, Section 242 and Section 245 of the
General Corporation Law of the State of Delaware
Venture Packaging, Inc., a Delaware corporation (the
"Corporation"), does hereby certify that:
FIRST: The present name of the Corporation is "Venture
Packaging, Inc." which is the name under which the Corporation was
originally incorporated. The date of filing of the original Certificate of
Incorporation of the Corporation with the Secretary of State of the State
of Delaware was August 3, 1995.
SECOND: This Amended and Restated Certificate of Incorporation
(the "Certificate") amends and restates in its entirety the present
Certificate of Incorporation of the Corporation. This Certificate has been
duly adopted and approved by the Board of Directors of the Corporation by
unanimous written consent in lieu of a meeting thereof in accordance with
the provisions of Sections 141(f), 242 and 245 of the General Corporation
Law of the State of Delaware and by the Stockholders of the Corporation by
written consent in lieu of a meeting thereof in accordance with the
provisions of Sections 228(a), 242 and 245 of the General Corporation Law
of the State of Delaware.
THIRD: This Certificate shall become effective immediately upon
its filing with the Secretary of State of the State of Delaware.
FOURTH: Upon the filing with the Secretary of State of the State
of Delaware of this Certificate, the Certificate of Incorporation of the
Corporation shall be amended and restated in its entirety to read as set
forth below:
ARTICLE I
The name of the corporation (hereinafter, the "CORPORATION") is
Venture Packaging, Inc.
ARTICLE II
The address of the registered office of the Corporation in the
State of Delaware is 9 East Loockerman Street, City of Dover, County of
Kent, Delaware 19901. The name of the registered agent of the Corporation
at such address is National Registered Agents, Inc.
ARTICLE III HREE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the "GENERAL CORPORATION LAW").
ARTICLE IV
The total number of shares of all classes of stock which the
Corporation has authority to issue is 1000 shares, all of which are shares
of Common Stock, par value $.01 per share.
ARTICLE V
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of the Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
the Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case
may be, agree on any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
ARTICLE VI
A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to 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
General Corporation Law, or (iv) for any transaction from which the
director derived any improper personal benefit. If the General Corporation
Law is amended after the date of incorporation of the Corporation to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE VII
The number of directors of the Corporation shall be as set forth
in the By-laws of the Corporation. The election of directors of the
Corporation need not be by ballot unless the By-laws so require.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the board of directors of the
Corporation is expressly authorized and empowered to make, alter, amend or
repeal the By-laws in any manner not inconsistent with the laws of the
State of Delaware or this Certificate of Incorporation.
ARTICLE IX
The Corporation is to have perpetual existence.
ARTICLE X
Meetings of stockholders may be held within or without the State
of Delaware, as the By-laws may provide. The books of the Corporation may
be kept outside the State of Delaware at such place or places as may be
designated from time to time by the board of directors or in the By-laws of
the Corporation.
ARTICLE XI
The Corporation elects not to be governed by Section 203 of the
General Corporation Law.
ARTICLE XII
The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by statute, and all rights conferred upon
stockholders are granted subject to this reservation.
* * * *
-1-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by a duly authorized officer this ____ day of August, 1997 and
hereby affirms that the facts stated herein are true.
VENTURE PACKAGING, INC.
__________________________________________
Name: James M. Kratochvil
Title: Vice President and Chief inancial
Officer
-2-
BYLAWS
OF
VENTURE PACKAGING, INC.
Set forth below are the Bylaws of Venture Packaging, Inc., a
Delaware corporation (the "Corporation"), as adopted by the Board of
Directors of the Corporation effective as of August 7, 1995.
ARTICLE I
OFFICES
-------
SECTION 1. REGISTERED OFFICE. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle,
State of Delaware.
SECTION 2. OTHER OFFICES. The Corporation may also have
offices at such other places both within and without the State of
Delaware as the Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
SECTION 1. PLACE OF MEETINGS. Meetings of the stockholders for
the election of directors or for any other purpose shall be held at such
time and place, either within or without the State of Ohio, as shall be
designated from time to time by the Board of Directors and stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. ANNUAL MEETINGS. The Annual Meetings of
Stockholders shall be held on such date and at such time as shall be
designated from time to time by the Board of Directors and stated in the
notice of the meeting. Written notice of the Annual Meeting stating the
place, date and hour of the meeting shall be given to each stockholder
entitled to vote at such meeting not less than ten (10) nor more than
sixty (60) days before the date of the meeting.
SECTION 3. SPECIAL MEETING. Special Meetings of Stockholders
shall be called as provided for by the Certificate of Incorporation.
Written notice of a Special Meeting stating the place, date and hour of
the meeting and the purpose or purposes for which the meeting is called
shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting to each stockholder entitled to vote at
such meeting. Business transacted at all special meetings shall be
confined to the objects stated in the call.
SECTION 4. QUORUM. Except as otherwise provided by law or by
the Certificate of Incorporation, the holders of a majority of the
capital stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum at
all meetings of the stockholders for the transaction of business. If,
however, such quorum shall not be present or presented at any meeting of
the stockholders, the stockholders entitled to vote thereof, present in
person or represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting,
until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty (30)
days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder entitled to vote at the meeting.
SECTION 5. VOTING. Unless otherwise required by law, the
Certificate of Incorporation or these Bylaws (i) any question brought
before any meeting of stockholders shall be decided by the vote of the
holders of a majority of the stock represented and entitled to vote
thereat and (ii) each stockholder represented at a meeting of
stockholders shall be entitled to cast one vote for each share of the
capital stock entitled to vote thereat held by such stockholder. Such
votes may be cast in person or by proxy but no proxy shall be voted on or
after three years from its date, unless such proxy provides for a longer
period. The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in his discretion,
may require that any votes cast at such meeting shall be cast by written
ballot.
SECTION 6. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer
of the Corporation who has charge of the stock ledger of the Corporation
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting or, if
not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder of
the Corporation who is present.
SECTION 7. STOCK LEDGER. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list required by Section 6 of this Article
II or the books of the Corporation, or to vote in person or by proxy at
any meeting of stockholders.
SECTION 8. NOTICE OF BUSINESS. At any annual meeting of
stockholders, only such business shall be conducted as shall have been
(a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or to the direction of the Board of
Directors, or (c) otherwise properly brought before the annual meeting by
a stockholder who is a stockholder of record at the time of the giving of
the notice provided for in this Section 8 of this Article II and who
shall be entitled to vote at such meeting. In addition to any other
applicable requirements, for business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the Corporation not less
than 60 days nor more than 90 days prior to the meeting; PROVIDED,
HOWEVER, that in the event that less than 70 days' notice or prior public
disclosure of the date of the-meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than
the close of business on the 10th day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure was made, whichever first occurs. A stockholder's notice to
the Secretary shall set forth as to each matter the stockholder proposes
to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the reasons for
conducting such business at the meeting, (iii) the name and record
address of the stockholder proposing such business, (iv) the class or
series and number of shares of the Corporation which are owned
beneficially or of record by the stockholder and (v) a description of all
arrangements or understandings between the stockholder and any other
person or persons (including their names) in connection with the proposal
of such business by the stockholder and any material interest of the
stockholder in such business, and (vi) a representation that the
stockholder intends to appear in person or by proxy at the annual meeting
to bring such business before the meeting.
Notwithstanding anything in these By-laws to the contrary, no
business shall be conducted at the annual meeting except in accordance
with the procedures set forth in this Section 8 of this Article II;
PROVIDED, HOWEVER, that nothing in this Section 8 of this Article II
shall be deemed to preclude discussion by any stockholder of any business
properly brought before the annual meeting in accordance with said
procedure.
The officer of the Corporation presiding at the annual meeting
shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with
the provisions of this Section 8 of this Article II, and if he should so
determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
Notwithstanding the foregoing provisions of this Section 8 of this
Article II, a stockholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder with respect to the matters set forth in
this Section 8 of this Article II.
ARTICLE III
DIRECTORS
---------
SECTION 1. NUMBER OF DIRECTORS. In the absence of the Board of
Directors setting a different number, the number of directors shall be
three (3). No decrease in the number of directors shall shorten the term
of any incumbent director.
SECTION 2. NOMINATION OF DIRECTORS. Only persons who are
nominated in accordance with the following procedures shall be eligible
for election as directors. Nominations of persons for election to the
Board of Directors at the annual meeting may be made at a meeting of
stockholders by or at the direction of the Board of Directors by any
nominating committee or person appointed by the Board of Directors or by
any stockholder of the Corporation entitled to vote for the election of
Directors at the meeting who complies with the notice procedures set
forth in this Article III. Such nominations, other than those made by or
at the direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and
received at the principal executive offices of the Corporation not less
than 60 days nor more than 90 days prior to the meeting; provided,
however, that in the event that less than 70 days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be received not later than
the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure
was made, whichever first occurs. Such stockholder's notice to the
Secretary shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a director, (i) the
name, age, business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class and
number of shares of capital stock of the Corporation which are
beneficially owned by the person, (iv) any other information relating to
the person that is required to be disclosed in solicitations for proxies
for election of directors pursuant to Rule 14a under the Securities
Exchange Act of 1934, as amended, and (v) the consent of the person to
serve as a director of the Corporation, if so elected; and (b) as to the
stockholder giving the notice (i) the name and record address of
stockholder, (ii) the class or series and number of shares of capital
stock of the Corporation which are beneficially owned by the stockholder,
(iii) a description of all arrangements or understandings between the
stockholder and each proposed nominee and any other person pursuant to
which the nominations are to be made, (iv) a representation that the
stockholder intends to appear in person or by proxy at the meeting to
nominate the persons named and (v) certain other information. The
Corporation may require any proposed nominee to furnish such other
information as may reasonably be required by the Corporation to determine
the eligibility of such proposed nominee to serve as director of the
Corporation. No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set
forth herein.
The officer of the Corporation presiding at the meeting shall,
if the fact warrant, determine and declare to the meeting that a
nomination was not made in accordance with the foregoing procedure, and
if he should so determine, he shall so declare to the meeting and the
defective nomination shall be disregarded.
SECTION 3. DUTIES AND POWERS. The business of the Corporation
shall be managed by or under the direction of the Board of Directors
which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these Bylaws directed or required to be exercised or
done by the stockholders.
SECTION 4. MEETINGS. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the
State of Delaware. Regular meetings of the Board of Directors may be
held without Notice at such time and at such place as may from time to
time be determined by the Board of Directors. Special meetings of the
Board of Directors may be called by the Chairman, if there be one, the
President or by a majority of the Board of Directors. Notice thereof
stating the place, date and hour of the meeting shall be given to each
director either by mail not less than forty-eight (48) hours' notice, or
on such shorter notice as the person or persons calling such meeting may
deem necessary or appropriate in the circumstances.
SECTION 5. QUORUM. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation or these Bylaws, at all
meetings of the Board of Directors, a majority of the entire Board of
Directors shall constitute a quorum for the transaction of business, and
the act of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the Board of Directors. If a
quorum shall not be present at any meeting of the Board of Director, the
directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
shall be present.
SECTION 6. ACTIONS OF THE BOARD. Unless otherwise provided by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of
the Board of Directors or committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
SECTION 7. MEETINGS BY MEANS OF CONFERENCE TELEPHONE. Unless
otherwise provided by the Certificate of Incorporation or these Bylaws,
members of the Board of Directors of the Corporation, or any committee
designated by the Board of Directors, may participate in a meeting of the
Board of Directors or such committee by means of a conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to these Section 7 of Article III shall constitute
presence in person at such meeting.
SECTION 8. COMMITTEES. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors,
designate one or more committees, each committee to consist of one or
more of the directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of any
such committee. In the absence or disqualification of a member of a
committee, and in the absence of a designation by the Board of Directors
of an alternate member to replace the absent or disqualified member, the
member or members thereof present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any absent or disqualified member. Any
committee, to the extent allowed by law and provided in the resolution
establishing such committee, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business
and affairs of the Corporation. Each committee shall keep regular
minutes and report to the Board of Directors when required.
SECTION 9. COMPENSATION. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors
and may be paid a fixed sum for attendance at such meeting of the Board
of Directors and/or a stated salary as director. No such payment shall
preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee
meetings.
SECTION 10. INTERESTED DIRECTORS. No contract or transaction
between the Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors
or officers are directors or officers, or have a financial interest,
shall be void or violable solely for this reason, or solely because the
director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such
purpose if (i) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or are known
to the Board of Directors or the committee, and the Board of Directors or
committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum, (ii) the
material facts as to his or their relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholder
entitled to vote thereon, and to the contract or transaction is
specifically approved in good faith by a vote of the stockholders; or
(iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof or the stockholders. Common or interested directors
may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
--------
SECTION 1. GENERAL. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, a Secretary
and a Treasurer. The Board of Directors, in its discretion, may also
choose a Chairman of the Board of Directors (who must be a director) and
one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Certificate of
Incorporation or these Bylaws. The officers of the Corporation need not
be stockholders of the Corporation nor, except in the case of the
Chairman of the Board of Directors, need such officers be directors of
the Corporation.
SECTION 2. ELECTION. The Board of Directors at its first
meeting held after such Annual Meeting of Stockholders shall elect the
officers of the Corporation, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors; and all officers
of the Corporation shall hold office until their successors are chosen
and qualified, or until their earlier resignation or removal. Any
officer elected by the Board of Directors must be removed at any time by
the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the
Board of Directors. The salaries of all officers of the Corporation
shall be fixed by the Board of Directors.
SECTION 3. VOTING SECURITIES OWNED BY THE CORPORATION. Powers
of attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be
executed in the name of and on behalf of the Corporation by the President
or any Vice President and any such officer may, in the name of and on
behalf of the Corporation, take all such actions as any such officer may
deem advisable to vote in person or by proxy at any meeting of security
holders of any corporation in which the Corporation may own securities
and at any such meeting shall possess and may exercise any and all rights
and powers incident to the ownership of such securities and which, as the
owner thereof, the Corporation might have exercised and possessed if
present. The Board of Directors may, by resolution, from time to time
confer like powers upon any other person or persons.
SECTION 4. CHAIRMAN. The Chairman, if present, shall preside
at all meetings of the stockholders and of the Board of Directors. He
shall be the chief executive officer of the Corporation, and as such,
shall have general supervision and direction of the business and affairs
of the Corporation, subject to the control of the Board of Directors and
shall see that all orders and resolutions of the Board of Directors are
carried into effect. The Chairman of the Board of Directors shall also
perform such other duties and may exercise such other powers as from time
to time may be assigned to him by these By-laws or by the Board of
Directors.
SECTION 5. PRESIDENT. The President shall be the chief
operating officer of the Corporation. In the absence or disability of
the Chairman, or if there be none, the President shall preside at all
meetings of the stockholders and the Board of Directors. If there be no
Chairman, the President shall be the chief executive officer of the
Corporation. The President shall also perform such other duties and may
exercise such other powers as from time to time may be assigned to him by
these By-laws, the Chairman or by the Board of Directors.
SECTION 6. VICE PRESIDENT. At the request of the President or
in his absence or in the event of his inability or refusal to act (and if
there be no Chairman of the Board of Directors), the Vice President or
the Vice Presidents if there is more than one (in the order designated by
the Board of Directors) shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. Each Vice President shall perform such
other duties and have such other powers as the Chairman of the Board of
Directors from time to time may prescribe. If there be no Chairman and
no Vice President, the Board of Directors shall designate the officer of
the Corporation who, in the absence of the President or in the event of
the inability or refusal of the President to act, shall perform the
duties of the President, and when so acting, shall have all powers of and
be subject to the restrictions upon the President.
SECTION 7. SECRETARY. The Secretary shall attend all meetings
of the Board of Directors and all meetings of stockholders and record all
the proceedings thereat in a book or books to be kept for that purpose;
the Secretary shall also perform like duties of the standing committees
when required. The Secretary shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by
the Chairman or the Board of Directors, under whose supervision he shall
be. If the Secretary shall be unable or shall refuse to cause to be
given notice of all meetings of the stockholders and special meetings of
the Board of Directors, and if there be no Assistant Secretary, then
either the Chairman or the Board of Directors may choose another officer
to cause such notice to be given. The Secretary shall have custody of
the seal of the Corporation and the Secretary or any Assistant Secretary,
if there be one, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of
the Secretary or by the signature of any such Assistant Secretary. The
Board of Directors may give general authority to any other officer to
affix the seal of the Corporation and to attest the affixing by his
signature. The Secretary shall see that all books, reports, statements,
certificates and other documents and records required by law to be kept
or filed are properly kept or filed, as the case may be.
SECTION 8. TREASURER. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and either valuable effects in
the name and to the credit of the Corporation in such depositories as may
be designated by the Board of Directors. The Treasurer shall disburse
the funds of the Corporation as may be ordered by the Board of Directors,
taking proper vouchers for such disbursements, and shall render to the
Chairman and the Board of Directors, at its regular meetings, or when the
Chairman or the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties
as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
SECTION 9. ASSISTANT SECRETARIES. Except as may be otherwise
provided in these By-laws, Assistant Secretaries, if there be any, shall
perform such duties and have such powers as from time to time may be
assigned to them by the Chairman, the Board of Directors, the President,
any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the
Secretary.
SECTION 10. ASSISTANT TREASURERS. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from time
to time may be assigned to them by the Chairman, the Board of Directors,
the President, any Vice President, if there be one, or the Treasurer, and
in the absence of the Treasurer or in the event of his disability or
refusal to act, shall perform the duties of the Treasurer, and when so
acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors,
an Assistant Treasurer shall give the Corporation a bond in such sum and
with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and
for the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or
under his control belonging to the Corporation.
SECTION 11. OTHER OFFICERS. Such other officers as the Board
of Directors may choose shall perform such duties and have such powers
from time to time may be assigned to them by the Chairman or the Board of
Directors, as the case may be. The Board of Directors may delegate to
any other officer of the Corporation the power to choose such other
officers and to prescribe their respective duties and powers.
<PAGE>
ARTICLE V
STOCK
-----
SECTION 1. FORM OF CERTIFICATES. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name
of the Corporation (i) by the Chairman of the Board of Directors, the
President or a Vice President and (ii) by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation.
SECTION 2. SIGNATURES. Where a certificate is countersigned by
(i) a transfer agent other than the Corporation or its employee, or (ii)
a registrar other than the Corporation or its employee, any other
signature on the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate issued, it may be
issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
SECTION 3. LOST CERTIFICATES. The Board of Directors may
direct a new certificate to be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate, or his
legal representative, to advertise the same in such manner as the Board
of Directors shall require and/or to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
SECTION 4. TRANSFERS. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these Bylaws.
Transfers of stock shall be made on the books of the Corporation only by
the person named in the certificate or by his attorney lawfully
constituted in writing and upon the surrender of the certificate
therefor, which shall be canceled before a new certificate shall be
issued.
SECTION 5. RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty (60) days nor less than ten (10) days before
the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
SECTION 6. BENEFICIAL OWNERS. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person registered
on its books as the owner of shares, and shall not be bound to recognize
any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
ARTICLE VI
NOTICES
-------
SECTION 1. NOTICES. Whenever written notice is required by
law, the Certificate of Incorporation or these Bylaws, to be given to any
director, member of a committee or stockholder, such notice may be given
by mail, addressed to such director, member of a committee or
stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the
United States mail. Written notice may also be given personally or by
electronic facsimile, or telegram, telex or cable.
SECTION 2. WAIVERS OF NOTICE. Whenever any notice is required
by law, the Certificate of Incorporation or these Bylaws, to be given to
any director, member of a committee or stockholder, a waiver thereof in
writing, signed, by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VII
GENERAL PROVISIONS
------------------
SECTION 1. DIVIDENDS. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors at any
regular or special meeting, and may be paid in cash, in property, or in
shares of the capital stock. Before payment of any dividend, there may
be set aside out of any funds of the Corporation available for dividends
such sum or sums as the Board of Directors from time to time, in its
absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose,
and the Board of Directors may modify or abolish any such reserve.
SECTION 2. DISBURSEMENTS. All checks or demands for money and
notes of the Corporation shall be signed by each officer or officers or
such other person or persons as the Board of Directors may from time to
time designate.
SECTION 3. FISCAL YEAR. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
SECTION 4. CORPORATE SEAL. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Delaware." The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
SECTION 5. CONSISTENCY WITH CERTIFICATE OF INCORPORATION AND
SHARE RESTRICTION AGREEMENT. If any provision of these Bylaws shall be
inconsistent with the Certificate of Incorporation as in effect at the
time of the adoption of these Bylaws or as amended from time to time, the
Certificate of Incorporation, as in effect at the time, shall govern and
control. If any provision of these Bylaws shall be inconsistent with the
Share Restriction Agreement (the "Stockholder Agreement") made and
entered into as of August 7, 1995 among the Corporation and the
shareholders of the Corporation, a copy of which is on file with the
Secretary of the Corporation, the Stockholder Agreement, as in effect at
the time, shall govern and control.
ARTICLE VIII
INDEMNIFICATION
---------------
SECTION 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS
OTHER THAN THOSE BY OR IN THE RIGHT OF THE CORPORATION. Subject to
Section 3 of this Article VIII, the Corporation shall indemnify each
director and any officer or other person that the Board of Directors
shall designate from time to time who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of
the fact that he is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall
not, of itself, create a presumption that the person did not act in good
faith and in a manner in which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
SECTION 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS
BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify each director and any
officer or other person that the Board of Directors shall designate from
time to time who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of
the Corporation to procure a judgment in its favor by reason of the fact
that he is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
SECTION 3. AUTHORIZATION OF INDEMNIFICATION. Any
indemnification under this Article VIII (unless ordered by a court) shall
be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer or other
person is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 1 or Section 2 of this Article
VIII, as the case may be. Such determination shall be made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (ii) by the
stockholders. To the extent, however, that a director or officer of the
Corporation has been successful in the merits or otherwise in defense of
any action, suit or proceeding described above, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization in the
specific case.
SECTION 4. GOOD FAITH DEFINED. For purposes of any
determination under Section 3 of this Article VIII, a person shall be
deemed to have acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, or,
with respect to any criminal action or proceeding, to have had no
reasonable cause to believe his conduct was unlawful, if his action is
based on the records or books of account of the Corporation or another
enterprise, or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties, or on
the advice of legal counsel for the Corporation or another enterprise or
on information or records given or reports made to the Corporation or
another enterprise by an independent certified public accountant or by an
appraiser or other expert selection with reasonable care by the
Corporation or another enterprise. The term "another enterprise" as used
in this Section 4 of this Article VIII shall mean any other corporation
or any partnership, joint venture, trust, employee benefit plan or other
enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, employee or agent. The provisions of
this Section 4 of this Article VIII shall not be deemed to be exclusive
or to limit in any way the circumstances in which a person may be deemed
to have met the applicable standard of conduct set forth in Section 1 or
Section 2 of this Article VIII, as the case may be.
SECTION 5. INDEMNIFICATION BY A COURT. Notwithstanding any
contrary determination in the specific case under Section 3 of this
Article VIII, and notwithstanding the absence of any determination
thereunder, any director or officer may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 1 and 2 of this Article VIII. The
basis of such indemnification by a court shall be a determination of such
court that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standards of conduct as
set forth in Section 1 or Section 2 of this Article VIII, as the case may
be. Neither a contrary determination in the specific case under Section
3 of this Article VIII nor the absence of any determination thereunder
shall be a defense to such application or create a presumption that the
director or officer seeking indemnification has not met any applicable
standard of conduct. Notice of any application for indemnification
pursuant to this Section 5 of this Article VIII shall be given to the
Corporation promptly upon the filing of such application. If successful,
in whole or in part, the director or officer seeking indemnification
shall also be entitled to be paid the expense of prosecuting such
application.
SECTION 6. EXPENSES PAYABLE IN ADVANCE. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
action, suit or proceeding shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.
SECTION 7. NONEXCLUSIVELY OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any Bylaw, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise,
but as to action in his official capacity and as to action in another
capacity while holding such office, it being the policy of the
Corporation that indemnification of the persons specified in Sections 1
or 2 of this Article VIII shall be made to the fullest extent permitted
by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended. The provisions of this Article VIII
shall not be deemed to preclude the indemnification of any person who is
not specified in Section 1 or Section 2 of this Article VIII but whom the
Corporation has the power or obligation to indemnify under the provisions
of the General Corporation Law of the State of Delaware, or otherwise.
SECTION 8. INSURANCE. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article
VIII.
SECTION 9. CERTAIN DEFINITIONS. For purposes of this Article
VIII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power and
authority to indemnify its directors and officers, so that any person who
is or was a director or officer of such constituent corporation, or is or
was a director or officer of such constituent corporation serving at the
request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, shall stand in the same
position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such indemnification relates to his
acts while serving in any of the foregoing capacities, of such
constituent corporation, as he would have with respect to such
constituent corporation if this separate existence had continued. For
purposes of this Article VIII, references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit
plan; and references to "serving at the request of the Corporation" shall
include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to an employee benefit plan, its participants or beneficiaries;
and a person who acted in good faith and in a manner he reasonably
believed to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article VIII.
SECTION 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES. The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article VIII shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person. Any repeal or
modification of this Article VIII by the stockholders of the Corporation
shall not adversely affect any rights to indemnification and advancement
of expenses existing pursuant to this Article VIII with respect to any
acts or omissions occurring prior to such repeal or modification.
SECTION 11. LIMITATION ON INDEMNIFICATION. Notwithstanding
anything contained in this Article VIII to the contrary, except for
proceedings to enforce rights to indemnification (which shall be governed
by Section 5 of this Article VIII), the Corporation shall not be
obligated to indemnify any director or officer in connection with a
proceeding (or part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized or consented to by the Board
of Directors of the Corporation.
ARTICLES OF INCORPORATION
OF
VENTURE PACKAGING MIDWEST, INC.
The undersigned, desiring to form a corporation for profit (the
"Corporation") in accordance with Chapter 1701 of the OHIO REVISED CODE, as
amended (the "ORC"), hereby states as follows:
1. NAME. The name of the Corporation is Venture Packaging
----
Midwest, Inc.
2. PRINCIPAL OFFICE. The place in the State of Ohio where the
-----------------
principal office of the Corporation is to be located is Monroeville, Huron
County, Ohio.
3. PURPOSE. The purpose for which the Corporation is formed
--------
is to engage in any lawful act or activity for which corporations may be
formed under Sections 1701.01 to 1701.98, inclusive, of the ORC.
4. AUTHORIZED SHARES. The number of shares that the
------------------
Corporation is authorized to have outstanding is Eight Hundred Fifty (850),
all of which shall be shares of Common Stock, without par value.
5. PREEMPTIVE RIGHTS. No holder of shares of the Corporation
------------------
shall have any preemptive right to subscribe for or to purchase any shares
of the Corporation of any class whether now or hereafter authorized.
IN WITNESS WHEREOF, the undersigned has set his hand this 9th day
of August, 1995.
____________________________________
Timothy J. Rathbun, Incorporator
-1-
CODE OF REGULATIONS
OF
VENTURE PACKAGING MIDWEST, INC.
Set forth below is the Code of Regulations (the "Regulations") of
Venture Packaging Midwest, Inc., an Ohio corporation (the "Company"), for
the government of the Company, the conduct of its affairs and the
management of its properties, as adopted by the shareholders of the Company
effective as of August 10, 1995.
ARTICLE I
OFFICES
-------
1.1 PRINCIPAL OFFICE.
- ----------------------
The principal office of the Company shall be at such place in the City
of Monroeville, Huron County, Ohio, as may be designated from time to time
by the Board of Directors of the Company (the "Board").
1.2 OTHER OFFICES.
- -------------------
The Company shall also have offices at such other places within, as
well as without, the State of Ohio as the Board may from time to time
determine.
ARTICLE II
MEETINGS OF SHAREHOLDERS
------------------------
2.1 ANNUAL MEETING.
- --------------------
The annual meeting of the shareholders of the Company for the purpose
of fixing or changing the number of directors of the Company, electing
directors, considering financial statements and other reports and
transacting such other business as may properly come before the meeting
shall be held at such time as determined by the Board in each year, but in
no event later than six (6) months after the close of a fiscal year in each
year, beginning with the fiscal year of the Company ending in 1994. Upon
due notice, there may also be considered and acted upon at the annual
meeting of the shareholders of the Company any matter which may properly be
considered and acted upon at a special meeting of the shareholders of the
Company, in which case and for which purpose the annual meeting of the
shareholders of the Company shall also be considered as, and shall be, a
special meeting of the shareholders of the Company. If the annual meeting
of the shareholders of the Company is not held or if directors of the
Company are not elected thereat, a special meeting of the shareholders may
be called and held for that purpose.
2.2 SPECIAL MEETINGS.
- ----------------------
Special meetings of the shareholders of the Company may be called at
any time by (i) the Chairman of the Board or President of the Company, (ii)
a majority of the Board acting with or without a meeting or (iii) the
holder or holders of at least twenty percent (20%) of all the shares of the
Company outstanding and entitled to vote thereat.
2.3 PLACE OF MEETINGS.
- -----------------------
Meetings of the shareholders of the Company shall be held at the
principal office of the Company in the City of Monroeville, Ohio, unless
the Board decides that a meeting shall be held at some other place within
or without the State of Ohio and causes the notice thereof to so state.
2.4 NOTICE OF MEETINGS.
- ------------------------
Unless waived, a written, printed or typewritten notice of the hour,
day, place and purpose or purposes of any meeting of shareholders of the
Company shall be given to each shareholder entitled thereto not less than
seven (7) days nor more than sixty (60) days before the date fixed for the
meeting and as prescribed by law. Such notice shall be given either
personal delivery or mailed to each shareholders of the Company entitled to
notice of or to vote at such meeting by or at the direction of the Chairman
of the Board of the Company, President of the Company, the Secretary of the
Company or any other person authorized by the Board or required by these
Regulations to give such notice. If such notice is mailed, it shall be
directed, postage prepaid, to the shareholders of the Company at their
respective addresses as they appear upon the records of the Company, and
notice shall be deemed to have been given on the day so mailed. If any
meeting is adjourned to another time or place, no notice as to such
adjourned meeting need be given other than by announcement at the meeting
at which such an adjournment is taken. No business shall be transacted at
any such adjourned meeting except as might have been lawfully transacted at
the meeting at which such adjournment was taken. All notices with respect
to any shareholders of record in the name of two or more persons may be
given to one of such persons who was named first upon the books of the
Company, and notice so given shall be sufficient and effective notice to
all the holders of such shares.
Upon request in writing delivered either in person or by registered
mail to the Chairman of the Board, President or Secretary of the Company by
any person or persons entitled to call a meeting of the shareholders of the
Company, such officer shall cause to be given to the shareholders entitled
thereto notice of a meeting to be held on a date not less than seven (7)
days nor more than sixty (60) days after the receipt of such request, as
such officer, in his sole and absolute discretion, may fix. If such notice
is not given within five (5) days after the delivery or mailing of such
request, the person or persons calling the meeting may fix the time of the
meeting and give notice thereof as provided in this Section 4.
Every person who by operation of law, transfer or otherwise shall
become entitled to any share or right or interest therein shall be bound by
every notice in respect of such share which, prior to his name and address
being entered upon 5he books of the Company as the registered holder of
such share, shall have been given to the person in whose name such share
appeared of record.
2.5 WAIVER OF NOTICE.
- ----------------------
Notice of the hour, day, place and purpose or purposes of any meeting
of the shareholders of the Company, whether required by law, the Articles
of Incorporation of the Company (the "Articles") or these Regulations, may
be waived in writing, either before or after the holding of such meeting,
by any shareholder entitled thereto, which writing shall be filed with or
entered upon the records of the meeting. Attendance of any shareholder in
any such meeting without protesting, prior to or at the commencement of the
meeting, the lack of proper notice shall be deemed to be a waiver by such
shareholder of notice of such meeting. If all of the shareholders of the
Company entitled to vote shall meet in person or by proxy and consent to
holding a meeting, such meeting shall be valid for all purposes without
call or notice, and at such meeting any action may be properly taken.
2.6 SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE.
- -------------------------------------------------
If the record date shall not be fixed by the Board or the books of the
Company shall not be closed against transfers of shares pursuant to
statutory authority, the record date for the determination of shareholders
of the Company entitled to notice of or to vote at any meeting of the
shareholders of the Company shall be the date next preceding the day on
which notice is given, or the date next preceding the day on which the
meeting is held, as the case may be. Such record date shall continue to be
the record date for all adjournments of such meeting unless a new record
date shall be fixed and notice thereof and of the date of the adjourned
meeting be given to all shareholders of the Company entitled to notice in
accordance with the new record date so fixed.
2.7 QUORUM.
- ------------
The shareholders of the Company present in person or by proxy at any
meeting thereof for the determination of the number of directors, or the
election of directors, or for the consideration and action upon reports
required to be laid before such meeting, shall constitute a quorum.
At any meeting called for any other purpose, the holders of shares
entitling them to exercise a majority of the voting power of the Company,
present in person or represented by proxy, shall constitute a quorum,
except when a greater proportion is required by law, the Articles or these
Regulations. At any meeting at which a quorum is present, all questions
and business that shall come before the meeting shall be determined by the
vote of the holders of a majority of such voting shares as are represented
in person or by proxy, except when a greater proportion is required by law,
the Articles or these Regulations.
At any meeting of shareholders, whether a quorum is present or not,
the holders of a majority of the voting shares represented by shareholders
present in person or by proxy may adjourn such meeting from time to time
and from place to place without notice other than by announcement at the
meeting. At any such adjourned meeting at which a quorum is present, any
business may be transacted which might be transacted at the meeting as
originally notified or held.
2.8 PROXIES.
- -------------
Any shareholder of record who is entitled to attend a meeting of
shareholders, or to vote thereat or to assent or give consents in writing,
shall be entitled to be represented at such meeting or to vote thereat or
to assent or give consents in writing, as the case may be, or to exercise
any other of his rights, by proxy or proxies appointed by a writing signed
by such shareholder, or his duly authorized attorney, as provided by the
laws of the State of Ohio.
A facsimile, telegram, cablegram, wireless message or photogram
appearing to have been transmitted by a shareholder, or a photograph,
photostatic or equivalent reproduction of a writing appointing a proxy or
proxies, shall be a sufficient writing.
No appointment of a proxy shall be valid after the expiration of
eleven (11) months after it is made unless the writing specifies the date
on which it is to expire or the length of time it is to continue in force.
Unless the writing appointing a proxy or proxies otherwise provides:
(a) Each and every proxy shall have the power of substitution,
and when three (3) or more persons are appointed, a majority of them or
their respective substitutes may appoint a substitute or substitutes to act
for all.
(b) If more than one proxy is appointed, then (i) with respect
to voting or giving consents at a shareholders' meeting, a majority of such
proxies as attends the meeting, or if only one attends then that one may
exercise all the voting and consenting authority thereat; and if an even
number attend and a majority do not agree on any particular issue, each
proxy so attending shall be entitled to exercise such authority with
respect to an equal number of shares; {ii) with respect to exercising any
other authority, a majority may act for all.
(c) A writing appointing a proxy shall not be revoked by the
death or incapacity of the maker unless before the vote is taken or the
authority granted is otherwise exercised, written notice of such death or
incapacity is given to the Company by the executor or the administrator of
the estate of such maker or by the fiduciary having control of the shares
in respect of which the proxy was appointed.
(d) The presence of a shareholder at a meeting shall not operate
to revoke a writing appointing a proxy. A shareholder, without affecting
any vote previously taken, may revoke such writing not otherwise revoked by
giving notice to the Company in writing or in open meeting.
2.9 VOTING.
- ------------
At any meeting of shareholders and except as otherwise provided by law
or by the Articles or by these Regulations, each shareholder of the Company
shall be entitled to one vote (or fraction thereof in case of fractional
shares) in person or by proxy for each share of the Company (or fraction
thereof in the case of fractional shares) registered in his name on the
books of the Company (i) on the date fixed pursuant to subparagraph (vi) of
Section 1 of Article III of these Regulations as the record date for the
determination of shareholders entitled to vote at such meeting,
notwithstanding the prior or subsequent sale, or other disposal of such
share or shares or transfer of the same on the books of the Company on or
after the date so fixed, or (ii) if no such record date shall have been
fixed, then as of the date next preceding the date of such meeting.
2.10 FINANCIAL REPORTS.
- -----------------------
At the annual meeting of the shareholders of the Company, or the
meeting held in lieu thereof, there shall be laid before the shareholders a
financial statement of the Company, which may be consolidated, meeting the
requirements of Section 1701.38(A) of the OHIO REVISED CODE (the "ORC")
with an opinion appended thereto meeting the requirements of Section
1701.38(B) of the ORC.
2.11 ACTION WITHOUT MEETING.
- ----------------------------
Any action which may be authorized or taken at any meeting of
shareholders may me authorized or taken without a meeting in a writing or
writings signed by all of the holders of shares who would be entitled to
notice of a meeting of the shareholders held for such purpose. Such
writing or writings shall be filed with or entered upon the records of the
Company.
2.12 ORGANIZATION OF MEETINGS.
- ------------------------------
The Chairman of the Board of the Company, or, in his absence, the
President of the Company, or, in the absence of both of them, a Vice
President of the Company, shall call all meetings of the shareholders of
the Company to order and shall act as Chairman thereof; PROVIDED, HOWEVER,
if all of such persons are absent, then the shareholders of the Company
shall elect a Chairman. The Secretary of the Company, or, in his absence,
an Assistant Secretary, or, in the absence of both, a person appointed by
the Chairman of the meeting, shall act as Secretary of the meeting and
shall keep and make a record of the proceedings thereat.
2.13 ORDER OF BUSINESS.
- -----------------------
The order of business at all meetings of the shareholders of the
Company, unless waived or otherwise changed by the Chairman of the meeting
or the Board, shall be as follows: (i) call meeting to order; (ii)
selection of Chairman and/or Secretary, if necessary; (iii) proof of notice
of meeting and presentment of affidavit thereof; (iv) roll call, including
filing of proxies with the Secretary of the meeting; (v) upon appropriate
demand, appointment of inspectors of election; (vi) reading, correction and
approval of previously unapproved minutes; (vii) reports of officers and
committees; (viii) if annual meeting or meeting called for that purpose,
election of directors of the Company; (ix) unfinished business, if
adjourned meeting; (x) consideration in sequence of all other matters set
forth in the call for and written notice of the meeting; (xi) any new
business other than that set forth in the notice of the meeting which shall
have been submitted to the Secretary of the Company in writing at least ten
(10) days prior to the date of the meeting; and, (xii) adjournment.
2.14 LIST OF SHAREHOLDERS.
- --------------------------
At any meeting of shareholders of the Company, a list of shareholders,
alphabetically arranged, showing the number and classes of shares held by
each on the record date applicable to such meeting, shall be produced on
the request of any shareholder of the Company.
ARTICLE III
DIRECTORS
---------
3.1 GENERAL POWERS OF BOARD.
- -----------------------------
The powers of the Company shall be exercised, its business and affairs
conducted, and its property controlled by the Board except where the law,
the Articles or these Regulations require action to be authorized or taken
by the shareholders of the Company. Without prejudice to the general
powers conferred by or implied in the preceding sentence, the Board shall
have the power to: (i) fix, define and limit the powers and duties of all
officers of the Company and to fix the salaries of all officers; (ii)
appoint, and at their discretion, with or without cause, to remove or
suspend such subordinate officers, assistants, managers, agents and
employees of the Company as the Board may from time to time deem advisable,
and to determine their duties and fix their compensation; (iii) require any
officer, agent or employee of the Company to furnish a bond for faithful
performance in such amount and with such sureties as the Board may approve;
(iv) designate a depositary or depositaries of the funds of the Company and
the officer or officers of the Company or other persons who shall be
authorized to sign notes, checks, drafts, contracts, deeds, mortgages and
other instruments on behalf of the Company; (v) appoint and remove transfer
agents and/or registrars for the Company's shares; (vi) fix a time not
exceeding forty-five (45) days preceding the date of any meeting of
shareholders of the Company, or the date fixed for the payment of any
dividend or distribution, or the date for the allotment of rights, or
(subject to contract rights with respect thereto) the date when any change
or conversion or exchange of shares shall be made or go into effect, as a
record date for the determination of the shareholders entitled to notice of
and to vote at any such meeting, or entitled to receive payment of any such
dividend, distribution, or allotment of rights, or to exercise the rights
in respect to any such change, conversion or exchange of shares, and, in
such case, only the persons who are shareholders of record on the date so
fixed shall be entitled to notice of and to vote at such meeting, or to
receive payment of such dividend, distribution, or allotment of rights, or
to exercise such rights, as the case may be, notwithstanding any transfer
of any shares on the books of the Company after any record date fixed as
aforesaid, or change of ownership of any shares either before or after such
record date, and such persons shall conclusively be deemed to be the
shareholders of the Company on such record date, notwithstanding notice or
knowledge to the contrary; and the Board may close the books of the Company
against transfer of shares during the whole or any part of such period; and
(vii) establish such rules and regulations respecting the issuance and
transfer of shares and certificates for shares as the Board may consider
reasonable.
3.2 NUMBER OF DIRECTORS.
- -------------------------
Until changed in accordance with the provisions of this Section, the
number of directors of the Company, none of whom need be shareholders,
shall be three (3). The number of directors of the Company may be fixed or
changed by resolution at any annual meeting of the shareholders of the
Company or at any special meeting of the shareholders of the Company called
for that purpose, adopted by the vote of the holders of shares, present in
person or by proxy, entitling them to exercise a majority of the voting
power on such proposal of the shares represented at such meeting, but no
reduction shall have the effect of removing any director prior to the
expiration of his term of office. In addition, the number of directors of
the Company may be fixed or changed by action of the Board at a meeting
called for that purpose at which a quorum is present by a majority vote of
the members of the Board present at the meeting. The directors then in
office may fill any director's office that is created by an increase in the
number of directors and the number of directors elected shall be deemed to
be the number of directors fixed unless otherwise fixed by resolution
adopted at the meeting at which such directors are elected.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
Directors shall be elected at the annual meeting of shareholders, but
when the annual meeting is not held or directors are not elected thereat,
they may be elected at a special meeting called and held for that purpose.
Such election shall be by ballot whenever requested by any shareholder
entitled to vote at such election; but, unless such a request is made, the
election may be conducted in any manner approved at such meeting. At each
meeting of shareholders at which directors are to be elected only persons
nominated by an officer, director or in writing by a shareholder at least
five (5) days prior to the meeting shall be eligible for election and those
persons receiving the greatest number of votes shall be directors.
3.4 TERM OF OFFICE.
- --------------------
Directors shall hold office until the annual meeting next succeeding
their election and until their successors are elected and qualified or
until their earlier resignation, removal from office or death.
3.5 VACANCIES.
- ---------------
Vacancies in the Board may be filled by a majority vote of the
remaining directors until an election to fill such vacancies is had.
Shareholders entitled to elect directors shall have the right to fill any
vacancy in the Board (whether the same has been temporarily filled by the
remaining directors or not) at any meeting of the shareholders called for
that purpose, and any directors elected at any such meeting of shareholders
shall serve until the next annual election of directors and until their
successors are elected and qualified.
3.6 RESIGNATION FROM THE BOARD.
- --------------------------------
Resignation from the Board shall be deemed to take effect immediately
upon its being received by any incumbent corporate officer other than an
officer who is also the resigning director, unless some other time is
specified therein.
3.7 QUALIFICATIONS.
- --------------------
Directors need not be shareholders of the Company.
3.8 REMOVAL.
- -------------
Directors shall be subject to removal as provided by law or by other
lawful procedures and nothing herein shall be construed to prevent the
removal of any or all directors in accordance therewith.
3.9 MEETINGS OF THE BOARD.
- ---------------------------
A regular meeting of the Board may be held immediately following the
adjournment of each shareholders' meeting at which directors are elected.
The holding of such shareholders' meeting shall constitute notice of such
Board meeting and such meeting shall be held without further notice. Other
regular meetings shall be held at such other times and places as may be
fixed by the Board. Special meetings of the Board may be held at any time
upon call of the Chairman of the Board, President, or any two members of
the Board. Notice of any special meeting of the Board of Directors shall
be mailed to each director, addressed to him at his residence or usual
place of business, at least five (5) days before the day on which the
meeting is to be held, or shall be sent to him at such place by facsimile,
telegraph, cable, radio or wireless, or be given personally or by
telephone, not later than the day before the day on which the meeting is to
be held. Every such notice shall state the time and place of the meeting
but need not state the purpose or purposes thereof. Notice of any meeting
of the Board need not be given to any director, however, if waived by him
in writing or by facsimile, telegraph, cable, radio or wireless, whether
before or after such meeting, or if he shall be present at such meeting
without protest prior to the commencement thereof; and any meetin9 of the
Board shall be a legal meeting without any notice thereof having been given
if all the directors shall be present thereat.
All meetings of the Board shall be held at the office of the Company
in the City of Monroeville, Ohio, or at such other place, within or without
the State of Ohio, as the Board may determine from time to time and as may
be specified in the notice thereof.
3.10 QUORUM.
- ------------
A majority of the Board shall constitute a quorum for the transaction
of business; PROVIDED, HOWEVER, that whenever less than a quorum is present
at the time and place appointed for any meeting of the Board, a majority of
those present may adjourn the meeting from time to time, without notice
other than by announcement at the meeting, until a quorum shall be present.
At any meeting at which a quorum is present, all acts, questions and
business which may come before the meeting shall be determined by a
majority of votes cast by the members of the Board present at such meeting,
unless the vote of a greater number is required by the Articles or these
Regulations.
3.11 ACTION WITHOUT A MEETING.
- ------------------------------
Any action which may be authorized or taken at a meeting of the
directors may be authorized or taken without a meeting in a writing or
writings signed by all the directors, which writing or writings shall be
filed with or entered upon the records of the Company.
3.12 COMPENSATION.
- ------------------
The directors, as such, shall not receive any salary for their
services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board; PROVIDED, HOWEVER, that nothing herein
contained shall be construed to preclude any director from serving the
Company in any other capacity and receiving compensation therefor. Members
of the executive committee or of any standing or special committee may by
resolution of the Board be allowed such compensation for their services as
the Board may deem reasonable, and additional compensation may be allowed
to directors for special services rendered.
3.13 BY-LAWS.
- -------------
For the government of its actions, the Board may adopt by-laws
consistent with the Articles and these Regulations.
3.14 ATTENDANCE AT MEETINGS BY PERSONS WHO ARE NOT DIRECTORS.
- -------------------------------------------------------------
Unless waived by a majority of the members of the Board in attendance,
not less than twenty-four (24) hours before any regular or special meeting
of the Board, any director who desires the presence at such meeting of not
more than two (2) persons who are not directors shall so notify all other
directors, request the presence of such person or persons at the meeting
and state the reason in writing. Such person or persons shall not be
permitted to attend the meeting of the Board unless a majority of the
directors in attendance vote to admit such person to the meeting. Such
vote shall constitute the first order of business for any such meeting of
the Board. Such right to attend, whether granted by waiver or vote, may
be revoked at any time during any such meeting by the vote of a majority of
the members of the Board in attendance. Notwithstanding anything contained
in this Section 14 to the contrary, any shareholder of the Company shall be
permitted to attend any meeting of the Board and shall receive not less
than twenty-four (24) hours notice of such meeting given in accordance with
Section 9 of this Article; PROVIDED, HOWEVER, that such shareholder(s) may
be excused at any time by the action of a majority of the members of the
Board in attendance.
3.15 COMMITTEES.
- ----------------
The Board may by resolution provide for such standing or special
committees as it deems desirable, and discontinue the same at its pleasure.
Each such committee shall have such powers and perform such duties, not
inconsistent with law, as may be delegated to it by the Board. Vacancies
in such committees shall be filled by the Board or as it may provide.
ARTICLE IV
OFFICERS
--------
4.1 GENERAL PROVISIONS.
- ------------------------
The Board shall elect a President, such number of Vice Presidents as
the Board may from time to time determine, a Secretary and a Treasurer,
and, in its discretion, a Chairman of the Board. The Board may from time
to time create such other offices and appoint such other officers,
subordinate officers and assistant officers as it may determine. The
Chairman of the Board shall be, but the other officers need not be, chosen
from among the members of the Board. Any two or more of such offices,
other than that of President and Vice President, Secretary and Assistant
Secretary, or Treasurer and Assistant Treasurer, may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument
in more than one capacity if such instrument is required to be executed,
acknowledged or verified by two or more officers. All officers, as between
themselves and the Company, shall respectively have such authority and
perform such duties as are customarily incident to their respective
offices, and as may be specified from time to time by these Regulations and
the Board, regardless of whether such authority and duties are customarily
incident to such office. In the absence of any officer of the Company, or
for any other reason the Board may deem sufficient, the powers or duties of
such officer or any of them may be delegated to any other officer or to any
director of the Company. The Board may from time to time delegate to any
officer authority to appoint and remove subordinate officers and to
prescribe their authority and duty. The powers and duties of the officers
described in Article IV of these Regulations are subject to change from
time to time by the Board.
4.2 TERM OF OFFICE.
- --------------------
The officers of the Company shall hold office at the pleasure of the
Board, and unless sooner removed by the Board, until the meeting of the
Board following the date of their election and until their successors are
elected and qualified. The Board may remove any officer at any time, with
or without cause, by a majority vote. A vacancy in any office, however
created, shall be filled by the Board.
4.3 CHAIRMAN OF THE BOARD.
- ---------------------------
The Chairman of the Board, if one be elected, shall preside at all
meetings of the Board and shall have such other powers and duties as may be
prescribed by the Board.
4.4 PRESIDENT.
- ---------------
The President shall be the chief executive and operating officer of
the Company and shall exercise supervision over the business of the Company
and over its several officers, subject, however, to the control of the
Board. He or she shall preside at all meetings of shareholders and, in the
absence of, or if a Chairman of the Board shall not have been elected,
shall also preside at meetings of the Board. He or she shall have
authority to sign all certificates for shares and all deeds, mortgages,
bonds, contracts, notes and other instruments requiring his signature; and
shall have all the powers and duties prescribed by the Ohio General
Corporation Act (the "Act") and such others as the Board may from time to
time assign to him or her.
4.5 VICE PRESIDENTS.
- ---------------------
The Vice Presidents shall perform such duties as are conferred upon
them by these Regulations or as may from time to time be assigned to them
by the Board or the President. At the request of the President, or in his
or her absence or disability, the Vice President designated by the
President (or in the absence of such designation, the Vice President
designated by the Board) shall perform all the duties of the President, and
when so acting, shall have all the powers of the President. The authority
of Vice Presidents to sign in the name of the Company all certificates for
shares and authorized deeds, mortgages, bonds, contracts, notes and other
instruments shall be coordinated with like authority of the President. Any
one or more of the Vice Presidents may be designated as an "Executive Vice
President."
4.6 SECRETARY.
- ---------------
The Secretary shall keep minutes of all the proceedings of the
shareholders and Board and shall make proper record of the same, which
shall be attested by him or her; sign all certificates for shares, and all
deeds, mortgages, bonds, contracts, notes, and other instruments executed
by the Company requiring his or her signature; give notice of meetings of
shareholders and directors; produce on request at each meeting of
shareholders for the election of directors a certified list of shareholders
arranged in alphabetical order; keep such books as may be required by the
Board; and perform such other and further duties as may from time to time
be assigned to him or her by the Board or by the President.
4.7 TREASURER.
- ---------------
The Treasurer shall have general supervision of all finances; he or
she shall receive and have in charge all money, bills, notes, deeds,
leases, mortgages and similar property belonging to the Company and shall
do with the same as may from time to time be required by the Board of
Directors. He or she shall cause to be kept adequate and correct accounts
of the business transactions of the Company, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses, stated
capital, and shares, together with such other accounts as may be required,
and, upon the expiration of his or her term of office, shall turn over to
his or her successor or to the Board all property, books, papers and money
of the Company in his or her hands; and he or she shall perform such other
duties as from time to time may be assigned to him or her by the Board.
4.8 ASSISTANT AND SUBORDINATE OFFICERS.
- ----------------------------------------
The Board may appoint such assistant and subordinate officers as it
may deem desirable. Each such officer shall hold office during the
pleasure of the Board and perform such duties as the Board may prescribe.
The Board may, from time to time, authorize any officer and remove
assistant and subordinate officers, to authority and duties, and to fix
their compensation.
ARTICLE V
CERTIFICATES FOR SHARES
-----------------------
5.1 FORM AND EXECUTION.
- ------------------------
Certificates for shares shall be issued to each shareholder in such
form as shall be approved by the Board. Such certificates shall be signed
by the Chairman of the Board, the President or a Vice President and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer
of the Company, which certificates shall certify the number and class of
shares held by the shareholder in the Company, but no certificate for
shares shall be issued and delivered until such shares are fully paid.
When such a certificate is countersigned by an incorporated transfer agent
or registrar, the signature of any of said officers of the Company may be
facsimile, engraved, stamped or printed. Although any officer of the
Company whose manual or facsimile signature is affixed to a share
certificate shall cease to be such officer before the certificate is
delivered, such certificate, nevertheless, shall be effective in all
respects when delivered.
Such certificate for shares shall be transferable in person or by
attorney, but, except as hereinafter provided in the case of lost,
mutilated or destroyed certificates, no transfer of shares shall be entered
upon the records of the Company until the previous certificate, if any,
given for the same shall have been surrendered and canceled.
The Board shall have authority to make such rules and regulations, not
inconsistent with law, the Articles or these Regulations, as it deems
expedient concerning the issuance, transfer and registration of
certificates for shares and the shares represented thereby and may appoint
transfer agents and registrars thereof.
5.2 LOST, MUTILATED OR DESTROYED CERTIFICATES.
- -----------------------------------------------
If any certificate for shares is lost, mutilated or destroyed, the
Board may authorize the issue of a new certificate in place thereof upon
such terms and conditions as it may deem advisable. The Board in its
discretion may refuse to issue such new certificates until the Company has
been indemnified to its satisfaction and until it is protected to its
satisfaction by a final order or decree of a court of competent
jurisdiction.
5.3 REGISTERED SHAREHOLDERS.
- -----------------------------
A person in whose name shares are of record on the books of the
Company shall conclusively be deemed the unqualified owner thereof for all
purposes and to have capacity to exercise all rights of ownership. Neither
the Company nor any transfer agent of the Company shall be bound to
recognize any equitable interest in or claim to such shares on the part of
any other person, whether disclosed upon such certificate or otherwise, nor
shall they be obliged to see to the execution of any trust or obligation.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Each person who at any time is or shall have been a director and, at
the option of the Board, each person who at any time is or shall have been
an officer, employee or agent of the Company, or is or shall have been
serving at the request of the Company as a director, trustee, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, and his heirs, executors and administrators shall be
indemnified by the Company in accordance with and to the fullest extent
permitted by the Act as in effect at the time of the adoption of these
Regulations or as amended from time to time thereafter. The foregoing
right of indemnification shall not be deemed exclusive of other rights to
which any director, officer, trustee, employee, agent or other person may
be entitled in any capacity as a matter of law or under any regulation,
agreement, vote of the Board or otherwise. If authorized by the Board, the
Company may purchase and maintain insurance against liability on behalf of
any such person to the full extent permitted by the Act as in effect at the
time of the adoption of these Regulations or as amended from time to time
thereafter. The right of indemnification conferred herein shall be
extended to any threatened action, suit or proceeding, and the failure to
institute it shall be deemed its final determination. Advances may be made
by the Company against costs, expenses and fees, as and upon the terms
determined by the Board.
ARTICLE VII
FISCAL YEAR
-----------
The fiscal year of the Company end on such day as may be fixed from
time to time by the Board.
ARTICLE VIII
AMENDMENTS
----------
These Regulations may be amended, repealed or added to at any meeting
of shareholders called for that purpose by the affirmative vote of the
holders of record of shares entitling them to exercise a majority of the
voting power on such proposal or, without a meeting, by the written consent
of the holders of record of shares entitling them to exercise a majority of
the voting power on such proposal; PROVIDED, HOWEVER, that if an amendment
or addition is adopted by written consent without a meeting of the
shareholders, it shall be the duty of the Secretary of the Company to enter
the amendment or addition in the records of the Company, and to mail a copy
of such amendment or addition to each shareholder of record who would be
entitled to vote thereon and did not participate in the adoption thereof;
PROVIDED FURTHER, HOWEVER, that no amendment or addition to these
Regulations shall be made if such amendment or addition is inconsistent
with the Articles.
ARTICLE IX
SEAL
----
The Board may, in its discretion, provide a suitable seal containing
the name of the Company. If deemed advisable by the Board, duplicate seals
maybe provided and kept for the purpose of the Company.
ARTICLE X
CONSISTENCY WITH ARTICLES
-------------------------
If any provision of these Regulations shall be inconsistent with the
Articles as in effect at the time of the adoption of these Regulations or
as amended from time to time, the Articles, as in effect at the time, shall
govern and control. If any provision of these Regulations shall be
inconsistent with the 1995 Close Corporation Agreement (the "Corporation
Agreement") made and entered into as of August 7, 1995 among the Company
and the shareholders of the Company, a copy of which is on file with the
Secretary of the Company, the Corporation Agreement, as in effect at the
time, shall govern and control.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 SECTION HEADINGS.
- ----------------------
The headings contained in these Regulations are for reference purposes
only and shall not be construed to be part of and/or shall not affect in
any way the meaning or interpretation of these Regulations.
11.2 GENDER.
- ------------
Unless the context otherwise requires a different meaning, words of a
masculine gender shall be deemed and construed to include correlative words
of the feminine and neuter genders, words importing the singular number
shall include the plural number and vice versa, and the terms "hereof",
"hereby", "hereto", "hereunder", "herein" and similar terms mean these
Regulations.
11.3 COMPUTATION OF DAYS.
- -------------------------
Unless otherwise provided in these Regulations, in computing the
number of days for any purpose under these Regulations, all days shall be
counted including Saturdays, Sundays and holidays.
-1-
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF INCORPORATION
FOR A
STATUTORY CLOSE CORPORATION
The undersigned, desiring to form a corporation for profit (the
"Corporation") in accordance with the SOUTH CAROLINA BUSINESS CORPORATION
ACT OF 1988, as amended (the "BCA"), hereby states as follows:
1. NAME. The name of the Corporation is Venture Packaging
Southeast, Inc.
2. REGISTERED OFFICE. The initial Registered Office of the
Corporation is 200 Masters Boulevard, Anderson, SC 29624, County of
Anderson and the initial Registered Agent at such address is Timothy J.
Rathbun.
3. PRINCIPAL OFFICE. The place in the State of South Carolina
where the principal office of the Corporation is to be located is Anderson
County, South Carolina.
4. PURPOSE. The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be organized under
the BCA.
5. STATUTORY CLOSE CORPORATION. The Corporation is a
Statutory Close Corporation, formed pursuant to Chapter 18, Title 33 of the
BCA.
6. PREEMPTIVE RIGHTS. No holder of shares of the Corporation
shall have any preemptive right to subscribe for or to purchase any shares
of the Corporation of any class whether now or hereafter authorized.
7. CUMULATIVE VOTING. The shareholders of the Corporation may
not vote cumulatively in the election of directors.
8. NUMBER OF DIRECTORS. The number of directors of the
Corporation shall not be less than one (1) nor more than nine (9), the
exact number of directors to be determined from time to time by resolution
adopted by affirmative vote of a majority of the Board of Directors.
9. STAGGERED TERMS FOR DIRECTORS. If the Board of Directors
consists of six or more directors, then the Board may be divided into two
or three classes, with each class containing one-half or one-third of the
total, as nearly equal in number as the then total number of directors
constituting the board permits, with the term of office of the first class
first expiring at the first annual shareholders' meeting after their
election; the term of office of the second class first expiring at the
second annual shareholders' meeting after their election; and the term of
the third class (if any) first expiring at the third annual shareholders'
meeting after their election. Thereafter at each annual meeting of
shareholders, the successors to the class of directors whose term shall
then expire shall be elected to hold office for a term expiring at the
second or third succeeding annual meeting, as the case may be.
10. INCORPORATOR. The name and mailing address of the
incorporator of the Corporation is as follows:
<TABLE>
<CAPTION>
NAME ADDRESS SIGNATURE
<S> <C> <C>
Timothy J. Rathbun 200 Masters Boulevard
Anderson, SC 29624 ________________________
</TABLE>
11. AUTHORIZED SHARES. The number of shares that the
Corporation is authorized to have outstanding is One Thousand (1,000), all
of which shall be shares of Common Stock, without par value.
12. CERTIFICATION. I, Frank T. Davis, III, an attorney
licensed to practice in the State of South Carolina, certify that the
Corporation, to whose articles of incorporation this certificate is
attached, has complied with the requirements of Chapter 2, Title 33 of the
BCA.
IN WITNESS WHEREOF, the undersigned has set his hand this 2nd day
of August, 1995.
______________________________________
Frank T. Davis, III
7 N. Laurens Street
Greenville, SC 29601
-1-
BYLAWS
OF
VENTURE PACKAGING SOUTHEAST, INC.
Set forth below is the Bylaws (the "Bylaws") of Venture
Packaging Southeast, Inc., a South Carolina corporation (the "Company"),
for the government of the Company, the conduct of its affairs and the
management of its properties, as adopted by the shareholders of the
Company effective as of August 7, 1995.
ARTICLE I
OFFICES
-------
1.1 PRINCIPAL OFFICE.
- ----------------------
The principal office of the Company shall be at such place in the
County of Anderson, South Carolina, as may be designated from time to
time by the Board of Directors of the Company (the "Board").
1.2 OTHER OFFICES.
- -------------------
The Company may also have offices at such other places within, as
well as without, the State of South Carolina as the Board may from time
to time determine.
ARTICLE II
MEETINGS OF SHAREHOLDERS
------------------------
2.1 ANNUAL MEETING.
- --------------------
The annual meeting of the shareholders of the Company for the
purpose of fixing or changing the number of directors of the Company,
electing directors, considering financial statements and other reports
and transacting such other business as may properly come before the
meeting shall be held at such time as determined by the Board in each
year, but in no event later than six (6) months after the close of a
fiscal year in each year, beginning with the fiscal year of the Company
ending in 1996. Upon due notice, there may also be considered and acted
upon at the annual meeting of the shareholders of the Company any matter
which may properly be considered and acted upon at a special meeting of
the shareholders of the Company, in which case and for which purpose the
annual meeting of the shareholders of the Company shall also be
considered as, and shall be, a special meeting of the shareholders of the
Company. If the annual meeting of the shareholders of the Company is not
held or if directors of the Company are not elected thereat, a special
meeting of the shareholders may be called and held for that purpose.
2.2 SPECIAL MEETINGS.
- ----------------------
Special meetings of the shareholders of the Company may be called at
any time by (i) the Chairman of the Board or President of the Company,
(ii) a majority of the Board acting with or without a meeting or (iii)
the holder or holders of at least ten percent (10%) of all the shares of
the Company outstanding and entitled to vote thereat.
2.3 PLACE OF MEETINGS.
- -----------------------
Meetings of the shareholders of the Company shall be held at the
principal office of the Company in the County of Anderson, South
Carolina, unless the Board decides that a meeting shall be held at some
other place within or without the State of South Carolina and causes the
notice thereof to so state.
2.4 NOTICE OF MEETINGS.
- ------------------------
Unless waived, a written, printed or typewritten notice of the date,
time, place and purpose or purposes of any meeting of shareholders of the
Company shall be given to each shareholder entitled thereto not less than
ten (10) days nor more than sixty (60) days before the date fixed for the
meeting and as prescribed by law. Such notice shall be given either by
personal delivery or mailed to each shareholder of the Company entitled
to notice of or to vote at such meeting by or at the direction of the
Chairman of the Board of the Company, President of the Company, the
Secretary of the Company or any other person authorized by the Board or
required by these Bylaws to give such notice. If such notice is mailed,
it shall be directed, postage prepaid, to the shareholders of the Company
at their respective addresses as they appear upon the records of the
Company, and notice shall be deemed to have been given on the day so
mailed. If any meeting is adjourned to another time or place, no notice
as to such adjourned meeting need be given other than by announcement at
the meeting at which such an adjournment is taken. No business shall be
transacted at any such adjourned meeting except as might have been
lawfully transacted at the meeting at which such adjournment was taken.
All notices with respect to any shareholders of record in the name of two
or more persons may be given to one of such persons who was named first
upon the books of the Company, and notice so given shall be sufficient
and effective notice to all the holders of such shares.
Upon request in writing delivered either in person or by registered
mail to the Chairman of the Board, President or Secretary of the Company
by any person or persons entitled to call a meeting of the shareholders
of the Company, such officer shall cause to be given to the shareholders
entitled thereto notice of a meeting to be held on a date not less than
ten (10) days nor more than sixty (60) days after the receipt of such
request, as such officer, in his sole and absolute discretion, may fix.
If such notice is not given within five (5) days after the delivery or
mailing of such request, the person or persons calling the meeting may
fix the time of the meeting and give notice thereof as provided in this
Section 4.
Every person who by operation of law, transfer or otherwise shall
become entitled to any share or right or interest therein shall be bound
by every notice in respect of such share which, prior to his name and
address being entered upon the books of the Company as the registered
holder of such share, shall have been given to the person in whose name
such share appeared of record.
2.5 WAIVER OF NOTICE.
- ----------------------
Notice of the date, time, place and purpose or purposes of any
meeting of the shareholders of the Company, whether required by law, the
Articles of Incorporation of the Company (the "Articles") or these
Bylaws, may be waived in writing, either before or after the holding of
such meeting, by any shareholder entitled thereto, which writing shall be
filed with or entered upon the records of the meeting. Attendance of any
shareholder in any such meeting without protesting, prior to or at the
commencement of the meeting, the lack of proper notice shall be deemed to
be a waiver by such shareholder of notice of such meeting. If all of the
shareholders of the Company entitled to vote shall meet in person or by
proxy and consent to holding a meeting, such meeting shall be valid for
all purposes without call or notice, and at such meeting any action may
be properly taken.
2.6 SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE.
- -------------------------------------------------
If the record date shall not be fixed by the Board or the books of
the Company shall not be closed against transfers of shares pursuant to
statutory authority, the record date for the determination of
shareholders of the Company entitled to notice of or to vote at any
meeting of the shareholders of the Company shall be the date next
preceding the day on which notice is given, or the date next preceding
the day on which the meeting is held, as the case may be. Such record
date shall continue to be the record date for all adjournments of such
meeting unless a new record date shall be fixed and notice thereof and of
the date of the adjourned meeting be given to all shareholders of the
Company entitled to notice in accordance with the new record date so
fixed, which must occur if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original
meeting.
2.7 QUORUM.
- ------------
The holders of shares entitling them to exercise a majority of the
voting power of the Company, present in person or represented by proxy,
shall constitute a quorum, except when a greater proportion is required
by law, the Articles or these Bylaws.
At any meeting at which a quorum is present, all questions and
business that shall come before the meeting shall be determined by the
vote of the holders of a majority of such voting shares as are
represented in person or by proxy, except when a greater proportion is
required by law, the Articles or these Bylaws. At any meeting of
shareholders, whether a quorum is present or not, the holders of a
majority of the voting shares represented by shareholders present in
person or by proxy may adjourn such meeting from time to time and from
place to place without notice other than by announcement at the meeting.
At any such adjourned meeting at which a quorum is present, any business
may be transacted which might be transacted at the meeting as originally
notified or held.
2.8 PROXIES.
- -------------
Any shareholder of record who is entitled to attend a meeting of
shareholders, or to vote thereat or to assent or give consents in
writing, shall be entitled to be represented at such meeting or to vote
thereat or to assent or give consents in writing, as the case may be, or
to exercise any other of his rights, by proxy or proxies appointed by a
writing signed by such shareholder, or his duly authorized attorney, as
provided by the laws of the State of South Carolina.
A facsimile, telegram, cablegram, wireless message or photogram
appearing to have been transmitted by a shareholder, or a photograph,
photostatic or equivalent reproduction of a writing appointing a proxy or
proxies, shall be a sufficient writing.
No appointment of a proxy shall be valid after the expiration of
eleven (11) months after it is made unless the writing specifies the date
on which it is to expire or the length of time it is to continue in
force. Unless the writing appointing a proxy or proxies otherwise
provides:
(a) Each and every proxy shall have the power of substitution,
and when three (3) or more persons are appointed, a majority of them or
their respective substitutes may appoint a substitute or substitutes to
act for all.
(b) If more than one proxy is appointed, then (i) with respect
to voting or giving consents at a shareholders' meeting, a majority of
such proxies as attends the meeting, or if only one attends then that one
may exercise all the voting and consenting authority thereat; and if an
even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such authority with
respect to an equal number of shares; (ii) with respect to exercising any
other authority, a majority may act for all.
(c) A writing appointing a proxy shall not be revoked by the
death or incapacity of the maker unless before the vote is taken or the
authority granted is otherwise exercised, written notice of such death or
incapacity is given to the Company by the executor or the administrator
of the estate of such maker or by the fiduciary having control of the
shares in respect of which the proxy was appointed.
(d) The presence of a shareholder at a meeting shall not
operate to revoke a writing appointing a proxy. A shareholder, without
affecting any vote previously taken, may revoke such writing not
otherwise revoked by giving notice to the Company in writing or in open
meeting.
2.9 VOTING.
- ------------
At any meeting of shareholders and except as otherwise provided by
law or by the Articles or by these Bylaws, each shareholder of the
Company shall be entitled to one vote (or fraction thereof in case of
fractional shares) in person or by proxy for each share of the Company
(or fraction thereof in the case of fractional shares) registered in his
name on the books of the Company (i) on the date fixed pursuant to
subparagraph (vi) of Section 1 of Article III of these Bylaws as the
record date for the determination of shareholders entitled to vote at
such meeting, notwithstanding the prior or subsequent sale, or other
disposal of such share or shares or transfer of the same on the books of
the Company on or after the date so fixed, or (ii) if no such record date
shall have been fixed, then as of the date next preceding the date of
such meeting.
2.10 FINANCIAL REPORTS.
- -----------------------
Within 120 days after the close of each fiscal year of the Company,
the Company shall mail to each shareholder a copy of the financial
statements of the Company, which may be consolidated, meeting the
requirements of Section 33-16-200 of the SOUTH CAROLINA BUSINESS
CORPORATION ACT OF 1988, as amended (the "BCA") with an opinion appended
thereto meeting the requirements of Section 33-16-200(b) of the BCA.
2.11 REPORT OF CERTAIN SHARE TRANSACTIONS.
- ------------------------------------------
If the Company issues or authorizes the issuance of shares for
promissory notes or for promises to render future services, the Company
shall report in writing to the shareholders the number of shares
authorized or issued, and the consideration received by the Company
therefor, with or before the notice of the next shareholder meeting.
2.12 ACTION WITHOUT MEETING.
- ----------------------------
Any action which may be authorized or taken at any meeting of
shareholders may be authorized or taken without a meeting in a writing or
writings signed by all of the holders of shares who would be entitled to
notice of a meeting of the shareholders held for such purpose. Such
writing or writings shall be filed with or entered upon the records of
the Company.
2.13 ORGANIZATION OF MEETINGS.
- ------------------------------
The Chairman of the Board of the Company, or, in his absence, the
President of the Company, or, in the absence of both of them, a Vice
President of the Company, shall call all meetings of the shareholders of
the Company to order and shall act as Chairman thereof; PROVIDED,
HOWEVER, if all of such persons are absent, then the shareholders of the
Company shall elect a Chairman. The Secretary of the Company, or, in his
absence, an Assistant Secretary, or, in the absence of both, a person
appointed by the Chairman of the meeting, shall act as Secretary of the
meeting and shall keep and make a record of the proceedings thereat.
2.14 ORDER OF BUSINESS.
- -----------------------
The order of business at all meetings of the shareholders of the
Company, unless waived or otherwise changed by the Chairman of the
meeting or the Board, shall be as follows: (i) call meeting to order;
(ii) selection of Chairman and/or Secretary, if necessary; (iii) proof of
notice of meeting and presentment of affidavit thereof; (iv) roll call,
including filing of proxies with the Secretary of the meeting; (v) upon
appropriate demand, appointment of inspectors of election; (vi) reading,
correction and approval of previously unapproved minutes; (vii) reports
of officers and committees; (viii) if annual meeting or meeting called
for that purpose, election of directors of the Company; (ix) unfinished
business, if adjourned meeting; (x) consideration in sequence of all
other matters set forth in the call for and written notice of the
meeting; (xi) any new business other than that set forth in the notice of
the meeting which shall have been submitted to the Secretary of the
Company in writing at least ten (10) days prior to the date of the
meeting; and, (xii) adjournment.
2.15 LIST OF SHAREHOLDERS.
- --------------------------
Before and at any meeting of shareholders of the Company, an
alphabetical list of shareholders, arranged by group and class or series,
showing the number and classes of shares held by each on the record date
applicable to such meeting, meeting the requirements of Section 33-7-200
of the BCA and subject to the requirements of Section 33-16-102(c) of the
BCA shall be made available on the request of any shareholder of the
Company.
ARTICLE III
DIRECTORS
3.1 GENERAL POWERS OF BOARD.
- -----------------------------
The powers of the Company shall be exercised, its business and
affairs conducted, and its property controlled by the Board except where
the law, the Articles or these Bylaws require action to be authorized or
taken by the shareholders of the Company. Without prejudice to the
general powers conferred by or implied in the preceding sentence, the
Board shall have the power to: (i) fix, define and limit the powers and
duties of all officers of the Company and to fix the salaries of all
officers; (ii) appoint, and at their discretion, with or without cause,
to remove or suspend such subordinate officers, assistants, managers,
agents and employees of the Company as the Board may from time to time
deem advisable, and to determine their duties and fix their compensation;
(iii) require any officer, agent or employee of the Company to furnish a
bond for faithful performance in such amount and with such sureties as
the Board may approve; (iv) designate a depositary or depositaries of the
funds of the Company and the officer or officers of the Company or other
persons who shall be authorized to sign notes, checks, drafts, contracts,
deeds, mortgages and other instruments on behalf of the Company; (v)
appoint and remove transfer agents and/or registrars for the Company's
shares; (vi) fix a time not exceeding forty-five (45) days preceding the
date of any meeting of shareholders of the Company, or the date fixed for
the payment of any dividend or distribution, or the date for the
allotment of rights, or (subject to contract rights with respect thereto)
the date when any change or conversion or exchange of shares shall be
made or go into effect, as a record date for the determination of the
shareholders entitled to notice of and to vote at any such meeting, or
entitled to receive payment of any such dividend, distribution, or
allotment of rights, or to exercise the rights in respect to any such
change, conversion or exchange of shares, and, in such case, only the
persons who are' shareholders of record on the date so fixed shall be
entitled to notice of and to vote at such meeting, or to receive payment
of such dividend, distribution, or allotment of rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Company after any record date fixed as
aforesaid, or change of ownership of any shares either before or after
such record date, and such persons shall conclusively be deemed to be the
shareholders of the Company on such record date, notwithstanding notice
or knowledge to the contrary; and the Board may close the books of the
Company against transfer of shares during the whole or any part of such
period; and (vii) establish such rules and regulations respecting the
issuance and transfer of shares and certificates for shares as the Board
may consider reasonable.
3.2 NUMBER OF DIRECTORS.
- -------------------------
Until changed in accordance with the provisions of this Section, the
number of directors of the Company, none of whom need be shareholders,
shall be three (3). The number of directors of the Company may be fixed
or changed by resolution at any annual meeting of the shareholders of the
Company or at any special meeting of the shareholders of the Company
called for that purpose, adopted by the vote of the holders of shares,
present in person or by proxy, entitling them to exercise a majority of
the voting power on such proposal of the shares represented at such
meeting, but no reduction shall have the effect of removing any director
prior to the expiration of his term of office. In addition, the number
of directors of the Company may be fixed or changed by action of the
Board at a meeting called for that purpose at which a quorum is present
by a majority vote of the members of the Board present at the meeting;
PROVIDED, HOWEVER, that the Board may increase or decrease the size of
the Board by thirty percent (30%) or less from the number last approved
by the shareholders. The directors then in office may fill any
director's office that is created by an increase in the number of
directors and the number of directors elected shall be deemed to be the
number of directors fixed unless otherwise fixed by resolution adopted at
the meeting at which such directors are elected.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
Directors shall be elected at the annual meeting of shareholders,
but when the annual meeting is not held or directors are not elected
thereat, they may be elected at a special meeting called and held for
that purpose. Such election shall be by ballot whenever requested by any
shareholder entitled to vote at such election; but, unless such a request
is made, the election may be conducted in any manner approved at such
meeting. At each meeting of shareholders at which directors are to be
elected only persons nominated by an officer, director or in writing by a
shareholder at least five (5) days prior to the meeting shall be eligible
for election and those persons receiving the greatest number of votes
shall be directors.
3.4 TERM OF OFFICE.
- --------------------
Directors shall hold office until the annual meeting next succeeding
their election and until their successors are elected and qualified or
until their earlier resignation, removal from office or death.
3.5 VACANCIES.
- ---------------
Vacancies in the Board may be filled by a majority vote of the
remaining directors until an election to fill such vacancies is had.
Shareholders entitled to elect directors shall have the right to fill any
vacancy in the Board (whether the same has been temporarily filled by the
remaining directors or not) at any meeting of the shareholders called for
that purpose, and any directors elected at any such meeting of
shareholders shall serve until the next annual election of directors and
until their successors are elected and qualified.
3.6 RESIGNATION FROM THE BOARD.
- --------------------------------
Resignation from the Board shall be deemed to take effect
immediately upon its being received by any incumbent corporate officer
other than an officer who is also the resigning director, unless some
other time is specified therein.
3.7 QUALIFICATIONS.
- --------------------
Directors need not be residents of South Carolina or shareholders of
the Company.
3.8 REMOVAL.
- -------------
Directors shall be subject to removal as provided by law or by other
lawful procedures and nothing herein shall be construed to prevent the
removal of any or all directors in accordance therewith.
3.9 MEETINGS OF THE BOARD.
- ---------------------------
A regular meeting of the Board may be held immediately following the
adjournment of each shareholders' meeting at which directors are elected.
The holding of such shareholders' meeting shall constitute notice of such
Board meeting and such meeting shall be held without further notice.
Other regular meetings shall be held at such other times and places as
may be fixed by the Board. Special meetings of the Board may be held at
any time upon call of the Chairman of the Board, President, or any two
members of the Board. Notice of any special meeting of the Board of
Directors shall be mailed to each director, addressed to him at his
residence or usual place of business, at least two (2) days before the
day on which the meeting is to be held, or shall be sent to him at such
place by facsimile, telegraph, cable, radio or wireless, or be given
personally or by telephone, not later than the day before the day on
which the meeting is to be held. Every such notice shall state the time
and place of the meeting but need not state the purpose or purposes
thereof. Notice of any meeting of the Board need not be given to any
director, however, if waived by him in writing or by facsimile,
telegraph, cable, radio or wireless, whether before or after such
meeting, or if he shall be present at such meeting without protest prior
to the commencement thereof; and any meeting of the Board shall be a
legal meeting without any notice thereof having been given if all the
directors shall be present thereat.
All meetings of the Board shall be held at the office of the Company
in the County of Anderson, South Carolina, or at such other place, within
or without the State of South Carolina, as the Board may determine from
time to time and as may be specified in the notice thereof.
3.10 QUORUM.
- ------------
A majority of the Board shall constitute a quorum for the
transaction of business; PROVIDED, HOWEVER, that whenever less than a
quorum is present at the time and place appointed for any meeting of the
Board, a majority of those present may adjourn the meeting from time to
time, without notice other than by announcement at the meeting, until a
quorum shall be present. At any meeting at which a quorum is present,
all acts, questions and business which may come before the meeting shall
be determined by a majority of votes cast by the members of the Board
present at such meeting, unless the vote of a greater number is required
by the Articles or these Bylaws.
3.11 ACTION WITHOUT A MEETING.
- ------------------------------
Any action which may be authorized or taken at a meeting of the
directors may be authorized or taken without a meeting in a writing or
writings signed by all the directors, which writing or writings shall be
filed with or entered upon the records of the Company.
3.12 COMPENSATION.
- ------------------
The directors, as such, shall not receive any salary for their
services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board; PROVIDED, HOWEVER, that nothing herein
contained shall be construed to preclude any director from serving the
Company in any other capacity and receiving compensation therefor.
Members of the executive committee or of any standing or special
committee may by resolution of the Board be allowed such compensation for
their services as the Board may deem reasonable, and additional
compensation may be allowed to directors for special services rendered.
3.13 ATTENDANCE AT MEETINGS BY PERSONS WHO ARE NOT DIRECTORS.
- -------------------------------------------------------------
Unless waived by a majority of the members of the Board in
attendance, not less than twenty-four (24) hours before any regular or
special meeting of the Board, any director who desires the presence at
such meeting of not more than two (2) persons who are not directors shall
so notify all other directors, request the presence of such person or
persons at the meeting and state the reason in writing. Such person or
persons shall not be permitted to attend the meeting of the Board unless
a majority of the directors in attendance vote to admit such person to
the meeting. Such vote shall constitute the first order of business for
any such meeting of the Board. Such right to attend, whether granted by
waiver or vote, may be revoked at any time during any such meeting by the
vote of a majority of the members of the Board in attendance.
Notwithstanding anything contained in this Section to the contrary, any
shareholder of the Company shall be permitted to attend any meeting of
the Board and shall receive not less than twenty-four (24) hours notice
of such meeting given in accordance with Section 9 of this Article;
PROVIDED, HOWEVER, that such shareholder(s) may be excused at any time by
the action of a majority of the members of the Board in attendance.
3.14 COMMITTEES.
- ----------------
The Board may by resolution provide for such standing or special
committees as it deems desirable, and discontinue the same at its
pleasure. Each such committee shall have such powers and perform such
duties, not inconsistent with law, as may be delegated to it by the
Board. Vacancies in such committees shall be filled by the Board or as
it may provide.
ARTICLE IV
OFFICERS
--------
4.1 GENERAL PROVISIONS.
- ------------------------
The Board shall elect a President, such number of Vice Presidents as
the Board may from time to time determine, a Secretary and a Treasurer,
and, in its discretion, a Chairman of the Board. The Board may from time
to time create such other offices and appoint such other officers,
subordinate officers and assistant officers as it may determine. The
Chairman of the Board shall be, but the other officers need not be,
chosen from among the members of the Board. Any two or more of such
offices, other than that of President and Vice President, Secretary and
Assistant Secretary, or Treasurer and Assistant Treasurer, may be held by
the same person, and any officer may execute, acknowledge or verify any
instrument in more than one capacity if such instrument is required to be
executed, acknowledged or verified by two or more officers. All
officers, as between themselves and the Company, shall respectively have
such authority and perform such duties as are customarily incident to
their respective offices, and as may be specified from time to time by
these Bylaws and the Board, regardless of whether such authority and
duties are customarily incident to such office. In the absence of any
officer of the Company, or for any other reason the Board may deem
sufficient, the powers or duties of such officer or any of them may be
delegated to any other officer or to any director of the Company. The
Board may from time to time delegate to any officer authority to appoint
and remove subordinate officers and to prescribe their authority and
duty. The powers and duties of the officers described in Article IV of
these Bylaws are subject to change from time to time by the Board.
4.2 TERM OF OFFICE.
- --------------------
The officers of the Company shall hold office at the pleasure of the
Board, and unless sooner removed by the Board, until the meeting of the
Board following the date of their election and until their successors are
elected and qualified. The Board may remove any officer at any time,
with or without cause, by a majority vote. A vacancy in any office,
however created, shall be filled by the Board.
4.3 CHAIRMAN OF THE BOARD.
- ---------------------------
The Chairman of the Board, if one be elected, shall preside at all
meetings of the Board and shall have such other powers and duties as may
be prescribed by the Board.
4.4 PRESIDENT.
- ---------------
The President shall be the chief executive and operating officer of
the Company and shall exercise supervision over the business of the
Company and over its several officers, subject, however, to the control
of the Board. He or she shall preside at all meetings of shareholders
and, in the absence of, or if a Chairman of the Board shall not have been
elected, shall also preside at meetings of the Board. He or she shall
have authority to sign all certificates for shares and all deeds,
mortgages, bonds, contracts, notes and other instruments requiring his
signature; and shall have all the powers and duties prescribed by the
SOUTH CAROLINA BUSINESS CORPORATION ACT OF 1988, as amended (the "Act")
and such others as the Board may from time to time assign to him or her.
4.5 VICE PRESIDENTS.
- ---------------------
The Vice Presidents shall perform such duties as are conferred upon
them by these Bylaws or as may from time to time be assigned to them by
the Board or the President. At the request of the President, or in his
or her absence or disability, the Vice President designated by the
President (or in the absence of such designation, the Vice President
designated by the Board) shall perform all the duties of the President,
and when so acting, shall have all the powers of the President. The
authority of Vice Presidents to sign in the name of the Company all
certificates for shares and authorized deeds, mortgages, bonds,
contracts, notes and other instruments shall be coordinated with like
authority of the President. Any one or more of the Vice Presidents may
be designated as an "Executive Vice President."
4.6 SECRETARY.
- ---------------
The Secretary shall keep minutes of all the proceedings of the
shareholders and Board and shall make proper record of the same, which
shall be attested by him or her; sign all certificates for shares, and
all deeds, mortgages, bonds, contracts, notes, and other instruments
executed by the Company requiring his or her signature; give notice of
meetings of shareholders and directors; produce on request at each
meeting of shareholders for the election of directors a certified list of
shareholders arranged in alphabetical order; keep such books as may be
required by the Board; and perform such other and further duties as may
from time to time be assigned to him or her by the Board or by the
President.
4.7 TREASURER.
- ---------------
The Treasurer shall have general supervision of all finances; he or
she shall receive and have in charge all money, bills, notes, deeds,
leases, mortgages and similar property belonging to the Company and shall
do with the same as may from time to time be required by the Board of
Directors. He or she shall cause to be kept adequate and correct
accounts of the business transactions of the Company, including accounts
of its assets, liabilities, receipts, disbursements, gains, losses,
stated capital, and shares, together with such other accounts as may be
required, and, upon the expiration of his or her term of office, shall
turn over to his or her successor or to the Board all property, books,
papers and money of the Company in his or her hands; and he or she shall
perform such other duties as from time to time may be assigned to him or
her by the Board.
4.8 ASSISTANT AND SUBORDINATE OFFICERS.
- ----------------------------------------
The Board may appoint such assistant and subordinate officers as it
may deem desirable. Each such officer shall hold office during the
pleasure of the Board and perform such duties as the Board may prescribe
to appoint prescribe their compensation. The Board may, from time to
time, authorize any officer and remove assistant and subordinate
officers, to authority and duties, and to fix their compensation.
ARTICLE V
CERTIFICATES FOR SHARES
-----------------------
5.1 FORM AND EXECUTION.
- ------------------------
Certificates for shares shall be issued to each shareholder in such
form as shall be approved by the Board. Such certificates shall be
signed by the Chairman of the Board, the President or a Vice President
and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Company, which certificates shall certify the
number and class of shares held by the shareholder in the Company, but no
certificate for shares shall be issued and delivered until such shares
are fully paid. When such a certificate is countersigned by an
incorporated transfer agent or registrar, the signature of any of said
officers of the Company may be facsimile, engraved, stamped or printed.
Although any officer of the Company whose manual or facsimile signature
is affixed to a share certificate shall cease to be such officer before
the certificate is delivered, such certificate, nevertheless, shall be
effective in all respects when delivered.
Such certificate for shares shall be transferable in person or by
attorney, but, except as hereinafter provided in the case of lost,
mutilated or destroyed certificates, no transfer of shares shall be
entered upon the records of the Company until the previous certificate,
if any, given for the same shall have been surrendered and canceled.
The Board shall have authority to make such rules and regulations,
not inconsistent with law, the Articles or these Bylaws, as it deems
expedient concerning the issuance, transfer and registration of
certificates for shares and the shares represented thereby and may
appoint transfer agents and registrars thereof.
5.2 LOST, MUTILATED OR DESTROYED CERTIFICATES.
- -----------------------------------------------
If any certificate for shares is lost, mutilated or destroyed, the
Board may authorize the issue of a new certificate in place thereof upon
such terms and conditions as it may deem advisable. The Board in its
discretion may refuse to issue such new certificates until the Company
has been indemnified to its satisfaction and until it is protected to its
satisfaction by a final order or decree of a court of competent
jurisdiction.
5.3 REGISTERED SHAREHOLDERS.
- -----------------------------
A person in whose name shares are of record on the books of the
Company shall conclusively be deemed the unqualified owner thereof for
all purposes and to have capacity to exercise all rights of ownership.
Neither the Company nor any transfer agent of the Company shall be bound
to recognize any equitable interest in or claim to such shares on the
part of any other person, whether disclosed upon such certificate or
otherwise, nor shall they be obliged to see to the execution of any trust
or obligation.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICER
----------------------------------------
Each person who at any time is or shall have been a director and, at
the option of the Board, each person who at any time is or shall have
been an officer, employee or agent of the Company, or is or shall have
been serving at the request of the Company as a director, trustee,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, and his heirs, executors and
administrators shall be indemnified by the Company in accordance with and
to the fullest extent permitted by the Act as in effect at the time of
the adoption of these Bylaws or as amended from time to time thereafter.
The foregoing right of indemnification shall not be deemed exclusive of
other rights to which any director, officer, trustee, employee, agent or
other person may be entitled in any capacity as a matter of law or under
any regulation, agreement, vote of the Board or otherwise. If authorized
by the Board, the Company may purchase and maintain insurance against
liability on behalf of any such person to the full extent permitted by
the Act as in effect at the time of the adoption of these Bylaws or as
amended from time to time thereafter. The right of indemnification
conferred herein shall be extended to any threatened action, suit or
proceeding, and the failure to institute it shall be deemed its final
determination. Advances may be made by the Company against costs,
expenses and fees, as and upon the terms determined by the Board.
If the Company indemnifies or advances expenses to a director
pursuant to Section 33-8-510, 33-8-530 or 33-8-540 or Article VI hereof
in connection with a proceeding by or in the right of the Company, the
Company shall report the indemnification or advance in writing to the
shareholders with or before the notice of the next shareholder meeting.
ARTICLE VII
FISCAL YEAR
-----------
The fiscal year of the Company will end on such day as may be fixed
from time to time by the Board.
ARTICLE VIII
AMENDMENTS
----------
These Bylaws may be amended, repealed or added to at any meeting of
shareholders called for that purpose by the affirmative vote of the
holders of record of shares entitling them to exercise a majority of the
voting power on such proposal or, without a meeting, by the written
consent of the holders of record of shares entitling them to exercise a
majority of the voting power on such proposal; PROVIDED, HOWEVER, that if
an amendment or addition is adopted by written consent without a meeting
of the shareholders, it shall be the duty of the Secretary of the Company
to enter the amendment or addition in the records of the Company, and to
mail a copy of such amendment or addition to each shareholder of record
who would be entitled to vote thereon and did not participate in the
adoption thereof; PROVIDED, FURTHER, HOWEVER, that no amendment or
addition to these Bylaws shall be made if such amendment or addition is
inconsistent with the Articles.
ARTICLE IX
SEAL
----
The Board may, in its discretion, provide a suitable seal containing
the name of the Company. If deemed advisable by the Board, duplicate
seals may be provided and kept for the purpose of the Company.
ARTICLE X
CONSISTENCY WITH ARTICLES AND CORPORATION AQREEMENT
---------------------------------------------------
If any provision of these Bylaws shall be inconsistent with the
Articles as in effect at the time of the adoption of these Bylaws or as
amended from time to time, the Articles, as in effect at the time, shall
govern and control. If any provision of these Bylaws shall be
inconsistent with the 1995 Close Corporation Agreement (the "Corporation
Agreement") made and entered into as of August 7, 1995 among the Company
and the shareholders of the Company, a copy of which is on file with the
Secretary of the Company, the Corporation Agreement, as in effect at the
time, shall Govern and control.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 SECTION HEADINGS.
- ----------------------
The headings contained in these Bylaws are for reference purposes
only and shall not be construed to be part of and/or shall not affect in
any way the meaning or interpretation of these Bylaws.
11.2 GENDER.
- ------------
Unless the context otherwise requires a different meaning, words of
a masculine gender shall be deemed and construed to include correlative
words of the feminine and neuter genders, words importing the singular
number shall include the plural number and vice versa, and the terms
"hereof", "hereby", "hereto", "hereunder", "herein" and similar terms
mean these Bylaws.
11.3 COMPUTATION OF DAYS.
- -------------------------
Unless otherwise provided in these Bylaws, in computing the number
of days for any purpose under these Bylaws, all days shall be counted
including Saturdays, Sundays and holidays.
-1-
No 3558202
THE COMPANIES ACTS 1985 TO 1989
_________________________________
COMPANY LIMITED BY SHARES
_________________________________
MEMORANDUM OF ASSOCIATION
OF
_______________________
NIM HOLDINGS LIMITED
_______________________
A. The Company's Name is NIM HOLDINGS LIMITED
B. The Company's Registered Office is to be situated in England and Wales.
C. The Company's objects are:
1. Without prejudice to the objects hereinafter specified to carry
on business as a General Commercial Company.
2. To carry an any other business which may seem to the Company to
be capable of being conveniently or advantageously carried on
in connection or conjunction with any business of the Company
with a view directly or indirectly to enhancing the value of or
to render profitable or more profitable any of the Company's
property, assets or rights or expertise.
3. To purchase or otherwise acquire and undertake all or any part
of the business property and liabilities of any company, firm,
person or body carrying on or proposing to carry on any
business which the Company is authorized to carry on or
possessed of property suitable for the purposes of the Company.
4. To purchase or otherwise acquire take on lease or in exchange,
let or hire any real or personal property or assets or any
rights or privileges which the Company may think necessary or
convenient or capable of being profitably dealt with in such
manner as may be thought fit.
5. To amalgamate or enter into any partnership or into any
arrangement or other association for sharing profits union of
interests, co-operation, joint adventure, reciprocal concession
or otherwise with any company, firm, person or body carrying on
or engaged in or about to carry on or engage in any business or
transactions which the Company is authorized to carry on or
engage in or any business transaction capable of being
conducted so as directly or indirectly to benefit the Company.
6. To subscribe, underwrite, purchase or otherwise acquire shares
or stock in or securities or investments of any nature
whatsoever and to subsidize or otherwise assist any such
company and with or without guarantee to sell, hold, re-issue
or otherwise deal with such shares, investments, stock or
securities and any rights or options in respect thereof and to
buy and sell foreign exchange.
7. To build, develop, construct, maintain, alter, enlarge, pull
down, remove or replace any buildings, works, factories, roads,
structures or facilities of all kinds and plant and machinery
necessary or convenient for the business of the Company and to
join with any person, firm or company in doing any of the
things aforesaid.
8. To enter into any arrangements with any Government or
Authorities supreme, municipal, local or otherwise and to
obtain from any such Government or Authority all rights,
concessions, authorizations and privileges that may seem
conducive to the Company's objects or any of them.
9. To obtain the grant of, purchase or otherwise acquire any
concessions, contracts, licenses, grants, trade marks,
copyrights or rights of any kind, patents, inventions,
privileges, exclusive or otherwise, authorities, monopolies,
undertakings or businesses, or any right or option in relation
thereto, and to perform and fulfill the terms and conditions
thereof, and to carry the same into effect, operate thereunder,
develop, grant licenses thereunder, and turn to account,
maintain or sell, dispose of, and deal with the same in such
manner as the Company may think expedient.
10. To apply for, promote and obtain any provisional order, Act of
Parliament or charter for enabling the Company to carry any of
its objects into effect or for effecting any modification of
the Company's constitution or for any other purpose which may
seem expedient and to oppose any proceedings or applications
which may seem calculated directly or indirectly to prejudice
the Company's interests.
11. To promote or join in the promotion of any company for the
purpose of acquiring all or any of the business, property,
assets, rights and liabilities of any company whether or not
having objects similar to those of the Company or for any other
purpose which may seem directly or indirectly calculated to
benefit the Company and to place or guarantee the placing of,
underwrite, subscribe for or otherwise acquire all or any part
of the shares, debentures or other securities of any such other
company.
12. To enter into any arrangements or contracts with any person,
firm or company for carrying on the whole or any part of the
business of the Company, and to fix and determine their
remuneration, which may be by way of money payment, allotment
of shares (either fully or partly paid) or otherwise.
13. To sell, exchange, lease, grant licenses, dispose of, turn to
account or otherwise deal with the whole of the undertaking,
property, assets, rights and effects of the Company or any part
thereof for such consideration as may be considered expedient
and in particular shares, stock or other securities whether
fully or partly paid up.
14. To pay for any rights or property acquired by the Company, and
to remunerate any person, firm or company rendering services to
the Company whether by cash payment or by the allotment of
shares, debentures or other securities of the Company credited
as paid up in full or in part or in any other manner
whatsoever, and to pay all or any of the preliminary expenses
of the Company and of any company formed or promoted by the
Company.
15. To invest the monies of the Company not immediately required
for any other purpose of the Company by the purchase of the
shares or securities of any company or by the purchase of any
interest in land or buildings or in such other manner as shall
from time to time be considered expedient.
16. To guarantee the payment of any debentures, debenture stock,
bonds, mortgages, charges, obligations, interest, dividends,
securities, monies or shares or the performance of contracts or
engagements of any other company, firm or person and to give
indemnities and guarantees of all kinds and to enter into
partnership or any joint purse arrangement with any person,
firm or Company having objects similar to those of the Company
or any of them.
17. To guarantee or give indemnities or provide security whether by
personal obligation or covenant or by mortgaging or charging
all or any part of the undertaking, property and assets both
present and future and uncalled capital of the Company, or by
all or any of such methods, the performance of any contracts or
obligations of any person, firm or company whatsoever.
18. To advance, lend or deposit money or give credit to or with any
company, firm or person on such terms as may be thought fit and
with or without security.
19. To draw, make, accept, endorse, discount, execute and issue,
and to buy, sell and deal with bills of exchange, promissory
notes, debentures, bills of lading, warrants and other
negotiable or transferable instruments or securities.
20. To raise or borrow and to secure or discharge any debt or
obligation of the Company, and to receive money on deposit or
loan in such a manner and on such terms as may seem expedient
and in such manner as may be thought fit and in particular by
mortgages and charges and the issue of debentures or debenture
stock or other securities of any description upon all or any
part of the undertaking, property, assets and rights of the
Company both present and future including any uncalled capital
of the Company.
21. To establish and maintain or contribute to any scheme for the
acquisition by trustees of shares in the Company or its holding
company to be held by or for the benefit of employees
(including any Director holding a salaried employment or
office) of the Company or (so far as for the time being
permitted by law) any of the Company's subsidiaries and to lend
money (so far as aforesaid) to any such employees to enable
them to acquire shares of the Company or its holding company
and to formulate and carry into effect any scheme for sharing
profits with any such employees.
22. To establish and maintain or procure the establishment and
maintenance of any contributory or non-contributory pension or
super-annuation funds for the benefit of, and to give or
procure the giving of donations, gratuities, pensions,
allowances or emoluments to any persons who are or were at any
time in the employment or service of the Company or of any
company which is a subsidiary of the Company or any such
holding company or otherwise is allied to or associated with
the Company, or who are or were at any time directors or
officers of the Company or of any such other company, and the
wives, widows, families and dependants of any such persons; to
establish and subsidize and subscribe to any institutions,
associations, clubs or funds calculated to be for the benefit
of or to advance the interests and well-being of the Company or
of any such other company and make payments to or towards the
insurance of any such person and do any of the matters
aforesaid either alone or in conjunction with any such other
company as aforesaid.
23. To purchase and maintain insurance for or for the benefit of
any person or persons who are or were at any time directors,
officers or employees or auditors of the Company, or of any
other company which is its holding company, or any company
which is associated with the Company, or of any subsidiary
undertaking of the Company or trustees of any pension fund in
which any employees of the Company or of any such other company
or subsidiary undertaking are interested, including (without
prejudice to the generality of the foregoing) insurance against
any liability incurred by such persons in respect of any act or
omission in the actual or purported execution and/or discharge
of their duties and/or in the exercise or purported exercise of
their powers and/or otherwise in relation to their duties,
powers or offices in relation to the Company or any such other
company, subsidiary undertaking or pension fund and to such
extent as may be permitted by law to indemnify or to exempt any
such person against or from any such liability; for the
purposes of this clause "holding company" and "subsidiary
undertaking" shall have the same meanings as in the Companies
Act 1985 as amended by the Companies Act 1989.
24. To distribute among the members of the Company in specie or
otherwise any property or assets of the Company subject to any
consent required by law.
25. To procure the registration, recognition or incorporation of
the Company in or under the laws of any territory outside
England.
26. To issue any securities which the Company has power to issue
for any other purpose by way of security or indemnity or in
satisfaction of any liability undertaken or agreed to be
undertaken by the Company.
27. To guarantee or otherwise support or secure, either with or
without the Company receiving any consideration or advantage
and whether by personal covenant or by mortgaging or charging
all or any part of the undertaking, property, assets, rights
and revenues (present and future) and uncalled capital of the
Company, or by both such methods or by any other means
whatsoever, the discharge and performance respectively of the
liabilities and obligations of and the repayment or payment of
any moneys whatsoever by any person, firm or company, including
(but not limited to):
(i) the discharge and performance respectively of any
liabilities and obligations whatsoever of, and the
repayment or payment of any moneys whatsoever by, any
company which is for the time being or is likely to become
the Company's holding company or a subsidiary of the
Company or another subsidiary of the Company's holding
company (the terms "holding company" and "subsidiary"
having the meanings given to them by Section 736 of the
Companies Act 1985) or otherwise associated with the
Company in business; and
(ii) the discharge and performance respectively of any
liabilities and obligations incurred in connection with or
for the purpose of the acquisition of shares in the
Company or in any company which is for the time being the
Company's holding company insofar as the giving of any
such guarantee or other support or security is not
prohibited by law; and
(iii) the repayment or payment of the principal amounts of,
and premiums, interest and dividends on, any borrowings
and securities.
28. To the extent that the same is permitted by law to give
financial assistance for the purpose of the acquisition of
shares in the Company or in the Company's holding company (as
that term is defined by Section 736 of the Companies Act 1985)
for the time being and for the purpose of reducing or
discharging a liability incurred for the purpose of such an
acquisition and to give such assistance by means of a gift,
loan or guarantee, indemnity, the provision of security or
otherwise howsoever permitted by law.
29. To do all or any of the things and matters aforesaid in any
part of the world, and either as principals, agents,
contractors, trustees or otherwise, and by or through
subsidiary companies, agents, sub-contractors or trustees or
otherwise, and either alone or in conjunction with others.
30. To do all such other things as may be considered to be
incidental or conducive to any of the above objects.
And it is hereby declared that the objects of the Company as
specified in each of the foregoing paragraphs of this clause
shall be separate and distinct objects and shall not be
restrictively construed but the widest interpretation shall be
given thereto, and they shall not, except where the context
expressly so requires, be in any way limited or restricted by
reference to or inference from the terms of any other sub-
clause or the order in which the same occur or by the name of
the Company.
A. The liability of the Members is limited.
B. The Authorized Share Capital of the Company is <pound-sterling>1,000
divided into 1,000 Ordinary Shares of <pound-sterling>1 each.
Note: Clauses 3 (27) and (28) inserted by special resolution dated 2 July 1998
<PAGE>
WE, the Subscribers to this Memorandum of Association wish to be formed
into a Company pursuant to this Memorandum; and we agree to take the
number of shares shown opposite our respective names.
<TABLE>
<CAPTION>
NAMES and ADDRESSES of SUBSCRIBERS Number of Shares taken by each
Subscriber
<S> <C>
EMMANUEL COHEN
ONE
2{nd} Floor
80 Great Eastern Street
London EC2A 3JL
VIOLET COHEN
ONE
2{nd} Floor
80 Great Eastern Street
London EC2A 3JL
Company Director
Total shares taken
TWO
DATED the 28{TH} DAY OF APRIL 1998
WITNESS to the above signatures:
RM COMPANY SERVICES LIMITED
2{nd} Floor
80 Great Eastern Street
London EC2A 3JL
Company Formation Agent
</TABLE>
THE COMPANIES ACT 1985
PRIVATE COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
NIM HOLDINGS LIMITED
Adopted by Special Resolution passed 2 July 1998
1. PRELIMINARY
- ----------------
The regulations contained in Table A in the Schedule to the Companies
(Table A to F) Regulations 1985 in force at the time of adoption of
these Articles (such Table being hereinafter called "Table A") shall
apply to the Company save insofar as they are excluded or varied by
these Articles and such regulations (save as so excluded or varied)
and these Articles shall be the regulations of the Company.
2. INTERPRETATION
- -------------------
In these Articles and in Table A the following expressions have the
following meanings unless inconsistent with the context:
"the Act" the Companies Act 1985 including any statutory modification
or re-enactment thereof for the time being in force.
"these Articles" these Articles of Association, whether as originally
adopted or as from time to time altered by special
resolution.
"clear days" in relation to the period of a notice means that period
excluding the day when the notice is given or deemed
to be given and the day for which it is given or on
which it is to take effect.
"the directors" the directors for the time being of the Company or (as
the context shall require) any of them acting as the
board of directors of the Company but such
expression shall not include any associate directors
(as hereinafter defined) who shall not be deemed to
be directors of the Company for any purpose
whatsoever.
"executed" includes any mode of execution.
"the holder" in relation to shares means the member whose name is
entered in the register of members as the holder of
the shares.
"office" the registered office of the Company.
"seal" the common seal of the Company (if any).
"secretary" the secretary of the Company or any other person appointed
to perform the duties of the secretary of the
Company, including a joint, assistant or deputy
secretary.
"share" includes any interest in a share.
"the United Kingdom" Great Britain and Northern Ireland.
Unless the context otherwise requires, words or expressions contained
in these Articles and in Table A bear the same meaning as in the Act
but excluding any statutory modification thereof not in force when
these Articles become binding on the Company. Regulation 1 of Table A
shall not apply to the Company.
3. SHARE CAPITAL
- ------------------
3.1 No shares comprised in the authorized share capital of the
Company from time to time shall be issued without the consent in
writing of the holder or holders (in aggregate) of a majority of
the voting rights in the Company (within the meaning of Section
736A(2) of the Act) nor shall any share be issued at a discount
or otherwise be issued in breach of the provisions of these
Articles or of the Act.
3.2 Regulation 4 of Table A and, in accordance with Section 91(1) of
the Act, sections 89(1) and 90(1) to (6) (inclusive) of the Act
shall not apply to the Company.
4. LIEN
- ---------
Save in respect of any share registered in the name of Berry Plastics
Corporation, the Company shall have a first and paramount lien on all
shares, whether fully paid or not, standing registered in the name of
any person indebted or under liability to the Company, whether he
shall be the sole registered holder thereof or shall be one of two or
more joint holders, for all moneys presently payable by him or his
estate to the Company. Regulation 8 of Table A shall be modified
accordingly.
5. CALLS ON SHARES AND FORFEITURE
- -----------------------------------
There shall be added at the end of the first sentence of regulation 18
of Table A, so as to increase the liability of any member in default
in respect of a call, the words "and all expenses that may have been
incurred by the Company by reason of such non-payment."
6. TRANSFER OF SHARES
- -----------------------
6.1 The first sentence in regulation 24 of Table A shall not apply to
the Company. The words "They may also" at the beginning of the
second sentence of that regulation shall be replaced by the words
"The directors may".
6.2 Notwithstanding anything contained in these Articles, the
directors shall not decline to register any transfer of shares,
nor may they suspend registration thereof where such a transfer
is executed by any bank or institution to whom such shares have
been charged by way of security, or by any nominee of such a bank
or institution, pursuant to the power of sale under such
security, and a certificate by any official of such bank or
institution that the shares were so charged and the transfer was
so executed shall be conclusive evidence of such facts.
7. GENERAL MEETINGS
- ---------------------
The directors may call general meetings and regulation 37 of Table A
shall not apply to the Company.
8. NOTICE OF GENERAL MEETINGS
- -------------------------------
8.1 A notice convening a general meeting shall be required to specify
the general nature of the business to be transacted only in the
case of special business and regulation 38 of Table A shall be
modified accordingly. The words "or a resolution appointing a
person a director" and paragraphs (a) and (b) in regulation 38 of
Table A shall be deleted and the words "in accordance with
section 369(3) of the Act" shall be inserted after the words "if
it is so agreed" in that regulation.
8.2 All business shall be deemed special that is transacted at an
extraordinary general meeting, and also all that is transacted at
an annual general meeting with the exception of declaring a
dividend, the consideration of the profit and loss account,
balance sheet, and the reports of the directors and auditors, the
appointment of and the fixing of the remuneration of the auditors
and the giving or renewal of any authority in accordance with the
provisions of section 80 of the Act.
8.3 Every notice convening a general meeting shall comply with the
provisions of section 372(3) of the Act as to giving information
to members in regard to their right to appoint proxies; and
notices of and other communications relating to any general
meeting which any member is entitled to receive shall be sent to
the directors and to the auditors for the time being of the
Company.
9. PROCEEDINGS AT GENERAL MEETINGS
- ------------------------------------
9.1 The words "save that, if and for so long as the Company has only
one person as a member, one member present in person or by proxy
shall be a quorum" shall be added at the end of the second
sentence of regulation 40 of Table A.
9.2 If a quorum is not present within half an hour from the time
appointed for a general meeting the general meeting shall stand
adjourned to the same day in the next week at the same time and
place or to such other day and at such other time and place as
the directors may determine; and if at the adjourned general
meeting a quorum is not present within half an hour from the time
appointed therefor the member or members present in person or by
proxy or (being a corporate body) by representative and entitled
to vote upon the business to be transacted shall constitute a
quorum and shall have power to decide upon all matters which
could properly have been disposed of at the meeting from which
the adjournment took place. Regulation 41 of Table A shall not
apply to the Company.
10. VOTES OF MEMBERS
- ---------------------
10.1 Regulation 54 of Table A shall not apply to the Company. Subject
to any rights or restrictions for the time being attached to any
class or classes of shares, on a show of hands every member
entitled to vote who (being an individual) is present in person
or by proxy (not being himself a member entitled to vote) or
(being a corporate body) is present by a representative or proxy
(not being himself a member entitled to vote) shall have one vote
and, on a poll, every member shall have one vote for each share
of which he is the holder.
10.2 The words "be entitled to" shall be inserted between the words
"shall" and "vote" in regulation 57 of Table A.
10.3 A member shall not be entitled to appoint more than one proxy to
attend on the same occasion and accordingly the final sentence of
regulation 59 of Table A shall not apply to the Company. Any
such proxy shall be entitled to cast the votes to which he is
entitled in different ways.
11. NUMBER OF DIRECTORS
- ------------------------
11.1 Regulation 64 of Table A shall not apply to the Company.
11.2 The maximum number and minimum number respectively of the
directors may be determined from time to time by ordinary
resolution. Subject to and in default of any such determination
there shall be no maximum number of directors and the minimum
number of directors shall be one.
12. ALTERNATE DIRECTORS
- ------------------------
12.1 An alternate director shall be entitled to receive notice of all
meetings of the directors and of all meetings of committees of
the directors of which his appointer is a member (subject to his
giving to the Company an address within the United Kingdom at
which notices may be served on him), to attend and vote at any
such meeting at which the director appointing him is not
personally present, and generally to perform all the functions of
his appointor at such meeting as a director in his absence. An
alternate director shall not be entitled as such to receive any
remuneration from the Company, save that he may be paid by the
Company such part (if any) of the remuneration otherwise payable
to his appointor as such appointor may by notice in writing to
the Company from time to time direct. Regulation 66 of Table A
shall not apply to the Company.
12.2 A director, or any such other person as is mentioned in
regulation 65 of Table A may act as an alternate director to
represent more than one director, and an alternate director shall
be entitled at any meeting of the directors or of any committee
of the directors to one vote for every director whom he
represents in addition to his own vote (if any) as a director,
but he shall count as only one for the purpose of determining
whether a quorum is present and the final sentence of regulation
88 shall not apply to the Company.
12.3 Save as otherwise provided in the regulations of the Company, an
alternate director shall be deemed for the purposes specified in
Article 12.1 to be a director and shall alone be responsible for
his own acts and defaults and he shall not be deemed to be the
agent of the director appointing him. Regulation 69 of Table A
shall not apply to the Company.
13. APPOINTMENT AND RETIREMENT OF DIRECTORS
- --------------------------------------------
13.1 The directors shall not be required to retire by rotation and
regulations 73 to 80 (inclusive) of Table A shall not apply to
the Company.
13.2 A member or members holding a majority of the voting rights in
the Company (within the meaning of section 736A(2) of the Act)
shall have power at any time, and from time to time, to appoint
any person to be a director, either as an additional director
(provided that the appointment does not cause the number of
directors to exceed any number determined in accordance with
Article 11.2 as the maximum number of directors for the time
being in force) or to fill a vacancy and to remove from office
any director howsoever appointed. Any such appointment or
removal shall be made by notice in writing to the Company signed
by the member or members taking the same or, in the case of a
member being a corporate body, signed by one of its directors or
duly authorized officers or by its duly authorized attorney and
shall take effect upon lodgement of such notice at the office.
13.3 The Company may by ordinary resolution appoint any person who is
willing to act to be a director, either to fill a vacancy or as
an additional director.
13.4 The directors may appoint a person who is willing to act to be a
director, either to fill a vacancy or as an additional director,
provided that the appointment does not cause the number of
directors to exceed any number determined in accordance with
Article 11.2 as the maximum number of directors for the time
being in force.
14. DISQUALIFICATION AND REMOVAL OF DIRECTORS
- ----------------------------------------------
The office of a director shall be vacated if:
14.1 he ceases to be a director by virtue of any provision of the Act
or these Articles or he becomes prohibited by law from being a
director; or
14.2 he becomes bankrupt or makes any arrangement or composition with
his creditors generally; or
14.3 he is, or may be, suffering from mental disorder and either:
14.3.1 he is admitted to hospital in pursuance of an application
for admission for treatment under the Mental Health Act 1983
or, in Scotland, an application for admission under the
Mental Health (Scotland) Act 1960, or
14.3.2 an order is made by a court having jurisdiction (whether
in the United Kingdom or elsewhere) in matters concerning
mental disorder for his detention or for the appointment of
a receiver, curator bonis or other person to exercise powers
with respect to his property or affairs; or
14.4 he resigns his office by notice to the Company; or
14.5 he shall for more than six consecutive months have been absent
without permission of the directors from meetings of the
directors held during that period and the directors resolve that
his office be vacated; or
14.6 he is removed from office as a director pursuant to Article 13.2;
and
14.7 regulation 81 of Table A shall not apply to the Company.
15. GRATUITIES AND PENSIONS
- ----------------------------
Regulation 87 of Table A shall not apply to the Company and the
directors may exercise any powers of the Company conferred by its
Memorandum of Association to give and provide pensions, annuities,
gratuities or any other benefits whatsoever to or for past or present
directors or employees (or other dependants) of the Company or any
subsidiary or associated undertaking (as defined in section 27(3) of
the Companies Act 1989) of the Company and the directors shall be
entitled to retain any benefits received by them or any of them by
reason of the exercise of any such powers.
16. PROCEEDINGS OF THE DIRECTORS
- ---------------------------------
16.1 Whensoever the minimum number of the directors shall be one
pursuant to the provisions of Article 11.2 a sole director shall
have authority to exercise all the powers and discretions which
are expressed by Table A and by these Articles to be vested in
the directors generally and regulations 89 and 90 of Table A
shall be modified accordingly.
16.2 Subject to the provisions of the Act, and provided that he has
disclosed to the directors the nature and extent of any interest
of his, a director notwithstanding his office:
16.2.1 may be a party to or otherwise interested in any
transaction or arrangement with the Company or in which the
Company is in any way interested;
16.2.2 may be a director or other office of or employed by or be
a party to any transaction or arrangement with or otherwise
interested in any corporate body promoted by the Company or
in which the Company is in any way interested;
16.2.3 may or any firm or company of which he is a member or
director may act in a professional capacity for the Company
or any corporate body in which the Company is in any way
interested;
16.2.4 shall not by reason of his office be accountable to the
Company for any benefit which he derives from such office,
service or employment or from any such transaction or
arrangement or from any interest or any such corporate body
and no such transaction or arrangement shall be liable to be
avoided on the ground of any such interest or benefit; and
16.2.5 shall be entitled to vote on any resolution and (whether
or not he shall vote) be counted in the quorum on any matter
referred to in any of Articles 16.2.1 to 16.2.4 (inclusive)
or on any resolution which in any way concerns or relates to
a matter in which he has, directly or indirectly, any kind
of interest whatsoever and if he shall vote on any
resolution as aforesaid his vote shall be counted.
16.3 For the purposes of Article 16.2:
16.3.1 a general notice to the directors that a director is to be
regarded as having an interest of the nature and extent
specified in the notice in any transaction or arrangement in
which a specified person or class of persons is interested
shall be deemed to be a disclosure that the director has an
interest in any such transaction of the nature and extent so
specified;
16.3.2 an interest of which a director has no knowledge and of
which it is unreasonable to expect him to have knowledge
shall not be treated as an interest of his; and
16.3.3 an interest of a person who is for any purpose of the Act
(excluding any statutory modification not in force when
these Articles were adopted) connected with a director shall
be treated as an interest of the director and in relation to
an alternate director an interest of his appointor shall be
treated as an interest of the alternate director without
prejudice to any interest which the alternate director has
otherwise.
16.4 Any director (including an alternate director) may participate in
a meeting of the directors or a committee of the directors of
which he is a member by means of a conference telephone or
similar communications equipment whereby all persons
participating in the meeting can hear each other and
participation in a meeting in this manner shall be deemed to
constitute presence in person at such meeting and, subject to
these Articles and the Act, he shall be entitled to vote and be
counted in a quorum accordingly. Such a meeting shall be deemed
to take place where the largest group of those participating is
assembled or, if there is no such group, where the chairman of
the meeting then is.
16.5 Regulation 88 of Table A shall be amended by substituting for the
sentence:
"IT SHALL NOT BE NECESSARY TO GIVE NOTICE OF A MEETING TO A DIRECTOR
WHO IS ABSENT FROM THE UNITED KINGDOM"
the following sentence:
"NOTICE OF EVERY MEETING OF THE DIRECTORS SHALL BE GIVEN TO EACH
DIRECTOR AND HIS ALTERNATE, INCLUDING DIRECTORS AND ALTERNATE
DIRECTORS WHO MAY FOR THE TIME BEING BE ABSENT FROM THE UNITED KINGDOM
AND HAVE GIVEN THE COMPANY AN ADDRESS WITHIN THE UNITED KINGDOM FOR
SERVICE."
16.6 Regulations 94 to 97 (inclusive) of Table A shall not apply to
the Company.
17. THE SEAL
- -------------
If the Company has a seal it shall be used only with the authority of
the directors or of a committee of the directors. The directors may
determine who shall sign any instrument to which the seal is affixed
and unless otherwise so determined, every instrument to which the seal
is affixed shall be signed by one director and by the secretary or
another director. In the second sentence of Regulation A the words
"shall be sealed with the seal and" shall be deleted. Each share
certificate shall only be issued by authority of the directors or of a
committee of the directors authorized by the directors and shall bear
the signature of one director and the company secretary or a second
director.
18. NOTICES
- ------------
18.1 In regulation 112 of Table A, the words "by facsimile to a
facsimile number supplied by the member for such purpose or"
shall be inserted immediately after the words "or by sending it"
and the words "first class" shall be inserted immediately before
the words "post in a prepaid envelope."
18.2 Where a notice is sent by first class post, proof of the notice
having been posted in a properly addressed, prepaid envelope
shall be conclusive evidence that the notice was given and shall
be deemed to have been given at the expiration of 24 hours after
the envelope containing the same is posted. Where a notice is
sent by facsimile receipt of the appropriate answerback shall be
conclusive evidence that the notice was given and the notice
shall be deemed to have been given at the time of transmission
following receipt of the appropriate answerback. Regulation 115
of Table A shall not apply to the Company.
18.3 If at any time by reason of the suspension or curtailment of
postal services within the United Kingdom the Company is unable
effectively to convene a general meeting by notices sent through
the post, a general meeting may be convened by a notice
advertised in at least one national daily newspaper and such
notice shall be deemed to have been duly served on all members
entitled thereto at noon on the day when the advertisement
appears. In any such case the Company shall send confirmatory
copies of the notice by post if at least seven days prior to the
meeting the posting of notices to addresses throughout the United
Kingdom again becomes practicable.
19. WINDING UP
- ---------------
In regulation 117 of Table A, the words "with the like sanction" shall
be inserted immediately before the words "determine how the division".
20. INDEMNITY
- --------------
20.1 Subject to the provisions of section 310 of the Act every
director (including an alternate director) or other officer of
the Company shall be indemnified out of the assets of the Company
against all losses or liabilities which he may sustain or incur
in or about the lawful execution of the duties of his office or
otherwise in relation thereto, including any liability incurred
by him in defending any proceedings, whether civil or criminal,
in which judgment is given in his favour or in which he is
acquitted or in connection with any application under section 144
or section 727 of the Act in which relief is granted to him by
the court, and no director (including an alternate director) or
other officer shall be liable for any loss, damage or misfortune
which may happen to or be incurred by the Company in the lawful
execution of the duties of his office or in relation thereto.
Regulation 118 of Table A shall not apply to the Company.
20.2 The directors shall have power to purchase and maintain at the
expense of the Company for the benefit of any director (including
an alternate director), officer or auditor of the Company
insurance against any such liability as is referred to in section
310(1) of the Act and subject to the provisions of the Act
against any other liability which may attach to him or loss or
expenditure which he may incur in relation to anything done or
alleged to have been done or omitted to be done as a director
(including an alternate director), officer or auditor.
20.3 The directors may authorize directors of companies within the
same group of companies as the Company to purchase and maintain
insurance at the expense of the Company for the benefit of any
director (including an alternate director), other officer or
auditor in such company in respect of such liability, loss or
expenditure as is referred to in Article 20.2.
21. ASSOCIATE DIRECTORS
- ------------------------
21.1 The directors may from time to time appoint any manager or other
officer or person in the employment of the Company to be an
Associate Director of the Company.
21.2 The appointment of a person to be an Associate Director shall not
(save as otherwise agreed between him and the Company) affect the
terms and conditions of his employment by the Company whether as
regards duties, powers, remuneration, pension or otherwise and
his appointment as an Associate Director shall be terminated if
the provisions of Article 14 would apply to him if he were a
director so as to cause him to vacate office as such or if he
resigns his employment or appointment or in the event of his
ceasing to be in the employment of the Company in some capacity
other than that of an Associate Director or in the event of his
appointment being terminated by a resolution of the directors.
21.3 The appointment, removal and remuneration of any Associate
Director shall be determined by the directors with full power to
make such arrangements as the directors may think fit and the
directors shall have the right to enter into any contracts on
behalf of the Company or transact any business of any description
without the knowledge or approval of the Associate Directors
except that no act shall be done that would impose any personal
liability on any or all of the Associate Directors except with
his or their knowledge and consent.
21.4 In calculating the number to form a quorum at any meeting of the
directors any associate directors present shall not be counted.
An Associate Director shall not be entitled to vote nor (except
when expressly invited by the directors to attend) to receive
notice of or to attend at any meeting of the directors or of a
committee of the directors.
21.5 The directors may designate the Associate Directors or any of
them by such other name or title in place of the word "Associate"
as they may from time to time consider to be descriptive of their
office and actual duties. Any Associate Director so designated
shall be entitled to describe himself accordingly and, in the
absence of such designation, shall be entitled to describe
himself as "Associate Director"; in signing any document which he
is authorized to sign as Associate Director he shall always after
his signature add the words "Associate Director" or, if he shall
have been otherwise designated, such other name or title
designated to him.
-1-
No 964668
THE COMPANIES ACTS 1948 to 1967
________________________
COMPANY LIMITED BY SHARES
________________________
MEMORANDUM OF ASSOCIATION
OF
_____________________________________________
NORWICH INJECTION MOULDERS LIMITED
_____________________________________________
1. The Name of the Company is "NORWICH INJECTION MOULDERS LIMITED".
2. The Registered Office at the Company will be situated in England.
3. The Objects for which the Company is established are:
(A) To carry on all or any of the businesses of Plastic Injection
Moulders, Manufacturers, Designers, Producers, Merchants,
Marketers, Importers, Exporters, Distributors, Agents for and
Dealers in Plastic, Polythene, Synthetic Fibres, Polyurethane
and all other synthetics, chemicals and substances and Plastic
Products, Materials and Utensils of all kinds, fabricated from
Injection Moulded, Extruded and Vacuum Formed Plastic and Glass
Fibre Materials and for and in Plastic Paints and Coverings of
every description; to undertake all operations in connection
with the processing and application thereof, to carry on the
business of Manufacturers and Designers of and Dealers in
Household, Domestic, Commercial and Industrial Goods, Parts,
Components and Articles of every description; Electrical,
Mechanical, Motor and General Engineers and Contractors,
Builders and Decorators, Garage Proprietors, Transport
Contractors; and to carry out researches, investigations and
experimental work of every description in relation to the
objects of the Company.
(B) To buy, sell, manufacture, and deal in plant, machinery,
vehicles, tools, materials and things of all kinds capable of
being used in connection with the above-mentioned businesses,
or any of them, or likely to be required by customers of, or
persons having dealings with the Company.
(C) To carry on any other business (whether manufacturing or
otherwise) which may seem to the Company capable of being
conveniently carried on in connection with the above objects,
or calculated directly or indirectly to enhance the value of or
render more profitable any of the Company's property.
<PAGE>
(D) To purchase or by any other means acquire any freehold,
leasehold, or other property for any estate or interest
whatsoever, and any rights, privileges, or easements over or in
respect of any property, and any buildings, offices, factories,
mills, works, wharves, roads, railways, tramways, machinery,
engines, rolling stock, vehicles, plant, live and dead stock,
barges, vessels, or things, and any real or personal property
or rights whatsoever which may be necessary for, or may be
conveniently used with, or may enhance the value of any other
property of the Company.
(E) To build, construct, maintain, alter, enlarge, pull down and
remove or replace any buildings offices, factories, mills,
works, wharves, roads, railways, tramways, machinery, engines,
walls, fences, banks, dams, sluices, or watercourses and to
clear sites for the same, or to join with any person, firm, or
company in doing any of the things aforesaid, and to work,
manage, and control the same or join with others in so doing.
(F) To apply for, register, purchase, or by other means acquire and
protect, prolong, and renew, whether in the United Kingdom or
elsewhere, any patents, patent rights, brevets d'invention,
licences, trade marks, designs, protections, and concessions
which may appear likely to be advantageous or useful to the
Company, and to use and turn to account and to manufacture
under or grant licences or privileges in respect of the same,
and to expend money in experimenting upon and testing and in
improving or seeking to improve any patents, inventions, or
rights which the Company may acquire or propose to acquire.
(G) To acquire and undertake the whole or any part of the business,
goodwill, and assets of any person, firm, or company carrying
on or proposing to carry on any of the businesses which this
Company is authorized to carry on, and as part of the
consideration for such acquisition to undertake all or any of
the liabilities of such person, firm, or company, or to acquire
an interest in, amalgamate with, or enter into partnership or
into any arrangement for sharing profits, or for co-operation,
or for limiting competition, or for mutual assistance with any
such person, firm or company, or for subsidizing or otherwise
assisting any such person, firm or company, and to give or
accept, by way of consideration for any of the acts or things
aforesaid or property acquired, any Shares, Debentures,
Debenture Stock, or securities that may be agreed upon, and to
hold and retain, or sell, mortgage and deal with any Shares,
Debentures, Debenture Stock, or securities so received.
(H) To improve, manage, cultivate, develop, exchange, let on lease
or otherwise, mortgage, charge, sell, dispose of, turn to
account, grant rights and privileges in respect of, or
otherwise deal with all or any part of the property and rights
of the Company.
(I) To invest and deal with the moneys of the Company not
immediately required in such Shares or upon such securities and
in such manner as may from time to time be determined.
(J) To lend and advance money or give credit to such persons,
firms, or companies and on such terms as may seem expedient,
and in particular to customers of and others having dealings
with the Company, and to give guarantees or become security for
any such persons, firms, or companies.
(K) To borrow or raise money in such manner as the Company shall
think fit, and in particular by the issue of Debentures or
Debenture Stock (perpetual or otherwise), and to secure the
repayment of any money borrowed, raised, or owing, by mortgage,
charge, or lien upon the whole or any part of the Company's
property or assets (whether present or future), including its
uncalled Capital, and also by a similar mortgage, charge, or
lien to secure and guarantee the performance by the Company of
any obligation or liability it may undertake.
(L) To draw, make, accept, endorse, discount, execute, and issue
promissory notes, bills of exchange, bills of lading, warrants,
debentures, and other negotiable or transferable instruments.
(M) To apply for, promote, and obtain any Act of Parliament,
Provisional Order, or Licence of the Board of Trade or other
authority for enabling the Company to carry any of its objects
into effect, or for effecting any modification of the Company's
constitution, or for any other purpose which may seem
expedient, and to oppose any proceedings or applications which
may seem calculated directly or indirectly to prejudice the
Company's interests.
(N) To enter into any arrangements with any Governments or
authorities (supreme, municipal, local, or otherwise), or any
companies, firms, or persons that may seem conducive to the
attainment of the Company's objects or any of them, and to
obtain from any such Government, authority, company, firm, or
person, any charters, contracts, decrees, rights, privileges,
and concessions which the Company may think desirable, and to
carry out, exercise, and comply with any such charters,
contracts, decrees, rights, privileges, and concessions.
(O) To subscribe for, take, purchase, or otherwise acquire and hold
shares or other interests in or securities of any other company
having objects altogether or in part similar to those of this
Company or carrying on any business capable of being carried on
so as directly or indirectly to benefit this Company.
(P) To act as agents or brokers and as trustees for any person,
firm, or company, and to undertake and perform sub-contracts,
and also to act in any of the businesses of the Company through
or by means of agents, brokers, sub-contractors, or others.
(Q) To remunerate any person, firm, or company rendering services
to this Company, either by cash payment or by the allotment to
him or them of Shares or securities of the Company credited as
paid up in full or in part or otherwise as may be thought
expedient.
<PAGE>
(R) To pay all or any expenses incurred in connection with the
promotion, formation, and incorporation of the Company, or to
contract with any person, firm, or company to pay the same, and
to pay commissions to brokers and others for underwriting,
placing, selling, or guaranteeing the subscription of any
Shares, Debentures, Debenture Stock, or securities of this
Company.
(S) To support and subscribe to any charitable or public object,
and any institution, society, or club which may be for the
benefit of the Company or its employees, or may be connected
with any town or place where the Company carries on business;
to give or award pensions, annuities, gratuities, and
superannuation or other allowances or benefits or charitable
aid to any persons who are or have been Directors of, or who
are or have been employed by, or who are serving or have served
the Company, and to the wives, widows, children, and other
relatives and dependants of such persons; to make payments
towards insurance; and to set up, establish, support, and
maintain superannuation and other funds or schemes (whether
contributory or non-contributory) for the benefit of any such
persons and of their wives, widows, children, and other
relatives and dependants.
(T) To promote any other company for the purpose of acquiring the
whole or any part of the business or property and undertaking
any of the liabilities of this Company, or of undertaking any
business or operations which may appear likely to assist or
benefit this Company or to enhance the value of any property or
business of this Company, and to place or guarantee the placing
of, underwrite, subscribe for, or otherwise acquire all or any
part of the shares or securities of any such company as
aforesaid.
(U) To sell or otherwise dispose of the whole or any part of the
business or property of the Company, either together or in
portions, for such consideration as the Company may think fit,
and in particular for shares, debentures, or securities of any
company purchasing the same.
(V) To distribute among the Members of the Company in kind any
property of the Company, and in particular any shares,
debentures, or securities of other companies belonging to this
Company or of which this Company may have the power of
disposing.
(W) To procure the Company to be registered or recognized in any
part of the world.
(X) To do all such other things as may be deemed incidental or
conducive to the attainment of the above objects or any of
them.
(Y) To guarantee or otherwise support or secure, either with or
without the Company receiving any consideration or advantage
and whether by personal covenant or by mortgaging or charging
all or any part of the undertaking, property, assets, rights
and revenues (present and future) and uncalled capital of the
Company, or by both such methods or by any other means
whatsoever, the discharge and performance respectively of the
liabilities and obligations of and the repayment or payment of
any moneys whatsoever by any person, firm or company, including
(but not limited to):
(i) the discharge and performance respectively of any
liabilities and obligations whatsoever of, and the
repayment or payment of any moneys whatsoever by, any
company which is for the time being or is likely to become
the Company's holding company or a subsidiary of the
Company or another subsidiary of the Company's holding
company (the terms "holding company" and "subsidiary"
having the meanings given to them by Section 736 of the
Companies Act 1985) or otherwise associated with the
Company in business; and
(ii) the discharge and performance respectively of any
liabilities and obligations incurred in connection with or
for the purpose of the acquisition of shares in the
Company or in any company which is for the time being the
Company's holding company insofar as the giving of any
such guarantee or other support or security is not
prohibited by law; and
(iii) the repayment or payment of the principal amounts of,
and premiums, interest and dividends on, any borrowings
and securities.
(Z) To the extent that the same is permitted by law to give
financial assistance for the purpose of the acquisition of
shares in the Company or in the Company's holding company (as
that term is defined by Section 736 of the Companies Act 1985)
for the time being and for the purpose of reducing or
discharging a liability incurred for the purpose of such an
acquisition and to give such assistance by means of a gift,
loan or guarantee, indemnity, the provision of security or
otherwise howsoever permitted by law.
It is hereby expressly declared that each Sub-Clause of this Clause
shall be construed independently of the other Sub-Clauses hereof,
and that none of the objects mentioned in any Sub-Clause shall be
deemed to be merely subsidiary to the objects mentioned in any other
Sub-Clause.
4. The Liability of the Members is Limited.
5. The Share Capital of the Company is <pound-sterling>100 divided into
One Hundred Shares of <pound-sterling>1 each.
Note: Clauses 3(Y) and (Z) inserted by special resolution dated 2 July
1998
<PAGE>
We, the several persons whose Names, Addresses and Descriptions are
subscribed, are desirous of being formed into a Company in pursuance of
this Memorandum of Association, and we respectively agree to take the
number of Shares in the Capital of the Company set opposite our
respective names.
<TABLE>
<CAPTION>
N{*} of Shares
NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS taken by each
Subscriber
<S> <C>
Roy C Keen ONE
Wilec House
82 City Road
London EC1
Commercial Manager
M J Hope ONE
Wilec House
82 City Road
London EC1
Commercial Manager
TOTAL SHARES TAKEN TWO
</TABLE>
Dated this 20th day of October 1969
Witness to the above Signatures:
D S Hodgson
Wilec House
82 City Road
London EC1
THE COMPANIES ACT 1985
PRIVATE COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
NORWICH INJECTION MOULDERS LIMITED
ADOPTED BY SPECIAL RESOLUTION PASSED 2 JULY 1998
1. PRELIMINARY
- ----------------
The regulations contained in Table A in the Schedule to the
Companies (Table A to F) Regulations 1985 in force at the time of
adoption of these Articles (such Table being hereinafter called
"Table A") shall apply to the Company save insofar as they are
excluded or varied by these Articles and such regulations (save as
so excluded or varied) and these Articles shall be the regulations
of the Company.
2. INTERPRETATION
- -------------------
In these Articles and in Table A the following expressions have the
following meanings unless inconsistent with the context:
"the Act" the Companies Act 1985 including any statutory
modification or re-enactment thereof for the time
being in force.
"these Articles" these Articles of Association, whether as
originally adopted or as from time to time altered
by special resolution.
"clear days" in relation to the period of a notice means that
period excluding the day when the notice is given or
deemed to be given and the day for which it is
given or on which it is to take effect.
"the directors" the directors for the time being of the Company or
(as the context shall require) any of them acting
as the board of directors of the Company but such
expression shall not include any associate
directors (as hereinafter defined) who shall not
be deemed to be directors of the Company for any
purpose whatsoever.
"executed" includes any mode of execution.
<PAGE>
"the holder" in relation to shares means the
member whose name is entered in the register of
members as the holder of the shares.
"office" the registered office of the Company.
"seal" the common seal of the company (if any).
"secretary" the secretary of the Company or any other person
appointed to perform the duties of the secretary
of the Company, including a joint, assistant or
deputy secretary.
"share" includes any interest in a share.
"the United Kingdom" Great Britain and Northern Ireland.
Unless the context otherwise requires, words or expressions
contained in these Articles and in Table A bear the same meaning as
in the Act but excluding any statutory modification thereof not in
force when these Articles become binding on the Company. Regulation
1 of Table A shall not apply to the Company.
3. SHARE CAPITAL
- ------------------
3.1 No shares comprised in the authorized share capital of the
Company from time to time shall be issued without the consent
in writing of the holder or holders (in aggregate) of a
majority of the voting rights in the Company (within the
meaning of Section 736A(2) of the Act) nor shall any share be
issued at a discount or otherwise be issued in breach of the
provisions of these Articles or of the Act.
3.2 Regulation 4 of Table A and, in accordance with Section 91(1)
of the Act, sections 89(1) and 90(1) to (6) (inclusive) of the
Act shall not apply to the Company.
4. LIEN
- ---------
The Company shall have a first and paramount lien on all shares,
whether fully paid or not, standing registered in the name of any
person indebted or under liability to the Company, whether he shall
be the sole registered holder thereof or shall be one of two or more
joint holders, for all moneys presently payable by him or his estate
to the Company. Regulation 8 of Table A shall be modified
accordingly.
5. CALLS ON SHARES AND FORFEITURE
- -----------------------------------
There shall be added at the end of the first sentence of regulation
18 of Table A so as to increase the liability of any member in
default in respect of a call, the words "and all expenses that may
have been incurred by the Company by reason of such nonpayment."
6. TRANSFER OF SHARES
- -----------------------
The first sentence in regulation 24 of Table A shall not apply to
the Company. The words "They may also" at the beginning of the
second sentence of that regulation shall be replaced by the words
"The directors may".
7. GENERAL MEETINGS
- ---------------------
The directors may call general meetings and regulation 37 of Table A
shall not apply to the Company.
8. NOTICE OF GENERAL MEETINGS
- -------------------------------
8.1 A Notice convening a general meeting shall be required to
specify the general nature of the business to be transacted
only in the case of special business and regulation 38 of Table
A shall be modified accordingly. The words "or a resolution
appointing a person a director" and paragraphs (a) and (b) in
regulation 38 of Table A shall be deleted and the words "in
accordance with section 369(3) of the Act" shall be inserted
after the words "if it is so agreed" in that regulation.
8.2 All business shall be deemed special that is transacted at an
extraordinary general meeting, and also all that is transacted
at an annual general meeting with the exception of declaring a
dividend, the consideration of the profit and loss account,
balance sheet, and the reports of the directors and auditors,
the appointment of and the fixing of the remuneration of the
auditors and the giving or renewal of any authority in
accordance with the provisions of section 80 of the Act.
8.3 Every notice convening a general meeting shall comply with the
provisions of section 372(3) of the Act as to giving
information to members in regard to their right to appoint
proxies; and notices of and other communications relating to
any general meeting which any member is entitled to receive
shall be sent to the directors and to the auditors for the time
being of the Company.
9. PROCEEDINGS AT GENERAL MEETINGS
- ------------------------------------
9.1 The words "save that, if and for so long as the Company has
only one person as a member, one member present in person or
by proxy shall be a quorum" shall be added at the end of the
second sentence of regulation 40 of Table A.
9.2 If a quorum is not present within half an hour from the time
appointed for a general meeting the general meeting shall stand
adjourned to the same day in the next week at the same time and
place or to such other day and at such other time and place as
the directors may determine; and if at the adjourned general
meeting a quorum is not present within half an hour from the
time appointed therefor the member or members present in person
or by proxy or (being a corporate body) by representative and
entitled to vote upon the business to be transacted shall
constitute a quorum and shall have power to decide upon all
matters which could properly have been disposed of at the
meeting from which the adjournment took place. Regulation 41
of Table A shall not apply to the Company.
10. VOTES OF MEMBERS
- ---------------------
10.1 Regulation 54 of Table A shall not apply to the Company.
Subject to any rights or restrictions for the time being
attached to any class or classes of shares, on a show of hands
every member entitled to vote who (being an individual) is
present in person or by proxy not being himself a member
entitled to vote) or (being a corporate body) is present by a
representative or proxy (not being himself a member entitled to
vote) shall have one vote and, on a poll, every member shall
have one vote for each share of which he is the holder.
10.2 The words "be entitled to" shall be inserted between the words"
shall" and "vote" in regulation 57 of Table A.
10.3 A member shall not be entitled to appoint more than one proxy
to attend on the same occasion and accordingly the final
sentence of regulation 59 of Table A shall not apply to the
Company. Any such proxy shall be entitled to cast the votes to
which he is entitled in different ways.
11. NUMBER OF DIRECTORS
- ------------------------
11.1 Regulation 64 of Table A shall not apply to the company.
11.2 The maximum number and minimum number respectively of the
directors may be determined from time to time by ordinary
resolution. Subject to and in default of any such
determination there shall be no maximum number of directors and
the minimum number of directors shall be one.
12. ALTERNATE DIRECTORS
- ------------------------
12.1 An alternate director shall be entitled to receive notice of
all meetings of the directors and of all meetings of committees
of the directors of which his appointer is a member (subject to
his giving to the company an address within the United Kingdom
at which notices may be served on him), to attend and vote at
any such meeting at which the director appointing him is not
personally present, and generally to perform all the functions
of his appointer at such meeting as a director in his absence.
An alternate director shall not be entitled as such to receive
any remuneration from the company, save that he may be paid by
the Company such part (if any) of the remuneration otherwise
payable to his appointor as such appointor may by notice in
writing to the Company from time to time direct. Regulation 66
of Table A shall not apply to the Company.
12.2 A director, or any such other person as is mentioned in
regulation 65 of Table A, may act as an alternate director to
represent more than one director, and an alternate director
shall be entitled at any meeting of the directors or of any
committee of the directors to one vote for every director whom
he represents in addition to his own vote (if any) as a
director, but he shall count as only one for the purpose of
determining whether a quorum is present and the final sentence
of regulation 88 shall not apply to the Company.
12.3 Save as otherwise provided in the regulations of the Company,
an alternate director shall be deemed for the purposes
specified in Article 12.1 to be a director and shall alone be
responsible for his own acts and defaults and he shall not be
deemed to be the agent of the director appointing him.
Regulation 69 of Table A shall not apply to the Company.
13. APPOINTMENT AND RETIREMENT OF DIRECTORS
- --------------------------------------------
13.1 The directors shall not be required to retire by rotation and
regulations 73 to 80 (inclusive) of Table A shall not apply to
the Company.
13.2 A member or members holding a majority of the voting rights in
the Company (within the meaning of section 736a(2) of the Act)
shall have power at any time, and from time to time, to appoint
any person to be a director, either as an additional director
(provided that the appointment does not cause the number of
directors to exceed any number determined in accordance with
article 11.2 as the maximum number of directors for the time
being in force) or to fill a vacancy and to remove from office
any director howsoever appointed. Any such appointment or
removal shall be made by notice in writing to the Company
signed by the member or members taking the same or, in the case
of a member being a corporate body, signed by one of its
directors or duly authorized officers or by its duly authorized
attorney and shall take effect upon lodgment of such notice at
the office.
13.3 The Company may by ordinary resolution appoint any person who
is willing to act to be a director, either to fill a vacancy or
as an additional director.
13.4 The directors may appoint a person who is willing to act to be
a director, either to fill a vacancy or as an additional
director, provided that the appointment does not cause the
number of directors to exceed any number determined in
accordance with Article 11.2 as the maximum number of directors
for the time being in force.
14. DISQUALIFICATION AND REMOVAL OF DIRECTORS
- ----------------------------------------------
The office of a director shall be vacated if:
14.1 he ceases to be a director by virtue of any provision of the
Act or these Articles or he becomes prohibited by law from
being a director; or
14.2 he becomes bankrupt or makes any arrangement or composition
with his creditors generally; or
14.3 he is, or may be, suffering from mental disorder and either:
14.3.1 he is admitted to hospital in pursuance of an
application for admission for treatment under the Mental
Health Act 1983 or, in Scotland, an application for
admission under the Mental Health (Scotland) Act 1960, or
14.3.2 an order is made by a court having jurisdiction (whether
in the United Kingdom or elsewhere) in matters concerning
mental disorder for his detention or for the appointment
of a receiver, curator bonus or other person to exercise
powers with respect to his property or affairs; or
14.4 he resigns his office by notice to the Company; or
14.5 he shall for more than six consecutive months have been absent
without permission of the directors from meetings of the
directors held during that period and the directors resolve
that his office be vacated; or
14.6 he is removed from office as a director pursuant to Article
13.2; and
14.7 Regulation 81 of Table A shall not apply to the Company.
15. GRATUITIES AND PENSIONS
- ----------------------------
Regulation 87 of Table A shall not apply to the Company and the
directors may exercise any powers of the Company conferred by its
Memorandum of Association to give and provide pensions, annuities,
gratuities or any other benefits whatsoever to or for past or
present directors or employees (or other dependants) of the Company
or any subsidiary or associated undertaking (as defined in section
27(3) of the Companies Act 1989) of the Company and the directors
shall be entitled to retain any benefits received by them or any of
them by reason of the exercise of any such powers.
16. PROCEEDINGS OF THE DIRECTORS
- ---------------------------------
16.1 Whensoever the minimum number of the directors shall be one
pursuant to the provisions of Article 11.2 a sole director
shall have authority to exercise all the powers and
discretion's which are expressed by Table A and by these
Articles to be vested in the directors generally and
regulations 89 and 90 of Table A shall be modified accordingly.
16.2 Subject to the provisions of the Act, and provided that he has
disclosed to the directors the nature and extent of any
interest of his, a director notwithstanding his office:
16.2.1 may be a party to or otherwise interested in any
transaction or arrangement with the Company or in which
the Company is in any way interested;
16.2.2 may be a director or other office of or employed by or
be a party to any transaction or arrangement with or
otherwise interested in any corporate body promoted by the
Company or in which the Company is in any way interested;
16.2.3 may or any firm or company of which he is a member or
director may act in a professional capacity for the
Company or any corporate body in which the Company is in
any way interested;
16.2.4 shall not by reason of his office be accountable to the
Company for any benefit which he derives from such office,
service or employment or from any such transaction or
arrangement or from any interest or any such corporate
body and no such transaction or arrangement shall be
liable to be avoided on the ground of any such interest or
benefit; and
16.2.5 shall be entitled to vote on any resolution and (whether
or not he shall vote) be counted in the quorum on any
matter referred to in any of the Articles 16.2.1 to 16.2.4
(inclusive) or on any resolution which in any way concerns
or relates to a matter in which he has, directly or
indirectly, any kind of interest whatsoever and if he
shall vote on any resolution as aforesaid his vote shall
be counted.
16.3 For the purposes of Article 16.2:
16.3.1 a general notice to the directors that a director is to
be regarded as having an interest of the nature and extent
specified in the notice in any transaction or arrangement
in which a specified person or class of persons is
interested shall be deemed to be a disclosure that the
director has an interest in any such transaction of the
nature and extent so specified;
16.3.2 an interest of which a director has no knowledge and of
which it is unreasonable to expect him to have knowledge
shall not be treated as an interest of his; and
16.3.3
16.4 Any director (including an alternate director) may participate
in a meeting of the directors or a committee of the directors
of which he is a member by means of a conference telephone or
similar communications equipment whereby all persons
participating in the meeting can hear each other and
participation in a meeting in this manner shall be deemed to
constitute presence in person at such meeting and, subject to
these Articles and the Act, he shall be entitled to vote and be
counted in a quorum accordingly. Such a meeting shall be
deemed to take place where the largest group of those
participating is assembled or, if there is no such group, where
the chairman of the meeting then is.
16.5 Regulation 88 of Table A shall be amended by substituting for
the sentence:
"IT SHALL NOT BE NECESSARY TO GIVE NOTICE OF A MEETING TO A
DIRECTOR WHO IS ABSENT FROM THE UNITED KINGDOM"
the following sentence:
"NOTICE OF EVERY MEETING OF THE DIRECTORS SHALL BE GIVEN TO
EACH DIRECTOR AND HIS ALTERNATE, INCLUDING DIRECTORS AND
ALTERNATE DIRECTORS WHO MAY FOR THE TIME BEING BE ABSENT FROM
THE UNITED KINGDOM AND HAVE GIVEN THE COMPANY AN ADDRESS WITHIN
THE UNITED KINGDOM FOR SERVICE."
16.6 Regulations 94 to 97 (inclusive) of Table A shall not apply to
the Company.
17. THE SEAL
- -------------
If the Company has a seal it shall be used only with the authority
of the directors or of a committee of the directors. The directors
may determine who shall sign any instrument to which the seal is
affixed and unless otherwise so determined, every instrument to
which the seal is affixed shall be signed by one director and by the
secretary or another director. In the second sentence of Regulation
A the words "shall be sealed with the seal and" shall be deleted.
Each share certificate shall only be issued by authority of the
directors or of a committee of the directors authorized by the
directors and shall bear the signature of one director and the
company secretary or a second director.
18. NOTICES
- ------------
18.1 In regulation 112 of Table A, the words "by facsimile to a
facsimile number supplied by the member for such purpose or"
shall be inserted immediately after the words "or by sending
it" and the words "first class" shall be inserted immediately
before the words "post in a prepaid envelope."
18.2 Where a notice is sent by first class post, proof of the notice
having been posted in a properly addressed, prepaid envelope
shall be conclusive evidence that the notice was given and
shall be deemed to have been given at the expiration of 24
hours after the envelope containing the same is posted. Where
a notice is sent by facsimile receipt of the appropriate
answerback shall be conclusive evidence that the notice was
given and the notice shall be deemed to have been given at the
time of transmission following receipt of the appropriate
answerback. Regulation 115 of Table A shall not apply to the
Company.
18.3 If at any time by reason of the suspension or curtailment of
postal services within the United Kingdom the Company is unable
effectively to convene a general meeting by notices sent
through the post, a general meeting may be convened by a notice
advertised in at least one national daily newspaper and such
notice shall be deemed to have been duly served on all members
entitled thereto at noon on the day when the advertisement
appears. In any such case the Company shall send confirmatory
copies of the notice by post if at least seven days prior to
the meeting the posting of notices to addresses throughout the
United Kingdom again becomes practicable.
19. WINDING UP
- ---------------
In regulation 117 of Table A, the words "with the like sanction"
shall be inserted immediately before the words "determine how the
division".
20. INDEMNITY
- --------------
20.1 Subject to the provisions of section 310 of the Act every
director (including an alternate director) or other officer of
the Company shall be indemnified out of the assets of the
Company against all losses or liabilities which he may sustain
or incur in or about the lawful execution of the duties of his
office or otherwise in relation thereto, including any
liability incurred by him in defending any proceedings, whether
civil or criminal, in which judgment is given in his favour or
in which he is acquitted or in connection with any application
under section 144 or section 727 of the Act in which relief is
granted to him by the court, and no director (including an
alternate director) or other officer shall be liable for any
loss, damage or misfortune which may happen to or be incurred
by the Company in the lawful execution of the duties of his
office or in relation thereto. Regulation 118 of Table A shall
not apply to the Company.
20.2 The directors shall have power to purchase and maintain at the
expense of the Company for the benefit of any director
(including an alternate director), officer or auditor of the
Company insurance against any such liability as is referred to
in section 310(1) of the Act and subject to the provisions of
the Act against any other liability which may attach to him or
loss or expenditure which he may incur in relation to anything
done or alleged to have been done or omitted to be done as a
director (including an alternate director), officer or auditor.
20.3 The directors may authorize directors of companies within the
same group of companies as the Company to purchase and maintain
insurance at the expense of the Company for the benefit of any
director (including an alternate director), other officer or
auditor in such company in respect of such liability, loss or
expenditure as is referred to in Article 20.2.
21. ASSOCIATE DIRECTORS
- ------------------------
21.1 The directors may from time to time appoint any manager or
other officer or person in the employment of the Company to be
an associate director of the Company.
21.2 The appointment of a person to be an associate director shall
not (save as otherwise agreed between him and the Company)
affect the terms and conditions of his employment by the
Company whether as regards duties, powers, remuneration,
pension or otherwise and his appointment as an associate
director shall be terminated if the provisions of Article 14
would apply to him if he were a director so as to cause him to
vacate office as such or if he resigns his employment or
appointment or in the event of his ceasing to be in the
employment of the Company in some capacity other than that of
an associate director or in the event of his appointment being
terminated by a resolution of the directors.
21.3 The appointment, removal and remuneration of any associate
director shall be determined by the directors with full power
to make such arrangements as the directors may think fit and
the directors shall have the right to enter into any contracts
on behalf of the Company or transact any business of any
description without the knowledge or approval of the associate
directors except that no act shall be done that would impose
any personal liability on any or all of the associate directors
except with his or their knowledge and consent.
21.4 In calculating the number to form a quorum at any meeting of
the directors any associate directors present shall not be
counted. An associate director shall not be entitled to vote
nor (except when expressly invited by the directors to attend)
to receive notice of or to attend at any meeting of the
directors or of a committee of the directors.
21.5 The directors may designate the associate directors or any of
them by such other name or title in place of the word
"Associate" as they may from time to time consider to be
descriptive of their office and actual duties. Any associate
director so designated shall be entitled to describe himself
accordingly and, in the absence of such designation, shall be
entitled to describe himself as "associate director"; in
signing any document which he is authorized to sign as
associate director he shall always after his signature add the
words "associate director" or, if he shall have been otherwise
designated, such other name or title designated to him.
CERTIFICATE OF INCORPORATION
OF
KNIGHT PLASTICS, INC.
ARTICLE FIRST
The name of the corporation (herein called the "Corporation") is
Knight Plastics, Inc.
ARTICLE SECOND
The address of the registered office of the Corporation in the
State of Delaware is 9 East Loockerman Street, City of Dover, County of
Kent. The name of the registered agent of the Corporation at such address
is National Registered Agents, Inc.
ARTICLE THIRD
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE FOURTH
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is one thousand (1,000) shares,
all of which shall be designated Common Stock and shall have a par value of
$0.01 per share.
ARTICLE FIFTH
The name and mailing address of the incorporator is as follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
<S> <C>
Michael S. Hubner c/o O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
41st Floor
New York, New York 10112
</TABLE>
ARTICLE SIXTH
The number of directors of the Corporation shall be such as from
time to time shall be fixed in the manner provided in the By-laws of the
Corporation. The election of directors of the Corporation need not be by
ballot unless the By-laws so require.
ARTICLE SEVENTH
A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived any improper personal benefit. If the Delaware
General Corporation Law is amended after the date of incorporation of the
Corporation to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
ARTICLE EIGHTH
For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the Corporation and of its directors and
stockholders, it is further provided:
(A) IN FURTHERANCE AND NOT IN LIMITATION OF THE POWERS
CONFERRED BY THE LAWS OF THE STATE OF DELAWARE, THE BOARD OF DIRECTORS
IS EXPRESSLY AUTHORIZED AND EMPOWERED:
(I) TO MAKE, ALTER, AMEND OR REPEAL THE BY-LAWS IN
ANY MANNER NOT INCONSISTENT WITH THE LAWS OF THE STATE OF
DELAWARE OR THIS CERTIFICATE OF INCORPORATION;
(II) WITHOUT THE ASSENT OR VOTE OF THE STOCKHOLDERS,
TO AUTHORIZE AND ISSUE SECURITIES AND OBLIGATIONS OF THE
CORPORATION, SECURED OR UNSECURED, AND TO INCLUDE THEREIN SUCH
PROVISIONS AS TO REDEMPTION, CONVERSION OR OTHER TERMS THEREOF AS
THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION MAY DETERMINE, AND
TO AUTHORIZE THE MORTGAGING OR PLEDGING, AS SECURITY THEREFOR, OF
ANY PROPERTY OF THE CORPORATION, REAL OR PERSONAL, INCLUDING
AFTER-ACQUIRED PROPERTY;
(III) TO DETERMINE WHETHER ANY, AND IF ANY, WHAT
PART, OF THE NET PROFITS OF THE CORPORATION OR OF ITS SURPLUS
SHALL BE DECLARED IN DIVIDENDS AND PAID TO THE STOCKHOLDERS, AND
TO DIRECT AND DETERMINE THE USE AND DISPOSITION OF ANY SUCH NET
PROFITS OR SUCH SURPLUS; AND
(IV) TO FIX FROM TIME TO TIME THE AMOUNT OF NET
PROFITS OF THE CORPORATION OR OF ITS SURPLUS TO BE RESERVED AS
WORKING CAPITAL OR FOR ANY OTHER LAWFUL PURPOSE.
In addition to the powers and authorities herein or by statute
expressly conferred upon it, the Board of Directors may exercise all such
powers and do all such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of the laws of the
State of Delaware, of this Certificate of Incorporation and of the By-laws
of the Corporation.
(B) ANY DIRECTOR OR ANY OFFICER ELECTED OR APPOINTED BY
THE STOCKHOLDERS OR BY THE BOARD OF DIRECTORS MAY BE REMOVED AT ANY
TIME IN SUCH MANNER AS SHALL BE PROVIDED IN THE BY-LAWS OF THE
CORPORATION.
(C) FROM TIME TO TIME ANY OF THE PROVISIONS OF THIS
CERTIFICATE OF INCORPORATION MAY BE ALTERED, AMENDED OR REPEALED, AND
OTHER PROVISIONS AUTHORIZED BY THE LAWS OF THE STATE OF DELAWARE AT
THE TIME IN FORCE MAY BE ADDED OR INSERTED, IN THE MANNER AND AT THE
TIME PRESCRIBED BY SAID LAWS, AND ALL RIGHTS AT ANY TIME CONFERRED
UPON THE STOCKHOLDERS OF THE CORPORATION BY THIS CERTIFICATE OF
INCORPORATION ARE GRANTED SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH
(C).
ARTICLE NINTH
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of the Corporation or of any creditor or stockholder
thereof or on the application of any receiver or receivers appointed for
the Corporation under the provisions of Section 291 of the Delaware General
Corporation Law or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the provisions of
Section 279 of the Delaware General Corporation Law order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case
may be, agree on any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
IN WITNESS WHEREOF, I, the undersigned, being the sole
incorporator hereinabove named, for the purpose of forming a corporation
pursuant to the General Corporation Law of the State of Delaware, DO HEREBY
CERTIFY, under penalties of perjury, that this is my act and deed and that
the facts hereinabove stated are truly set forth and, accordingly, I have
hereunto set my hand as of the 25th day of August, 1998.
____________________________________
Michael S. Hubner
Sole Incorporator
-1-
BY-LAWS OF
KNIGHT PLASTICS, INC.
ARTICLE I
OFFICES
1.1 REGISTERED OFFICE.
- -----------------------
The registered office of Knight Plastics, Inc. (the "Corporation"),
in the State of Delaware shall be at 9 East Loockerman Street, City of
Dover, County of Kent 19901, and the registered agent in charge thereof
shall be National Registered Agents, Inc.
1.2 OTHER OFFICES.
- -------------------
The Corporation may also have an office or offices at any other
place or places within or outside the State of Delaware.
ARTICLE II
MEETING OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
2.1 ANNUAL MEETINGS.
- ---------------------
The annual meeting of the stockholders for the election of
directors, and for the transaction of such other business as may properly
come before the meeting, shall be held at such place, date and hour as
shall be fixed by the Board of Directors (the "Board") and designated in
the notice or waiver of notice thereof, except that no annual meeting
need be held if all actions, including the election of directors,
required by the General Corporation Law of the State of Delaware (the
"Delaware Statute") to be taken at a stockholders' annual meeting are
taken by written consent in lieu of meeting pursuant to Section 2.10.
2.2 SPECIAL MEETINGS.
- ----------------------
A special meeting of the stockholders for any purpose or purposes
may be called by the Board, the Chairman, the President or the record
holders of at least a majority of the issued and outstanding shares of
Common Stock of the Corporation, to be held at such place, date and hour
as shall be designated in the notice or waiver of notice thereof.
2.3 NOTICE OF MEETINGS.
- ------------------------
Except as otherwise required by statute, the Certificate of
Incorporation of the Corporation (the "Certificate") or these By-laws,
notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not
less than 10 nor more than 60 days before the day on which the meeting is
to be held, by delivering written notice thereof to him personally, or
by mailing a copy of such notice, postage prepaid, directly to him at his
address as it appears in the records of the Corporation, or by
transmitting such notice thereof to him at such address by telegraph,
cable or other telephonic transmission. Every such notice shall state
the place, the date and hour of the meeting, and, in case of a special
meeting, the purpose or purposes for which the meeting is called. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy, or who
shall, in person or by attorney thereunto authorized, waive such notice
in writing, either before or after such meeting. Except as otherwise
provided in these By-laws, neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders need be specified in any
such notice or waiver of notice. Notice of any adjourned meeting of
stockholders shall not be required to be given, except when expressly
required by law.
2.4 QUORUM.
- ------------
At each meeting of the stockholders, except where otherwise provided
by the Certificate or these By-laws, the holders of a majority of the
issued and outstanding shares of Common Stock of the Corporation entitled
to vote at such meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. In the absence of a
quorum, a majority in interest of the stockholders present in person or
represented by proxy and entitled to vote, or, in the absence of all the
stockholders entitled to vote, any officer entitled to preside at, or act
as secretary of, such meeting, shall have the power to adjourn the
meeting from time to time, until stockholders holding the requisite
amount of stock to constitute a quorum shall be present or represented.
At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally called.
2.5 ORGANIZATION.
- ------------------
(a) Unless otherwise determined by the Board, at each meeting
of the stockholders, one of the following shall act as chairman of the
meeting and preside thereat, in the following order of precedence:
(i) the Chairman;
(ii) the President;
(iii) any director, officer or stockholder of the
Corporation designated by the Board to act as chairman of such
meeting and to preside thereat if the Chairman or the President
shall be absent from such meeting; or
(iv) a stockholder of record who shall be chosen chairman
of such meeting by a majority in voting interest of the stockholders
present in person or by proxy and entitled to vote thereat.
(b) The Secretary or, if he shall be presiding over such
meeting in accordance with the provisions of this Section 2.5 or if he
shall be absent from such meeting, the person (who shall be an Assistant
Secretary, if an Assistant Secretary has been appointed and is present)
whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
2.6 ORDER OF BUSINESS.
- -----------------------
The order of business at each meeting of the stockholders shall be
determined by the chairman of such meeting, but such order of business
may be changed by a majority in voting interest of those present in
person or by proxy at such meeting and entitled to vote thereat.
2.7 VOTING.
- ------------
Except as otherwise provided by law, the Certificate or these By-
laws, at each meeting of the stockholders, every stockholder of the
Corporation shall be entitled to one vote in person or by proxy for each
share of Common Stock of the Corporation held by him and registered in
his name on the books of the Corporation on the date fixed pursuant to
Section 6.7 as the record date for the determination of stockholders
entitled to vote at such meeting. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held. A person whose
stock is pledged shall be entitled to vote, unless, in the transfer by
the pledgor on the books of the Corporation, he has expressly empowered
the pledgee to vote thereon, in which case only the pledgee or his proxy
may represent such stock and vote thereon. If shares or other securities
having voting power stand in the record of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common,
tenants by the entirety or otherwise, or if two or more persons have the
same fiduciary relationship respecting the same shares, unless the
Secretary shall be given written notice to the contrary and furnished
with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting
shall have the following effect:
(i) if only one votes, his act binds all;
(ii) if more than one votes, the act of the majority so
voting binds all; and
(iii) if more than one votes, but the vote is evenly split
on any particular matter, such shares shall be voted in the manner
provided by law.
If the instrument so filed shows that any such tenancy is held in
unequal interests, a majority or even-split for the purposes of this
Section 2.7 shall be a majority or even-split in interest. The
Corporation shall not vote directly or indirectly any share of its own
capital stock. Any vote of stock may be given by the stockholder
entitled thereto in person or by his proxy appointed by an instrument in
writing, subscribed by such stockholder or by his attorney thereunto
authorized, delivered to the secretary of the meeting; PROVIDED, HOWEVER,
that no proxy shall be voted after three years from its date, unless said
proxy provides for a longer period. At all meetings of the stockholders,
all matters (except where other provision is made by law, the Certificate
or these By-laws) shall be decided by the vote of a majority in interest
of the stockholders present in person or by proxy at such meeting and
entitled to vote thereon, a quorum being present. Unless demanded by a
stockholder present in person or by proxy at any meeting and entitled to
vote thereon, the vote on any question need not be by ballot. Upon a
demand by any such stockholder for a vote by ballot upon any question,
such vote by ballot shall be taken. On a vote by ballot, each ballot
shall be signed by the stockholder voting, or by his proxy, if there be
such proxy, and shall state the number of shares voted.
2.8 INSPECTION.
- ----------------
The chairman of the meeting may at any time appoint one or more
inspectors to serve at any meeting of the stockholders. Any inspector
may be removed, and a new inspector or inspectors appointed, by the Board
at any time. Such inspectors shall decide upon the qualifications of
voters, accept and count votes, declare the results of such vote, and
subscribe and deliver to the secretary of the meeting a certificate
stating the number of shares of stock issued and outstanding and entitled
to vote thereon and the number of shares voted for and against the
question, respectively. The inspectors need not be stockholders of the
Corporation, and any director or officer of the Corporation may be an
inspector on any question other than a vote for or against his election
to any position with the Corporation or on any other matter in which he
may be directly interested. Before acting as herein provided, each
inspector shall subscribe an oath faithfully to execute the duties of an
inspector with strict impartiality and according to the best of his
ability.
2.9 LIST OF STOCKHOLDERS.
- --------------------------
It shall be the duty of the Secretary or other officer of the
Corporation who shall have charge of its stock ledger to prepare and
make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose
germane to any such meeting, during ordinary business hours, for a period
of at least 10 days prior to such meeting, either at a place within the
city where such meeting is to be held, which place shall be specified in
the notice of the meeting or, if not so specified, at the place where the
meeting is to be held. Such list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING.
- ----------------------------------------------
Any action required by the Delaware Statute to be taken at any
annual or special meeting of the stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and
without a vote, by a consent in writing, as permitted by the Delaware
Statute.
ARTICLE III
BOARD OF DIRECTORS
3.1 GENERAL POWERS.
- --------------------
The business, property and affairs of the Corporation shall be
managed by or under the direction of the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by law or by the Certificate directed or required to be exercised
or done by the stockholders.
3.2 NUMBER AND TERM OF OFFICE.
- -------------------------------
The number of directors shall be fixed from time to time by the
Board. Directors need not be stockholders. Each director shall hold
office until his successor is elected and qualified, or until his earlier
death or resignation or removal in the manner hereinafter provided.
3.3 ELECTION OF DIRECTORS.
- ---------------------------
At each meeting of the stockholders for the election of directors at
which a quorum is present, the persons receiving the greatest number of
votes, up to the number of directors to be elected, of the stockholders
present in person or by proxy and entitled to vote thereon shall be the
directors; PROVIDED, HOWEVER, that for purposes of such vote no
stockholder shall be allowed to cumulate his votes. Unless an election
by ballot shall be demanded as provided in Section 2.7, election of
directors may be conducted in any manner approved at such meeting.
3.4 RESIGNATION, REMOVAL AND VACANCIES.
- ----------------------------------------
(a) Any director may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, upon receipt thereof; unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
(b) Any director or the entire Board may be removed, with or
without cause, at any time by vote of the holders of a majority of the
shares then entitled to vote at an election of directors or by written
consent of the stockholders pursuant to Section 2.10.
(c) Vacancies occurring on the Board for any reason may be
filled by vote of the stockholders or by the stockholders' written
consent pursuant to Section 2.10, or by vote of the Board or by the
directors' written consent pursuant to Section 3.6. If the number of
directors then in office is less than a quorum, such vacancies may be
filled by a vote of a majority of the directors then in office.
3.5 MEETINGS.
- --------------
(A) ANNUAL MEETINGS. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of
organization and the transaction of other business, unless it shall have
transacted all such business by written consent pursuant to Section 3.6.
(B) OTHER MEETINGS. Other meetings of the Board shall be held
at such times and places as the Board, the Chairman, the President or any
director shall from time to time determine.
(C) NOTICE OF MEETINGS. Notice shall be given to each
director of each meeting, including the time, place and purpose of such
meeting. Notice of each such meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least
two days before the date on which such meeting is to be held, or shall be
sent to him at such place by telegraph, cable, wireless or other form of
recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held,
but notice need not be given to any director who shall attend such
meeting. A written waiver of notice, signed by the person entitled
thereto, whether before or after the time of the meeting stated therein,
shall be deemed equivalent to notice.
(D) PLACE OF MEETINGS. The Board may hold its meetings at
such place or places within or outside the State of Delaware as the Board
may from time to time determine, or as shall be designated in the
respective notices or waivers of notice thereof.
(E) QUORUM AND MANNER OF ACTING. A majority of the total
number of directors then in office shall be present in person at any
meeting of the Board in order to constitute a quorum for the transaction
of business at such meeting, and the vote of a majority of those
directors present at any such meeting at which a quorum is present shall
be necessary for the passage of any resolution or act of the Board,
except as otherwise expressly required by law or these By-laws. In the
absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum
shall be present.
(F) ORGANIZATION. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in
the following order of precedence:
(i) the Chairman;
(ii) the President (if a director); or
(iii) any director designated by a majority of the
directors present.
The Secretary or, in the case of his absence, an Assistant
Secretary, if an Assistant Secretary has been appointed and is present,
or any person whom the chairman of the meeting shall appoint shall act as
secretary of such meeting and keep the minutes thereof.
3.6 DIRECTORS' CONSENT IN LIEU OF MEETING.
- -------------------------------------------
Any action required or permitted to be taken at any meeting of the
Board may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall
be signed by all the directors then in office and such consent is filed
with the minutes of the proceedings of the Board.
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT.
- ----------------------------------------------------------------------
Any one or more members of the Board may participate in a meeting of
the Board by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each
other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
3.8 COMMITTEES.
- ----------------
The Board may, by resolution or resolutions passed by a majority of
the whole Board, designate one or more committees, each such committee to
consist of one or more directors of the Corporation, which to the extent
provided in said resolution or resolutions shall have and may exercise
the powers of the Board in the management of the business and affairs of
the Corporation and may authorize the seal of the Corporation to be
affixed to all papers which may require it, such committee or committees
to have such name or names as may be determined from time to time by
resolution adopted by the Board. A majority of all the members of any
such committee may determine its action and fix the time and place of its
meetings, unless the Board shall otherwise provide. The Board shall have
power to change the members of any such committee at any time, to fill
vacancies and to discharge any such committee, either with or without
cause, at any time.
ARTICLE IV
OFFICERS
4.1 EXECUTIVE OFFICERS.
- ------------------------
The principal officers of the Corporation shall be a Chairman, if
one is appointed (and any references to the Chairman shall not apply if a
Chairman has not been appointed), a President, a Secretary, and a
Treasurer, and may include such other officers as the Board may appoint
pursuant to Section 4.3. Any two or more offices may be held by the same
person.
4.2 AUTHORITY AND DUTIES.
- --------------------------
All officers, as between themselves and the Corporation, shall have
such authority and perform such duties in the management of the
Corporation as may be provided in these By-laws or, to the extent so
provided, by the Board.
4.3 OTHER OFFICERS.
- --------------------
The Corporation may have such other officers, agents and employees
as the Board may deem necessary, including one or more Assistant
Secretaries, one or more Assistant Treasurers and one or more Vice
Presidents, each of whom shall hold office for such period, have such
authority, and perform such duties as the Board, the Chairman, or the
President may from time to time determine. The Board may delegate to any
principal officer the power to appoint and define the authority and
duties of, or remove, any such officers, agents, or employees.
4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL.
- ---------------------------------------------
(a) All officers shall be elected or appointed by the Board
and shall hold office for such term as may be prescribed by the Board.
Each officer shall hold office until his successor has been elected or
appointed and qualified or until his earlier death or resignation or
removal in the manner hereinafter provided. The Board may require any
officer to give security for the faithful performance of his duties.
(b) Any officer may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if the
time be not specified, at the time it is accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be
necessary to make it effective.
(c) All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board or by the
stockholders of the Corporation with or without cause.
4.5 VACANCIES.
- ---------------
If the office of Chairman, President, Secretary or Treasurer becomes
vacant for any reason, the Board shall fill such vacancy, and if any
other office becomes vacant, the Board may fill such vacancy. Any
officer so appointed or elected by the Board shall serve only until such
time as the unexpired term of his predecessor shall have expired, unless
reelected or reappointed by the Board.
4.6 THE CHAIRMAN.
- ------------------
The Chairman shall give counsel and advice to the Board and the
officers of the Corporation on all subjects concerning the welfare of the
Corporation and the conduct of its business and shall perform such other
duties as the Board may from time to time determine. Unless otherwise
determined by the Board, he shall preside at meetings of the Board and of
the Stockholders at which he is present.
4.7 THE PRESIDENT.
- -------------------
The President shall be the chief executive officer of the
Corporation. The President shall have general and active management and
control of the business and affairs of the Corporation subject to the
control of the Board and shall see that all orders and resolutions of the
Board are carried into effect. The President shall from time to time
make such reports of the affairs of the Corporation as the Board of
Directors may require and shall perform such other duties as the Board
may from time to time determine.
4.8 THE SECRETARY.
- -------------------
The Secretary shall, to the extent practicable, attend all meetings
of the Board and all meetings of the stockholders and shall record all
votes and the minutes of all proceedings in a book to be kept for that
purpose. He may give, or cause to be given, notice of all meetings of
the stockholders and of the Board, and shall perform such other duties as
may be prescribed by the Board, the Chairman or the President, under
whose supervision he shall act. He shall keep in safe custody the seal
of the Corporation and affix the same to any duly authorized instrument
requiring it and, when so affixed, it shall be attested by his signature
or by the signature of the Treasurer or, if appointed, an Assistant
Secretary or an Assistant Treasurer. He shall keep in safe custody the
certificate books and stockholder records and such other books and
records as the Board may direct, and shall perform all other duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
4.9 THE TREASURER.
- -------------------
The Treasurer shall have the care and custody of the corporate funds
and other valuable effects, including securities, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as may
be designated by the Board. The Treasurer shall disburse the funds of
the Corporation as may be ordered by the Board, taking proper vouchers
for such disbursements, shall render to the Chairman, President and
directors, at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation and shall perform all other duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board, the Chairman or the President.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
5.1 EXECUTION OF DOCUMENTS.
- ----------------------------
The Board shall designate, by either specific or general resolution,
the officers, employees and agents of the Corporation who shall have the
power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and
other documents for and in the name of the Corporation, and may authorize
such officers, employees and agents to delegate such power (including
authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation; unless so designated or expressly
authorized by these By-laws, no officer, employee or agent shall have any
power or authority to bind the Corporation by any contract or engagement,
to pledge its credit or to render it liable pecuniarily for any purpose
or amount.
5.2 DEPOSITS.
- --------------
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation or otherwise
as the Board or Treasurer, or any other officer of the Corporation to
whom power in this respect shall have been given by the Board, shall
select.
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS.
- ---------------------------------------------------------------
The Board shall designate the officers of the Corporation who shall
have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the
powers and rights which the Corporation may have as the holder of stock
or other securities in any other corporation, and to vote or consent with
respect to such stock or securities. Such designated officers may
instruct the person or persons so appointed as to the manner of
exercising such powers and rights, and such designated officers may
execute or cause to be executed in the name and on behalf of the
Corporation and under its corporate seal or otherwise, such written
proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise its powers
and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
6.1 CERTIFICATES FOR SHARES.
- -----------------------------
Every owner of stock of the Corporation shall be entitled to have a
certificate certifying the number and class of shares owned by him in
the Corporation, which shall be in such form as shall be prescribed by
the Board. Certificates shall be numbered and issued in consecutive
order and shall be signed by, or in the name of, the Corporation by the
Chairman, the President or any Vice President, and by the Treasurer (or
an Assistant Treasurer, if appointed) or the Secretary (or an Assistant
Secretary, if appointed). In case any officer or officers who shall have
signed any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation, such certificate or certificates
may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate had
not ceased to be such officer or officers of the Corporation.
6.2 RECORD.
- ------------
A record in one or more counterparts shall be kept of the name of
the person, firm or corporation owning the shares represented by each
certificate for stock of the Corporation issued, the number of shares
represented by each such certificate, the date thereof and, in the case
of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name shares of stock stand on the
stock record of the Corporation shall be deemed the owner thereof for all
purposes regarding the Corporation.
6.3 TRANSFER AND REGISTRATION OF STOCK.
- ----------------------------------------
(a) The transfer of stock and certificates which represent the
stock of the Corporation shall be governed by Article 8 of Subtitle 1 of
Title 6 of the Delaware Code (the Uniform Commercial Code), as amended
from time to time.
(b) Registration of transfers of shares of the Corporation
shall be made only on the books of the Corporation upon request of the
registered holder thereof, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and upon the surrender of the certificate or certificates
for such shares properly endorsed or accompanied by a stock power duly
executed.
6.4 ADDRESSES OF STOCKHOLDERS.
- -------------------------------
Each stockholder shall designate to the Secretary an address at
which notices of meetings and all other corporate notices may be served
or mailed to him, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon him by mail directed to him
at his post-office address, if any, as the same appears on the share
record books of the Corporation or at his last known post-office address.
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.
- ------------------------------------------------
The holder of any shares of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of the certificate
therefor, and the Board may, in its discretion, cause to be issued to him
a new certificate or certificates for such shares, upon the surrender of
the mutilated certificates or, in the case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction, and the
Board may, in its discretion, require the owner of the lost or destroyed
certificate or his legal representative to give the Corporation a bond in
such sum and with such surety or sureties as it may direct to indemnify
the Corporation against any claim that may be made against it on account
of the alleged loss or destruction of any such certificate.
6.6 REGULATIONS.
- -----------------
The Board may make such rules and regulations as it may deem
expedient, not inconsistent with these By-laws, concerning the issue,
transfer and registration of certificates for stock of the Corporation.
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
- -------------------------------------------------------------
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board may fix a record date,
which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board, and which record date
shall be not more than 60 nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date
for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board, and which date shall be not more than 10 days after
the date upon which the resolution fixing the record date is adopted by
the Board. If no record date has been fixed by the Board, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board is
required by the Delaware Statute, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its registered
office in this State, its principal place of business or an officer or
agent of the Corporation having custody of the book in which proceedings
of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
fixed by the Board and prior action by the Board is required by the
Delaware Statute, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board adopts the resolution
taking such prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than 60 days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
ARTICLE VII
SEAL
The Board may provide a corporate seal, which shall be in the form
of a circle and shall bear the full name of the Corporation, the year of
incorporation of the Corporation and the words and figures "Corporate
Seal - Delaware."
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be the calendar year unless
otherwise determined by the Board.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
9.1 INDEMNIFICATION.
- ---------------------
(a) As provided in the Charter, to the fullest extent
permitted by the Delaware Statute as the same exists or may hereafter be
amended, a director of this Corporation shall not be liable to the
Corporation or its stockholders for breach of fiduciary duty as a
director.
(b) Without limitation of any right conferred by paragraph (a)
of this Section 9.1, each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director,
officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity while serving as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware Statute, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than permitted prior thereto),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes or amounts paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer or employee and shall inure to the benefit of the
indemnitee's heirs, testators, intestates, executors and administrators;
PROVIDED, HOWEVER, that such person acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, and with respect to a criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; PROVIDED
FURTHER, HOWEVER, that no indemnification shall be made in the case of an
action, suit or proceeding by or in the right of the Corporation in
relation to matters as to which it shall be adjudged in such action, suit
or proceeding that such director, officer, employee or agent is liable to
the Corporation, unless a court having jurisdiction shall determine that,
despite such adjudication, such person is fairly and reasonably entitled
to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided
in Section 9.1(c) with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) initiated by such
indemnitee was authorized by the Board of Directors of the Corporation.
The right to indemnification conferred in this Article IX shall be a
contract right and shall include the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its
final disposition (hereinafter an "advancement of expenses"); PROVIDED,
HOWEVER, that, if the Delaware Statute requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a director
or officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking (hereinafter an "undertaking"), by or on
behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is
no further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section or otherwise.
(c) If a claim under Section 9.1(b) is not paid in full by the
Corporation with 60 days after a written claim has been received by the
Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be 20 days, the
indemnitee may at any time thereafter bring suit against the Corporation
to recover the unpaid amount of the claim. If successful in whole or in
part in any such suit, or in a suit brought by the Corporation to recover
an advancement of expenses pursuant to the terms of any undertaking, the
indemnitee shall be entitled to be paid also the expense of prosecuting
or defending such suit. In (i) any suit brought by the indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought
by the indemnitee to enforce a right to an advancement of expenses) it
shall be a defense that, and (ii) in any suit by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses
upon a final adjudication that, the indemnitee has not met the applicable
standard of conduct set forth in the Delaware Statute. Neither the
failure of the Corporation (including the Board, independent legal
counsel, or the stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware Statute, nor an actual
determination by the Corporation (including the Board, independent legal
counsel, or the stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In
any suit brought by the indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to
be indemnified, or to such advancement of expenses, under this Section or
otherwise shall be on the Corporation.
(d) The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
the Charter, agreement, vote of stockholders or disinterested directors
or otherwise.
9.2 INSURANCE.
- ---------------
The Corporation may purchase and maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer,
employee or agent of the Corporation or any person who is or was serving
at the request of the Corporation as a director, officer, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware Statute.
ARTICLE X
AMENDMENT
Any by-law (including these By-laws) may be adopted, amended or
repealed by the vote of the holders of a majority of the shares then
entitled to vote or by the stockholders' written consent pursuant to
Section 2.10, or by the vote of the Board or by the directors' written
consent pursuant to Section 3.6.
* * * * *
* * *
*
<PAGE>
TABLE OF CONTENTS
PAGE
1.1 Registered Office................................................ 1
1.2 Other Offices.................................................... 1
ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING 1
2.1 Annual Meetings.................................................. 1
2.2 Special Meetings................................................. 1
2.3 NOTICE OF MEETINGS............................................... 1
2.4 Quorum........................................................... 2
2.5 ORGANIZATION..................................................... 2
2.6 Order of Business................................................ 3
2.7 VOTING........................................................... 3
2.8 Inspection....................................................... 4
2.9 LIST OF STOCKHOLDERS............................................. 4
2.10 Stockholders' Consent in Lieu of Meeting........................ 4
ARTICLE III BOARD OF DIRECTORS......................................... 5
3.1 General Powers................................................... 5
3.2 Number and Term of Office........................................ 5
3.3 ELECTION OF DIRECTORS............................................ 5
3.4 Resignation, Removal and Vacancies............................... 5
3.5 MEETINGS......................................................... 5
3.6 Directors' Consent in Lieu of Meeting............................ 6
3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT............................................................ 7
3.8 Committees....................................................... 7
ARTICLE IV OFFICERS.................................................... 7
4.1 Executive Officers............................................... 7
4.2 Authority and Duties............................................. 7
4.3 OTHER OFFICERS................................................... 7
4.4 Term of Office, Resignation and Removal.......................... 8
4.5 VACANCIES........................................................ 8
4.6 The Chairman..................................................... 8
4.7 THE PRESIDENT.................................................... 8
4.8 The Secretary.................................................... 9
4.9 THE TREASURER.................................................... 9
ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC................ 9
5.1 Execution of Documents........................................... 9
5.2 Deposits......................................................... 10
5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS 10
ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............... 10
6.1 Certificates for Shares.......................................... 10
6.2 Record........................................................... 10
6.3 TRANSFER AND REGISTRATION OF STOCK............................... 11
6.4 Addresses of Stockholders........................................ 11
6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES....................... 11
6.6 Regulations...................................................... 11
6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.......... 11
ARTICLE VII SEAL....................................................... 12
Article VIII Fiscal Year............................................... 12
ARTICLE IX INDEMNIFICATION AND INSURANCE............................... 13
9.1 Indemnification.................................................. 13
9.2 Insurance........................................................ 14
ARTICLE X AMENDMENT.................................................... 15
<PAGE>
KNIGHT PLASTICS, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
___________________________
BY-LAWS
___________________________
AS ADOPTED ON AUGUST 25, 1998
EXECUTION COPY
BERRY PLASTICS CORPORATION
BPC HOLDING CORPORATION
BERRY IOWA CORPORATION
BERRY TRI-PLAS CORPORATION
BERRY STERLING CORPORATION
AEROCON, INC.
PACKERWARE CORPORATION
BERRY PLASTICS DESIGN CORPORATION
VENTURE PACKAGING, INC.
VENTURE PACKAGING MIDWEST, INC.
VENTURE PACKAGING SOUTHEAST, INC.
NIM HOLDINGS LIMITED
NORWICH INJECTION MOULDERS LIMITED
12 1/4 % SENIOR SUBORDINATED NOTES DUE 2004
INDENTURE
Dated as of August 24, 1998
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
<PAGE>
CROSS-REFERENCE TABLE{1}
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 12.03
(c) 12.03
313(a) 7.06
(b)(1) 7.06
(b)(2) 7.06; 7.07
(c) 7.06; 12.02
(d) 7.06
314(a) 4.03; 12.02
(b) N.A.
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) N.A.
(e) 12.05
(f) N.A.
315(a) 7.01
(b) 7.05; 12.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) 6.07; 9.02
(b) 6.07
(c) 2.13
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 12.01
(b) N.A.
(c) 12.01
N.A. means not applicable.
**FOOTNOTES**
{1}This Cross-Reference Table is not part of the Indenture.
1
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE 1
Section 1.01. Definitions. 1
Section 1.02. Other Definitions. 14
Section 1.03. Incorporation by Reference of Trust Indenture Act. 15
Section 1.04. Rules of Construction. 16
ARTICLE 2 THE NOTES 16
Section 2.01. Form and Dating. 16
Section 2.02. Execution and Authentication. 17
Section 2.03. Registrar and Paying Agent. 18
Section 2.04. Paying Agent to Hold Money in Trust. 18
Section 2.05. Lists Of Holders of the Notes. 19
Section 2.06. Transfer and Exchange. 19
Section 2.07. Replacement Notes. 33
Section 2.08. Outstanding Notes. 33
Section 2.09. Treasury Notes. 34
Section 2.10. Temporary Notes. 34
Section 2.11. Cancellation. 34
Section 2.12. Defaulted Interest. 35
Section 2.13. Record Date. 35
Section 2.14. CUSIP Number. 35
ARTICLE 3 REDEMPTION AND PREPAYMENT 36
Section 3.01. Notices to Trustee. 36
Section 3.02. Selection of Notes to be Redeemed. 36
Section 3.03. Notice of Redemption. 37
Section 3.04. Effect of Notice of Redemption. 38
Section 3.05. Deposit of Redemption Price. 38
Section 3.06. Notes Redeemed in Part. 38
Section 3.07. Optional Redemption. 38
Section 3.08. Mandatory Redemption. 39
Section 3.09. Offer to Purchase by Application of Excess Proceeds. 39
ARTICLE 4 COVENANTS 41
Section 4.01. Payment of Notes. 41
Section 4.02. Maintenance of Office or Agency. 41
Section 4.03. Reports. 42
Section 4.04. Compliance Certificate. 42
Section 4.05. Taxes. 43
Section 4.06. Stay, Extension and Usury Laws. 43
Section 4.07. Restricted Payments. 44
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries 45
Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified
Stock 46
Section 4.10. Asset Sales. 47
Section 4.11. Transactions with Affiliates. 49
Section 4.12. Liens. 49
Section 4.13. Additional Guarantees. 49
Section 4.14. Corporate Existence. 50
Section 4.15. Offer to Repurchase Upon Change of Control. 50
Section 4.16. No Senior Subordinated Indebtedness. 51
ARTICLE 5 SUCCESSORS 52
Section 5.01. Merger, Consolidation Or Sale Of Assets. 52
Section 5.02. Successor Corporation Substituted. 52
ARTICLE 6 DEFAULTS AND REMEDIES 53
Section 6.01. Events Of Default. 53
Section 6.02. Acceleration. 55
Section 6.03. Other Remedies. 56
Section 6.04. Waiver Of Past Defaults. 56
Section 6.05. Control By Majority. 57
Section 6.06. Limitation On Suits. 57
Section 6.07. Rights Of Holders Of Notes To Receive Payment. 58
Section 6.08. Collection Suit By Trustee. 58
Section 6.09. Trustee May File Proofs Of Claim. 58
Section 6.10. Priorities. 59
Section 6.11. Undertaking For Costs. 59
ARTICLE 7 TRUSTEE 60
Section 7.01. Duties Of Trustee. 60
Section 7.02. Rights Of Trustee. 61
Section 7.03. Individual Rights of Trustee. 62
Section 7.04. Trustee's Disclaimer. 62
Section 7.05. Notice Of Defaults. 62
Section 7.06. Reports By Trustee To Holders Of The Notes. 62
Section 7.07. Compensation And Indemnity. 63
Section 7.08. Replacement Of Trustee. 64
Section 7.09. Successor Trustee By Merger, Etc. 65
Section 7.10. Eligibility; Disqualification. 65
Section 7.11. Preferential Collection Of Claims Against Company. 65
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE 66
Section 8.01. Option To Effect Legal Defeasance Or Covenant Defeasance. 66
Section 8.02. Legal Defeasance And Discharge. 66
Section 8.03. Covenant Defeasance. 66
Section 8.04. Conditions To Legal Or Covenant Defeasance. 67
Section 8.05. Deposited Money And Government Securities To Be Held In
Trust; Other Miscellaneous Provisions. 68
Section 8.06. Repayment To Company. 69
Section 8.07. Reinstatement. 70
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER 70
Section 9.01. Without Consent Of Holders Of Notes. 70
Section 9.02. With Consent Of Holders Of Notes. 71
Section 9.03. compliance With Trust Indenture Act. 73
Section 9.04. Revocation And Effect Of Consents. 73
Section 9.05. Notation On Or Exchange Of Notes. 73
Section 9.06. Trustee to Sign Amendments, Etc. 73
ARTICLE 10 NOTE GUARANTEES 74
Section 10.01. Note Guarantee. 74
Section 10.02. Subordination. 75
Section 10.03. liquidation; Dissolution; Bankruptcy. 76
Section 10.04. Default on Designated Senior Indebtedness of The
Guarantor 76
Section 10.05. Acceleration of Notes. 77
Section 10.06. When Distribution Must be Paid Over. 77
Section 10.07. Notice by a Guarantor. 78
Section 10.08. Subrogation. 79
Section 10.09. Relative Rights. 79
Section 10.10. Subordination May Not be Impaired by any Guarantor. 79
Section 10.11. Distribution or Notice to Representative. 79
Section 10.12. Rights of Trustee and Paying Agent. 80
Section 10.13. Authorization to Effect Subordination. 80
Section 10.14. Limitation of Guarantor's Liability. 80
Section 10.15. Execution and Delivery of Note Guarantee. 81
Section 10.16. Guarantors May Consolidate, Etc., on Certain Terms. 81
Section 10.17. Releases Following Sale of Assets. 82
ARTICLE 11 SUBORDINATION 82
Section 11.01. Subordination. 82
Section 11.02. Liquidation; Dissolution; Bankruptcy. 83
Section 11.03. Default on Senior Indebtedness. 83
Section 11.04. Acceleration of Notes. 84
Section 11.05. When Distribution Must be Paid Over. 84
Section 11.06. Notice by Company. 85
Section 11.07. Subrogation. 85
Section 11.08. Relative Rights. 85
Section 11.09. Subordination May Not be Impaired by Company. 86
Section 11.10. Distribution or Notice to Representative. 86
Section 11.11. Rights of Trustee and Paying Agent. 86
Section 11.12. Authorization to Effect Subordination. 87
ARTICLE 12 MISCELLANEOUS 87
Section 12.01. Trust Indenture Act Controls. 87
Section 12.02. Notices. 87
Section 12.03. Communication by Holders of Notes With Other Holders of
Notes 88
Section 12.04. Certificate and Opinion as to Conditions Precedent. 89
Section 12.05. Statements Required in Certificate or Opinion. 89
Section 12.06. Rules by Trustee and Agents. 89
Section 12.07. No Personal Liability of Directors, Officers, Employees
and Stockholders. 90
Section 12.08. Governing Law. 90
Section 12.09. Consent to Jurisdiction. 90
Section 12.10. No Adverse Interpretation of Other Agreements. 90
Section 12.11. Successors. 90
Section 12.12. Severability. 91
Section 12.13. Counterpart Originals. 91
Section 12.14. Table of Contents, Headings, Etc. 91
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
EXHIBIT E FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO THE NOTE
GUARANTEES
1
<PAGE>
INDENTURE dated as of August 24, 1998 among Berry Plastics Corporation, a
Delaware corporation (the "Company"), BPC Holding Corporation, a Delaware
corporation ("Holding"), Berry Iowa Corporation, a Delaware corporation
("Berry Iowa"), Berry Tri-Plas Corporation, a Delaware corporation ("Berry
Tri-Plas"), Berry Sterling Corporation, a Delaware corporation ("Berry
Sterling"), AeroCon, Inc., a Delaware corporation ("AeroCon"), PackerWare
Corporation, a Kansas corporation ("PackerWare"), Berry Plastics Design
Corporation, a Delaware corporation ("Berry Design"), Venture Packaging,
Inc., a Delaware corporation ("Venture Holdings"), Venture Packaging
Midwest, Inc., an Ohio corporation ("Venture Midwest"), Venture Packaging
Southeast, Inc., a South Carolina corporation ("Venture Southeast"), NIM
Holdings Limited, a company organized under the laws of England and Wales
("NIM Holdings"), and Norwich Injection Moulders Limited, a company
organized under the laws of England and Wales ("Norwich" and, collectively
with Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon,
PackerWare, Berry Design, Venture Holdings, Venture Midwest, Venture
Southeast and NIM Holdings, the "Guarantors") and United States Trust
Company of New York, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the
Holders of the 12 1/4 % Series B Senior Subordinated Notes due 2004 (the
"Series B Notes") and the 12 1/4 % Series C Senior Subordinated Notes due
2004 (the "Series C Notes") and, together with the Series B Notes, the
"Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
1.1 Definitions.
"144A GLOBAL NOTE" means a global note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the
name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in
reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person: (i)
Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Subsidiary of such
specified Person and (ii) Indebtedness encumbering any asset acquired by
such specified Person.
"ADDITIONAL NOTES" means up to $75.0 million in aggregate
principal amount of Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED, HOWEVER, that beneficial
ownership of 10% or more of the voting securities of a Person shall be
deemed to be control. Neither Chase Bank, CITEI, nor their respective
Affiliates shall be deemed an Affiliate of the Company or any of its
Subsidiaries for purposes of this definition by reason of its direct or
indirect beneficial ownership of 15% or less of the Common Stock of Holding
or by reason of any employee thereof being appointed to the Board of
Directors of Holding.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such
transfer or exchange.
"ASSET SALE" means (i) the sale, lease, conveyance or other
disposition of any property or assets of the Company or any Subsidiary
(including by way of a sale-and-leaseback) other than sales of inventory in
the ordinary course of business (PROVIDED that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of the
Company shall be governed by Sections 4.15 and 5.01 hereof), or (ii) the
issuance or sale of Equity Interests of any of its Subsidiaries, in the
case of either clause (i) or (ii) above, whether in a single transaction or
a series of related transactions, (a) that have a fair market value in
excess of $250,000, or (b) for net proceeds in excess of $250,000. For
purposes of this definition, the term "Asset Sale" shall not include (i)
the transfer of assets by the Company to a Wholly Owned Subsidiary of the
Company or by a Wholly Owned Subsidiary of the Company to the Company or to
another Wholly Owned Subsidiary of the Company, (ii) any Restricted
Payment, dividend or purchase or retirement of Equity Interests permitted
under Section 4.07 hereof or (iii) the issuance or sale of Equity Interests
of any Subsidiary of the Company, PROVIDED that such Equity Interests are
issued or sold in consideration for the acquisition of assets by such
Subsidiary or in connection with a merger or consolidation of another
Person into such Subsidiary.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company,
or any authorized committee of the Board of Directors.
"BORROWING BASE" means, as of any date, an amount equal to the
sum of (a) 85% of the face amount of all accounts receivable owned by the
Company and its Subsidiaries as of such date that are not more than 90 days
past due, and (b) 65% of the book value (calculated on a FIFO basis) of all
inventory owned by the Company and its Subsidiaries as of such date, all
calculated on a consolidated basis and in accordance with GAAP. To the
extent that information is not available as to the amount of accounts
receivable or inventory as of a specific date, the Company may utilize the
most recent available information for purposes of calculating the Borrowing
Base.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be so required to be capitalized on a balance
sheet prepared in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests,
participations, rights or other equivalents (however designated) of
corporate stock, including, without limitation, with respect to
partnerships, partnership interests (whether general or limited) and any
other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets
of, such partnership.
"CASH EQUIVALENTS" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months from the date of acquisition and
overnight bank deposits, in each case with any lender party to the Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500 million, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses
(ii) and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper
having the highest rating obtainable from Moody's Investors Service, Inc.
or Standard & Poor's Corporation and in each case maturing within six
months after the date of acquisition.
"CEDEL" means Cedel Bank, SA.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of Holding's or the Company's
assets to any person or group (as such term is used in Section 13(d)(3) of
the Exchange Act) (other than the Principal and his Related Parties), (ii)
the adoption of a plan relating to the liquidation or dissolution of
Holding or the Company, (iii) the acquisition by any person or group (as
such term is used in Section 13(d)(3) of the Exchange Act) (other than by
the Principal and his Related Parties) of a direct or indirect interest in
more than 35% of the voting power of the voting stock of Holding by way of
purchase, merger or consolidation or otherwise if (a) such person or group
(as defined above) (other than the Principal and his Related Parties) owns,
directly or indirectly, more of the voting power of the voting stock of
Holding than the Principal and his Related Parties and (b) such acquisition
occurs prior to the Initial Public Offering, (iv) the acquisition by any
person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) (other than by the Principal and his Related Parties) of a direct or
indirect interest in more than 50% of the voting power of the voting stock
of Holding by way of purchase, merger or consolidation or otherwise if such
acquisition occurs subsequent to the Initial Public Offering or (v) the
first day on which a majority of the members of the Board of Directors of
Holding are not Continuing Directors.
"CHASE BANK" means The Chase Manhattan Bank, NA.
"CITEI" means The CIT Group/Equity Investments, Inc.
"COMMON STOCK OF HOLDING" means the Class A Common Stock, $.00005
par value per share, and the Class B Common Stock, $.00005 par value per
share, of Holding.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period plus
(a) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing Consolidated Net Income), plus (b) provision for taxes based on
income or profits of such Person for such period, to the extent such
provision for taxes was included in computing Consolidated Net Income, plus
(c) Consolidated Interest Expense of such Person for such period to the
extent such expense was deducted in computing Consolidated Net Income, plus
(d) Consolidated Depreciation and Amortization Expense of such Person for
such period to the extent such expense was deducted in computing
Consolidated Net Income, plus (e) other non-cash charges (including,
without limitation, repricing of stock options, to the extent deducted in
computing Consolidated Net Income; but excluding any non-cash charge that
requires an accrual or reserve for cash expenditures in future periods or
which involved a cash expenditure in a prior period), in each case, on a
consolidated basis and determined in accordance with GAAP.
"CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, with
respect to any Person for any period, the total amount of depreciation and
amortization expense (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) of such Person for such period on a consolidated
basis as determined in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person
for any period, the sum of (a) consolidated interest expense of such Person
and its Subsidiaries for such period, whether paid or accrued, to the
extent such expense was deducted in computing Consolidated Net Income
(including amortization of original issue discount, non-cash interest
payments, the interest component of capital leases, and net payments (if
any) pursuant to Hedging Obligations), (b) commissions, discounts and other
fees and charges paid or accrued with respect to letters of credit and
bankers' acceptance financing, and (c) interest actually paid by such
Person or its Subsidiaries under a Guarantee of Indebtedness of any other
Person.
"CONSOLIDATED NET INCOME" means, with respect to any Person for
any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED, that (i) the Net Income of any Person that
is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends
or distributions paid to the referent Person or a Wholly Owned Subsidiary
thereof that is a Guarantor, (ii) the Net Income of any Person that is a
Subsidiary (other than a Wholly Owned Subsidiary) shall be included only to
the extent of the amount of dividends or distributions paid to the referent
Person or a Wholly Owned Subsidiary thereof that is a Guarantor, (iii) the
Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded and (iv)
the cumulative effect of a change in accounting principles shall be
excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its consolidated Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of Preferred Stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless
such dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of any
cash received by such Person upon issuance of such Preferred Stock, less
(x) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business
made within 16 months after the acquisition of such business) subsequent to
April 21, 1994 in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person, (y) all investments as of such date
in unconsolidated Subsidiaries and in Persons that are not Subsidiaries
(except, in each case, Permitted Investments), and (z) all unamortized debt
discount and expense and unamortized deferred charges as of such date, all
of the foregoing determined in accordance with GAAP.
"CONSOLIDATED STEP-UP DEPRECIATION AND AMORTIZATION" means, with
respect to any Person for any period, the total amount of depreciation
related to the write-up of assets and amortization of such Person for such
period on a consolidated basis as determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of Holding who (i) was a member of
such Board of Directors on the Issuance Date or (ii) was nominated for
election or elected to such Board of Directors with the affirmative vote of
a majority of the Continuing Directors who were members of such Board at
the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address
of the Trustee specified in Section 12.02 hereof or such other address as
to which the Trustee may give written notice to the Company.
"CREDIT FACILITY" means the Second Amended and Restated Financing
and Security Agreement, dated as of July 2, 1998, by the Company and
NationsBank, N.A., providing for up to $132.6 million of borrowings (plus
the <pound-sterling>1.5 million UK Revolver and the <pound-sterling>4.5
million UK Term Loan), including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and
in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"DEFAULT" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06
hereof, substantially in the form of Exhibit A hereto except that such Note
shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) the Senior Bank
Indebtedness and (ii) any other Senior Indebtedness (a) permitted to be
incurred under this Indenture the principal amount of which is $15 million
or more and (b) designated in the instrument creating or evidencing such
Senior Indebtedness as "Designated Senior Indebtedness."
"DISQUALIFIED STOCK" means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the Holder thereof, in whole or in part, on
or prior to July 15, 2004.
"DISTRIBUTION" means, for purposes of Articles 10 and 11, a
distribution consisting of cash, securities or other property, by set-off
or otherwise.
"EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION RIGHTS AGREEMENT" has the meaning
set forth in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries (other than under the Credit Facility) in existence on the
Issuance Date, until such amounts are repaid.
"FIXED CHARGES" means, with respect to any Person for any period,
the sum of (a) Consolidated Interest Expense of such Person for such
period, whether paid or accrued, to the extent such expense was deducted in
computing Consolidated Net Income and (b) the product of (i) all cash
dividend payments (and non-cash dividend payments in the form of securities
(other than Disqualified Stock) of an issuer) on any series of Preferred
Stock of such Person, times (ii) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person for
such period to the Fixed Charges of such Person for such period. In the
event that the Company or any of its Subsidiaries incurs, assumes,
guarantees or redeems any Indebtedness (other than revolving credit
borrowings) or issues Preferred Stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of Preferred Stock, as if the same had occurred at
the beginning of the applicable four-quarter reference period. For
purposes of making the computation referred to above, acquisitions,
dispositions and discontinued operations (as determined in accordance with
GAAP) that have been made by the Company or any of its Subsidiaries,
including all mergers and consolidations, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
Calculation Date shall be calculated on a pro forma basis assuming that all
such acquisitions, dispositions, discontinued operations, mergers and
consolidations (and the reduction of any associated fixed charge
obligations resulting therefrom) had occurred on the first day of the four-
quarter reference period.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect on the Issuance
Date.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in
the form of Exhibit A hereto issued in accordance with Section 2.01,
2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued
under this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of
which guarantee or obligations the full faith and credit of the United
States of America is pledged.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters
of credit and reimbursement agreements in respect thereof), of all or any
part of any Indebtedness.
"GUARANTORS" means each of (i) Holding, Berry Iowa, Berry Tri-
Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture Holdings,
Venture Midwest, Venture Southwest, NIM Holdings and Norwich and (ii) any
other Person that executes a Note Guarantee in accordance with the
provisions of this Indenture, and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii)
other agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means the global Note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the
name of the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold to
Institutional Accredited Investors.
"INDEBTEDNESS" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and also includes, to the extent not otherwise
included, the Guarantee of any Indebtedness of such Person or any other
Person.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INITIAL NOTES" means the first $25.0 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"INITIAL PUBLIC OFFERING" means a public offering of the Common
Stock of Holding that first results in the Common Stock of Holding becoming
listed for trading on a Stock Exchange.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act, who is not also a QIB.
"INVESTMENTS" means, with respect to any Person, all investments
by such Person in other Persons (including Affiliates) in the forms of
loans (including Guarantees), advances or capital contributions (excluding
commission, travel and similar advances to officers, directors, consultants
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities and all other items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"ISSUANCE DATE" means the closing date for the sale and original
issuance of the Notes.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding Business Day, and no interest shall
accrue for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by
such Holders in connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however, any
gain (but not loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback
transactions), and excluding any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain
(but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and
any relocation expenses incurred as a result thereof, taxes paid or payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that are the subject of such Asset Sale and any reserve for
indemnification or adjustment in respect of the sale price of such asset or
assets.
"1994 INDENTURE" means the indenture dated as of April 21, 1994,
as amended, among the Company, the Guarantors and the Trustee, relating to
the 1994 Notes.
"1994 NOTES" means the Company's 12 1/4 % Senior Subordinated
Notes due 2004.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as
a single class for all purposes under this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"OFFERING" means the offering of the Initial Notes by the
Company.
"OFFICER" means, with respect to any unnatural Person, the
Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Vice-President of
such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer
or the principal accounting officer of the Company, that meets the
requirements of Section 12.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of
Section 12.05 hereof. The counsel may be an employee of or counsel to
Holding, any Subsidiary of Holding or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to DTC, shall include Euroclear and Cedel).
"PERMITTED INVESTMENTS" means (a) any Investments in the Company
or in a Wholly Owned Subsidiary of the Company and that is engaged in the
same or a similar line of business as the Company and its Subsidiaries were
engaged in on the Issuance Date and (b) any Investments in Cash
Equivalents.
"PERMITTED REFINANCING" means Refinancing Indebtedness if (a) the
principal amount of Refinancing Indebtedness does not exceed the principal
amount of Indebtedness so extended, refinanced, renewed, replaced, defeased
or refunded (plus the amount of premiums, accrued interest and reasonable
expenses incurred in connection therewith); (b) the Refinancing
Indebtedness has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (c) the
Refinancing Indebtedness is subordinated in right of payment to the Notes
on terms at least as favorable to the Holders of Notes as those contained
in the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity.
"PREFERRED STOCK" means any Equity Interest with preferential
right in the payment of dividends or liquidation or any Disqualified Stock.
"PRINCIPAL" means Roberto Buaron.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange
for, or the proceeds of which are used to extend, refinance, renew,
replace, defease or refund Indebtedness referred to in clauses (a) and (b)
of the second paragraph of Section 4.09 hereof.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of August 24, 1998, by and among the Company and the
other parties named on the signature pages thereof, as such agreement may
be amended, modified or supplemented from time to time and, with respect to
any Additional Notes, one or more registration rights agreements between
the Company and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights
given by the Company to the purchasers of Additional Notes to register such
Additional Notes under the Securities Act."
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a global Note bearing the
Private Placement Legend and deposited with or on behalf of the Depositary
and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes
initially sold in reliance on Rule 903 of Regulation S.
"RELATED PARTY" means with respect to the Principal (A) in the
case of an individual, any spouse, sibling or descendant of such Principal
(whether or not such relationship arises from birth, adoption or marriage
or despite such relationship being dissolved by divorce) or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding a controlling interest of
which consist of such Principal and/or such other Persons referred to in
the immediately preceding clause (A).
"REPRESENTATIVE" means, for purposes of Articles 10 and 11, the
indenture trustee or other trustee, agent or representative for any Senior
Indebtedness or, with respect to any Guarantor, for any Senior Indebtedness
of such Guarantor.
"RESPONSIBLE OFFICER" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee
(or any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means any Investment other than a
Permitted Investment.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR BANK INDEBTEDNESS" means the Indebtedness outstanding
under the Credit Facility as such agreement may be restated, further
amended, supplemented or otherwise modified or replaced from time to time
hereafter, together with any refunding or replacement of any such
Indebtedness.
"SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and
(ii) any other Indebtedness permitted to be incurred by the Company or a
Guarantor, as the case may be, under the terms of this Indenture, unless
the instrument under which such Indebtedness is incurred expressly provides
that it is PARI PASSU with or subordinated in right of payment to the Notes
or a Note Guarantee, as the case may be. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include (w) any
liability for federal, state, local or other taxes owed or owing by the
Company or a Guarantor, as the case may be, (x) any Indebtedness of the
Company or a Guarantor, as the case may be, to Holding or to any of
Holding's other Subsidiaries or other Affiliates, (y) any trade payables or
(z) any Indebtedness that is incurred in violation of this Indenture.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"STOCK EXCHANGE" means the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of
that Person or a combination thereof.
"TAX SHARING AGREEMENT" means that certain Tax Sharing Agreement,
as in effect on the closing date of the Offering, between the Company and
Holding.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
<section><section> 77aaa-77bbbb) as in effect on the date on which this
Indenture is qualified under the TIA.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"UK TERM LOAN" means the <pound-sterling>4.5 million term loan
facility of the Company under the Credit Facility.
"UK REVOLVER" means the <pound-sterling>1.5 million revolving
credit facility of the Company under the Credit Facility.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note
substantially in the form of Exhibit A attached hereto that bears the
Global Note Legend and that has the "Schedule of Exchanges of Interests in
the Global Note" attached thereto, and that is deposited with or on behalf
of and registered in the name of the Depositary, representing a series of
Notes that do not bear the Private Placement Legend.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
sum of the products obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (y) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the due date of such payment, by (b)
the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership
interests of which (other than directors' qualifying shares) shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person and one or more Wholly Owned Subsidiaries of such Person.
1.2 OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction" 4.11
"Asset Sale Offer" 3.09
"Benefited Party" 10.01
"Change of Control Offer" 4.15
"Change of Control Payment" 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"Event of Default" 6.01
"Excess Proceeds" 4.10
"Guarantor Payment Blockage Notice 10.04
"incur" 4.09
"Legal Defeasance" 8.02
"Note Guarantee" 10.01
"Offer Amount" 3.09
"Offer Period" 3.09
"Paying Agent" 2.03
"Payment Blockage Notice" 11.03
"Payment Default" 6.01
"Purchase Date" 3.09
"Registrar" 2.03
"Restricted Payments" 4.07
"Termination Date" 2.06
1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company, the Guarantors and any
successor obligor upon the Notes or any Note Guarantee, as the case may be.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule
under the TIA have the meanings so assigned to them.
1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE II
THE NOTES
2.1 Form and Dating.
(A) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, the
terms of which are incorporated in and made a part of this Indenture. The
notation on each Note relating to the Note Guarantee shall be substantially
in the form set forth on Exhibit B, which is part of this Indenture. The
Notes may have notations, legends or endorsements approved as to form by
the Company and required by law, stock exchange rule, agreements to which
the Company or any Guarantor is subject or usage. Each Note shall be dated
the date of its authentication. The Notes shall be issuable only in
denominations of $1,000 and integral multiples thereof.
(B) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in
the Global Note" attached thereto). Notes issued in definitive form shall
be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(C) EUROCLEAR AND CEDEL PROCEDURES APPLICABLE. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Global
Notes that are held by Participants through Euroclear or Cedel Bank.
2.2 EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes for the Company
by manual or facsimile signature. The Company's seal shall be reproduced
on the Notes and may be in facsimile form. An Officer of each Guarantor
shall sign the Note Guarantee for such Guarantor by manual or facsimile
signature.
If an Officer of the Company or a Guarantor whose signature is on
a Note or a Note Guarantee, as the case may be, no longer holds that office
at the time the Note is authenticated, the Note or the Note Guarantee, as
the case may be, shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture. The
form of Trustee's authentication to be borne by the Notes shall be
substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by
two Officers of the Company, authenticate Notes with the Note Guarantees
endorsed thereon for original issue up to an aggregate principal amount
stated in paragraph 4 of the Notes. The aggregate principal amount of
Notes outstanding at any time shall not exceed the amount set forth herein
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent
has the same rights as an Agent to deal with the Company or any Guarantor
or an Affiliate of the Company or any Guarantor.
Any authenticating agent may resign at any time by giving written
notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of the authenticating agent by giving
written notice of termination to the authenticating agent and the Company.
Upon receiving notice of such resignation or upon such termination by the
Trustee, the Trustee may appoint a successor authenticating agent
acceptable to the Company, in which case it shall so notify the Holders.
Upon its appointment hereunder, any successor authenticating agent shall
become vested with all the rights, powers and duties of its predecessor
hereunder.
The Company shall agree, by separate instrument, to pay each
authenticating agent from time to time reasonable compensation for its
services.
2.3 REGISTRAR AND PAYING AGENT.
The Company and the Guarantors shall maintain (i) an office or
agency where Notes may be presented for registration of transfer or for
exchange (including any co-registrar, the "REGISTRAR") and (ii) an office
or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or
more additional paying agents. The term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent,
Registrar or co-registrar without prior notice to any Holder of a Note.
The Company shall notify the Trustee and the Trustee shall notify the
Holders of the Notes of the name and address of any Agent not a party to
this Indenture. The Company or any Guarantor may act as Paying Agent,
Registrar or co-registrar. The Company shall enter into an appropriate
agency agreement with any Agent not a party to this Indenture, which shall
incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, or fails to give the
foregoing notice, the Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07 hereof.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Notes.
2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for
the benefit of the Holders of the Notes or the Trustee all money held by
the Paying Agent for the payment of principal of, premium or Liquidated
Damages, if any, and interest on the Notes, and shall notify the Trustee of
any Default by the Company or any Guarantor in making any such payment.
While any such Default continues, the Trustee may require a Paying Agent to
pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or
a Guarantor) shall have no further liability for the money delivered to the
Trustee. If the Company or a Guarantor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders
of the Notes all money held by it as Paying Agent. Upon the occurrence of
either event specified in Section 6.01(h) or (i), the Trustee shall serve
as Paying Agent for the Notes.
2.5 LISTS OF HOLDERS OF THE NOTES.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders of the Notes and shall otherwise comply with TIA <section>
312(a). If the Trustee is not the Registrar, the Company and/or any
Guarantor shall furnish to the Trustee at least seven Business Days before
each interest payment date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders of the Notes,
including the aggregate principal amount of the Notes held by each thereof,
and the Company and each Guarantor shall otherwise comply with TIA
<section> 312(a).
2.6 TRANSFER AND EXCHANGE.
(A) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes will be exchanged by the Company for Definitive Notes if (i) the
Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Company within 120
days after the date of such notice from the Depositary or (ii) the Company
in its sole discretion determines that the Global Notes (in whole but not
in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange
for, or in lieu of, a Global Note or any portion thereof, pursuant to this
Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may
not be exchanged for another Note other than as provided in this Section
2.06(a), however, beneficial interests in a Global Note may be transferred
and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(B) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes shall be subject to restrictions
on transfer comparable to those set forth herein to the extent required by
the Securities Act. Transfers of beneficial interests in the Global Notes
also shall require compliance with either subparagraph (i) or (ii) below,
as applicable, as well as one or more of the other following subparagraphs,
as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order
from a Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in
(1) above. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter
of Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may
be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of
a beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may
be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Note, then, upon receipt by the Registrar
of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case of
an exchange, or the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that it is not (1) a broker-
dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company shall execute and
the Trustee shall authenticate and deliver to the Person designated in
the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall be registered in
such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities Act
other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(E) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present
or surrender to the Registrar the Definitive Notes duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to
the Registrar duly executed by such Holder or by its attorney, duly
authorized in writing. In addition, the requesting Holder shall provide
any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the
form of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d)
thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the
Unrestricted Definitive Notes pursuant to the instructions from the
Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance
by Persons that certify in the applicable Letters of Transmittal that (x)
they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the
Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted
Definitive Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this
Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OR (c) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY AND THE GUARANTORS
SO REQUEST), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note
by the Trustee or by the Depositary at the direction of the Trustee to
reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other
than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10,
4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being
redeemed in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding Interest Payment
Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
2.7 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of
the Company, shall authenticate and deliver a replacement Note (accompanied
by a notation of the Note Guarantee duly endorsed by the Guarantors) if the
Trustee's requirements for replacements of Notes are met. If required by
the Trustee, the Company or the Guarantors, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee,
the Company and the Guarantors to protect the Company, the Guarantors, the
Trustee, any Agent or any authenticating agent from any loss which any of
them may suffer if a Note is replaced. Each of the Company, the Guarantors
and the Trustee may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company
and the Guarantors and shall be entitled to all of the benefits of this
Indenture equally and proportionally with all other Notes duly issued
hereunder.
2.8 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that
the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
Subject to Section 2.09 hereof, a Note does not cease to be
outstanding because the Company, a Subsidiary of the Company or an
Affiliate of the Company holds the Note.
2.9 TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes
owned by the Company, any Guarantor, any of their respective Subsidiaries
or any Affiliate of the Company or any Guarantor shall be considered as
though not outstanding, except that for purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes which a Responsible Officer knows to be so owned shall
be so considered. Notwithstanding the foregoing, Notes that are to be
acquired by the Company, any Guarantor, any Subsidiary of the Company or
any Guarantor or an Affiliate of the Company or any Guarantor pursuant to
an exchange offer, tender offer or other agreement shall not be deemed to
be owned by the Company, a Guarantor, a Subsidiary of the Company or a
Guarantor or an Affiliate of the Company or a Guarantor until legal title
to such Notes passes to the Company, Guarantor, Subsidiary of the Company
or a Guarantor or Affiliate of the Company or a Guarantor, as the case may
be.
2.10 TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes
(accompanied by a notation of the Note Guarantee duly endorsed by the
Guarantors). Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company and the Trustee
consider appropriate for temporary Notes. Without unreasonable delay, the
Company shall prepare and the Trustee, upon receipt of the written order of
the Company signed by two Officers of the Company, shall authenticate
definitive Notes (accompanied by a notation of the Note Guarantee duly
endorsed by the Guarantors) in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits
and privileges as definitive Notes.
2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall
destroy cancelled Notes (subject to the record retention requirement of the
Exchange Act), unless the Company directs cancelled Notes to be returned to
it. The Company may not issue new Notes to replace Notes that it has
redeemed or paid or that have been delivered to the Trustee for
cancellation. All cancelled Notes held by the Trustee shall be destroyed
and certification of their destruction delivered to the Company, unless by
a written order, signed by two Officers of the Company, the Company shall
direct that cancelled Notes be returned to it.
2.12 DEFAULTED INTEREST.
If the Company or any Guarantor defaults in a payment of interest
on the Notes, the Company or such Guarantor (to the extent of their
obligations under the Note Guarantees) shall pay the defaulted interest in
any lawful manner plus, to the extent lawful, interest payable on the
defaulted interest, to the Persons who are Holders of the Notes on a
subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five Business Days prior to the
payment date, in each case at the rate provided in the Notes and in Section
4.01 hereof. The Company shall fix or cause to be fixed each such special
record date and payment date, and shall, promptly thereafter, notify the
Trustee of any such date. The Company shall notify the Trustee in writing
of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such defaulted interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Holders entitled to such defaulted interest as in this
Subsection provided. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such defaulted interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Holders entitled to such defaulted interest as in this
Subsection provided. At least 15 days before the special record date, the
Company (or the Trustee, in the name of and at the expense of the Company)
shall mail to Holders of the Notes a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
2.13 RECORD DATE.
The record date for purposes of determining the identity of
Holders of the Notes entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture shall be determined as
provided for in TIA <section> 316(c).
2.14 CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and, if
it does so, the Trustee shall use the CUSIP number in notices of redemption
or exchange as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Notes and that reliance
may be placed only on the other identification numbers printed on the
Notes. The Company will promptly notify the Trustee of any change in the
CUSIP number.
ARTICLE III
REDEMPTION AND PREPAYMENT
3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption
date, an Officers' Certificate setting forth (i) the clause of this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.
If the Company is required to make an offer to purchase Notes
pursuant to the provisions of Sections 4.10 or 4.15, it shall furnish to
the Trustee, at least 30 days before the scheduled purchase date, an
Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which the offer to purchase shall occur, (ii) the offer's
terms, (iii) the purchase price, (iv) the principal amount of the Notes to
be purchased, and (v) a statement to the effect that (a) the Company or one
of its Subsidiaries has made an Asset Sale and there are Excess Proceeds
aggregating more than $5.0 million and the amount of such Excess Proceeds,
or (b) a Change of Control has occurred, as applicable.
3.2 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be purchased in an Asset
Sale Offer or redeemed at any time, the Trustee shall select the Notes to
be purchased or redeemed among the Holders of the Notes in compliance with
the requirements of the principal national securities exchange, if any, on
which the Notes are listed or, if the Notes are not so listed, on a PRO
RATA basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot,
the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously
called for redemption. In the event that less than all of the Notes
properly tendered in an Asset Sale Offer are to be purchased, the
particular Notes to be purchased shall be selected promptly upon the
expiration of such Asset Sale Offer.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for
partial purchase or redemption, the principal amount thereof to be
purchased or redeemed. Notes and portions of Notes selected shall be in
amounts of $1,000 or whole multiples of $1,000; except that if all of the
Notes of a Holder are to be purchased or redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000,
shall be purchased or redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
In the event the Company is required to make an Asset Sale Offer
pursuant to Sections 3.09 and 4.10 hereof and the amount of Excess Proceeds
to be applied to such purchase would result in the purchase of a principal
amount of Notes which is not evenly divisible by $1,000, the Trustee shall
promptly refund to the Company the portion of such Excess Proceeds that is
not necessary to purchase the immediately lesser principal amount of Notes
that is so divisible.
3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a purchase or
redemption date, the Company shall mail or cause to be mailed, by first
class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER,
that the Company shall have delivered to the Trustee, at least 45 days
prior to the redemption date, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in
such notice as provided in the preceding paragraph.
3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable
on the redemption date at the redemption price. A notice of redemption may
not be conditional.
3.5 DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of,
and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue
on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid
to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder and deliver at the expense of the Company a new
Note (accompanied by a notation of the Note Guarantee duly endorsed by the
Guarantors) equal in principal amount to the unredeemed portion of the Note
surrendered.
3.7 OPTIONAL REDEMPTION.
(a) On or after April 15, 1999, the Company shall have the
option to redeem the Notes, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued
and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on April 15 of the years indicated below:
YEAR PERCENTAGE
1999 106.125%
2000 104.083%
2001 102.042%
2002 and thereafter 100.000%
(b) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
3.8 MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company
shall be required to commence an offer to all Holders to purchase Notes (an
"ASSET SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "OFFER
PERIOD"). No later than five Business Days after the termination of the
Offer Period (the "PURCHASE DATE"), the Company shall purchase the
principal amount of Notes required to be purchased pursuant to Section 4.10
hereof (the "OFFER AMOUNT") or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer. Payment
for any Notes so purchased shall be made in the same manner as interest
payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid
interest, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset
Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders.
The notice shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset
Sale Offer shall be made to all Holders. The notice, which shall govern
the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Company, a depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three days
before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to
be purchased pursuant to the terms of Section 3.02 hereof (with such
adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued (or transferred by book entry) new Notes (accompanied by a notation
of the Note Guarantee duly endorsed by the Guarantors) equal in principal
amount to the unpurchased portion of the Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, pursuant to the terms of Section 3.02 hereof,
the Offer Amount of Notes or portions thereof tendered pursuant to the
Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by
the Company in accordance with the terms of this Section 3.09. The
Company, the depositary or the Paying Agent, as the case may be, shall
promptly (but in any case not later than five days after the Purchase Date)
mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon written request from the Company shall authenticate and mail or
deliver such new Note (accompanied by a notation of the Note Guarantee duly
endorsed by the Guarantors) to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the Asset Sale Offer on
the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
ARTICLE IV
COVENANTS
4.1 Payment of Notes.
The Company shall pay or cause to be paid the principal of,
premium and Liquidated Damages, if any, and interest on the Notes on the
dates and in the manner provided in the Notes. Principal, premium, if any,
and interest shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Guarantor, holds as of 10:00 a.m. Eastern
Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal,
premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate
on the Notes to the extent lawful; it shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages, if any, (without regard to
any applicable grace period) at the same rate to the extent lawful.
4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City
of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices
and demands to or upon the Company or the Guarantors in respect of the
Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, the City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of
any such designation or rescission and of any change in the location of any
such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with
Section 2.03.
4.3 REPORTS.
Whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, the Company shall (i) furnish to the
Trustee and to all Holders all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms
l0-Q and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
thereon by the Company's certified independent accountants and (ii) file a
copy of all such information and any other information required by Section
13 or 15(d) of the Exchange Act with the SEC for public availability
(unless the SEC will not accept such a filing) and file such information
with the Trustee and make such information available to investors,
securities analysts and broker-dealers who request it in writing.
Notwithstanding the foregoing, to the extent permitted under the rules and
regulations of the SEC, the Company may instead supply such information
with respect to Holding. The Company shall at all times comply with TIA
<section> 314(a).
4.4 COMPLIANCE CERTIFICATE.
(a) Each of the Company and the Guarantors shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries and the Guarantors during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to
determining whether the Company, its Subsidiaries or such Guarantors has
kept, observed, performed and fulfilled their respective obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company, its
Subsidiaries or such Guarantors, as the case may be, has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company
or such Guarantor, as the case may be, is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company,
its Subsidiaries or such Guarantor, as the case may be, is taking or
proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that
in making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four or
Article Five hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) Each of the Company and the Guarantors shall, so long as any
of the Notes are outstanding, deliver to the Trustee, forthwith upon any
Officer becoming aware of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company or such Guarantor, as the case may be, is taking or proposes to
take with respect thereto.
4.5 TAXES.
The Company shall pay, and shall cause each of its Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
4.6 STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of
this Indenture; and each of the Company and the Guarantors (to the extent
that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to
any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every
such power as though no such law has been enacted.
4.7 RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend
or make any distribution on account of the Company's or any of its
Subsidiaries' Equity Interests (other than: dividends or distributions
payable in Equity Interests of the Person making such dividend or
distribution, other than Disqualified Stock; or dividends or distributions
payable to the Company or any Wholly Owned Subsidiary of the Company that
is a Guarantor); (ii) purchase, redeem or otherwise acquire or retire for
value any Equity Interests of the Company or any Subsidiary or other
Affiliate of the Company (other than any such Equity Interests owned by the
Company or any Wholly Owned Subsidiary of the Company that is a Guarantor);
(iii) purchase, redeem or otherwise acquire or retire for value any
Indebtedness (other than the 1994 Notes, the Notes and Indebtedness between
or among the Company and its Subsidiaries or between or among such
Subsidiaries) that is PARI PASSU with or subordinated to the Notes or any
Note Guarantee; (iv) directly or indirectly make any loan or advance to, or
make any payment to, Holding; or (v) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (v) above
being collectively referred to as "Restricted Payments"), unless, at the
time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof; and
(c) such Restricted Payment, (A) in the case of any Restricted
Payment other than as defined by clause (i) above, together with the
aggregate of all other Restricted Payments made by the Company and its
Subsidiaries after April 21, 1994 (including Restricted Payments permitted
by the next succeeding paragraph (other than such Restricted Payments
permitted by clauses (iv), (v) and (vi) of the next succeeding paragraph)),
or (B) in the case of any Restricted Payment defined in clause (i) above,
together with the aggregate of all other Restricted Payments made by the
Company and its Subsidiaries after April 21, 1994 (including Restricted
Payments permitted by the next succeeding paragraph (other than Restricted
Payments permitted by clauses (iv) and (v) of the next succeeding
paragraph)), is less than the sum of (x) 50% of the sum of the Consolidated
Net Income and Consolidated Step-Up Depreciation and Amortization of the
Company for the period (taken as one accounting period) from the beginning
of the first fiscal quarter that began after April 21, 1994 to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment
(or, if such Consolidated Net Income plus Consolidated Step-Up Depreciation
and Amortization for such period is a deficit, 100% of such deficit), plus
(y) 100% of the aggregate net cash proceeds received by the Company from
the issue or sale since April 21, 1994 of Equity Interests of the Company
or of debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company and other than Disqualified
Stock or debt securities that have been converted into Disqualified Stock).
The foregoing provisions shall not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at
said date of declaration such payment would have complied with the
provisions of this Indenture; (ii) the redemption, repurchase, retirement
or other acquisition of any Equity Interests of the Company in exchange
for, or out of the proceeds of, the substantially concurrent sale (other
than to a Subsidiary of the Company) of other Equity Interests of the
Company (other than any Disqualified Stock); (iii) the defeasance,
redemption or repurchase of PARI PASSU or subordinated Indebtedness in a
Permitted Refinancing; (iv) a Restricted Payment to Holding pursuant to the
Tax Sharing Agreement as the same may be amended from time to time in a
manner that is not materially adverse to the Company; (v) a Restricted
Payment to Holding to pay its operating and administrative expenses
including, without limitation, directors fees, legal and audit expenses,
SEC compliance expenses and corporate franchise and other taxes, not to
exceed in any fiscal year $500,000; (vi) a Restricted Payment to Holding to
pay management fees not to exceed $750,000 in any fiscal year of the
Company; (vii) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of Holding pursuant to any
management equity subscription agreement or stock option agreement in
effect as of April 21, 1994; PROVIDED, HOWEVER, that (a) the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $1 million and (b) no Default or Event of
Default shall have occurred and be continuing immediately after such
transaction; and (viii) Investments by the Company in joint ventures or
similar projects in a business similar to that conducted by the Company and
its Subsidiaries on the Issuance Date in an aggregate amount not to exceed
$1 million.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which
the calculations required by this Section were computed, which calculations
may be based upon the Company's latest available financial statements.
4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (a)(i) pay dividends or make any other
distributions to the Company or any of its Subsidiaries (A) on its Capital
Stock or (B) with respect to any other interest or participation in, or
measured by, its profits, or (ii) pay any indebtedness owed to the Company
or any of its Subsidiaries, (b) make loans or advances to the Company or
any of its Subsidiaries or (c) transfer any of its properties or assets to
the Company or any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reasons of (i) Existing Indebtedness as
in effect on the Issuance Date, (ii) the Credit Facility as in effect on
the Issuance Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, PROVIDED that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or refinancings
are no more restrictive with respect to such dividend and other payment
restrictions than those contained in the Credit Facility as in effect on
the Issuance Date, (iii) the 1994 Indenture and the 1994 Notes, (iv) this
Indenture and the Notes, (v) applicable law, (vi) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of
its Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired,
PROVIDED that the Consolidated Cash Flow of such Person, to the extent of
such restriction, is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture, (vii) by reason
of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (viii)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (c)
above on the property so acquired, or (ix) permitted Refinancing
Indebtedness, PROVIDED that the restrictions contained in the agreements
governing such Refinancing Indebtedness are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced.
4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable with respect to
(collectively, "incur" and correlatively, an "incurrence" of) any
Indebtedness (including Acquired Debt) and the Company shall not issue any,
and shall not permit any of its Subsidiaries to issue any, shares of
Disqualified Stock; PROVIDED, HOWEVER, that the Company may incur
Indebtedness or issue shares of Disqualified Stock if the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or
such Disqualified Stock is issued would have been at least 2.25 to 1
determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom and including the earnings of any business acquired
by the Company or any of its Subsidiaries with the proceeds therefrom), as
if the additional Indebtedness had been incurred, or the Disqualified Stock
had been issued, as the case may be, at the beginning of such four-quarter
period. In addition, each of the following Indebtedness shall be
subordinated in right of payment to the Notes or the Note Guarantees, as
the case may be, at least to the same extent as the Notes are subordinated
to Senior Indebtedness: (A) all Indebtedness that does not provide for all
interest payments to be made in cash; (B) all Indebtedness of the Company
to any of its Subsidiaries; and (C) any Indebtedness of the Company and its
Subsidiaries if at the time of incurrence thereof, Indebtedness of the
Company and the Guarantors that is PARI PASSU in right of payment to the
Notes and the Note Guarantees (including, on a pro forma basis, the
Indebtedness to be incurred) exceeds $100 million other than the 1994 Notes
and the Notes.
The foregoing limitations shall not apply to (a) revolving credit
Indebtedness and letters of credit pursuant to the Credit Facility in an
aggregate principal amount not to exceed at any one time outstanding the
greater of (i) $60 million in principal amount (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company thereunder), less the aggregate amount of all
repayments after April 21, 1994 that permanently reduce the commitment
under the Credit Facility, and (ii) the Borrowing Base; (b) the Existing
Indebtedness; (c) the Notes (other than any Additional Notes) or any Note
Guarantee; (d) the incurrence by the Company or any of its Subsidiaries of
Refinancing Indebtedness; PROVIDED, HOWEVER, that such Refinancing
Indebtedness is a Permitted Refinancing; (e) Indebtedness between or among
the Company and any of its Wholly Owned Subsidiaries that are Guarantors;
(f) Indebtedness from the Company to Holding PROVIDED that the advances
evidenced by such Indebtedness are permitted under Section 4.07 hereof; (g)
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding; and (h) the
incurrence by the Company or its Subsidiaries of Indebtedness (in addition
to Indebtedness permitted by any other clause of this paragraph) in an
aggregate principal amount at any time outstanding not to exceed the sum of
$1 million at any one time.
Notwithstanding anything to the contrary, the Company and its
Subsidiaries shall not be permitted to incur any additional Senior
Indebtedness unless it is secured.
4.10 ASSET SALES.
The Company shall not, and shall not permit any of its
Subsidiaries to, conduct an Asset Sale, unless (x) the Company (or the
Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee no later than immediately prior to the
consummation of such proposed Asset Sale with respect to any Asset Sale
involving aggregate payments in excess of $1 million) of the assets sold or
otherwise disposed of and (y) at least 75% of the consideration therefor
received by the Company or such Subsidiary is in the form of cash;
PROVIDED, HOWEVER, that the amount of (A) any liabilities (as shown on the
Company's or such Subsidiary's most recent balance sheet or in the notes
thereto), of the Company or any Subsidiary (other than liabilities that are
by their terms subordinated to the Notes or any Guarantee thereof) that are
assumed by the transferee of any such assets and (B) any notes or other
obligations received by the Company or any such Subsidiary from such
transferee that are immediately converted by the Company or such Subsidiary
into cash (to the extent of the cash received), shall be deemed to be cash
for purposes of this Section 4.10.
Within 180 days after any Asset Sale, the Company may apply the
Net Proceeds from such Asset Sale to either (a) permanently reduce Senior
Indebtedness, or (b) make an investment in another business or capital
expenditure or other long-term/tangible assets, in each case, in the same
or a similar line of business as the Company was engaged in on the Issuance
Date. Pending the final application of any such Net Proceeds, the Company
may temporarily reduce Senior Bank Indebtedness or otherwise invest such
Net Proceeds in Cash Equivalents. Any Net Proceeds from the Asset Sale
that are not applied or invested as provided in the first sentence of this
paragraph shall be deemed to constitute "Excess Proceeds." If the aggregate
amount of Excess Proceeds exceeds $5 million, upon completion of the Asset
Sale Offer required under the 1994 Indenture, the Company shall make an
Asset Sale Offer to all Holders of Notes to purchase the maximum principal
amount of Notes, that is an integral multiple of $1,000, that may be
purchased out of the Excess Proceeds, if any, remaining upon completion of
the Asset Sale Offer required under 1994 Indenture, at an offer price in
cash in an amount equal to 101% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase, in accordance with the procedures set forth in Section 3.09
hereof. To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company may
use such deficiency for general corporate purposes. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes to be purchased in
the manner described under Section 3.02 hereof. Upon completion of such
offer to purchase, the amount of Excess Proceeds shall be reset to zero.
Any Asset Sale Offer pursuant to this Section 4.10 shall be made pursuant
to the provisions of Section 3.09 hereof.
The Company shall comply with the requirements of Rule 14e-l
under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of Notes in connection with an Asset Sale.
4.11 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter
into any contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an
"AFFILIATE TRANSACTION"), unless (a) such Affiliate Transaction is on terms
that are no less favorable to the Company or the relevant Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Subsidiary with a Person who was not an Affiliate and (b)
the Company delivers to the Trustee (i) with respect to any Affiliate
Transaction involving aggregate payments in excess of $2 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above
and that such Affiliate Transaction has been approved by a majority of the
Board of Directors and (ii) with respect to any Affiliate Transaction
involving aggregate payments in excess of $5 million, an opinion as to the
fairness to the Company or such Subsidiary from a financial point of view
issued by an investment banking firm of national standing; PROVIDED,
HOWEVER, that (i) any employment agreement entered into by the Company or
any of its Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Subsidiary; (ii) transactions
between or among the Company and/or its Subsidiaries; (iii) transactions
permitted under Section 4.07 hereof; and (iv) the advisory fee paid to
First Atlantic Capital, Ltd. in connection with the Offering, in each
case, shall not be deemed Affiliate Transactions.
4.12 LIENS.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly (i) create, incur, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired by the
Company or any Subsidiary, or any income or profits therefrom or (ii)
assign or convey any right to receive income therefrom, in any such case to
secure any Indebtedness (other than Senior Indebtedness of the Company or
Senior Indebtedness of a Guarantor permitted to be incurred pursuant to
this Indenture) unless contemporaneously therewith or prior thereto,
effective provision is made (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee)
whereby the Notes or a Note Guarantee are secured equally and ratably with
such other Indebtedness (or if such other Indebtedness is subordinated to
the Notes or a Note Guarantee, the Notes or a Note Guarantee, as the case
may be, are secured on a basis with the same relative priority to such
other Indebtedness).
4.13 ADDITIONAL GUARANTEES.
If the Company or any of its Subsidiaries shall (i) transfer or
cause to be transferred, in one or a series of related transactions (other
than a transaction or series of related transactions constituting a
Restricted Payment permitted pursuant to Section 4.07 hereof), any assets,
businesses, divisions, real property or equipment having a book value in
excess of $1 million to any Subsidiary that is not a Guarantor or (ii)
acquire another Subsidiary having (a) total assets with a book value in
excess of $1 million or (b) Consolidated Cash Flow in excess of $1 million,
then the Company shall cause such transferee or acquired Subsidiary to (A)
execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such transferee or
acquired Subsidiary shall unconditionally guarantee (a "Note Guarantee," as
defined in Article 10 hereof), on a senior subordinated basis, all of the
Company's obligations under the Notes on the terms set forth in Article 10
hereof and (B) deliver to the Trustee an Opinion of Counsel as to the
enforceability of such Note Guarantee.
4.14 CORPORATE EXISTENCE.
Subject to Article 5 and Article 10 hereof, as the case may be,
the Company and each of the Guarantors shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of
each of their Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of
the Company, any such Guarantor or any such Subsidiary, as the case may be,
and (ii) the rights (charter and statutory), licenses and franchises of the
Company, the Guarantors and their respective Subsidiaries; PROVIDED,
HOWEVER, that the Company and the Guarantors shall not be required to
preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of their respective Subsidiaries, if
the Board of Directors of Holding shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Company, the Guarantors and their Subsidiaries, taken as a whole, and that
the loss thereof is not adverse in any material respect to the Holders of
the Notes.
4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Company shall
make an offer to each Holder to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "CHANGE OF CONTROL OFFER") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase
(the "CHANGE OF CONTROL PAYMENT"). Within 10 days following any Change of
Control, the Company will mail a notice to each Holder stating: (i) that
the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered will be accepted for payment; (ii) the purchase
price and the purchase date, which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed (the "CHANGE OF
CONTROL PAYMENT DATE"); (iii) that any Note not tendered will continue to
accrue interest; (iv) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer will cease to accrue interest after the Change
of Control Payment Date; (v) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (vi) that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that
Holders whose Notes are being purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes in connection
with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment Notes or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of
all Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof tendered to the Company.
The Paying Agent shall promptly mail to each Holder of Notes so accepted
the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered by such Holder, if any; PROVIDED, that
each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. Prior to making the Change of Control Payment, but in
any event within 90 days following a Change of Control, the Company shall
either repay all outstanding Designated Senior Indebtedness or obtain the
requisite consents, if any, under all agreements governing outstanding
Designated Senior Indebtedness to permit the repurchase of Notes required
by this Section 4.15. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change
of Control Payment Date.
4.16 NO SENIOR SUBORDINATED INDEBTEDNESS.
Notwithstanding the provisions of Section 4.09 hereof, (i) the
Company shall not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right
of payment to any Senior Indebtedness and senior in any respect in right of
payment to the Notes, and (ii) no Guarantor shall incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to its Senior Indebtedness and
senior in any respect in right of payment to its Note Guarantee.
ARTICLE V
SUCCESSORS
5.1 Merger, Consolidation Or Sale Of Assets.
The Company shall not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its properties or assets in one or more related transactions, to another
Person unless (i) the Company is the surviving Person formed by or
surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee,
under the Notes and this Indenture; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) the Company or
any Person formed by or surviving any such consolidation or merger, or to
which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (A) shall have Consolidated Net Worth
(immediately after the transaction) equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction
and (B) shall, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 4.09 hereof.
5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially
all of the assets of the Company or the Company and its Subsidiaries on a
consolidated basis in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company
is merged or to which such sale, assignment, transfer, lease, conveyance or
other disposition is made shall succeed to, and be substituted for (so that
from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring
to the "Company" or the "Guarantor," as the case may be, shall refer
instead to the successor corporation and not to the Company or the
Guarantor, as the case may be), and may exercise every right and power of
the Company or the Guarantors, as the case may be, under this Indenture
with the same effect as if such successor Person had been named as the
Company or Guarantor, as the case may be, herein; PROVIDED, HOWEVER, that
the predecessor Company and the predecessor Subsidiaries that are
Guarantors shall not be relieved from the obligation to pay the principal
of and interest on the Notes except in the case of a sale of all of the
Company's assets that meets the requirements of Section 5.01 hereof.
The Trustee shall, at the written request of the Company and the
Holders, authenticate and deliver new Notes representing such successor
pursuant to the terms of Section 2.02 hereof.
ARTICLE VI
DEFAULTS AND REMEDIES
6.1 Events Of Default.
An "Event of Default" occurs if:
(a) the Company or the Guarantors default in the payment when
due of interest or Liquidated Damages, if any, on the Notes (whether or not
prohibited by the subordination provisions of Article 10 or Article 11
hereof, as the case may be) and such default continues for a period of 30
days;
(b) the Company or the Guarantors default in the payment when
due of principal of or premium, if any, on the Notes (whether or not
prohibited by the subordination provisions of Article 10 or Article 11
hereof, as the case may be) when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to
purchase) or otherwise;
(c) the Company fails to comply with any of the provisions of
Section 4.07, 4.09, 4.10 or 4.15 hereof;
(d) the Company or the Guarantors fail to observe or perform any
other covenant, representation, warranty or other agreement in this
Indenture or the Notes for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in principal amount of the Notes
(including Additional Notes, if any) then outstanding;
(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company, Holding or
any of their respective Subsidiaries (or the payment of which is guaranteed
by the Company, Holding or any of their respective Subsidiaries) whether
such Indebtedness or Guarantee now exists, or is created after the Issuance
Date, which default (i) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration
of the grace period provided in such Indebtedness (a "PAYMENT DEFAULT") or
(ii) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $2 million or more;
(f) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the
Company, Holding or any of their respective Subsidiaries and such judgment
or judgments remain unpaid or undischarged for a period (during which
execution shall not be effectively stayed) of 60 days, PROVIDED that the
aggregate of all such undischarged judgments exceeds $2 million;
(g) except as permitted by this Indenture, any Note Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor
(or its successors or assigns), or any Person acting on behalf of such
Guarantor (or its successors or assigns), shall deny or disaffirm its
obligations or shall fail to comply with any obligations under its Note
Guarantee.
(h) the Company, any Guarantor or any of their respective
Subsidiaries pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company, any Guarantor or any
of their respective Subsidiaries in an involuntary case;
(ii) appoints a Custodian of the Company, any Guarantor or
any of their respective Subsidiaries or for all or substantially all
of the property of the Company, any Guarantor or any of their
respective Subsidiaries; or
(iii) orders the liquidation of the Company, any Guarantor
or any of their respective Subsidiaries and the order or decree
remains unstayed and in effect for 60 consecutive days.
6.2 ACCELERATION.
If any Event of Default (other than an Event of Default specified
in clause (h) or (i) of Section 6.01 hereof with respect to the Company,
any Guarantor or any of their respective Subsidiaries) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Notes (including Additional Notes, if any) may
declare all the Notes to be due and payable immediately; PROVIDED, HOWEVER,
that if any Indebtedness is outstanding pursuant to the Credit Facility,
upon a declaration of acceleration, the principal and interest on the Notes
shall be payable, upon the earlier of (i) the day which is five Business
Days after notice of acceleration is given to the Company and the lender
under the Credit Facility or (ii) the date of acceleration of the
Indebtedness under the Credit Facility. Notwithstanding the foregoing, if
an Event of Default specified in clause (h) or (i) of Section 6.01 hereof
occurs with respect to the Company, Holding or any of their respective
Subsidiaries, all outstanding Notes shall be due and payable immediately
without further action or notice. The Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including
Additional Notes, if any) by written notice to the Trustee may on behalf of
all of the Holders rescind any acceleration of the Notes and its
consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
If an Event of Default occurs on or after April 15, 1999 by
reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding payment of the premium
that the Company would have had to pay if the Company then had elected to
redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration
of the Notes, an equivalent premium shall also become and be immediately
due and payable, to the extent permitted by law, anything in this Indenture
or in the Notes to the contrary notwithstanding. If an Event of Default
occurs prior to April 15, 1999 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium
shall also become and be immediately due and payable in an amount, of
107.350% of the principal amount that would otherwise be due but for the
provisions of this sentence.
6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium
and Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture, including, but
not limited to, notifying the Guarantors pursuant to the terms hereof and
the Note Guarantees.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders in respect of which such
judgment has been recovered.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their
former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had
been instituted.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.
No delay or omission of the Trustee or of any Holder to exercise
any right or remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or constitute a waiver of any such Default
or Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
6.4 WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding (including Additional Notes, if any) by
notice to the Trustee may on behalf of the Holders of all of the Notes
waive any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment
of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase)
(PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes (including Additional Notes, if any)
may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
6.5 CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes (including Additional Notes, if any) may direct the time, method and
place of conducting any proceeding for exercising any remedy available to
the Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture that the Trustee determines may be unduly prejudicial to the
rights of other Holders of Notes or that may involve the Trustee in
personal liability.
6.6 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes (including Additional Notes, if any) make a written
request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense reasonably anticipated by the
Trustee in complying with such request;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes (including Additional Notes,
if any) do not give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of such Holder.
6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Notes, including the
Guarantors), its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or securities or
other property payable or deliverable upon the exchange of the Notes or
upon any such claims and any custodian in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee, and
in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
7.07 hereof out of the estate in any such proceeding shall be denied for
any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and
other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
SECOND: to the holders of Senior Indebtedness of the Company or
the Guarantors, as the case may be, to the extent required by Article 10 or
Article 11 hereof, as applicable;
THIRD: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any, and interest, respectively; and
FOURTH: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit
by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Notes (including Additional Notes, if any) .
ARTICLE VII
TRUSTEE
7.1 Duties Of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture
and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper
Person. The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled, upon
reasonable notice and during normal business hours, to examine the books,
records and premises of the Company, personally or by agent or attorney so
long as such examination does not interfere with the Company's business.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel and the written advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that in the reasonable discretion of the Trustee, might be
incurred by it in compliance with such request or direction.
7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company, the
Guarantors or any Affiliate of the Company or the Guarantors with the same
rights it would have if it were not Trustee. However, in the event that
the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties.
The Trustee is also subject to Sections 7.10 and 7.11 hereof.
7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Company's use of the proceeds
from the Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal
of, premium and Liquidated Damages, if any, or interest on any Note, the
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice
is in the interests of the Holders of the Notes.
7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA <section>
313(a) (but if no event described in TIA <section> 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with TIA <section> 313(b)(2).
The Trustee shall also transmit by mail all reports as required by TIA
<section> 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA
<section> 313(d). The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange.
7.7 COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee from time
to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company and the
Guarantors shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include
the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company and the Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Guarantors (including this Section
7.07) and defending itself against any claim (whether asserted by the
Company, any Guarantor or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company and the
Guarantors of their obligations hereunder. The Company and the Guarantors
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company and the Guarantors shall
pay the reasonable fees and expenses of such counsel. The Company and the
Guarantors need not pay for any settlement made without their consent,
which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this
Indenture.
To secure the Company's and the Guarantors' payment obligations
in this Section, the Trustee shall have, and the Company does hereby grant,
assign and convey to the Trustee, to the benefit of the Holders, a security
interest in and a Lien on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge
of this Indenture.
The Trustee's right to receive payment of any amounts due under
this Section 7.07 shall not be subordinate to any other liability or
indebtedness of the Company (even though the Notes may be subordinated) and
the payments of principal and interest on the Notes shall be subordinate to
the Trustee's right to receive such payment.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(h) or (i) hereof occurs, the
expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA <section>
313(b)(2) to the extent applicable.
7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Notes of a majority in principal amount of the then outstanding Notes
(including Additional Notes, if any) may remove the Trustee by so notifying
the Trustee and the Company in writing. The Company may remove the Trustee
if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) may appoint a
successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, any Guarantor, or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes (including Additional Notes,
if any) may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, PROVIDED all sums owing to the Trustee hereunder have been paid
and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's and the Guarantors' obligations under Section 7.07 hereof
shall continue for the benefit of the retiring Trustee.
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act
shall be the successor Trustee.
7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such
laws to exercise corporate trustee power, that is subject to supervision or
examination by federal or state authorities and that has a combined capital
and surplus of at least $100 million as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA paragraphs 310(a)(1), (2) and (5). The Trustee
is subject to TIA paragraph 310(b).
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA paragraph 311(a), excluding any
creditor relationship listed in TIA paragraph 311(b). A Trustee who has
resigned or been removed shall be subject to TIA paragraph 311(a) to the
extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
8.1 Option To Effect Legal Defeasance Or Covenant Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate delivered
to the Trustee, at any time, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article Eight.
8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company and the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be deemed to have been discharged from their obligations with
respect to all outstanding Notes and Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE").
For this purpose, Legal Defeasance means that the Company and the
Guarantors shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes and the Note Guarantees,
which shall thereafter be deemed to be "outstanding" only for the purposes
of Section 8.05 hereof and the other Sections of this Indenture referred to
in (a) and (b) below, and to have satisfied all its other obligations under
such Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments
in respect of the principal of, premium and Liquidated Damages, if any, and
interest on such Notes when such payments are due, (b) the Company's and
the Guarantors' obligations with respect to such Notes under Article 2 and
Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's and the Guarantors' obligations
in connection therewith and (d) this Article Eight. Subject to compliance
with this Article Eight, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, be released from their obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15 and
4.16 hereof with respect to the outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and the Notes and the Note Guarantees shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that
such Notes shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company and the Guarantors may omit to comply with
and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(e) through 6.01(f) and Section 6.01(h) and 6.01(i) hereof shall not
constitute Events of Default.
8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars, non-
callable Government Securities, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and
Liquidated Damages, if any, and interest on the outstanding Notes on the
stated date for payment thereof or on the applicable redemption date, as
the case may be, of such principal or installment of principal of, premium
and Liquidated Damages, if any, or interest on the outstanding Notes;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the Issuance Date, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Notes pursuant to this
Article Eight concurrently with such incurrence) or insofar as Sections 6.0
1(h) or 6.01(i) hereof is concerned, at any time in the period ending on
the day on which all applicable preference periods have run;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the day on which all applicable preference
periods have run, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over the other creditors of the Company or
the Guarantors or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or the Guarantors; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of
principal, premium and Liquidated Damages, if any, and interest, but such
money need not be segregated from other funds except to the extent required
by law.
The Company and the Guarantors shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against
the cash or non-callable Government Securities deposited pursuant to
Section 8.04 hereof or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held
by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
8.6 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium
or Liquidated Damages, if any, or interest, if any, on any Note and
remaining unclaimed for two years after such principal, premium or
Liquidated Damages, if any, or interest, if any, have become due and
payable shall be paid to the Company on its written request accompanied by
an Officers' Certificate or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter,
as an unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof,
shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense
of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the
Company.
8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's and the
Guarantors' obligations under this Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02
or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as
the case may be; PROVIDED, HOWEVER, that, if the Company and the Guarantors
make any payment of principal of, premium or Liquidated Damages, if any, or
interest, if any, on any Note following the reinstatement of its
obligations, the Company and the Guarantors shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money
held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
9.1 Without Consent Of Holders Of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of the Notes in the case of a merger or
consolidation pursuant to Article Five or Article 10 hereof, as the case
may be;
(d) to make any change that would provide any additional rights
or benefits to the Holders of the Notes (including providing for additional
Note Guarantees pursuant to Section 4.13 hereof) or that does not adversely
affect the legal rights hereunder of any Holder of the Notes;
(e) to provide for the issuance of Additional Notes in
accordance with the provisions set forth herein; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company
and the Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
9.2 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the
Notes with the consent of the Holders of at least a majority in principal
amount of the Notes (including Additional Notes, if any) then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on
the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the
Notes may be waived with the consent of the Holders of at least a majority
in principal amount of the then outstanding Notes (including Additional
Notes, if any) voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Company and the
Guarantors in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves
the substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Sections 6.04 and
6.07 hereof, the Holders of a majority in aggregate principal amount of the
Notes (including Additional Notes, if any) then outstanding may waive
compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Notes held by
a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the redemption
of the Notes;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium or Liquidated Damages, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders of
at least a majority in aggregate principal amount of the then outstanding
Notes (including Additional Notes, if any) and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium or Liquidated Damages, if any, or
interest on the Notes;
(g) waive a redemption payment with respect to any Note;
(h) make any change to the subordination provisions of Article
10 or Article 11 hereof that adversely affects Holders;
(i) except pursuant to Article 8 and Article 10 hereof, release
any Guarantor from its obligations under its Note Guarantee, or change any
Note Guarantee in any manner that would adversely affect Holders; or
(j) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or a supplemental Indenture that complies
with the TIA as then in effect.
9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder
of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation
of the consent is not made on any Note. However, any such Holder of a Note
or subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
9.5 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new
Notes (accompanied by a notation of the Note Guarantee duly endorsed by the
Guarantors) that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. The Company and the Guarantors may not sign an amendment or
supplemental Indenture until the Board of Directors of the Company approves
it. In executing any amended or supplemental indenture, the Trustee shall
be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
ARTICLE X
NOTE GUARANTEES
10.1 Note Guarantee.
The Guarantors and each Subsidiary of the Company which in
accordance with Section 4.13 hereof is required to guarantee the
obligations of the Company under the Notes upon execution of a counterpart
of this Indenture, hereby jointly and severally unconditionally guarantees
(each such guarantee, a "NOTE GUARANTEE") to each Holder of a Note
authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture, the Notes or the obligations of the
Company under this Indenture or the Notes, that: (i) the principal of,
interest and Liquidated Damages, if any, on the Notes will be paid in full
when due, whether at the maturity or interest payment or mandatory
redemption date, by acceleration, call for redemption or otherwise, and
interest on the overdue principal of and interest, if any, on the Notes and
all other obligations of the Company to the Holders or the Trustee under
this Indenture or the Notes will be promptly paid in full or performed, all
in accordance with the terms of this Indenture and the Notes; and (ii) in
case of any extension of time of payment or renewal of any Notes or any of
such other obligations, they will be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity,
by acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Guarantor will be obligated to pay the
same whether or not such failure to pay has become an Event of Default
which could cause acceleration pursuant to Section 6.02 hereof. Each
Guarantor agrees that this is a guarantee of payment not a guarantee of
collection.
Each Guarantor hereby agrees that its obligations with regard to
this Note Guarantee shall be joint and several, unconditional, irrespective
of the validity or enforceability of the Notes or the obligations of the
Company under this Indenture, the absence of any action to enforce the
same, the recovery of any judgment against the Company or any other obligor
with respect to this Indenture, the Notes or the obligations of the Company
under this Indenture or the Notes, any action to enforce the same or any
other circumstances (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each
Guarantor further, to the extent permitted by law, waives and relinquishes
all claims, rights and remedies accorded by applicable law to guarantors
and agrees not to assert or take advantage of any such claims, rights or
remedies, including but not limited to: (a) any right to require the
Trustee, the Holders or the Company (each, a "BENEFITED PARTY") to proceed
against the Company or any other Person or to proceed against or exhaust
any security held by a Benefited Party at any time or to pursue any other
remedy in any Benefited Party's power before proceeding against such
Guarantor; (b) the defense of the statute of limitations in any action
hereunder or in any action for the collection of any Indebtedness or the
performance of any obligation hereby guaranteed; (c) any defense that may
arise by reason of the incapacity, lack of authority, death or disability
of any other Person or the failure of a Benefited Party to file or enforce
a claim against the estate (in administration, bankruptcy or any other
proceeding) of any other Person; (d) demand, protest and notice of any kind
including but not limited to notice of the existence, creation or incurring
of any new or additional Indebtedness or obligation or of any action or
non-action on the part of such Guarantor, the Company, any Benefited Party,
any creditor of such Guarantor, the Company or on the part of any other
Person whomsoever in connection with any Indebtedness or obligations hereby
guaranteed; (e) any defense based upon an election of remedies by a
Benefited Party, including but not limited to an election to proceed
against such Guarantor for reimbursement; (f) any defense based upon any
statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more burdensome than that
of the principal; (g) any defense arising because of a Benefited Party's
election, in any proceeding instituted under the Federal Bankruptcy Code,
of the application of Section 111l(b)(2) of the Federal Bankruptcy Code; or
(h) any defense based on any borrowing or grant of a security interest
under Section 364 of the Federal Bankruptcy Code. Each Guarantor hereby
covenants that its Note Guarantee will not be discharged except by complete
performance of the obligations contained in its Note Guarantee and this
Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any
Custodian, trustee, or similar official acting in relation to either the
Company or such Guarantor, any amount paid by the Company or such Guarantor
to the Trustee or such Holder, the applicable Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it will not be entitled to any right of subrogation
in relation to the Holders in respect of any obligations guaranteed hereby
until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between such Guarantor, on
the one hand, and the Holders and the Trustee, on the other hand, (i) the
maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.02 hereof for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the Company or any other obligor on the Notes of the
obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those obligations as provided in Section 6.02 hereof, those
obligations (whether or not due and payable) will forthwith become due and
payable by such Guarantor for the purpose of this Note Guarantee.
10.2 SUBORDINATION.
Each Guarantor, the Trustee, and each Holder by accepting a Note
agrees, that the obligations of such Guarantor hereunder shall be
subordinated in right of payment to the prior payment in full of all
Obligations of every type whatsoever, contingent or otherwise due in
respect of Senior Indebtedness of such Guarantor and of the Company
(whether outstanding on the date hereof or hereafter created, incurred,
assumed or guaranteed). The subordination provisions of this Article 10
are made for the benefit of the holders of all Senior Indebtedness (whether
outstanding on the date hereof or issued hereafter) of each Guarantor, such
holders of Senior Indebtedness of each Guarantor are made obligees under
this Article 10 and such holders of Senior Indebtedness of each Guarantor
or any of them may enforce the provisions of this Article 10. Holders of
Senior Indebtedness of each Guarantor are third party beneficiaries of this
Article 10 and no amendment thereof shall be effected without the prior
written consent of the holders of a majority of the outstanding principal
amount of Senior Indebtedness of each Guarantor.
10.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of any Guarantor in a
liquidation or dissolution of such Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to
such Guarantor or its property, in an assignment for the benefit of
creditors or any marshaling of such Guarantor's assets and liabilities:
(1) holders of Senior Indebtedness of such
Guarantor shall be entitled to receive payment in full of all
Obligations due in respect of such Senior Indebtedness of such
Guarantor (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior
Indebtedness of such Guarantor, whether or not such interest was
an allowed claim) before the Trustee or any Holder shall be
entitled to receive any payment from the Guarantor under or
pursuant to this Note Guarantee with respect to the Notes; and
(2) until all Obligations with respect to Senior
Indebtedness of such Guarantor (as provided in subsection (1)
above) are paid in full, any distribution to which the Trustee or
any Holder would be entitled but for this Article shall be made
to holders of Senior Indebtedness of such Guarantor (except that
Holders may receive securities that are subordinated in right and
priority of payment to at least the same extent as the Note
Guarantee to (a) Senior Indebtedness of such Guarantor and (b)
any securities issued in exchange for Senior Indebtedness of such
Guarantor).
10.4 DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS OF THE GUARANTOR.
No Guarantor shall make any payment or distribution to the
Trustee or any Holder upon or in respect of its Note Guarantee or the
Notes, or any Obligation with respect thereto, and no Guarantor shall
acquire from the Trustee or any Holder any Notes for cash or property
(other than securities that are subordinated in right and priority of
payment to at least the same extent as its Note Guarantee to (a) Senior
Indebtedness of such Guarantor and (b) any securities issued in exchange
for Senior Indebtedness of such Guarantor) until all principal and other
Obligations with respect to the Senior Indebtedness of such Guarantor have
been paid in full if:
(i) a default in the payment when due, whether upon
acceleration or otherwise, of the principal, premium, if any, or
interest on any Senior Indebtedness of such Guarantor occurs and is
continuing beyond any applicable grace period; or
(ii) any other default on Designated Senior Indebtedness of
such Guarantor occurs and is continuing and the Trustee receives a
notice of the default from such Guarantor, or the holders of any such
Designated Senior Indebtedness of such Guarantor, stating that such
Guarantor or holders are invoking a payment blockage under this
Section 10.04(ii) (a "GUARANTOR PAYMENT BLOCKAGE NOTICE"). If the
Trustee receives any such notice, a subsequent notice received within
365 days thereafter shall not be effective for purposes of this
Section.
Each Guarantor may and shall resume payments on and distributions
in respect of its Note Guarantee, the Notes and all Obligations with
respect thereto, and may acquire such Notes, Obligations for value when:
(1) in the case of a payment default as described
in (i) above, upon the date on which such default is cured or
waived, and
(2) in the case of a nonpayment default as
described in (ii) above, on the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date
on which a Guarantor Payment Blockage Notice is received if the
maturity of such Designated Senior Indebtedness of such Guarantor
has not been accelerated, and this Article otherwise permits the
payment at the time of such payment.
10.5 ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, each Guarantor shall promptly notify each Representative of
holders of Senior Indebtedness of such Guarantor of the acceleration.
10.6 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives from a
Guarantor any payment of any Obligations with respect to the Notes or any
other Obligation guaranteed hereby at a time when the Trustee or such
Holder has actual knowledge that such payment is prohibited by Section
10.03 or Section 10.04 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Indebtedness
of such Guarantor as their interests may appear, or their Representative
under the indenture or other agreement (if any) pursuant to which Senior
Indebtedness of such Guarantor may have been issued, as their respective
interests may appear, for application to the payment of all Obligations
with respect to Senior Indebtedness of such Guarantor remaining unpaid to
the extent necessary to pay such Obligations in full in accordance with
their terms, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness of such Guarantor.
If a distribution is made to the Trustee or any Holder that
because of this Article 10 should not have been made to it at a time when
the Trustee or such Holder has actual knowledge that such distribution
should not have been made to it, the Trustee or such Holder who receives
the distribution shall hold it in trust for the benefit of, and, upon
written request, pay it over to, the holders of Senior Indebtedness of such
Guarantor as their interests may appear, or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Indebtedness
of such Guarantor may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to
Senior Indebtedness of such Guarantor remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness of such Guarantor.
With respect to any Guarantor, with respect to the holders of
Senior Indebtedness of such Guarantor, the Trustee undertakes to perform
only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness of such Guarantor shall be
read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness of
such Guarantor, and shall not be liable to any such holders if the Trustee
shall pay over or distribute to or on behalf of Holders or the Company or
any other Person money or assets to which any holders of Senior
Indebtedness of such Guarantor shall be entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
10.7 NOTICE BY A GUARANTOR.
Each Guarantor shall promptly notify the Trustee and the Paying
Agent of any facts known to such Guarantor that would cause a payment of
any Obligations with respect to the Notes or its Note Guarantee to violate
this Article, but failure to give such notice shall not affect the
subordination of its Note Guarantee or of the Notes to the Senior
Indebtedness of such Guarantor as provided in this Article.
10.8 SUBROGATION.
With respect to any Guarantor, after all Senior Indebtedness of
such Guarantor is paid in full and until the Notes are paid in full,
Holders shall, without duplication, be subrogated to the rights of holders
of Senior Indebtedness of such Guarantor to receive distributions
applicable to Senior Indebtedness of such Guarantor to the extent that
distributions otherwise payable to the Holders have been applied to the
payment of Senior Indebtedness of such Guarantor. A distribution made
under this Article to holders of Senior Indebtedness of such Guarantor that
otherwise would have been made to Holders is not, as between such Guarantor
and Holders, a payment by the Company on the Senior Indebtedness of such
Guarantor.
10.9 RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders
of Senior Indebtedness of such Guarantor. Nothing in this Indenture shall:
(1) impair, as between such Guarantor and the
Holders, the obligation of such Guarantor, which is absolute and
unconditional, to pay principal of and interest on the Notes in
accordance with their terms;
(2) affect the relative rights of Holders and
creditors of such Guarantor other than their rights in relation
to holders of Senior Indebtedness of such Guarantor; or
(3) prevent the Trustee or any Holder from
exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders of Senior Indebtedness
of such Guarantor set forth herein to receive distributions and
payments otherwise payable to Holders.
10.10 SUBORDINATION MAY NOT BE IMPAIRED BY ANY GUARANTOR.
With respect to any Guarantor, no right of any holder of Senior
Indebtedness of such Guarantor to enforce the subordination of the Note
Guarantee shall be impaired by any act or failure to act by such Guarantor
or any Holder or by failure of such Guarantor or any Holder to comply with
this Indenture.
10.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
With respect to any Guarantor, whenever a distribution is to be
made or a notice given to holders of Senior Indebtedness of such Guarantor,
the distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets referred to in this
Article 10, the Trustee and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent
or other Person making any distribution for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness of such Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10.
10.12 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of
any payment or distribution by the Trustee, and the Trustee and the Paying
Agent may continue to make payments on the Notes, unless the Trustee shall
have received at its Corporate Trust Office at least five Business Days
prior to the date of such payment written notice of facts that would cause
the payment of any Obligations with respect to the Note Guarantee to
violate this Article. Only a Guarantor, the holder of any Senior
Indebtedness of such Guarantor, or the Representative of holders of Senior
Indebtedness of such Guarantor may give the notice. Nothing in this
Article 10 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
With respect to any Guarantor, the Trustee in its individual or
any other capacity may hold Senior Indebtedness of such Guarantor with the
same rights it would have if it were not Trustee.
10.13 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in this Article 10, and appoints the Trustee the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not
file a proper proof of claim or proof of debt in the form required in any
proceeding relative to any Guarantor referred to in Section 6.09 hereof at
least 30 days before the expiration of the time to file such claim, the
holders (or their Representative) of Senior Indebtedness of each Guarantor
are hereby authorized to file an appropriate claim for and on behalf of the
Holders of the Notes.
10.14 LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof, each beneficiary
hereof, hereby confirms that it is its intention that the Note Guarantee by
such Guarantor not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Note Guarantee. To effectuate the foregoing
intention, each such Person hereby irrevocably agrees that the obligation
of such Guarantor under its Note Guarantee under this Article 10 shall be
limited to the maximum amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 10,
result in the obligations of such Guarantor in respect of such maximum
amount not constituting a fraudulent conveyance. Each beneficiary under
the Note Guarantees, by accepting the benefits hereof, confirms its
intention that, in the event of a bankruptcy, reorganization or other
similar proceeding of the Company or any Guarantor in which concurrent
claims are made upon such Guarantor hereunder, to the extent such claims
will not be fully satisfied, each such claimant with a valid claim against
the Company shall be entitled to a ratable share of all payments by such
Guarantor in respect of such concurrent claims.
10.15 EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 10.01 hereof,
each Guarantor hereby agrees that this Indenture shall be executed on
behalf of each Guarantor by its President or one of its Vice Presidents and
that the notation on each Note relating to the Note Guarantee shall be
executed on behalf of each Guarantor by an Officer.
10.16 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) No Guarantor shall consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person
whether or not it is affiliated with such Guarantor unless (i) subject to
the provisions of the following paragraph and Section 10.17 hereof, the
Person formed by or surviving any such consolidation or merger (if other
than such Guarantor) assumes all the obligations of such Guarantor pursuant
to a supplemental indenture in a form reasonably satisfactory to the
Trustee, under its Note Guarantee and this Indenture, (ii) immediately
after giving effect to such transaction, no Default or Event of Default
exists, and (iii) in the case of any Guarantor other than Holding, such
Guarantor, or any Person formed by or surviving any such consolidation or
merger, (A) shall have Consolidated Net Worth (immediately after giving
effect to such transaction), equal to or greater than the Consolidated Net
Worth of such Guarantor immediately preceding the transaction and (B) will
be permitted by virtue of the Company's pro forma Fixed Charge Coverage
Ratio to incur, immediately after giving effect to such transaction, at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09 hereof. In case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the Note Guarantee
in this Indenture and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by
the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor.
Notwithstanding the foregoing, (A) a Guarantor may consolidate
with or merge with or into the Company, PROVIDED, that the surviving
corporation (if other than the Company) shall expressly assume by
supplemental indenture complying with the requirements of this Indenture,
the due and punctual payment of the principal of, premium, if any, and
interest on all of the Notes, and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be
performed by the Company and (B) a Guarantor may consolidate with or merge
with or into any other Guarantor.
10.17 RELEASES FOLLOWING SALE OF ASSETS.
Upon a sale or other disposition of all or substantially all of
the assets of any Guarantor (other than Holding), by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of any Guarantor, then such Guarantor (in the event of a sale
or other disposition, by way of such a merger, consolidation or otherwise,
of all of the Capital Stock of such Guarantor) or the corporation acquiring
the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be released and
relieved of its obligations under its Note Guarantee; PROVIDED that the Net
Proceeds of such sale or other disposition are applied in accordance with
Section 4.10 hereof.
ARTICLE XI
SUBORDINATION
11.1 Subordination.
The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by the Notes shall be subordinated in right
of payment to the prior payment in full of all Obligations of every type
whatsoever, contingent or otherwise due in respect of Senior Indebtedness
of the Company (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed). The subordination provisions of
this Article 11 are made for the benefit of the holders of all Senior
Indebtedness (whether outstanding on the date hereof or issued hereafter)
of the Company, such holders of Senior Indebtedness of the Company are made
obligees under this Article 11 and such holders of Senior Indebtedness of
the Company or any of them may enforce the provisions of this Article 11.
Holders of Senior Indebtedness of the Company are third party beneficiaries
of this Article 11 and no amendment hereof shall be effected without the
prior written consent of the holders of a majority of the outstanding
principal amount of Senior Indebtedness of the Company.
11.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to
the Company or its property, an assignment for the benefit of creditors or
any marshalling of the Company's assets and liabilities:
(1) holders of Senior Indebtedness of the Company
shall be entitled to receive payment in full of all Obligations
due in respect of such Senior Indebtedness of the Company
(including interest after the commencement of any such proceeding
at the rate specified in the applicable Senior Indebtedness of
the Company, whether or not such interest is an allowed claim)
before the Holders shall be entitled to receive any payment with
respect to the Notes; and
(2) until all Obligations with respect to Senior
Indebtedness of the Company (as provided in subsection (1) above)
are paid in full, any distribution to which Holders would be
entitled but for this Article shall be made to holders of Senior
Indebtedness of the Company (except that Holders may receive
securities that are subordinated in right and priority of payment
to at least the same extent as the Notes to (a) Senior
Indebtedness of the Company and (b) any securities issued in
exchange for any such Senior Indebtedness of the Company).
11.3 DEFAULT ON SENIOR INDEBTEDNESS.
The Company may not make any payment or distribution to the
Trustee or any Holder upon or in respect of the Notes, or any Obligation
with respect thereto, and may not acquire from the Trustee or any Holder
any Notes for cash or property (other than securities that are subordinated
in right and priority of payment to at least the same extent as the Notes
to (a) Senior Indebtedness of the Company and (b) any securities issued in
exchange for Senior Indebtedness of the Company) until all principal and
other Obligations with respect to the Senior Indebtedness of the Company
have been paid in full if:
(i) a default in the payment when due, whether upon
acceleration or otherwise, of the principal of, premium, if any, or
interest on any Senior Indebtedness of the Company occurs and is
continuing beyond any applicable grace period; or
(ii) any other default on Designated Senior Indebtedness of
the Company occurs and is continuing and the Trustee receives a notice
of such default from the Company, or from, or on behalf of, the
holders of any such Designated Senior Indebtedness of the Company,
stating that it is or such holders are invoking a payment blockage
under this Section 11.03(ii) (a "PAYMENT BLOCKAGE NOTICE"). If the
Trustee receives any such notice, a subsequent notice received within
365 days thereafter shall not be effective for purposes of this
Section.
The Company may and shall resume payments on and distributions in
respect of the Notes, and all Obligations with respect thereto, and may
acquire them when:
(1) in the case of a payment default as described
in (i) above, upon the date on which such default is cured or
waived, and
(2) in the case of a nonpayment default as
described in (ii) above, on the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date
on which the applicable Payment Blockage Notice is received,
unless the maturity of any such Designated Senior Indebtedness of
the Company has been accelerated, and this Article otherwise
permits the payment at the time of such payment.
11.4 ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify each Representative of holders
of Senior Indebtedness of the Company of the acceleration.
11.5 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes at a time when the Trustee or
such Holder has actual knowledge that such payment is prohibited by Section
11.02 or Section 11.03 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Indebtedness
of the Company as their interests may appear, or their Representatives
under the indenture or other agreement (if any) pursuant to which Senior
Indebtedness of the Company may have been issued, as their respective
interests may appear, for application to the payment of all Obligations
with respect to Senior Indebtedness of the Company remaining unpaid to the
extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness of the Company.
If a distribution is made to the Trustee or any Holder that
because of this Article 11 should not have been made to it at a time when
the Trustee or such Holder has actual knowledge that such distribution
should not have been made to it, the Trustee or such Holder who receives
the distribution shall hold it in trust for the benefit of, and, upon
written request, pay it over to, the holders of Senior Indebtedness of the
Company as their interests may appear, or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Indebtedness
of the Company may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to
Senior Indebtedness of the Company remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness of the Company.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform only such obligations on the
part of the Trustee as are specifically set forth in this Article 11 and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness of the Company shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to
any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to
which any holders of Senior Indebtedness of the Company shall be entitled
by virtue of this Article 11, except if such payment is made as a result of
negligent action, its own negligent failure to act or its own willful
conduct or gross negligence of the Trustee.
11.6 NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article, but failure
to give such notice shall not affect the subordination of the Notes to the
Senior Indebtedness of the Company as provided in this Article.
11.7 SUBROGATION.
After all Senior Indebtedness of the Company is paid in full and
until the Notes are paid in full, Holders shall, without duplication, be
subrogated to the rights of holders of Senior Indebtedness of the Company
to receive distributions applicable to Senior Indebtedness of the Company
to the extent that distributions otherwise payable to the Holders have been
applied to the payment of Senior Indebtedness of the Company. A
distribution made under this Article to holders of Senior Indebtedness of
the Company that otherwise would have been made to Holders is not, as
between the Company and Holders, a payment by the Company on Senior
Indebtedness of the Company.
11.8 RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders
of Senior Indebtedness of the Company. Nothing in this Indenture shall:
(1) impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes in
accordance with their terms;
(2) affect the relative rights of Holders and
creditors of the Company other than their rights in relation to
holders of Senior Indebtedness of the Company; or
(3) prevent the Trustee or any Holder from
exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders of Senior Indebtedness
of the Company set forth herein to receive distributions and
payments otherwise payable to Holders.
If the Company fails because of this Article to pay principal of
or interest on a Note on the due date, the failure is still a Default or
Event of Default.
11.9 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness of the Company to
enforce the subordination of the Indebtedness with respect to the Notes
shall be impaired by any act or failure to act by the Company or any Holder
or by failure of the Company or any Holder to comply with this Indenture.
11.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness of the Company, the distribution may be made
and the notice given to their Representative.
Upon any payment or distribution of assets referred to in this
Article 11, the Trustee and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent
or other Person making any distribution for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 11.
11.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of
any payment or distribution by the Trustee, and the Trustee and the Paying
Agent may continue to make payments on the Notes, unless the Trustee shall
have received at its Corporate Trust Office at least three Business Days
prior to the date of such payment written notice of facts that would cause
the payment of any Obligations with respect to the Notes to violate this
Article. Only the Company, the holder of any Senior Indebtedness of the
Company, or any Representative of holders of Senior Indebtedness of the
Company may give the notice. Nothing in this Article 11 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness of the Company with the same rights it would have if it
were not Trustee.
11.12 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in this Article 11, and appoints the Trustee the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not
file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the holders (or their
Representative) of Senior Indebtedness of the Company are hereby authorized
to file an appropriate claim for and on behalf of the Holders of the Notes.
ARTICLE XII
MISCELLANEOUS
12.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA <section>318(c), the imposed duties shall
control.
12.2 NOTICES.
Any notice or communication by the Company, the Guarantors or the
Trustee to the others is duly given if in writing and delivered in Person
or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next
day delivery, to the others' address:
If to the Company or any Guarantor:
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
Telecopier No.: (812) 421-9604
Attention: Martin R. Imbler
With a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Telecopier No.: (212) 408-2420
Attention: Michael Joseph O'Brien, Esq.
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Telecopier No.: (212) 852-1625
Attention: Corporate Trust Administration
The Company, the Guarantors or the Trustee, by notice to the
others may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in TIA <section> 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company or any Guarantor mails a notice or communication
to Holders, it shall mail a copy to the Trustee and each Agent at the same
time.
12.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA <section> 312(b) with
other Holders with respect to their rights under this Indenture or the
Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA <section> 312(c).
12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or the Guarantors
to the Trustee to take any action under this Indenture, the Company or the
Guarantors shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA paragraph 314(a)(4)) shall comply with
the provisions of TIA paragraph 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
12.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
12.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, shall
have any liability for any obligations of the Company or any Guarantor
under the Notes, the Note Guarantees, this Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note and the Note Guarantees waives and releases
all such liability. The waiver and release are part of the consideration
for issuance of the Notes and the Note Guarantees.
12.8 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
12.9 CONSENT TO JURISDICTION
To the fullest extent permitted by applicable law, each of the
parties hereto hereby irrevocably submits to the jurisdiction of any New
York State court or Federal court sitting in the borough of Manhattan in
New York City in respect of any suit, action or proceeding arising out of
or relating to the provisions of this Indenture and irrevocably agrees that
all claims in respect of any such suit, action or proceeding may be heard
and determined in any such court. Each of the parties hereto waive, to the
fullest extent permitted by applicable law, any objection which it may now
or hereafter have to the laying of venue of any such suit, action or
proceeding brought in any such court, and any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
12.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
12.11 SUCCESSORS.
All agreements of the Company and the Guarantors in this
Indenture and the Notes and the Note Guarantees, as the case may be, shall
bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
12.12 SEVERABILITY.
In case any provision in this Indenture, or in the Notes or in
the Note Guarantees shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
12.13 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent
the same agreement.
12.14 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents. Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and
shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
1
<PAGE>
SIGNATURES
Dated as of August 24, 1994 BERRY PLASTICS CORPORATION
By:______________________________________
Name:
Title:
BPC HOLDING CORPORATION
By:______________________________________
Name:
Title:
BERRY IOWA CORPORATION
By:______________________________________
Name:
Title:
BERRY STERLING CORPORATION
By:______________________________________
Name:
Title:
BERRY TRI-PLAS CORPORATION
By:______________________________________
Name:
Title:
AEROCON, INC.
By:______________________________________
Name:
Title:
PACKERWARE CORPORATION
By:______________________________________
Name:
Title:
BERRY PLASTICS DESIGN CORPORATION
By:______________________________________
Name:
Title:
VENTURE PACKAGING, INC.
By:______________________________________
Name:
Title:
VENTURE PACKAGING MIDWEST, INC.
By:_______________________________________
Name:
Title:
VENTURE PACKAGING SOUTHEAST, INC.
By:_______________________________________
Name:
Title:
NIM HOLDINGS LIMITED
By:_______________________________________
Name:
Title:
NORWICH INJECTION MOULDERS LIMITED
By:_______________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
By:_____________________________
Name:
Title:
Dated as of August 24, 1998
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EXHIBIT A
(Face of Note)
CUSIP 085790AC7
12 1/4 % Series B Senior Subordinated Notes due 2004
No.1 $25,000,000
BERRY PLASTICS CORPORATION
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of Twenty-Five Million Dollars ($25,000,000)
on April 15, 2004.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Dated: August 24, 1998
BERRY PLASTICS CORPORATION
By:_______________________________
Name:
Title:
By:________________________________
Name:
Title:
(SEAL)
This is one of the Notes
referred to in the
within-mentioned Indenture:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:____________________________
Authorized Signatory
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(Back of Security)
12 1/4 % SERIES B SENIOR SUBORDINATED NOTE
DUE April 15, 2004
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 OR (c) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY AND THE GUARANTORS SO
REQUEST), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Berry Plastics Corporation, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate and in the manner specified below.
The Company shall pay in cash interest on the principal amount of
this Note at the rate per annum of 12 1/4 % from August 24, 1998 until maturity
and shall pay the Liquidated Damages payable pursuant to Section 5 of the
Registration Rights Agreements referred to below. The Company will pay
interest and Liquidated Damages semi-annually on October 15 and April 15 of
each year, or if any such day is not a Business Day (as defined in the
Indenture), on the next succeeding Business Day (each an "Interest Payment
Date"). The first Interest Payment Date shall be October 15, 1998.
Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Interest shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
the original issuance of the Notes. To the extent lawful, the Company shall
pay interest on overdue principal at the rate of 1% per annum in excess of the
then applicable interest rate on the Notes; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at
the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the record date next
preceding the Interest Payment Date, even if such Notes are cancelled after
such record date and on or before such Interest Payment Date. The Company will
pay principal, interest and Liquidated Damages in money of the United States
that at the time of payment is legal tender for payment of public and private
debts. The Company, however, may pay principal, premium, if any, interest and
Liquidated Damages by check payable in such money. It may mail an interest
check to a Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without notice to any Holder. The Company or any Guarantor (as
defined below) may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of August 24, 1998 (the "Indenture") among the Company, the guarantors
named therein (the "Guarantors") and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code
<section><section> 77aaa-77bbbb) as in effect on the date of the Indenture.
The Notes are subject to all such terms, and Holders of the Notes are referred
to the Indenture and such Act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
The Notes are unsecured general obligations of the Company limited to
$100,000,000 in aggregate principal amount.
5. OPTIONAL REDEMPTION. On or after April 15, 1999, the Company
shall have the option to redeem the Notes, in whole or in part, at the
redemption prices (expressed as percentages of the principal amount) set forth
below, plus accrued and unpaid interest thereon, to the applicable redemption
date, if redeemed during the 12 month period beginning on April 15 of the years
indicated below:
YEAR PERCENTAGE
1999 106.125%
2000 104.083%
2001 102.042%
2002 and thereafter 100.000%
1. MANDATORY REDEMPTION. The Company shall not be required to
make mandatory redemption or sinking fund payments with respect to the Notes.
2. REDEMPTION OR REPURCHASE AT OPTION OF HOLDER. () If there is
a Change of Control, the Company shall be required to offer to purchase all
Notes at 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase.
Holders of Notes that are subject to an offer to purchase will receive an offer
to purchase from the Company prior to any related purchase date, and may elect
to have such Notes purchased by completing the form entitled "Option of Holder
to Elect Purchase" appearing below.
(b) When the aggregate amount of Excess Proceeds from Asset Sales
exceeds $5 million, upon completion of the Asset Sale Offer required under the
1994 Indenture, the Company shall be required to offer to purchase the maximum
principal amount of Notes (including any Additional Notes) that may be
purchased out of the Excess Proceeds if any, remaining upon completion of the
Asset Sale Offer required under the 1994 Indenture at 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date fixed for
the closing of such offer. If the aggregate principal amount of Notes tendered
by Holders thereof exceeds the amount of Excess Proceeds, the Notes to be
redeemed shall be selected pursuant to the terms of Section 3.02 of the
Indenture (with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples thereof,
shall be purchased). To the extent that the aggregate amount of Notes
(including any Additional Notes) tendered by Holders thereof is less than the
Excess Proceeds, the Company may use such deficiency for general corporate
purposes. Holders of Notes which are the subject of an offer to purchase will
receive an offer to purchase from the Company prior to any related purchase
date, and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
3. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address. Notes may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called for redemption.
4. SUBORDINATION. The Notes are subordinated to Senior
Indebtedness of the Company (whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed or guaranteed) and all Obligations
with respect thereto. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Notes may be paid. The
Company agrees, and each Holder by accepting a Note agrees, to the
subordination and authorizes the Trustee to give it effect.
5. NOTE GUARANTEES. Payment of principal of, premium, if any, and
interest (including interest on overdue principal, premium, if any, and
interest, if lawful) on the Notes is unconditionally guaranteed by the
Guarantors, on a senior subordinated basis, pursuant to Article 10 of the
Indenture.
6. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture.
The Registrar need not exchange or register the transfer of any Note or portion
of a Note selected for redemption. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed, during the period between a record date and the corresponding
Interest Payment Date.
7. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee
for registration of the transfer of this Note, the Trustee, any Agent, the
Company and the Guarantors may deem and treat the Person in whose name this
Note is registered as its absolute owner for the purpose of receiving payment
of principal of and interest on this Note and for all other purposes
whatsoever, whether or not this Note is overdue, and neither the Trustee, any
Agent, the Company nor any Guarantor shall be affected by notice to the
contrary. The registered holder of a Note shall be treated as its owner for
all purposes.
8. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in principal amount of the then outstanding Notes (including
Additional Notes, if any) (including consents obtained in connection with a
tender offer or exchange offer for Notes), and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) (including consents
obtained in connection with a tender offer or exchange offer for Notes).
Without the consent of any Holder, the Indenture or the Notes may be amended to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for
assumption of the Company's or any Guarantor's obligations to Holders in the
case of a merger or consolidation or to make any change that would provide any
additional rights or benefits to the Holders (including providing for
additional Note Guarantees pursuant to Section 4.13 of the Indenture) or that
does not adversely affect the rights of any Holder under the Indenture, to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture or to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA.
9. DEFAULTS AND REMEDIES. Events of Default include: default by
the Company or the Guarantors in the payment when due of interest or Liquidated
Damages, if any, on the Notes (whether or not prohibited by the subordination
provisions of Article 10 or Article 11 of the Indenture, as the case may be)
and such default continues for a period of 30 days; default by the Company or
the Guarantors in the payment when due of principal of or premium, if any, on
the Notes (whether or not prohibited by the subordination provisions of Article
10 or Article 11 of the Indenture, as the case may be) when the same becomes
due and payable at maturity, upon redemption (including in connection with an
offer to purchase or otherwise); failure by the Company to comply with Sections
4.07, 4.09, 4.10 or 4.15 of the Indenture; failure by the Company or the
Guarantors to observe or perform any other covenant, representation, warranty
or other agreement in the Notes for 60 days after the notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes
(including Additional Notes, if any) then outstanding; default occurs under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company, Holding or any of their respective Subsidiaries (or the payment of
which is guaranteed by the Company, Holding or any of their respective
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created
after the Issuance Date, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $2 million or more; a final judgment or final
judgments for the payment of money are entered by a court or courts of
competent jurisdiction against the Company, Holding or any of their respective
Subsidiaries and such judgment or judgments remain unpaid or undischarged for a
period (during which execution shall not be effectively stayed) of 60 days,
PROVIDED that the aggregate of all such undischarged judgments exceeds $2
million; except as permitted by the Indenture, any Note Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect or any Guarantor (or its successors
or assigns), or any Person acting on behalf of such Guarantor (or its
successors or assigns), shall deny or disaffirm its obligations or shall fail
to comply with any obligations under its Note Guarantee; and certain events of
bankruptcy or insolvency with respect to the Company, any Guarantor or any of
their respective Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes (including Additional Notes, if any) may declare all
the Notes to be due and payable immediately; except, that if any Indebtedness
is outstanding pursuant to the Credit Facility, upon a declaration of
acceleration, the principal and interest on the Notes shall be payable upon the
earlier of (1) the day which is five business days after notice of acceleration
is given to the Company and the lender under the Credit Facility or (2) the
date of acceleration of the Indebtedness under the Credit Facility and except
that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any of its
Subsidiaries, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes
(including Additional Notes, if any) may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice
of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Company must furnish an annual
compliance certificate to the Trustee.
10. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company, the Guarantors or their
respective Affiliates, and may otherwise deal with the Company the Guarantors
or their respective Affiliates, as if it were not Trustee.
11. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Notes, the Note Guarantees, the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note and the Note Guarantees
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes and the Note Guarantees.
12. AUTHENTICATION. Neither this Note nor any Note Guarantee shall
be valid until authenticated by the manual signature of the Trustee or an
authenticating agent.
13. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
14. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE NOTE
GUARANTEES.
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The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Request may be made to:
Berry Plastics Corporation
101 Oakley Street
P.O. Box 959
Evansville, Indiana 47710-0959
Attention: Chief Financial Officer
NOTE GUARANTEE
Each of the Guarantors and each Subsidiary of the Company which
in accordance with Section 4.13 of the Indenture is required to guarantee
the obligations of the Company under the Notes upon execution of a
counterpart of this Indenture, has jointly and severally unconditionally
guaranteed (i) the due and punctual payment of the principal of and
interest on the Notes, whether at the maturity or interest payment or
mandatory redemption date, by acceleration, call for redemption or
otherwise, and of interest on the overdue principal of and interest, if
any, on the Notes and all other obligations of the Company to the Holders
or the Trustee under the Indenture or the Notes and (ii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration or otherwise.
The obligations of each Guarantor to the Holder and to the
Trustee pursuant to this Note Guarantee and the Indenture are as expressly
set forth in Article 10 of the Indenture, and reference is hereby made to
such Indenture for the precise terms of this Note Guarantee. The terms of
Article 10 of the Indenture are incorporated herein by reference.
This is a continuing guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and
assigns until full and final payment of all of the Company's obligations
under the Notes and the Indenture and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of
any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof. This is a guarantee of payment and not a
guarantee of collection.
This Note Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Note Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
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Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.
BPC HOLDING CORPORATION
By:_____________________________________
Name:
Title:
BERRY IOWA CORPORATION
By:_____________________________________
Name:
Title:
BERRY STERLING CORPORATION
By:_____________________________________
Name:
Title:
BERRY TRI-PLAS CORPORATION
By:_____________________________________
Name:
Title:
AEROCON, INC.
By:_____________________________________
Name:
Title:
PACKERWARE CORPORATION
By:_____________________________________
Name:
Title:
BERRY PLASTICS DESIGN CORPORATION
By:_____________________________________
Name:
Title:
VENTURE PACKAGING, INC.
By:_____________________________________
Name:
Title:
VENTURE PACKAGING MIDWEST, INC.
By:_____________________________________
Name:
Title:
VENTURE PACKAGING SOUTHEAST, INC.
By:_____________________________________
Name:
Title:
NIM HOLDINGS LIMITED
By:_____________________________________
Name:
Title:
NORWICH INJECTION MOULDERS LIMITED
By:_____________________________________
Name:
Title:
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Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax ID. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
_______________________________________________________________________________
Date:_______________________
Your Signature:__________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 (upon the occurrence of an Asset Sale) or 4.15
(upon the occurrence of a Change of Control) of the Indenture, check the
box below:
_____Section 4.10 _____Section 4.15
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.15 of the Indenture, state the amount you
elect to have purchased: $___________
Date:_____________________ Your Signature:_______________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:____________________
Signature Guarantee.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Re: 12 1/4 Senior Subordinated Notes due 2004
Reference is hereby made to the Indenture, dated as of August 24,
1998 (the "INDENTURE"), among Berry Plastics Corporation, as issuer (the
"COMPANY"), the Guarantors named therein and United States Trust Company of
New York, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
___________________, (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A
hereto, in the principal amount of $___________ in such Note[s] or
interests (the "TRANSFER"), to ___________________________ (the
"TRANSFEREE"), as further specified in Annex A hereto. In connection with
the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. _____ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE
144A. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), and, accordingly, the Transferor hereby further
certifies that the beneficial interest or Definitive Note is being
transferred to a Person that the Transferor reasonably believed and
believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the 144A Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
2. _____ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance
with Rule 903 or Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor
and any Person acting on its behalf reasonably believed and believes that
the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore
securities market and neither such Transferor nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, (iii) the transaction is not part of
a plan or scheme to evade the registration requirements of the Securities
Act and (iv) if the proposed transfer is being made prior to the expiration
of the Restricted Period, the transfer is not being made to a U.S. Person
or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated
in the Private Placement Legend printed on the Regulation S Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.
3. _____ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S.
The Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of
the United States, and accordingly the Transferor hereby further certifies
that (check one):
(a) _____ such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) _____ such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) _____ such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act;
or
(d) _____ such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule
904, and the Transferor hereby further certifies that it has not engaged in
any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note
and/or the Definitive Notes and in the Indenture and the Securities Act.
4. _____ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE
NOTE.
(a) _____ CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) _____ CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(c) _____ CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other
than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not
be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
_________________________________________
[Insert Name of Transferor]
By:______________________________________
Name:
Title:
Dated:____________________
B-2
<PAGE>
EXHIBIT B
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) _____ a beneficial interest in the:
(i) _____ 144A Global Note (CUSIP ), or
(ii) _____ Regulation S Global Note (CUSIP ), or
(iii) _____ IAI Global Note (CUSIP ); or
(b) _____ a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) _____ a beneficial interest in the:
(i) _____ 144A Global Note (CUSIP ), or
(ii) _____ Regulation S Global Note (CUSIP ), or
(iii) _____ IAI Global Note (CUSIP ); or
(iv) _____ Unrestricted Global Note (CUSIP ); or
(b) _____ a Restricted Definitive Note; or
(c) _____ an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-1
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Re: 12 1/4 % Senior Subordinated Notes due 2004
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of August 24,
1998 (the "INDENTURE"), among Berry Plastics Corporation, as issuer (the
"COMPANY"), the Guarantors named therein and United States Trust Company of
New York, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
__________________________, (the "OWNER") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies
that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) _____ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
NOTE. In connection with the Exchange of the Owner's beneficial interest in
a Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest
in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) _____ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note
for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant
to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv)
the Definitive Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(c) _____ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant
to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv)
the beneficial interest is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(d) _____ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) _____ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for
the Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Restricted Definitive Note and in the Indenture and the Securities Act.
(b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest
in the [CHECK ONE] _____ 144A Global Note, _____ Regulation S Global Note,
_____ IAI Global Note with an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in accordance with the Securities Act, and
in compliance with any applicable blue sky securities laws of any state of
the United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture
and the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:_______________________________________
Name:
Title:
Dated:____________________
B-2
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Re: 12 1/4 % Senior Subordinated Notes due 2004
Reference is hereby made to the Indenture, dated as of
August 24, 1998 (the "INDENTURE"), among Berry Plastics Corporation, as
issuer (the "COMPANY"), the Guarantors named therein and United States
Trust Company of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) _____ a beneficial interest in a Global Note, or
(b) _____ a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes
or any interest therein is subject to certain restrictions and
conditions set forth in the Indenture and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Notes or
any interest therein except in compliance with, such restrictions and
conditions and the United States Securities Act of 1933, as amended (the
"SECURITIES ACT").
2. We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell the Notes or any interest therein, we will do so only (A) to
the Company or any subsidiary thereof, (B) in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished
on its behalf by a U.S. broker-dealer) to you and to the Company a
signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of
transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a
transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes
or beneficial interest therein, we will be required to furnish to you
and the Company such certifications, legal opinions and other
information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to
the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
____________________________________________
[Insert Name of Accredited Investor]
By:_____________________________________
Name:
Title:
Dated:____________________
B-3
<PAGE>
EXHIBIT E
EXHIBIT E
[FORM OF NOTATION ON SENIOR SUBORDINATED NOTE
RELATING TO THE NOTE GUARANTEES]
Each of the Guarantors and each Subsidiary of the Company
which in accordance with Section 4.13 of the Indenture is required to
guarantee the obligations of the Company under the Notes upon execution
of a counterpart of this Indenture, has jointly and severally
unconditionally guaranteed (i) the due and punctual payment of the
principal of and interest on the Notes, whether at the maturity or
interest payment or mandatory redemption date, by acceleration, call for
redemption or otherwise, and of interest on the overdue principal of and
interest, if any, on the Notes and all other obligations of the Company
to the Holders or the Trustee under the Indenture or the Notes and (ii)
in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension
or renewal, whether at maturity, by acceleration or otherwise.
The obligations of each Guarantor to the Holder and to the
Trustee pursuant to this Note Guarantee and the Indenture are as
expressly set forth in Article 10 of the Indenture, and reference is
hereby made to such Indenture for the precise terms of this Note
Guarantee. The terms of Article 10 of the Indenture are incorporated
herein by reference.
This is a continuing guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its successors
and assigns until full and final payment of all of the Company's
obligations under the Notes and the Indenture and shall inure to the
benefit of the successors and assigns of the Trustee and the Holders
and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
This Note Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which
this Note Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized
officers.
B-4
REGISTRATION RIGHTS AGREEMENT
Dated as of August 24, 1998
by and among
BERRY PLASTICS CORPORATION
BPC HOLDING CORPORATION
BERRY IOWA CORPORATION
BERRY STERLING CORPORATION
BERRY TRI-PLAS CORPORATION
AEROCON, INC.
PACKERWARE CORPORATION
BERRY PLASTICS DESIGN CORPORATION
VENTURE PACKAGING, INC.
VENTURE PACKAGING MIDWEST, INC.
VENTURE PACKAGING SOUTHEAST, INC.
NIM HOLDINGS LIMITED
NORWICH INJECTION MOULDERS LIMITED
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of August 24, 1998, by and among, Berry Plastics Corporation, a
Delaware corporation (the "COMPANY"), BPC Holding Corporation, a Delaware
corporation, Berry Iowa Corporation, a Delaware corporation, Berry Sterling
Corporation, a Delaware corporation, Berry Tri-Plas Corporation, a Delaware
corporation, AeroCon, Inc., a Delaware corporation, PackerWare Corporation,
a Kansas corporation, Berry Plastics Design Corporation, a Delaware
corporation, Venture Packaging, Inc., a Delaware corporation, Venture
Packaging Midwest, Inc., an Ohio corporation, Venture Packaging Southeast,
Inc., a South Carolina corporation, NIM Holdings Limited, a company
organized under the laws of England and Wales, and Norwich Injection
Moulders Limited, a company organized under the laws of England and Wales
(collectively, the "GUARANTORS"), and Donaldson, Lufkin & Jenrette
Securities Corporation (the "INITIAL PURCHASER"), who has agreed to
purchase the Company's 12 1/4 % Series B Senior Subordinated Notes due
2004 (the "SERIES B NOTES") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated as of
August 19, 1998, (the "PURCHASE AGREEMENT"), by and among the Company, the
Guarantors and the Initial Purchaser. In order to induce the Initial
Purchaser to purchase the Series B Notes, the Company and the Guarantors
have agreed to provide the registration rights set forth in this Agreement.
The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchaser set forth in Section 2 of the Purchase
Agreement.
The parties hereby agree as follows:
1.1DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ACT: The Securities Act of 1933, as amended.
BUSINESS DAY: Any day except a Saturday. Sunday or other day in the City
of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BROKER-DEALER TRANSFER RESTRICTED SECURITIES: Series C Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Series B
Notes that such Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Series B
Notes acquired directly from the Company or any of its affiliates).
CERTIFICATED SECURITIES: As defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness
under the Act of the Exchange Offer Registration Statement relating to the
Series C Notes to be issued in the Exchange Offer, (b) the maintenance of
such Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
Registrar under the Indenture of Series C Notes in the same aggregate
principal amount as the aggregate principal amount of Series B Notes
tendered by Holders thereof pursuant to the Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Series B Notes, each Interest
Payment Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company under the Act of the
Series C Notes pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for Series C Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such
Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchaser proposes
to sell the Series B Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act.
HOLDERS: As defined in Section 2 hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
INDENTURE: The Indenture, dated the Closing Date, among the Company, the
Guarantors and the Trustee, pursuant to which the Notes are to be issued,
as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
INTEREST PAYMENT DATE: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
NOTES: The Series B Notes and the Series C Notes.
PERSON: An individual, partnership, corporation, trust, unincorporated
organization, or a governmental agency or political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated
by reference into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date, each Person who
is a Holder of Notes on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and the
Guarantors relating to (a) an offering of Series C Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i)
which is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
RESTRICTED BROKER-DEALER: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
SERIES C NOTES: The Company's 12 1/4 % Series C Senior Subordinated Notes
due 2004 to be issued pursuant to the Indenture (i) in the Exchange Offer
or (ii) upon the request of any Holder of Series B Notes covered by a Shelf
Registration Statement, in exchange for such Series B Notes.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until (i) the date on which
such Series B Note has been exchanged by a Person other than a broker-
dealer for a Series C Note in the Exchange Offer, (ii) following the
exchange by a broker-dealer in the Exchange Offer of a Series B Note for a
Series C Note, the date on which such Series B Note is sold to a purchaser
who receives from such broker-dealer on or prior to the date of such sale a
copy of the prospectus contained in the Exchange Offer Registration
Statement, (iii) the date on which such Series B Note has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement or (iv) the date on which such Series B Note
is distributed to the public pursuant to Rule 144 under the Act.
TRUSTEE: United States Trust Company of New York and any of its
successors.
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering
to the public.
1.2HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "HOLDER") whenever such Person owns Transfer Restricted Securities.
1.3REGISTERED EXCHANGE OFFER
(a)Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have
been complied with), the Company and the Guarantors shall (i) cause to be
filed with the Commission as soon as practicable after the Closing Date,
but in no event later than 90 days after the Closing Date, the Exchange
Offer Registration Statement, (ii) use their best efforts to cause such
Exchange Offer Registration Statement to become effective at the earliest
possible time, but in no event later than 150 days after the Closing Date,
(iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause such Exchange Offer Registration Statement to
become effective, (B) file, if applicable, a post-effective amendment to
such Exchange Offer Registration Statement pursuant to Rule 430A under the
Act and (C) cause all necessary filings, if any, in connection with the
registration and qualification of the Series C Notes to be made under the
Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange
Offer Registration Statement, commence and Consummate the Exchange Offer.
The Exchange Offer shall be on the appropriate form permitting registration
of the Series C Notes to be offered in exchange for the Series B Notes that
are Transfer Restricted Securities and to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers as contemplated
by Section 3(c) below.
(b)The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer referred to in the second
paragraph of Section 3(c) open for a period of not less than the minimum
period required under applicable federal and state securities laws to
Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors
shall cause the Exchange Offer to comply with all applicable federal and
state securities laws. No securities other than the Series C Notes shall be
included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use their respective best efforts to cause the Exchange
Offer to be Consummated on the earliest practicable date after the Exchange
Offer Registration Statement has become effective, but in no event later
than 60 Business Days thereafter.
(c)The Company and the Guarantors shall include a "Plan of
Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Restricted Broker-
Dealer who holds Series B Notes that are Transfer Restricted Securities and
that were acquired for the account of such Broker-Dealer as a result of
market-making activities or other trading activities, may exchange such
Series B Notes (other than Transfer Restricted Securities acquired directly
from the Company or any affiliate of the Company) pursuant to the Exchange
Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus
meeting the requirements of the Act in connection with its initial sale of
each Series C Note received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by
such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but
such "Plan of Distribution" shall not name any such Broker-Dealer or
disclose the amount of Notes held by any such Broker-Dealer, except to the
extent required by the Commission.
The Company and the Guarantors shall use their respective best efforts to
keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c)
below to the extent necessary to ensure that it is available for sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers,
and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period
of one year from the date on which the Exchange Offer is Consummated (or
such longer period if extended pursuant to Section 6(d) hereof).
The Company and the Guarantors shall promptly provide sufficient copies of
the latest version of such Prospectus to such Restricted Broker-Dealers
promptly upon request, and in no event later than one day after such
request, at any time during such one-year period in order to facilitate
such sales.
1.4SHELF REGISTRATION
(A)SHELF REGISTRATION. If (i) the Company and the Guarantors are
not required to file an Exchange Offer Registration Statement with respect
to the Series C Notes because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in
Section 6(a)(i) below have been complied with) or (ii) any Holder of
Transfer Restricted Securities shall notify the Company within 20 Business
Days following the Consummation of the Exchange Offer that (A) such Holder
was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Series C Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder
or (C) such Holder is a Broker-Dealer and holds Series B Notes acquired
directly from the Company or one of its affiliates, then the Company and
the Guarantors shall (x) cause to be filed, on or prior to 45 days after
the date on which the Company determines that it is not required to file
the Exchange Offer Registration Statement pursuant to clause (i) above or
45 days after the date on which the Company receives the notice specified
in clause (ii) above, a shelf registration statement pursuant to Rule 415
under the Act (which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "SHELF REGISTRATION STATEMENT")), relating
to all Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(b) hereof, and
shall (y) use their respective best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission as
promptly as possible after the date on which the Company and the Guarantors
become obligated to file such Shelf Registration Statement. If, after the
Company and the Guarantors have filed an Exchange Offer Registration
Statement which satisfies the requirements of Section 3(a) above, the
Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer shall not be
permitted under applicable federal law, then the filing of the Exchange
Offer Registration Statement shall be deemed to satisfy the requirements of
clause (x) above. Such an event shall have no effect on the requirements of
clause (y) above. The Company and the Guarantors shall use their respective
best efforts to keep the Shelf Registration Statement discussed in this
Section 4(a) continuously effective, supplemented and amended as required
by and subject to the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for sales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of
this Section 4(a), and to ensure that it conforms with the requirements of
this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of at least three
years (as extended pursuant to Section 6(d)) following the date on which
such Shelf Registration Statement first becomes effective under the Act, or
such shorter period ending when all Transfer Restricted Securities covered
by the Shelf Registration Statement cease to be Transfer Restricted
Securities.
(B)PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 days after
receipt of a request therefor, such information specified in item 507 of
Regulation S-K under the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein. No Holder of Transfer Restricted Securities shall be entitled to
liquidated damages pursuant to Section 5 hereof unless and until such
Holder shall have used its best efforts to provide all such information.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
1.5LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 60 Business Days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable
for its intended purpose without being succeeded immediately by a post-
effective amendment to such Registration Statement that cures such failure
and that is itself declared effective immediately (each such event referred
to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company
and the Guarantors hereby jointly and severally agree to pay liquidated
damages to each Holder of Transfer Restricted Securities with respect to
the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000
principal amount of Transfer Restricted Securities held by such Holder for
each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.50 per
week per $1,000 principal amount of Transfer Restricted Securities.
Notwithstanding anything to the contrary set forth herein, (1) upon filing
of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above,
(3) upon Consummation of the Exchange Offer, in the case of (iii) above, or
(4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange
Offer Registration Statement (and/or, if applicable, the Shelf Registration
Statement) to again be declared effective or made usable in the case of
(iv) above, the liquidated damages payable with respect to the Transfer
Restricted Securities as a result of such clause (i), (ii), (iii) or (iv),
as applicable, shall cease.
All accrued liquidated damages shall be paid by the Company and the
Guarantors on each Interest Payment Date to the Global Note Holder either
(i) in the form of additional Series C Notes, (ii) in cash, or (iii) in a
combination of additional Series C Notes and cash; PROVIDED, HOWEVER, that
in the event the Company and the Guarantors elect to pay liquidated damages
pursuant to clause (iii), cash and Series C Notes shall be distributed to
all Holders equally on a pro rata basis; PROVIDED, FURTHER, HOWEVER, that
the Company and the Guarantors may pay cash solely to the extent necessary
to prevent the issuance of Notes in denominations less than $1,000. If
payable in cash, all accrued liquidated damages shall be paid by wire
transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by mailing checks to their registered
addresses on each Damages Payment Date. All obligations of the Company and
the Guarantors set forth in the preceding paragraph that are outstanding
with respect to any Transfer Restricted Security at the time such security
ceases to be a Transfer Restricted Security shall survive until such time
as all such obligations with respect to such security shall have been
satisfied in full.
1.6REGISTRATION PROCEDURES
(A)EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective
best efforts to effect such exchange and to permit the sale of Broker-
Dealer Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
(i)If, following the date hereof there has been published a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, such that in the reasonable opinion of counsel to the
Company and the Guarantors there is a substantial question as to whether
the Exchange Offer is permitted by applicable federal law, the Company and
the Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Guarantors to
Consummate an Exchange Offer for such Series B Notes. The Company and the
Guarantors hereby agree to pursue the issuance of such a decision to the
Commission staff level. In connection with the foregoing, the Company and
the Guarantors hereby agree to take all such other actions as are requested
by the Commission or otherwise required in connection with the issuance of
such decision, including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff an
analysis prepared by counsel to the Company and the Guarantors setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff of such
submission.
(ii)As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company
and the Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of the Company, (B) it is not engaged in,
and does not intend to engage in, and has no arrangement or understanding
with any Person to participate in, a distribution of the Series C Notes to
be issued in the Exchange Offer and (C) it is acquiring the Series C Notes
in its ordinary course of business. Each Holder hereby acknowledges and
agrees that any Broker-Dealer and any such Holder using the Exchange Offer
to participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated in
MORGAN STANLEY AND CO.. INC., (available June 5, 1991) and EXXON CAPITAL
HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (including, if applicable, any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the registration
and prospectus delivery requirements of the Act in connection with a
secondary resale transaction and that such a secondary resale transaction
must be covered by an effective registration statement containing the
selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of Series C Notes obtained
by such Holder in exchange for Series B Notes acquired by such Holder
directly from the Company or an affiliate thereof.
(iii)Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May
13, 1988), MORGAN STANLEY AND CO.. INC., (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above, (B)
including a representation that the Company and the Guarantors have not
entered into any arrangement or understanding with any Person to distribute
the Series C Notes to be received in the Exchange Offer and that, to the
best of the Company's and the Guarantors' information and belief, each
Holder participating in the Exchange Offer is acquiring the Series C Notes
in its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Series C Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above.
(B)SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with
all the provisions of Section 6(c) below and shall use their respective
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished
to the Company and the Guarantors pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Guarantors will prepare and file with
the Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale
of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof within the time periods and
otherwise in accordance with the provisions hereof.
(C)GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Exchange Offer Registration Statement and the related
Prospectus, to the extent that the same are required to be available to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers), the Company and the Guarantors shall:
(i)use their respective best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by this
Agreement, the Company and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement, (1) in the case of
clause (A), correcting any such misstatement or omission, and (2) in the
case of clauses (A) and (B), use their respective best efforts to cause
such amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for its intended purpose(s) as soon
as practicable thereafter;
(ii)prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Act, and to comply fully with Rules 424, 430A and
462, as applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii)advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company and the Guarantors shall use
their respective best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv)furnish to the Initial Purchaser, each selling Holder named
in any Registration Statement or Prospectus and each of the underwriter(s)
in connection with such sale, if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders and underwriter(s) in
connection with such sale, if any, for a period of at least five Business
Days, and the Company and the Guarantors will not file any such
Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which the selling Holders of the Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s) in connection with such sale, if any, shall reasonably
object within five Business Days after the receipt thereof. A selling
Holder or underwriter, if any, shall be deemed to have reasonably objected
to such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission or fails to comply with the applicable
requirements of the Act;
(v)promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document, upon request, to the selling Holders and
to the underwriter(s) in connection with such sale, if any, make the
Company's and the Guarantors' representatives available for discussion of
such document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such selling
Holders or underwriter(s), if any, reasonably may request;
(vi)make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such selling Holders or any of such underwriter(s), all
financial and other records, pertinent corporate documents and properties
of the Company and the Guarantors and cause the Company's and the
Guarantors' officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement or any post-
effective amendment thereto subsequent to the filing thereof and prior to
its effectiveness;
(vii)if requested by any selling Holders or the underwriter(s) in
connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii)furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix)deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company and the
Guarantors hereby consent to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(x)enter into such agreements (including an underwriting
agreement) and make such representations and warranties that are reasonably
acceptable to the Company and the Guarantors and take all such other
reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant
to any Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder of Transfer Restricted Securities or
underwriter in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement, and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an Underwritten Registration, the
Company and the Guarantors shall:
(A)furnish (or in the case of paragraphs (2) and (3), use
their respective best efforts to furnish) to each selling Holder and each
underwriter, if any, upon the effectiveness of the Shelf Registration
Statement and to each Restricted Broker-Dealer upon Consummation of the
Exchange Offer:
(1)a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, signed on behalf of the Company and such
Guarantor by (x) the President or any Vice President and (y) a principal
financial or accounting officer of the Company and each Guarantor,
confirming, as of the date thereof, the type of matters set forth in
paragraphs (a) through (d) of Section 8 of the Purchase Agreement with
respect to the relevant Registration Statement and the securities
registered thereunder, and such other similar matters as the Holders,
underwriter(s) and/or Restricted Broker Dealers may reasonably request;
(2)an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, of counsel for the Company and the
Guarantors covering matters similar to those set forth in paragraph (f) of
Section 8 of the Purchase Agreement and such other matter as the Holders,
underwriters and/or Restricted Broker Dealers may reasonably request, and
in any event including a statement to the effect that such counsel has
participated in conferences with officers and other representatives of the
Company and the Guarantors, representatives of the independent public
accountants for the Company and the Guarantors and have considered the
matters required to be stated therein and the statements contained therein,
and although such counsel has not independently verified the accuracy,
completeness or fairness of such statements and has not made any
independent check or verification, such counsel advises that, on the basis
of the foregoing, no facts came to such counsel's attention that caused
such counsel to believe that the applicable Registration Statement, at the
time such Registration Statement or any post-effective amendment thereto
became effective and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation of the Exchange Offer, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus contained in such Registration
Statement as of its date and, in the case of the opinion dated the date of
Consummation of the Exchange Offer, as of the date of Consummation,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not independently verified,
the accuracy, completeness or fairness of the financial statements and
schedules and other financial data included in, or omitted from, any
Registration Statement contemplated by this Agreement or the related
Prospectus; and
(3)a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement or the date of
Consummation of the Exchange Offer, as the case may be, from the Company's
and the Guarantors' independent accountants, in the customary form and
covering matters of the type customarily covered in comfort letters to
underwriters in connection with primary underwritten offerings, and
affirming the matters set forth in the comfort letters delivered pursuant
to Section 8 of the Purchase Agreement, without exception;
(B)set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Shelf Registration Statement the indemnification provisions
and procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C)deliver such other documents and certificates as may be
reasonably requested by the selling Holders, the underwriter(s), if any,
and Restricted Broker Dealers, if any, to evidence compliance with clause
(A) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company and the Guarantors
pursuant to this clause (x).
The above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at any time the
representations and warranties of the Company and the Guarantors
contemplated in (A)(1) above cease to be true and correct, the Company
shall so advise the underwriter(s), if any, the selling Holders and each
Restricted Broker-Dealer promptly and if requested by such Persons, shall
confirm such advice in writing;
(xi)prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the applicable Registration
Statement; PROVIDED, HOWEVER, that the Company and the Guarantors shall not
be required to register or qualify as a foreign corporation where it is not
now so qualified or to take any action that would subject it to the service
of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not now so subject;
(xii)issue, upon the request of any Holder of Series B Notes
covered by any Shelf Registration Statement contemplated by this Agreement,
Series C Notes having an aggregate principal amount equal to the aggregate
principal amount of Series B Notes surrendered to the Company by such
Holder in exchange therefor or being sold by such Holder; such Series C
Notes to be registered in the name of such Holder or in the name of the
purchaser(s) of such Notes, as the case may be; in return, the Series B
Notes held by such Holder shall be surrendered to the Company for
cancellation;
(xiii)in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the Holders
or the underwriter(s), if any, may request at least two Business Days prior
to such sale of Transfer Restricted Securities;
(xiv)use their respective best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi)
above;
(xv)subject to Section 6(c)(i), if any fact or event contemplated
by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(xvi)provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under
the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvii)cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use their respective best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xviii)otherwise use their respective best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act);
(xix)cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee and
the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use their respective best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xx)provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(D)RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred to
in Section 6(c)(i) or any notice from the Company of the existence of any
fact of the kind described in Section 6(c)(iii)(C) or (D) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xv) hereof, or until it is advised in writing
by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (the "Advice"). If so directed
by the Company, each Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Transfer Restricted Securities
that was current at the time of receipt of either such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and including the date
when each selling Holder covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated
by Section 6(c)(xv) hereof or shall have received the Advice.
1.7REGISTRATION EXPENSES
(a)All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the
Company, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and
expenses (including filings made by the Initial Purchaser or any Holder
with the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter") and its counsel that may be required by the rules
and regulations of the NASD); (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the Series C
Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors and the Holders
of Transfer Restricted Securities (subject to the provisions of Section
7(b) below); (v) all application and filing fees in connection with listing
the Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required
by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company or the Guarantors.
(b)In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the
Guarantors will reimburse the Initial Purchaser and the Holders of Transfer
Restricted Securities being tendered in the Exchange Offer and/or resold
pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not
more than one counsel, who shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit
such Registration Statement is being prepared.
1.8INDEMNIFICATION
(a)The Company and the Guarantors agree, jointly and severally,
to indemnify and hold harmless (i) each Holder and (ii) each Person, if
any, who controls (within the meaning of Section 15 of the Act or Section
20 of the Exchange Act) any Holder (any of the Persons referred to in this
clause (ii) being hereinafter referred to as a "controlling person") and
(iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any
Person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "INDEMNIFIED HOLDER"), to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, judgments,
actions and expenses (including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing
or defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Holder) directly
or indirectly caused by, related to, based upon, arising out of or in
connection with any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto), or any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in conformity with
information relating to any of the Holders furnished in writing to the
Company and the Guarantors by any of the Holders expressly for use therein;
PROVIDED, HOWEVER, that the Company and the Guarantors shall not be
required to indemnify any such Person if such untrue statement or omission
or alleged untrue statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus or any amendment or
supplement thereto and the Prospectus does not contain any other untrue
statement or omission or alleged untrue statement or omission of a material
fact that was the subject matter of the related proceeding and any such
loss, liability, claim, damage or expense suffered or incurred by the
Indemnified Holder resulted from any action, claim or suit by any Person
who purchased Transfer Restricted Securities or Series C Notes which are
the subject thereof from such Indemnified Holder and it is established in
the related proceeding that such Indemnified Holder failed to deliver or
provide a copy of the Prospectus (as amended or supplemented) to such
Person with or prior to the confirmation of the sale of such Transfer
Restricted Securities or Series C Notes sold to such Person if required by
applicable law, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of noncompliance by
the Company or any Guarantor with Section 6 of this Agreement.
In case any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any of
the Indemnified Holders with respect to which indemnity may be sought
against the Company or any Guarantor, such Indemnified Holder (or the
Indemnified Holder controlled by such controlling person) shall promptly
notify the Company in writing (PROVIDED, that the failure to give such
notice shall not relieve the Company and such Guarantor of their
obligations pursuant to this Agreement, unless and only to the extent that
such failure directly results in the loss or compromise of any material
rights or defenses by the Company and such Guarantor and the Company and
such Guarantor were not otherwise aware of such action or claim). In such
event, the Company and such Guarantor shall retain counsel reasonably
satisfactory to the Indemnified Holders to represent the Indemnified
Holders and any others the Company and such Guarantor may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding. The Company
and such Guarantor shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any
local counsel) at any time for such Indemnified Holders, which firm shall
be designated by the Holders. The Company and the Guarantors shall be
liable for any settlement of any such action or proceeding effected with
the Company's prior written consent, which consent shall not be withheld
unreasonably, and the Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless each Indemnified Holder from and
against any loss, claim, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the Company.
The Company and the Guarantors shall not, without the prior written consent
of each Indemnified Holder, which shall not be unreasonably withheld,
settle or compromise or consent to the entry of judgment in or otherwise
seek to terminate any pending or threatened action, claim, litigation or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not any Indemnified Holder is a party
thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from all
liability arising out of such action, claim, litigation or proceeding.
(b)Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and
each Guarantor, and their respective directors, officers, and any Person
controlling (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Company or the Guarantors, and the respective
officers, directors, partners, employees, representatives and agents of
each such Person, to the same extent as the foregoing indemnity from the
Company and the Guarantors to each of the Indemnified Holders, but only
with respect to claims and actions based on information relating to such
Holder furnished in writing by such Holder expressly for use in any
Registration Statement, preliminary prospectus or Prospectus (or any
amendment or supplement thereto). In case any action or proceeding shall be
brought against the Company or any Guarantor or its directors or officers
or any such controlling person in respect of which indemnity may be sought
against a Holder of Transfer Restricted Securities, such Holder shall have
the rights and duties given the Company or such Guarantor, and the Company
or such Guarantor, such directors or officers or such controlling person
shall have the rights and duties given to each Holder by the preceding
paragraph. The liability of any Holder under this paragraph shall in no
event exceed the proceeds received by such Holder from sales of Transfer
Restricted Securities or Series C Notes giving rise to such obligations.
(c)If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b)
hereof (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one
hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or if such allocation is not permitted by applicable
law, the relative fault of the Company and the Guarantors, on the one hand,
and of the Indemnified Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors on the one hand and the Indemnified Holders on the other shall
be deemed to be in the same proportion as the total proceeds from the
offering (net of discounts and commissions but before deducting expenses)
of the Notes received by the Company bears to the total proceeds received
by such Indemnified Holder from the sale to Transfer Restricted Securities
or Series C Notes, as the case may be. The relative fault of the Company
and the Guarantors, on the one hand, and of the Indemnified Holder, on the
other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor or by the Indemnified
Holder and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission and any
other equitable consideration appropriate in the circumstances. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section
8(a), any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim.
The Company and the Guarantors, and each Holder of Transfer Restricted
Securities agree that it would not be just and equitable if contribution
pursuant to this Section 8(c) were determined by pro rata allocation (even
if the Holders were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Holder or its related Indemnified Holders shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the total
received by such Holder with respect to the sale of its Transfer Restricted
Securities pursuant to a Registration Statement exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Series B Notes held by
each of the Holders hereunder and not joint.
1.9RULE 144A
The Company and each Guarantor hereby agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and during any
period in which the Company or such Guarantor is not subject to Section 13
or 15(d) of the Securities Exchange Act, to make available, upon request of
any Holder of Transfer Restricted Securities, to any Holder or beneficial
owner of Transfer Restricted Securities in connection with any sale thereof
and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
1.10UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities
on the basis provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
1.11SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment bankers
and manager or managers for any Underwritten Offering that will administer
such offering will be selected by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities included in such
offering and reasonably acceptable to the Company. Such investment bankers
and managers are referred to herein as the "underwriters."
1.12MISCELLANEOUS
(A)REMEDIES. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, the Purchase
Agreement or granted by law, including recovery of liquidated or other
damages, will be entitled to specific performance of its rights under this
Agreement. The Company and the Guarantors agree that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by
them of the provisions of this Agreement and hereby agree to waive the
defense in any action for specific performance that a remedy at law would
be adequate.
(B)NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with the rights granted
to the holders of the Company's or any Guarantor's securities under any
agreement in effect on the date hereof.
(C)ADJUSTMENTS AFFECTING THE NOTES. The Company and the
Guarantors will not take any action, or voluntarily permit any change to
occur, with respect to the Notes that would materially and adversely affect
the ability of the Holders to Consummate any Exchange Offer.
(D)AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) the
consent of the Company is obtained, which shall not be unreasonably
withheld, (ii) in the case of Section 5 hereof and this Section 12(d)(i),
the Company has obtained the written consent of Holders of all outstanding
Transfer Restricted Securities and (iii) in the case of all other
provisions hereof, the Company has obtained the written consent of Holders
of a majority of the outstanding principal amount of Transfer Restricted
Securities. Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer
and that does not affect directly or indirectly the rights of other Holders
whose securities are not being tendered pursuant to such Exchange Offer may
be given by the Holders of a majority of the outstanding principal amount
of Transfer Restricted Securities subject to such Exchange Offer.
(E)NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i)if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii)if to the Company or any Guarantor:
Berry Plastics Corporation
101 Oakley Street
P.O. Box 959
Evansville, Indiana 47710-0959
Telecopier No.: (812) 421-9604
Attention: Martin R. Imbler
With a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Telecopier No.: (212) 408-2420
Attention: Michael Joseph O'Brien, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and on the next
Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee
at the address specified in the Indenture.
(F)SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each
of the parties, including without limitation and without the need for
an express assignment, subsequent Holders of Transfer Restricted
Securities; PROVIDED, HOWEVER, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer
Restricted Securities directly from such Holder.
(G)COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(H)HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(I)GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(J)SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(K)ENTIRE AGREEMENT. This Agreement and the other
agreements referenced herein are intended by the parties as a final
expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein with respect to the
registration rights granted with respect to the Transfer Restricted
Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.
(L)UNDERWRITING AGREEMENT. Notwithstanding the provisions
of Section 6 hereof, in the event of a Shelf Registration pursuant to
Section 4 hereof, to the extent that the Holders of Transfer
Restricted Securities shall enter into an underwriting or similar
agreement, which agreement contains provisions covering one or more
issues addressed in such Section with substantially similar effect,
the provisions contained in such Sections addressing such issue or
issues shall be of no force or effect with respect to the
registration of securities being effected in connection with such
underwriting or similar agreement.
(M)TERMINATION. This Agreement shall terminate and be of no
further force or effect when there shall not be any Transfer
Restricted Securities, except that the provisions of Section 5, 7, 8
and 12 shall survive any such termination.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
BERRY PLASTICS CORPORATION
By:
Name:
Title:
BPC HOLDING CORPORATION
By:_________________________________
Name:
Title:
BERRY IOWA CORPORATION
By:_________________________________
Name:
Title:
BERRY STERLING CORPORATION
By:_________________________________
Name:
Title:
BERRY TRI-PLAS CORPORATION
By:_________________________________
Name:
Title:
AEROCON, INC.
By:_________________________________
Name:
Title:
PACKERWARE CORPORATION
By:_________________________________
Name:
Title:
BERRY PLASTICS DESIGN CORPORATION
By:_________________________________
Name:
Title:
VENTURE PACKAGING, INC.
By:_________________________________
Name:
Title:
VENTURE PACKAGING MIDWEST, INC.
By:_________________________________
Name:
Title:
VENTURE PACKAGING SOUTHEAST, INC.
By:_________________________________
Name:
Title:
NIM HOLDINGS LIMITED
By:_________________________________
Name:
Title:
<PAGE>
NORWICH INJECTION MOULDERS LIMITED
By:_________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
Name:
Title:
BPC Holding Corporation
101 Oakley Street
Evansville, Indiana 47710
Page
December 22, 1998
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
Berry Plastics Corporation
12 {1}/4% SERIES C SENIOR SUBORDINATED NOTES DUE 2004
Dear Sirs:
We have acted as counsel for Berry Plastics Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing
of the Registration Statement of the Company on Form S-4, as amended (File
No. 333-64599) (the "Registration Statement"), under the Securities Act of
1933, as amended. All capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Registration
Statement.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate
records and other instruments as we have deemed necessary for the purposes
of rendering the opinions set forth below. As to certain questions of fact
material to the opinions contained herein, we have relied upon certificates
or statements of officers of the Company and certificates of public
officials. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals
and the conformity to authentic originals of all documents submitted to us
as certified or photostatic copies.
Based upon and subject to the foregoing, and subject to the qualifications
and limitations set forth therein, we are of the opinion that the
discussion in the Registration Statement entitled "MATERIAL FEDERAL INCOME
TAX CONSIDERATIONS" fairly presents the material Federal income tax
considerations relevant to the exchange of Old Notes for New Notes pursuant
to the Exchange Offer and to the ownership of the New Notes.
We know that we are referred to under the heading "Legal Matters" in the
Prospectus forming a part of the Registration Statement, and we hereby
consent to such use of our name in said Registration Statement and to the
use of this opinion for filing with said Registration Statement as Exhibit
8 thereto.
Very truly yours,
/s/ O'Sullivan Graev & Karabell, LLP
SECOND AMENDED AND RESTATED
FINANCING AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this
"AGREEMENT") is made this 2nd day of July, 1998, by and among BERRY
PLASTICS CORPORATION, a corporation organized under the laws of the State
of Delaware (the "BORROWER"), NIM HOLDINGS LIMITED, a company organized and
existing under the laws of England and Wales ("Berry UK"), and NORWICH
INJECTION MOULDERS LIMITED, a company organized and existing under the laws
of England and Wales ("NORWICH"); NATIONSBANK, N. A., a national banking
association ("NATIONSBANK"), FLEET CAPITAL CORPORATION, a corporation
organized and existing under the laws of the State of Rhode Island
("FLEET"), GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized
and existing under the laws of the State of New York ("GE CAPITAL"), HELLER
FINANCIAL, INC., a corporation organized and existing under the laws of the
State of Delaware ("HELLER") and each other financial institution which is
a party to this Agreement, whether by execution and delivery of this
Agreement or otherwise pursuant to Section 9.5 (Assignments by Lender)
(collectively, the "Lenders" and individually, a "LENDER"); and
NATIONSBANK, N. A., a national banking association, in its capacity as both
collateral and administrative agent for the Lenders (the "AGENT").
RECITALS
(A)The Borrower, the Agent and the Lenders are parties to that certain
Amended and Restated Financing and Security Agreement dated as of August
29, 1997 by and among the Borrower, the Agent and the Lenders (other than
Heller), as amended by that certain First Amendment to Amended and Restated
Financing and Security Agreement dated as of March 4, 1998 (as amended,
restated, supplemented or otherwise modified, the "Original Credit
Agreement"). Pursuant to the provisions of the Original Credit Agreement,
the Borrower applied to the Lenders for credit facilities consisting of (i)
a revolving credit facility in the maximum principal amount of $50,000,000,
(ii) a letter of credit facility in the maximum principal amount of
$5,000,000, as part of that revolving credit facility, (iii) a term loan
facility in the maximum principal amount of $28,003,000, (iv) a term loan
facility in the maximum principal amount of $30,000,000 ("Term Loan B"),
(iv) a standby letter of credit facility in the maximum principal amount of
$18,852,000, (v) a special source bond facility in the maximum principal
amount of $860,575.07 (the "Special Source Bond"), all to be used by the
Borrower for the Permitted Uses described in this Agreement.
(B)The Borrower has advised the Agent and the Lenders that the Borrower has
formed Berry UK and that Berry UK is a wholly-owned subsidiary of the
Borrower. Contemporaneously with the execution and delivery of this
Agreement, Berry UK has acquired or intends to acquire all of the capital
stock ("Norwich Stock") issued by Norwich in accordance with the provisions
of that certain Agreement for the Sale and Purchase of the Entire Issued
Share Capital of Norwich Injection Moulders Limited dated as of July 1,
1998 by and among Berry UK, the Borrower and the shareholders of Norwich
(as amended, restated, supplemented or otherwise modified, the "Norwich
Purchase Agreement").
(C)In connection with the consummation of the acquisition of the Norwich
Stock, the Borrower has requested that the Lenders agree (i) to amend and
restructure Term Loan B such that as of the date of this Agreement, the
maximum aggregate unpaid principal balance of Term Loan B shall be
$36,500,000 and (ii) otherwise to amend certain terms and conditions of the
Original Credit Agreement and that NationsBank (i) make a revolving credit
facility available to Berry UK and Norwich up to a maximum principal amount
of <pound-sterling>1,500,000 (the "UK Revolving Loan") and (ii) make a term
loan to Berry UK up to a maximum principal amount of
<pound-sterling>4,500,000 (the "UK Term Loan"). In addition, the Borrower
has requested that the Agent and the Lenders consent and agree to (1) the
formation of Berry UK and (2) the acquisition of the Norwich Stock by Berry
UK in accordance with the terms and conditions of the Norwich Purchase
Agreement.
(D)Accordingly, the Borrower, the Agent and the Lenders desire to amend and
restate the Original Credit Agreement, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1CERTAIN DEFINED TERMS.
As used in this Agreement, the terms defined in the Preamble and Recitals
hereto shall have the respective meanings specified therein, and the
following terms shall have the following meanings:
"Account" individually and "Accounts" collectively mean all presently
existing or hereafter acquired or created accounts, accounts receivable,
contract rights, notes, drafts, instruments, acceptances, chattel paper,
leases and writings evidencing a monetary obligation or a security interest
in, or a lease of, goods, all rights to receive the payment of money or
other consideration under present or future contracts (including, without
limitation, all rights to receive payments under presently existing or
hereafter acquired or created letters of credit), or by virtue of
merchandise sold or leased, services rendered, by or set forth in or
arising out of any present or future chattel paper, note, draft, lease,
acceptance, writing, bond, insurance policy, instrument, document or
general intangible, and all extensions and renewals of any thereof, all
rights under or arising out of present or future contracts, agreements or
general interest in merchandise which gave rise to any or all of the
foregoing, including all goods, all claims or causes of action now existing
or hereafter arising in connection with or under any agreement or document
or by operation of law or otherwise, all collateral security of any kind
(including, without limitation, real property mortgages and deeds of trust)
and letters of credit given by any Person with respect to any of the
foregoing, all books and records in whatever media (paper, electronic or
otherwise) recorded or stored, with respect to any or all of the foregoing
and all general intangibles necessary or beneficial to retain, access
and/or process the information contained in those books and records, and
all proceeds (cash and non-cash) of the foregoing.
"Account Debtor" means any Person who is obligated on an Account and
"Account Debtors" mean all Persons who are obligated on the Accounts.
"AeroCon, Inc." means AeroCon, Inc., a corporation organized and existing
under the laws of the State of Delaware, and its successors and assigns.
"Affiliate" means, with respect to any designated Person, any other Person,
(a) directly or indirectly controlling, directly or indirectly controlled
by, or under direct or indirect common control with the Person designated,
(b) directly or indirectly owning or holding ten percent (10%) or more of
any equity interest in such designated Person, or (c) ten percent (10%) or
more of whose stock or other equity interest is directly or indirectly
owned or held by such designated Person. For purposes of this definition,
the term "control" (including with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting securities or other equity interests or by contract or
otherwise.
"Agency Fee" and "Agency Fees" have the meanings described in SECTION 8.9
AGENCY FEE.
The Borrower shall pay to the Agent, an annual loan administration and
agency fee (collectively, the "Agency Fees" and individually, an "Agency
Fee"), in the aggregate amount of Eighty Thousand Dollars ($80,000),
payable quarterly in arrears in installments of $20,000 each. The initial
Agency Fee shall be payable on the Second Closing Date, and each Agency Fee
thereafter shall be payable in advance on the first day of each quarterly
period, commencing with the first such day following the date hereof. Each
Agency Fee shall be fully earned and non-refundable upon the date paid.
The Agent shall retain all of the Agency Fees for its own account and shall
have no obligation to remit or pay any portion thereof to any of the
Lenders. (Agency Fee).
"Agent" means the Person defined as the "Agent" in the preamble of this
Agreement and shall also include any successor Agent appointed pursuant to
SECTION 8.7 SUCCESSOR AGENT. (Successor Agent).
"Agent's Obligations" shall mean any and all Obligations payable solely to
and for the exclusive benefit of the Agent by the Borrower under the terms
of this Agreement and/or any of the other Financing Documents, including,
without limitation, and any and all Agency Fees, Letter of Credit Fronting
Fees and/or Field Examination Fees.
"Agreement" means this Second Amended and Restated Financing and Security
Agreement, as amended, restated, supplemented or otherwise modified in
writing in accordance with the provisions of SECTION 9.2 AMENDMENTS;
WAIVERS.
This Agreement and the other Financing Documents may not be amended,
modified, or changed in any respect except by an agreement in writing
signed by the Requisite Lenders, the Borrower, Berry UK and Norwich and to
the extent provided in CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS
REQUIRED. by an agreement in writing signed by all of the Lenders, the
Borrower, Berry UK and Norwich. In addition, any agreement which directly
or indirectly affects any rights, duties, obligations, liabilities or
remedies of the Agent under this Agreement, under any of other Financing
Documents or otherwise must be approved and signed by the Agent. No waiver
of any provision of this Agreement or of any of the other Financing
Documents, nor consent to any departure by the Borrower, Berry UK or
Norwich therefrom, shall in any event be effective unless the same shall be
in writing. No course of dealing between the Borrower, Berry UK, Norwich
and the Agent and/or any of the Lenders and no act or failure to act from
time to time on the part of the Agent and/or any of the Lenders shall
constitute a waiver, amendment or modification of any provision of this
Agreement or any of the other Financing Documents or any right or remedy
under this Agreement, under any of the other Financing Documents or under
applicable Laws. (Amendments; Waivers).
"Alternate Base Rate" means the sum of (a) the Base Rate PLUS (b) the
Applicable Margin.
"Amortizing Iowa Bond Letter of Credit Obligations" has the meaning
described in Section (ii)Notwithstanding the provisions of paragraph (a)
above, as long as no Event of Default has occurred, any drawing under the
Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a
drawing under the Iowa Bond Standby Credit Agreement, any drawing under the
Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any drawing
under the South Carolina Bond Letter of Credit - NB to purchase South
Carolina Bonds, in each case relating to Bonds which were tendered for
purchase by the holders thereof and which were not remarketed in a timely
fashion (each referred to herein as a "Conversion Drawing"), are not
required to be reimbursed to the Agent ON DEMAND; provided that BIC or the
Borrower, as appropriate, make payments of interest to the Agent at the
rates, at the times and otherwise subject to the provisions for interest on
the Loans under INTEREST. (Interest), and the principal amount of each such
Conversion Drawing is repaid in equal quarterly payments (i) over the
remaining term to expiry of the Bond Letter of Credit Facility with respect
to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond
Letter of Credit - NB and (ii) over a period of ten (10) years with respect
to the Iowa Bond Letter of Credit - NB; final payment of all outstanding
amounts relating to the Nevada Bond Letter of Credit - NB and/or the South
Carolina Bond Letter of Credit - NB to be made no later than expiry of the
Bond Letter of Credit Facility or the Revolving Credit Termination Date,
whichever is earlier, and final payment of all outstanding amounts relating
to the Iowa Bond Letter of Credit - NB to be made no later than the date
which is ten (10) years after the date of any Conversion Drawing under the
Iowa Bond Letter of Credit - NB or the Revolving Credit Termination Date,
whichever is earlier. In addition, the Agent and the Lenders agree that in
the event the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on
or about the business day preceding the expiration or termination of the
Iowa Bond Letter of Credit, as contemplated by Section 505 of the Iowa Bond
Trust Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations
resulting from the Draw, shall not be payable ON DEMAND as would otherwise
be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but
shall be repaid by the Borrower in equal consecutive quarterly installments
over a period of ten (10) years, commencing with the first day following
the first full quarterly period after the Draw and continuing on the first
day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter
of Credit Obligations"); provided, that (A) there does not exist a Default
or an Event of Default, (B) the Draw is not the result of an acceleration
of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement
and (C) the Draw is not the result of the occurrence of a "Determination of
Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall
be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the
Agent at the rates, at the times and otherwise subject to the provisions
for interest on the Loans under INTEREST. (Interest), with a final payment
of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB
to be made no later than the date which is ten (10) years after the date of
the Draw or the Revolving Credit Termination Date, whichever is earlier.
(Payments of Bond Letters of Credit).
"Applicable Interest Rate" means (a) the LIBOR Rate, or (b) the Alternate
Base Rate.
"Applicable Margin" means the applicable rate per annum to be added to the
LIBOR Base Rate or the Base Rate, as set forth in Section (A) APPLICABLE
INTEREST RATES.(Applicable Interest Rates).
"Asset Disposition" means the disposition of any or all of the Assets of
the Borrower or any Subsidiary of the Borrower, whether by sale, lease,
transfer or other disposition (including any such disposition effected by
way of merger or consolidation) other than Permitted Asset Dispositions.
"Assets" means at any date all assets that, in accordance with GAAP
consistently applied, should be classified as assets on a consolidated
balance sheet of the Borrower and its Subsidiaries.
"Assignee" has the meaning set forth in ASSIGNMENTS BY LENDERS.
Any Lender may, with the prior written consent of the Agent and the
Borrower, but without notice to or consent of any other Lender, which
consent shall not be unreasonably withheld, delayed or conditioned, assign
to any Person (each an "Assignee" and collectively, the "Assignees") all or
a portion of such Lender's Commitments; provided that (a) the amount
assigned by such Lender must be at least equal to Five Million Dollars
($5,000,000), (b) after giving effect to such assignment, such Lender must
continue to hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000), unless such Lender has assigned one hundred
percent (100%) of such Lender's Commitments, and (c) any amount assigned
shall be divided pro rata among such Lenders' Pro Rata Share of the
Commitments and Obligations. NationsBank agrees that if at any time
NationsBank sells one hundred percent (100%) of all of its Commitments,
NationsBank shall resign as Agent and the remaining Lenders shall select a
replacement Agent in accordance with the provisions of this Agreement. In
addition, NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to hold
a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of
the Lender (other than NationsBank) having the highest Pro Rata Share of
the Commitments. Any Lender which elects to make such an assignment shall
pay to the Agent, for the exclusive benefit of the Agent, an administrative
fee for processing each such assignment in the amount of Three Thousand
Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify
the Agent and the Borrower in writing of the date on which the assignment
is to be effective (the "Adjustment Date"). On or before the Adjustment
Date, the assigning Lender, the Agent, the Borrower and the respective
Assignee shall execute and deliver a written assignment agreement in a form
acceptable to the Agent, which shall constitute an amendment to this
Agreement to the extent necessary to reflect such assignment. Upon the
request of any assigning Lender following an assignment made in accordance
with this ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich shall
issue new Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning
Lender.(Assignments by Lenders).
"Assignment of Patents" means (a) that certain collateral assignment of
patents as security dated as of the First Closing Date from the Borrower to
the Agent for the benefit of the Lenders ratably and the Agent, (b) that
certain collateral assignment of patents as security dated as of the First
Closing Date from BTP, BIC, Berry Sterling and PackerWare to the Agent for
the benefit of the Lenders ratably and the Agent, and (c) that certain
collateral assignment of patents as security dated as of the date of the
Second Closing Date from Venture Southeast and Venture Midwest, as amended,
restated, supplemented or otherwise modified in writing at any time and
from time to time.
"Assignment of Trademarks" means (a) that certain collateral assignment of
trademarks as security dated as of the First Closing Date from the Borrower
to the Agent for the benefit of the Lenders ratably and the Agent, (b) that
certain collateral assignment of trademarks as security dated as of the
First Closing Date from PackerWare to the Agent for the benefit of the
Lenders ratably and the Agent, and (c) that certain collateral assignment
of trademarks as security dated the date of the Second Closing Date from
Venture Southeast and Venture Midwest to the Agent for the benefit of the
Lenders ratably and the Agent, as amended, restated, supplemented or
otherwise modified in writing at any time and from time to time.
"Base Rate" means the higher of (a) the Prime Rate, or (b) the sum of (i)
the Federal Funds Rate, plus (ii) fifty (50) basis points.
"Base Rate Loan" means any Loan for which interest is to be computed with
reference to the Alternate Base Rate.
"Berry Design" means Berry Plastics Design Corporation, a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns.
"Berry Sterling" means Berry Sterling Corporation, a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns.
"Berry UK" means NIM Holdings Limited, a company organized and existing
under the laws of the England, and its successors and assigns.
"BIC" means Berry Iowa Corporation, a corporation organized and existing
under the laws of the State of Delaware, and its successors and assigns.
"BTP" means Berry Tri-Plas Corporation, a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns.
"Bankruptcy Code" means the United States Bankruptcy Code, as amended from
time to time and any successor Laws.
"Bond Letter of Credit Agreements" means the collective reference to the
Iowa Bond Letter of Credit Agreement, the Nevada Bond Letter of Credit
Agreement and the South Carolina Bond Letter of Credit Agreement.
"Bond Letter of Credit Commitment" means the agreement of the Agent
relating to the issuance of the Bond Letters of Credit, the repayment of
the Bond Letter of Credit Obligations and the agreement of a Lender to
purchase a participating interest in any Bond Letter of Credit Obligations
with respect to such Bond Letters of Credit, all subject to and in
accordance with the provisions of this Agreement; and "Bond Letter of
Credit Commitments" means the collective reference to the Bond Letter of
Credit Commitment of the Agent and each of the Lenders.
"Bond Letter of Credit Committed Amount" has the meaning given such term in
Section (A) BOND LETTERS OF CREDIT.
Subject to and upon the provisions of the Bond Letter of Credit Agreements,
the Agent has agreed to issue the Bond Letters of Credit for the period
commencing on the First Closing Date and ending on the Revolving Credit
Termination Date (the "Bond Letter of Credit Commitment"). The Agent shall
have no obligation or commitment to issue a Bond Letter of Credit if the
aggregate stated amount of all Bond Letters of Credit then outstanding or
proposed to be issued exceeds Eighteen Million Eight Hundred Fifty-Two
Thousand Dollars ($18,852,000) (the "Bond Letter of Credit Committed
Amount").(Bond Letters of Credit).
"Bond Letter of Credit Facility" means the facility established pursuant to
THE BOND LETTER OF CREDIT FACILITY.(Bond Letter of Credit Facility).
"Bond Letter of Credit Fee" and "Bond Letter of Credit Fees" have the
meanings described in Section (B) BOND LETTER OF CREDIT FEES. (Bond Letter
of Credit Fees).
"Bond Letter of Credit Fronting Fee" and "Bond Letter of Credit Fronting
Fees" have the meanings described in Section (B) BOND LETTER OF CREDIT
FEES. (Bond Letter of Credit Fees).
"Bond Letter of Credit Obligations" means the collective reference to the
Iowa Bond Letter of Credit Obligations, the Nevada Bond Letter of Credit
Obligations and the South Carolina Bond Letter of Credit Obligations.
"Bond Letter of Credit Agreement Documents" means the collective reference
to the Iowa Bond Letter of Credit Agreement Documents - Bonds, the Iowa
Bond Letter of Credit Agreement Documents - NB, the Nevada Bond Letter of
Credit Agreement Documents - Bonds, the Nevada Bond Letter of Credit
Agreement Documents - NB, the South Carolina Bond Letter of Credit
Agreement Documents - Bonds, and the South Carolina Bond Letter of Credit
Agreement Documents - NB.
"Bond Letters of Credit" means the collective reference to the Iowa Bond
Letter of Credit - NB, the Nevada Bond Letter of Credit - NB and the South
Carolina Bond Letter of Credit - NB.
"Bonds" means the collective reference to the Iowa Bonds, the Nevada Bonds
and the South Carolina Bonds.
"Borrowing Base" has the meaning described in Section (C) BORROWING BASE.
As used in this Agreement, the term "Borrowing Base" means at any time, an
amount equal to the aggregate of (a) eighty-five percent (85%) of the
amount of Eligible Domestic Receivables, plus (b) the lesser of (i) sixty-
five percent (65%) of the amount of Eligible Domestic Inventory or (ii)
Twenty-five Million Dollars ($25,000,000(Borrowing Base).
"Borrowing Base Deficiency" has the meaning described in Section (C)
BORROWING BASE.
As used in this Agreement, the term "Borrowing Base" means at any time, an
amount equal to the aggregate of (a) eighty-five percent (85%) of the
amount of Eligible Domestic Receivables, plus (b) the lesser of (i) sixty-
five percent (65%) of the amount of Eligible Domestic Inventory or (ii)
Twenty-five Million Dollars ($25,000,000(Borrowing Base).
"Borrowing Base Report" has the meaning described in Section (D) BORROWING
BASE REPORT.
The Borrower will furnish to the Agent no less frequently than monthly, as
soon as available, but in any event within twenty (20) days of the end of
each fiscal month, and, upon the occurrence of an Event of Default or as
otherwise provided in this Section (D) BORROWING BASE REPORT., at such
other times as may be requested by the Agent a report of the Borrowing Base
in the form attached hereto as Exhibit A-1 (each a "Borrowing Base Report";
collectively, the "Borrowing Base Reports") in the form required from time
to time by the Agent, appropriately completed and duly signed. The
Borrowing Base Report shall contain the amount and payments on the
Accounts, the value of Inventory, and the calculations of the Borrowing
Base, all in such detail, and accompanied by such supporting and other
information, as the Agent may from time to time reasonably request. Upon
the Agent's request and upon the creation of any Accounts, the Borrower
will provide the Agent with (a) confirmatory assignment schedules; (b)
copies of Account Debtor invoices; (c) evidence of shipment or delivery;
and (d) such further schedules, documents and/or information regarding the
Accounts and the Inventory as the Agent may reasonably require. The items
to be provided under this subsection shall be in form reasonably
satisfactory to the Agent, and certified as true and correct by a
Responsible Officer, and delivered to the Agent from time to time solely
for the Agent's convenience in maintaining records of the Collateral. The
Borrower's failure to deliver any such items to the Agent shall not affect,
terminate, modify, or otherwise limit the Liens of the Agent and the
Lenders in the Collateral. Notwithstanding the foregoing, the Borrower
acknowledges and agrees that the Agent, at its option, may require that the
Borrower furnish to the Agent weekly and, if requested by the Agent, daily
Borrowing Base Reports if any one of the following events occur (i) the
Borrower's and Subsidiary Guarantors' collective aggregate availability
under the Revolving Loan is at any times less than or equal to Fifteen
Million Dollars ($15,000,000), (ii) the Borrower and the Subsidiary
Guarantors, on a consolidated basis, incur three (3) consecutive months of
net operating losses, or (iii) the occurrence of an Event of Default (each
of the aforementioned events are herein called a "Borrowing Base Trigger
Event"). The Agent agrees that it shall not be entitled to require that
the Borrower furnish weekly or daily Borrowing Base Reports solely as the
result of the occurrence of a Borrowing Base Trigger Event, if the Agent
fails to so notify the Borrower within ninety (90) days of the date that
the Borrower has cured the Borrowing Base Trigger Event to the reasonable
satisfaction of the Agent. The foregoing sentence, however, shall not
prevent the Agent from later requiring more frequent Borrowing Base Reports
following the occurrence of any subsequent Borrowing Base Trigger Event;
provided, that the Agent so notifies the Borrower within ninety (90) days
of date that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of the Agen(Borrowing Base Report).
"Borrowing Base Trigger Event" has the meaning described in Section (D)
BORROWING BASE REPORT.
The Borrower will furnish to the Agent no less frequently than monthly, as
soon as available, but in any event within twenty (20) days of the end of
each fiscal month, and, upon the occurrence of an Event of Default or as
otherwise provided in this Section (D) BORROWING BASE REPORT., at such
other times as may be requested by the Agent a report of the Borrowing Base
in the form attached hereto as Exhibit A-1 (each a "Borrowing Base Report";
collectively, the "Borrowing Base Reports") in the form required from time
to time by the Agent, appropriately completed and duly signed. The
Borrowing Base Report shall contain the amount and payments on the
Accounts, the value of Inventory, and the calculations of the Borrowing
Base, all in such detail, and accompanied by such supporting and other
information, as the Agent may from time to time reasonably request. Upon
the Agent's request and upon the creation of any Accounts, the Borrower
will provide the Agent with (a) confirmatory assignment schedules; (b)
copies of Account Debtor invoices; (c) evidence of shipment or delivery;
and (d) such further schedules, documents and/or information regarding the
Accounts and the Inventory as the Agent may reasonably require. The items
to be provided under this subsection shall be in form reasonably
satisfactory to the Agent, and certified as true and correct by a
Responsible Officer, and delivered to the Agent from time to time solely
for the Agent's convenience in maintaining records of the Collateral. The
Borrower's failure to deliver any such items to the Agent shall not affect,
terminate, modify, or otherwise limit the Liens of the Agent and the
Lenders in the Collateral. Notwithstanding the foregoing, the Borrower
acknowledges and agrees that the Agent, at its option, may require that the
Borrower furnish to the Agent weekly and, if requested by the Agent, daily
Borrowing Base Reports if any one of the following events occur (i) the
Borrower's and Subsidiary Guarantors' collective aggregate availability
under the Revolving Loan is at any times less than or equal to Fifteen
Million Dollars ($15,000,000), (ii) the Borrower and the Subsidiary
Guarantors, on a consolidated basis, incur three (3) consecutive months of
net operating losses, or (iii) the occurrence of an Event of Default (each
of the aforementioned events are herein called a "Borrowing Base Trigger
Event"). The Agent agrees that it shall not be entitled to require that
the Borrower furnish weekly or daily Borrowing Base Reports solely as the
result of the occurrence of a Borrowing Base Trigger Event, if the Agent
fails to so notify the Borrower within ninety (90) days of the date that
the Borrower has cured the Borrowing Base Trigger Event to the reasonable
satisfaction of the Agent. The foregoing sentence, however, shall not
prevent the Agent from later requiring more frequent Borrowing Base Reports
following the occurrence of any subsequent Borrowing Base Trigger Event;
provided, that the Agent so notifies the Borrower within ninety (90) days
of date that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of the Agen (Borrowing Base Report).
"Business Day" means any day other than a Saturday, Sunday or other day on
which (i) in the case of NationsBank (as Agent and Lender), commercial
banks in the State are authorized or required to close, and (ii) in the
case of the Lenders other than NationsBank, those Lenders are open for the
transaction of business at the addresses stated after their names on the
signature pages of this Agreement and (iii) if any payment is due or
interest is to be calculated or advance is to be made on such day, any day
in which trading in Dollars or Sterling deposits, as the case may be, is
being carried on in the London interbank market.
"Capital Expenditure" means an expenditure which would be classified as
such in accordance with GAAP (whether payable in cash or other property or
accrued as a liability) for Fixed or Capital Assets, including, without
limitation, the entering into of a Capital Lease.
"Capital Lease" means with respect to any Person any lease of real or
personal property, for which the related Lease Obligations have been or
should be, in accordance with GAAP consistently applied, reflected as a
liability on the balance sheet that Person.
"Cash Equivalents" means (a) securities with unexpired maturities of one
year or less issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) certificates of deposit with
unexpired maturities of one (1) year or less or money market accounts
maintained with, the Agent, any Lender, any Affiliate of the Agent or any
Lender, or any other domestic commercial bank having capital and surplus in
excess of One Hundred Million Dollars ($100,000,000.00) or such other
domestic financial institutions or domestic brokerage houses to the extent
disclosed to, and approved by, the Agent and (c) commercial paper of a
domestic issuer rated at least either A-1 by Standard & Poor's Corporation
(or its successor) or P-1 by Moody's Investors Service, Inc. (or its
successor) with unexpired maturities of six (6) months or less. In
addition, with respect to Berry UK and Norwich, Cash Equivalents shall also
mean (a) securities with unexpired maturities of one year or less issued or
fully guaranteed or insured by the British National Government or any
agency thereof and (b) certificates of deposit with unexpired maturities of
one (1) year or less or money market instruments issued by Barclays Bank
PLC.
"Chattel Paper" means a writing or writings which evidence both a monetary
obligation and a security interest in or lease of specific goods; any
returned, rejected or repossessed goods covered by any such writing or
writings and all proceeds (in any form including, without limitation,
accounts, contract rights, documents, chattel paper, instruments and
general intangibles) of such returned, rejected or repossessed goods; and
all proceeds (cash and non-cash) of the foregoing.
"Closing Date" means the date of this Agreement.
"Collateral" means all property of the Borrower and each Subsidiary
Guarantor subject from time to time to the Liens of this Agreement, any of
the Security Documents and/or any of the other Financing Documents,
together with any and all cash and non-cash proceeds and products thereof,
and the UK Collateral.
"Collateral Account" has the meaning described in Section (H) THE
COLLATERAL ACCOUNT.
Upon demand by the Agent following a Borrowing Base Trigger Event, the
Borrower will deposit, or cause to be deposited, all Items of Payment to a
bank account designated by the Agent and from which the Agent alone has
power of access and withdrawal (the "Collateral Account"). Each deposit
shall be made not later than the next Business Day after the date of
receipt of the Items of Payment. The Items of Payment shall be deposited
in precisely the form received, except for the endorsements of the Borrower
where necessary to permit the collection of any such Items of Payment,
which endorsement the Borrower hereby agree to make. In the event the
Borrower fails to do so, the Borrower hereby authorizes the Agent to make
the endorsement in the name of the Borrower. Prior to such a deposit, the
Borrower will not commingle any Items of Payment with the Borrower's other
funds or property, but will hold them separate and apart in trust and for
the account of the Agent for the benefit of the Lenders ratably and the
Agent. The Agent agrees that it shall not demand that the Borrower deposit
or cause to be deposited all Items of Deposit to the Collateral Account at
any time prior to the occurrence of a Borrowing Base Trigger Event. Once
the Agent has so made demand on the Borrower, unless otherwise agreed by
the Agent in writing, the Borrower shall continue to so deposit or cause to
be deposited all Items of Payment to the Collateral Account notwithstanding
that subsequent to such demand the Borrowing Base Trigger Event has been
cured, waived, otherwise remedied or is no longer applicable. (The
Collateral Account).
"COLLATERAL DISCLOSURE LIST" HAS THE MEANING DESCRIBED IN COLLATERAL
DISCLOSURE LIST.
On or prior to the date of this Agreement, the Borrower, Berry UK and
Norwich shall deliver to the Agent one or more lists (collectively, the
"Collateral Disclosure List") which shall contain such information with
respect to the business and real and personal property of the Borrower,
Berry UK, Norwich and each Subsidiary Guarantor as of its date of delivery
as the Agent may require and shall be certified by a Responsible Officer of
the Borrower, Berry UK, Norwich and each Subsidiary Guarantor, as
appropriate, all in the form provided to the Borrower by the Agent.
Promptly after demand by the Agent, the Borrower shall furnish and shall
cause Berry UK, Norwich and each Subsidiary Guarantor to furnish to the
Agent an update of the information contained in the Collateral Disclosure
List at any time and from time to time as may be requested by the Agent.
(Collateral Disclosure List).
"Collection" means each check, draft, cash, money, instrument, item, and
other remittance in payment or on account of payment of the Accounts or
otherwise with respect to any Collateral, including, without limitation,
cash proceeds of any returned, rejected or repossessed goods, the sale or
lease of which gave rise to an Account, and other proceeds of Collateral;
and "Collections" means the collective reference to all of the foregoing.
"Commitment" means with respect to each Lender, such Lender's Revolving
Credit Commitment, Letter of Credit Commitment, Term Loan A Commitment,
Term Loan B Commitment, Bond Letter of Credit Commitment, Special Source
Bond Commitment, UK Revolving Credit Commitment, or UK Term Loan Commitment
as the case may be, and "Commitments" means the collective reference to the
Revolving Credit Commitments, the Letter of Credit Commitments, the Term
Loan A Commitments, the Term Loan B Commitments, the Bond Letter of Credit
Commitments, Special Source Bond Commitment, the UK Revolving Credit
Commitments and the UK Term Loan Commitments of all of the Lenders.
"Committed Amount" means with respect to each Lender, such Lender's
Revolving Credit Committed Amount, Letter of Credit Committed Amount, Term
Loan A Committed Amount, Term Loan B Committed Amount, the Bond Letter of
Credit Committed Amount, UK Revolving Credit Committed Amount, UK Term Loan
Committed Amount, as the case may be, and "Committed Amounts" means
collectively the Revolving Loan Committed Amount, the Letter of Credit
Committed Amount, Term Loan A Committed Amount, Term Loan B Committed
Amount, the Bond Letter of Credit Committed Amount of each of the Lenders,
the UK Revolving Credit Committed Amounts, and the UK Term Loan Committed
Amounts.
"Compliance Certificate" means a periodic Compliance Certificate described
in Section (I) ANNUAL STATEMENTS AND CERTIFICATES. The Borrower shall
furnish to the Agent for distribution to the Lenders as soon as available,
but in no event more than ninety (90) days after the close of the
Borrower's fiscal years, (i) a copy of the annual consolidated and
consolidating financial statements in reasonable detail satisfactory to the
Agent relating to the Borrower, Berry UK, Norwich and all other
Subsidiaries, prepared in accordance with GAAP and examined and certified
by independent certified public accountants satisfactory to the Agent,
which financial statements shall include a consolidated and consolidating
balance sheet of the Borrower, Berry UK, Norwich and all other Subsidiaries
as of the end of such fiscal year and consolidated and consolidating
statements of income, cash flows and changes in shareholders equity of the
Borrower, Berry UK, Norwich and all other Subsidiaries for such fiscal
year, and (ii) a Compliance Certificate, in substantially the form attached
to this Agreement as EXHIBIT D, containing a detailed computation of each
financial covenant in this Agreement which is applicable for the period
reported, a certification that no change has occurred to the information
contained in the Collateral Disclosure List (except as set forth any
schedule attached to the certification) and (iii) a management letter in
the form prepared by the Borrower's independent certified public
accountants, but only if and to the extent customarily obtained by the
Borrower. The Agent agrees that any one of the "Big 4" accounting firms is
satisfactory to the Agent for purposes of this Section (A) FINANCIAL
STATEMENTS. except to the extent the Agent in its reasonable discretion and
based on good faith and legitimate concerns determines that any such
accounting firm would be unacceptable because of any conflict of interest
or any material adverse change affecting such firm's reliability or
financial viability. (Financial Statements).
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Internal Revenue Code.
"Container Purchase Agreement" means that certain asset purchase agreement
dated as of January 17, 1997 by and among the Borrower, Container
Industries, Inc. and the shareholders of Container Industries, Inc., as
amended, restated, supplemented or otherwise modified.
"Container Purchase Agreement Transaction" means the acquisition of all or
substantially all of the assets of Container Industries, Inc.
"Copyrights" means and includes, in each case whether now existing or
hereafter arising, all of the Borrower's or any Subsidiary's rights, title
and interest in and to (a) all copyrights, rights and interests in
copyrights, works protectable by copyright, copyright registrations,
copyright applications, and all renewals of any of the foregoing, (b) all
income, royalties, damages and payments now or hereafter due and/or payable
under any of the foregoing, including, without limitation, damages or
payments for past, current or future infringements of any of the foregoing,
(c) the right to sue for past, present and future infringements of any of
the foregoing, and (d) all rights corresponding to any of the foregoing
throughout the world.
"Credit Facility" means a Domestic Credit Facility or a UK Credit Facility,
and "Credit Facilities" means the Domestic Credit Facilities and the UK
Credit Facilities.
"Current Bond Letter of Credit Obligations" has the meaning described in
Section (E) PAYMENTS OF BOND LETTERS OF CREDIT. (Payments of Bond Letters
of Credit).
"Current Letter of Credit Obligations" has the meaning described in Section
(E) PAYMENTS OF LETTERS OF CREDIT..
The Borrower hereby promises to pay to the Agent, ON DEMAND and in United
States Dollars, the following which are herein collectively referred to as
the "Current Letter of Credit Obligations":
The Borrower hereby promises to pay to the Agent, ON DEMAND and in United
States Dollars, the following which are herein collectively referred to as
the "Current Letter of Credit Obligations": (Payments of Letters of
Credit).
"Debt Service" means for any period of determination thereof an amount
equal to the total of the aggregate amount of all payments of principal and
interest with respect to Indebtedness for Borrowed Money of the Borrower,
the Subsidiary Guarantors, Berry UK and Norwich, as appropriate, scheduled
to be due and payable during such period, excluding, any Term Loan B
Mandatory Prepayments with respect to Excess Cash Flow and any UK Term
Loan Mandatory Prepayment with respect to UK Excess Cash Flow. For
purposes of calculating "Debt Service", the Agent and the Lenders agree
that (a) scheduled payments with respect to the Iowa Bond Letter of Credit
Obligations shall reflect the permitted amortization of a portion of such
Iowa Bond Letter of Credit Obligations pursuant to Section (ii)
Notwithstanding the provisions of paragraph (a) above, as long as no Event
of Default has occurred, any drawing under the Iowa Bond Letter of Credit -
NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond
Standby Credit Agreement, any drawing under the Nevada Bond Letter of
Credit - NB to purchase Nevada Bonds, and any drawing under the South
Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in
each case relating to Bonds which were tendered for purchase by the holders
thereof and which were not remarketed in a timely fashion (each referred to
herein as a "Conversion Drawing"), are not required to be reimbursed to the
Agent ON DEMAND; provided that BIC or the Borrower, as appropriate, make
payments of interest to the Agent at the rates, at the times and otherwise
subject to the provisions for interest on the Loans under Interest.
(Interest), and the principal amount of each such Conversion Drawing is
repaid in equal quarterly payments (i) over the remaining term to expiry of
the Bond Letter of Credit Facility with respect to the Nevada Bond Letter
of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and
(ii) over a period of ten (10) years with respect to the Iowa Bond Letter
of Credit - NB; final payment of all outstanding amounts relating to the
Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of
Credit - NB to be made no later than expiry of the Bond Letter of Credit
Facility or the Revolving Credit Termination Date, whichever is earlier,
and final payment of all outstanding amounts relating to the Iowa Bond
Letter of Credit - NB to be made no later than the date which is ten (10)
years after the date of any Conversion Drawing under the Iowa Bond Letter
of Credit - NB or the Revolving Credit Termination Date, whichever is
earlier. In addition, the Agent and the Lenders agree that in the event
the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about
the business day preceding the expiration or termination of the Iowa Bond
Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust
Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations
resulting from the Draw, shall not be payable ON DEMAND as would otherwise
be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but
shall be repaid by the Borrower in equal consecutive quarterly installments
over a period of ten (10) years, commencing with the first day following
the first full quarterly period after the Draw and continuing on the first
day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter
of Credit Obligations"); provided, that (A) there does not exist a Default
or an Event of Default, (B) the Draw is not the result of an acceleration
of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement
and (C) the Draw is not the result of the occurrence of a "Determination of
Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall
be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the
Agent at the rates, at the times and otherwise subject to the provisions
for interest on the Loans under INTEREST. (Interest), with a final payment
of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB
to be made no later than the date which is ten (10) years after the date of
the Draw or the Revolving Credit Termination Date, whichever is
earlier.(Payments of Bond Letters of Credit), and (b) Iowa Bond Rollover
Payments shall not be included in the determination of Debt Service.
"Debt Service Coverage Ratio" means as to the Borrower, each of the
Subsidiary Guarantors, Berry UK and Norwich on a consolidated basis, for
any period of determination thereof the ratio of (a) EBITDA to (b) Debt
Service.
"Deed of Trust - Anderson" means that certain deed of trust or mortgage
dated as of the Second Closing Date from Venture Southeast to or for the
benefit of the Agent, as the same may from time to time be amended,
restated, supplemented or modified, which Deed of Trust - Anderson grants
to the Agent for the benefit of the Lenders ratably and for the benefit of
the Agent, a first priority Lien on that certain property located in
Anderson County, South Carolina, as further described therein.
"Deed of Trust - Indian Trail" means that certain deed of trust or mortgage
dated as of the First Closing Date from BTP to or for the benefit of the
Agent, as the same may from time to time be amended, restated, supplemented
or modified, which Deed of Trust - Indian Trail grants to the Agent for the
benefit of the Lenders ratably and for the benefit of the Agent, a first
priority Lien on that certain property known generally as Wesley Chapel-
Stouts Road, Indian Trail, North Carolina 28079.
"Deed of Trust - Evansville" means that certain deed of trust or mortgage
dated as of the First Closing Date from the Borrower to or for the benefit
of the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust - Evansville grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a first priority Lien on that certain property known generally as
101 Oakley Street, Evansville, Indiana 47710.
"Deed of Trust - Henderson" means that certain deed of trust or mortgage
dated as of the First Closing Date from the Borrower to or for the benefit
of the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust - Henderson grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a second priority Lien on that certain property known generally as
800 East Horizon Drive, Henderson, Nevada 89009.
"Deed of Trust - Iowa Falls" means that certain deed of trust or mortgage
dated as of the First Closing Date from BIC to or for the benefit of the
Agent, as the same may from time to time be amended, restated, supplemented
or modified, which Deed of Trust - Iowa Falls grants to the Agent for the
benefit of the Lenders ratably and for the benefit of the Agent, a first
priority Lien on that certain property known generally as 1036 Industrial
Park Road, Iowa Falls, Iowa 50126.
"Deed of Trust - Lawrence" means that certain deed of trust or mortgage
dated as of the First Closing Date from PackerWare to or for the benefit of
the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust - Lawrence grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a first priority Lien on that certain property known generally as
2330 Packer Road, Lawrence, Kansas 66044.
"Deed of Trust - Monroeville" means that certain deed of trust or mortgage
dated as of the Second Closing Date from Venture Midwest to or for the
benefit of the Agent, as the same may from time to time be amended,
restated, supplemented or modified, which Deed of Trust - Anderson grants
to the Agent for the benefit of the Lenders ratably and for the benefit of
the Agent, a first priority Lien on that certain property located in Huron
County, Ohio, as further described therein.
"Deed of Trust - Suffolk" means that certain credit line deed of trust,
assignment and security agreement dated as of May 13, 1997 from Berry
Design to or for the benefit of the Agent, as the same may from time to
time be amended, restated, supplemented or modified, which Deed of Trust -
Suffolk grants to the Agent for the benefit of the Lenders ratably and for
the benefit of the Agent, a first priority Lien on that certain property
known generally as 1401 Progress Road, Suffolk, Virginia.
"Deeds of Trust" means the collective reference to the Deed of Trust -
Anderson, the Deed of Trust - Indian Trail, the Deed of Trust - Evansville,
the Deed of Trust - Henderson, the Deed of Trust - Iowa Falls, the Deed of
Trust - Lawrence, the Deed of Trust - Monroeville, and the Deed of Trust -
Suffolk.
"Default" means an event that, with the giving of notice or lapse of time,
or both, would constitute an Event of Default under the provisions of this
Agreement.
"Distribution" means (a) the payment of any dividends or other
distributions on capital stock of the Borrower (except distributions in any
class of capital stock) and (b) the redemption or acquisition of capital
stock or Subordinated Indebtedness of the Borrower unless made
contemporaneously from the Net Proceeds of the sale of capital stock or the
issuance of Subordinated Indebtedness to the extent permitted by the
provisions of this Agreement or otherwise consented to by the Agent.
"Documents" means all documents of title, whether now existing or hereafter
acquired or created, and all proceeds (cash and non-cash) of the foregoing.
"Dollar" or "Dollars" means United States Dollars.
"Dollar Currency Equivalent" means, on any date of determination, the
amount of Dollars which results from the sale of a given amount in
Sterling, determined at the rate of exchange quoted by the Agent in London,
England, at 9:00 A.M. (London time) on such date of determination, to prime
banks in London, England for the spot sale in the London foreign exchange
market of Sterling for Dollars.
"Dollar Interest Period" means as to any Dollar LIBOR Loan, the period
commencing on and including the date such Dollar LIBOR Loan is made (or on
the effective date of the Borrower's election to convert any Base Rate Loan
to a Dollar LIBOR Loan in accordance with the provisions of this Agreement)
and ending on and including the day which is 30, 60, 90 or 180 days
thereafter, as selected by the Borrower in accordance with the provisions
of this Agreement, and thereafter, each period commencing on the last day
of the then preceding Interest Period for such Dollar LIBOR Loan and ending
on and including the day which is 30, 60, 90 or 180 days thereafter, as
selected by the Borrower, in accordance with the provisions of this
Agreement; provided, however that:
(a)the first day of any Dollar Interest Period shall be a
Business Day;
(b)if any Dollar Interest Period would end on a day that is not a
Business Day, such Dollar Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case, such Dollar Interest Period
shall end on the next preceding Business Day; and
(c)no Dollar Interest Period shall extend beyond the Revolving
Credit Termination Date or the scheduled maturity date of the Term Loans A,
or the Term Loans B, as appropriate.
"Dollar LIBOR Lending Office" means with respect to the Agent such branch
or office of the Agent as designated by the Agent from time to time as the
branch or office where the Dollar LIBOR Loans are to be made or maintained.
"Dollar LIBOR Base Rate" means for any Dollar Interest Period with respect
to any Dollar LIBOR Loan, the rate per annum (rounded upward, if necessary,
to the nearest next 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in United
States Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Dollar Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Dollar LIBOR Base Rate" shall mean, for any Dollar
LIBOR Loan for any Dollar Interest Period therefor, the rate per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Dollar Interest Period; PROVIDED, HOWEVER,
if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates. For
purposes of this definition, Telerate Page 3750 refers to the British
Bankers Association Libor Rates (determined at approximately 11:00 a. m
(London time)) that are published by Dow Jones Telerate, Inc.
"Dollar LIBOR Loan" means any Loan for which interest is to be computed
with reference to the Dollar LIBOR Rate.
"Dollar LIBOR Rate" means for any Dollar Interest Period with respect to
any Dollar LIBOR Loan, (a) the Applicable Margin, PLUS (b) the per annum
rate of interest calculated pursuant to the following formula:
DOLLAR LIBOR BASE RATE
1.00 - Reserve Percentage
"Domestic Credit Facility" means with respect to each Lender, such Lender's
Pro Rata Share of the Revolving Credit Facility, the Letter of Credit
Facility, the Term Loan A Facility, the Term Loan B Facility, the Bond
Letter of Credit Facility, or the Special Source Bond Facility, as the case
may be, and "Domestic Credit Facilities" means collectively the Revolving
Credit Facility, the Letter of Credit Facility, the Term Loan A Facility,
the Term Loan B Facility, the Bond Letter of Credit Facility, and the
Special Source Bond Facility, and any and all other credit facilities now
or hereafter extended to the Borrower under or secured by this Agreement.
"Draw" has the meaning described in Section (ii) Notwithstanding the
provisions of paragraph (a) above, as long as no Event of Default has
occurred, any drawing under the Iowa Bond Letter of Credit - NB to redeem
Iowa Bonds purchased with a drawing under the Iowa Bond Standby Credit
Agreement, any drawing under the Nevada Bond Letter of Credit - NB to
purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter
of Credit - NB to purchase South Carolina Bonds, in each case relating to
Bonds which were tendered for purchase by the holders thereof and which
were not remarketed in a timely fashion (each referred to herein as a
"Conversion Drawing"), are not required to be reimbursed to the Agent ON
DEMAND; provided that BIC or the Borrower, as appropriate, make payments of
interest to the Agent at the rates, at the times and otherwise subject to
the provisions for interest on the Loans under Interest. (Interest), and
the principal amount of each such Conversion Drawing is repaid in equal
quarterly payments (i) over the remaining term to expiry of the Bond Letter
of Credit Facility with respect to the Nevada Bond Letter of Credit - NB
and/or the South Carolina Bond Letter of Credit - NB and (ii) over a period
of ten (10) years with respect to the Iowa Bond Letter of Credit - NB;
final payment of all outstanding amounts relating to the Nevada Bond Letter
of Credit - NB and/or the South Carolina Bond Letter of Credit - NB to be
made no later than expiry of the Bond Letter of Credit Facility or the
Revolving Credit Termination Date, whichever is earlier, and final payment
of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB
to be made no later than the date which is ten (10) years after the date of
any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the
Revolving Credit Termination Date, whichever is earlier. In addition, the
Agent and the Lenders agree that in the event the Iowa Bond Trustee draws
on the Iowa Bond Letter of Credit on or about the business day preceding
the expiration or termination of the Iowa Bond Letter of Credit, as
contemplated by Section 505 of the Iowa Bond Trust Agreement (the "Draw"),
the Iowa Bond Letter of Credit Obligations resulting from the Draw, shall
not be payable ON DEMAND as would otherwise be required by this Section (E)
PAYMENTS OF BOND LETTERS OF CREDIT., but shall be repaid by the Borrower in
equal consecutive quarterly installments over a period of ten (10) years,
commencing with the first day following the first full quarterly period
after the Draw and continuing on the first day of each quarterly period
thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations");
provided, that (A) there does not exist a Default or an Event of Default,
(B) the Draw is not the result of an acceleration of the Iowa Bonds
pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C) the Draw
is not the result of the occurrence of a "Determination of Taxability" (as
defined in the Iowa Bond Trust Agreement). Interest shall be payable on
the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the
rates, at the times and otherwise subject to the provisions for interest on
the Loans under Interest. (Interest), with a final payment of all
outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be
made no later than the date which is ten (10) years after the date of the
Draw or the Revolving Credit Termination Date, whichever is earlier.
(Payment of Bond Letters of Credit).
"Early Termination Fee" has the meaning described in Section (K) EARLY
TERMINATION FEE.
In the event of the termination of the Revolving Credit Commitments, the
Borrower shall pay a fee to the Agent for the benefit of the Lenders
ratably (the "Early Termination Fee"), equal to following amount at the
following times: (Early Termination Fee).
"EBITDA" means as to the Borrower, Berry UK, Norwich and the Subsidiary
Guarantors, on a consolidated basis, as of any date or for any period of
determination, the sum of (a) the net profit (or loss) determined in
accordance with GAAP consistently applied, PLUS (b) interest expense and
income Taxes or alternative minimum Taxes for such period to the extent
deducted in the calculation of net income (or loss), PLUS (c) depreciation
and amortization of Assets for such period, PLUS (d) unusual expenses
associated with the write-off of the capitalized portion of financing
costs, MINUS (e) non-cash gains from Asset sales other than sales of
Inventory in the ordinary course of business, PLUS (f) non-cash losses from
Asset sales other than sales of Inventory in the ordinary course of
business, PLUS, (g) non-cash extraordinary losses, MINUS (h) extraordinary
gains, MINUS (i) interest income, MINUS (j) any gain relating to the
accumulated effect of any change in accounting method, PLUS (k) any loss
relating to the accumulated effect of any change in accounting method, each
item in clauses (a) through (k) calculated pursuant to GAAP for such
period, PLUS, (l) any non-cash compensation expenses, MINUS, (m) any non-
cash compensation gains.
"Eligible Domestic Inventory" means the collective reference to all
Inventory of the Borrower and each Subsidiary Guarantor held for sale,
valued at the lowest of the cost, any ceiling prices which may be
established by any Law of any Governmental Authority or prevailing market
value, all as reduced by the aggregate amount of all reserves, limits and
deductions provided for in this definition or in (C) BORROWING BASE.
As used in this Agreement, the term "Borrowing Base" means at any time, an
amount equal to the aggregate of (a) eighty-five percent (85%) of the
amount of Eligible Domestic Receivables, plus (b) the lesser of (i) sixty-
five percent (65%) of the amount of Eligible Domestic Inventory or (ii)
Twenty-five Million Dollars ($25,000,000 (Borrowing Base); EXCLUDING,
however, any Inventory which consists of:
(a)any Inventory located outside of the United States,
(b)any Inventory located outside of a state in which the Agent
has properly perfected the Liens of the Agent and the Lenders under this
Agreement, free and clear of all other Liens (other than Permitted Liens),
(c)any Inventory not in the actual possession of the Borrower or
a Subsidiary Guarantor, except to the extent provided in subsection (d)
below,
(d)any Inventory in the possession of a bailee, warehouseman,
consignee or similar third party, except to the extent that either (1) such
bailee, warehouseman, consignee or similar third party has entered into an
agreement with the Agent in which such bailee, warehouseman, consignee or
similar third party consents and agrees to the Lien of the Agent and the
Lenders on such Inventory and to such other terms and conditions as may be
reasonably required by the Agent, or (2) with respect to any Inventory in
the possession of a bailee or warehouseman, the Agent has established a
reserve for such Inventory in an amount not greater than three (3) months
of any fees or other charges which would be due and payable to any such
bailee and warehouseman under its agreements with the Borrower or
Subsidiary Guarantor, as appropriate (the Agent agrees to so establish a
reserve as shall be appropriate unless otherwise directed by the Borrower),
(e)any Inventory located on premises leased or rented to the
Borrower or a Subsidiary Guarantor or otherwise not owned by the Borrower
or a Subsidiary Guarantor, unless either (i) the Agent has received a
waiver and consent from the lessor, landlord and/or owner, in form and
substance reasonably satisfactory to the Agent and from any mortgagee of
such lessor, landlord or owner to the extent reasonably required by the
Agent or (ii) with respect to any such Inventory, the Agent has established
a reserve for such Inventory in an amount not greater than three (3) months
of any rents or other charges which would be due and payable to any such
lessor, landlord or owner under its agreements with the Borrower or
Subsidiary Guarantor, as appropriate (the Agent agrees to so establish a
reserve as shall be appropriate unless otherwise directed by the Borrower),
(f)any Inventory the sale or other disposition of which has given
rise to an Account,
(g)any Inventory which fails to meet all standards and
requirements imposed by any Governmental Authority over such Inventory or
its production, storage, use or sale to the extent that the failure to meet
any such standards and/or requirements imposed by any Governmental
Authority would entitle a purchaser of such Inventory to return the
Inventory or otherwise cancel or rescind its purchase or shall otherwise
materially impair the value of the Inventory or the ability of the Agent to
realize upon the value of the Inventory,
(h)work-in-process or supplies,
(i)any Inventory as to which the Agent determines in the exercise
of its sole and absolute discretion at any time and in good faith (i) is
not in merchantable condition or is defective, post-seasonal, slow moving
or obsolete and (ii) which the Agent determines in the exercise of its sole
and absolute discretion is unlikely to be sold in the ordinary course of
business within a reasonable period of time and on customary terms and
conditions, without significant out of the ordinary course discounts or
other concessions,
(j)any Inventory which the Agent in the good faith exercise of
its sole and absolute discretion has deemed to be ineligible because the
Agent considers the collateral value to the Agent and the Lenders to be
impaired in any material respect or its ability to realize such value to be
insecure in any material respect.
In the event of any dispute under the foregoing criteria, as to whether
Inventory is, or has ceased to be, Eligible Domestic Inventory, the
decision of the Agent in the good faith exercise of its sole and absolute
discretion shall control.
"Eligible Domestic Receivable" and "Eligible Domestic Receivables" mean, at
any time of determination thereof, the unpaid portion of each Account (net
of any returns, discounts, claims asserted by Account Debtors or other
obligors with respect to such Account, credits, charges, accrued rebates or
other allowances, offsets, deductions, counterclaims, disputes or other
defenses asserted by Account Debtors or other obligors with respect to such
Account, and reduced by the aggregate amount of all reserves, limits and
deductions expressly provided for in this Agreement), which shall be
receivable in United States Dollars by the Borrower or any Subsidiary
Guarantor, provided each Account conforms and continues to conform to the
following criteria to the reasonable satisfaction of the Agent:
(a)the Account arose in the ordinary course of business from a
bona fide outright sale of Inventory or from services performed;
(b)the Account is a valid, legally enforceable obligation of the
Account Debtor;
(c)if the Account arises from the sale of Inventory, the
Inventory the sale of which gave rise to the account has been shipped or
delivered to the Account Debtor on an absolute sale basis and not on a bill
and hold sale basis, a consignment sale basis, a guaranteed sale basis, a
sale or return basis, or on the basis of any other similar understanding;
(d)if the Account arises from the performance of services, such
services have been fully rendered;
(e)the Account is evidenced by an invoice or other documentation
in form reasonably acceptable to the Agent, dated no later than two (2)
Business Days after the date of shipment or performance and containing only
terms normally offered by the Borrower or the Subsidiary Guarantor, as
appropriate;
(f)the amount shown on the books of the Borrower or the
Subsidiary Guarantor, as appropriate, and on any invoice, certificate,
schedule or statement delivered to the Agent is owing to the Borrower or
the Subsidiary Guarantor, as appropriate, with any partial payment reducing
the amount of the Eligible Domestic Receivable by such partial payment
received;
(g)the Account is not outstanding more than one hundred twenty
(120) days from the date of the invoice therefor or past due more than
thirty (30) days after its due date, which shall not be later than ninety
(90) days after the invoice date;
(h)the Account is not owing by any Account Debtor for which fifty
percent (50%) or more of such Account Debtor's other Accounts (or any
portion thereof) due to Norwich, Berry UK, the Borrower or any Subsidiary
Guarantor, individually, or Norwich, Berry UK, the Borrower and each of the
Subsidiary Guarantors collectively, are non-Eligible Domestic Receivables
and/or non-Eligible UK Receivables;
(i)the Account is not owing by an Account Debtor or a group of
affiliated Account Debtors whose then existing Accounts owing to the
Borrower or any Subsidiary Guarantor, individually, exceed in the
aggregate, fifteen percent (15%) of the total Eligible Domestic Receivables
of the Borrower or the Subsidiary Guarantor, as appropriate and is not
owing by an Account Debtor or a group of affiliated Account Debtors whose
then existing Accounts to the Borrower and each of the Subsidiary
Guarantors collectively exceed, in the aggregate, fifteen percent (15%) of
the total Eligible Domestic Receivables of the Borrower and all of the
Subsidiary Guarantors except that with respect to Accounts owing by those
Account Debtors identified on SCHEDULE 1.1 attached hereto, as updated with
the Agent's consent at any time and from time, the Account is not owing by
any Account Debtor so named on SCHEDULE 1.1 whose then existing Accounts to
the Borrower and/or any Subsidiary Guarantor, individually, exceed, in the
aggregate, twenty-five percent (25%) of the total Eligible Domestic
Receivables of the Borrower or any Subsidiary Guarantor, as appropriate,
and is not owing by an Account Debtor so named on SCHEDULE 1.1 whose then
existing Accounts to the Borrower and each of the Subsidiary Guarantors,
collectively, exceed, in the aggregate, twenty-five percent (25%) of the
total Eligible Domestic Receivables of the Borrower and all of the
Subsidiary Guarantors;
(j)the Account Debtor has not returned, rejected or refused to
retain, or otherwise notified the Borrower or any Subsidiary Guarantor of
any dispute concerning, or claimed nonconformity of, any of the Inventory
or services from the sale or furnishing of which the Account arose;
(k)the Account Debtor is not a Subsidiary or Affiliate of
Norwich, Berry UK, the Borrower or any Subsidiary Guarantor or an employee,
officer, director of shareholder of Norwich, Berry UK, the Borrower or any
Subsidiary Guarantor or any Subsidiary or Affiliate of the Borrower or any
Subsidiary Guarantor (For purposes of calculating Eligible Domestic
Receivables, the term Affiliate shall not include any Affiliate of any
stockholder of the Parent);
(l)the Account Debtor is not incorporated or organized in or
primarily located in any jurisdiction outside of the United States of
America or Canada, unless the Account Debtor's obligations with respect to
such account are secured by a letter of credit, guaranty or banker's
acceptance having terms and from such issuers and confirmation banks as are
reasonably acceptable to the Agent in its commercially reasonable
discretion (which letter of credit, guaranty or banker's acceptance is
subject to an irrevocable assignment of proceeds in favor of the Agent for
the benefit of the Lenders ratably and the Agent);
(m)the Account Debtor with respect to such Account is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any
kind or of any other proceeding or action;
(n)the Account Debtor is not a Governmental Authority, unless the
Borrower or Subsidiary Guarantor, as appropriate, shall have complied to
the Agent's satisfaction with the Assignment of Claims Act of 1940, as
amended;
(o)neither the Borrower nor any of the Subsidiary Guarantors is
indebted in any manner to the Account Debtor (as creditor, lessor, supplier
otherwise), with the exception of customary credits, adjustments and/or
discounts given to an Account Debtor;
(p)the Account does not arise from services under or related to
any warranty obligation of the Borrower or any Subsidiary Guarantor or out
of service charges, finance charges or other fees for the time value of
money;
(q)the Account is not evidenced by Chattel Paper or an Instrument
of any kind and is not secured by any letter of credit, except as permitted
under subsection (l) above, unless the original of any such Chattel Paper
and/or Instrument has been delivered to the Agent;
(r)the title of the Borrower or the Subsidiary Guarantor, as
appropriate, to the account is absolute and is not subject to any prior
assignment, claim, Lien, or security interest, except Permitted Liens and
Liens in favor of the Agent and/or the Lenders;
(s)no bond or other undertaking by a guarantor or surety which is
not reasonably acceptable to the Agent has been or is required to be
obtained, supporting the Account and any of the Account Debtor's
obligations in respect of the Account, other than as and to the extent
permitted or required under the provisions of subsection (l) above;
(t)the Borrower and each Subsidiary Guarantor, as appropriate,
have the full and unqualified right and power to assign and grant a
security interest in, and Lien on, the Account to the Agent as security and
collateral for the payment of the Obligations;
(u)the Account does not arise out of a contract with, or order
from, an Account Debtor that, by its terms, forbids or makes void or
unenforceable the assignment or grant of a Lien by the Borrower and each
Subsidiary Guarantor, as appropriate, to the Agent, for the benefit of the
Lenders ratably and the Agent, of the Account arising from such contract or
order;
(v)the Account is subject to a Lien in favor of the Agent, for
the benefit of the Lenders ratably and the Agent, which Lien constitutes a
first priority perfected security interest and Lien, subject only to
Permitted Liens;
(w)the Inventory giving rise to the Account was not, at the time
of the sale thereof, subject to any Lien, except those in favor of the
Agent, for the benefit of the Lenders ratably and the Agent and other
Permitted Liens;
(x)no part of the Account represents a progress billing or a
retainage;
(y)the Agent in the good faith exercise of its commercially
reasonable discretion has not deemed the Account ineligible because of
uncertainty in any material respect as to the creditworthiness of the
Account Debtor or because the Agent otherwise considers the collateral
value of such Account to the Agent and the Lenders to be impaired in any
material respect or its ability to realize such value to be insecure in any
material respect.
In the event of any dispute, under the foregoing criteria, as to whether an
account is, or has ceased to be, an Eligible Domestic Receivable, the
decision of the Agent in the good faith exercise of its commercially
reasonable discretion shall control.
"Eligible UK Inventory" means the collective reference to all Inventory of
Berry UK and Norwich held for sale, valued at the lowest of the cost,
denominated in Sterling, any ceiling prices which may be established by any
Law of any Governmental Authority or prevailing market value, all as
reduced by the aggregate amount of all reserves, limits and deductions
provided for in this definition or in Section (C) UK BORROWING BASE. (UK
Borrowing Base); EXCLUDING, however, any Inventory which consists of:
(a)any Inventory located outside of England or Wales,
(b)any Inventory on which NationsBank does not have properly
perfected the Lien under the UK Security Documents, free and clear of all
other Liens (other than Permitted Liens and Liens securing the
Obligations),
(c)any Inventory which is (i) subject to retention of title by
any vendor or (ii) not in the actual possession of Norwich or Berry UK,
except to the extent provided in subsection (d) below,
(d)any Inventory in the possession of a bailee, warehouseman,
consignee or similar third party, except to the extent that either (1) such
bailee, warehouseman, consignee or similar third party has entered into an
agreement with NationsBank in which such bailee, warehouseman, consignee or
similar third party consents and agrees to the Lien of NationsBank on such
Inventory and to such other terms and conditions as may be reasonably
required by NationsBank, or (2) with respect to any Inventory in the
possession of a bailee or warehouseman, NationsBank has established a
reserve for such Inventory in an amount not greater than three (3) months
of any fees or other charges which would be due and payable to any such
bailee and warehouseman under its agreements with Norwich or Berry UK
(NationsBank agrees to so establish a reserve as shall be appropriate
unless otherwise directed by Norwich or Berry UK),
(e)any Inventory located on premises leased or rented to Norwich
or Berry UK or otherwise not owned by Norwich or Berry UK, unless either
(i) NationsBank has received a waiver and consent from the lessor, landlord
and/or owner, in form and substance reasonably satisfactory to NationsBank
and from any mortgagee of such lessor, landlord or owner to the extent
reasonably required by NationsBank or (ii) with respect to any such
Inventory, NationsBank has established a reserve for such Inventory in an
amount not greater than three (3) months of any rents or other charges
which would be due and payable to any such lessor, landlord or owner under
its agreements with Norwich or Berry UK (NationsBank agrees to so establish
a reserve as shall be appropriate unless otherwise directed by Norwich or
Berry UK),
(f)any Inventory the sale or other disposition of which has given
rise to an Account,
(g)any Inventory which fails to meet all standards and
requirements imposed by any Governmental Authority over such Inventory or
its production, storage, use or sale to the extent that the failure to meet
any such standards and/or requirements imposed by any Governmental
Authority would entitle a purchaser of such Inventory to return the
Inventory or otherwise cancel or rescind its purchase or shall otherwise
materially impair the value of the Inventory or the ability of NationsBank
to realize upon the value of the Inventory,
(h)work-in-process or supplies,
(i)any Inventory as to which NationsBank determines in the
exercise of its sole and absolute discretion at any time and in good faith
(i) is not in merchantable condition or is defective, post-seasonal, slow
moving or obsolete and (ii) which NationsBank determines in the exercise of
its sole and absolute discretion is unlikely to be sold in the ordinary
course of business within a reasonable period of time and on customary
terms and conditions, without significant out of the ordinary course
discounts or other concessions,
(j)any Inventory which NationsBank in the good faith exercise of
its sole and absolute discretion has deemed to be ineligible because
NationsBank considers the collateral value to NationsBank to be impaired in
any material respect or its ability to realize such value to be insecure in
any material respect.
In the event of any dispute under the foregoing criteria, as to whether
Inventory is, or has ceased to be, Eligible UK Inventory, the decision of
NationsBank in the good faith exercise of its sole and absolute discretion
shall control.
"Eligible UK Receivable" and "Eligible UK Receivables" mean, at any time of
determination thereof, the unpaid portion of each Account (net of any
returns, discounts, claims asserted by Account Debtors or other obligors
with respect to such Account, credits, charges, accrued rebates or other
allowances, offsets, deductions, counterclaims, disputes or other defenses
asserted by Account Debtors or other obligors with respect to such Account,
and reduced by the aggregate amount of all reserves, limits and deductions
expressly provided for in this Agreement), which shall be receivable in
Sterling by Norwich or Berry UK, provided each Account conforms and
continues to conform to the following criteria to the reasonable
satisfaction of NationsBank:
(a)the Account arose in the ordinary course of business from a
bona fide outright sale of Inventory or from services performed;
(b)the Account is a valid, legally enforceable obligation of the
Account Debtor;
(c)if the Account arises from the sale of Inventory, the
Inventory the sale of which gave rise to the account has been shipped or
delivered to the Account Debtor on an absolute sale basis and not on a bill
and hold sale basis, a consignment sale basis, a guaranteed sale basis, a
sale or return basis, or on the basis of any other similar understanding;
(d)if the Account arises from the performance of services, such
services have been fully rendered;
(e)the Account is evidenced by an invoice or other documentation
in form reasonably acceptable to NationsBank, dated no later than two (2)
Business Days after the date of shipment or performance and containing only
terms normally offered by Norwich or Berry UK;
(f)the amount shown on the books of Norwich or Berry UK, as
appropriate, and on any invoice, certificate, schedule or statement
delivered to NationsBank is owing to Norwich or Berry UK, as appropriate,
with any partial payment reducing the amount of the Eligible UK Receivable
by such partial payment received;
(g)the Account is not outstanding more than ninety (90) days from
the date of the invoice therefor or past due more than thirty (30) days
after its due date, which shall not be later than ninety (90) days after
the invoice date;
(h)the Account is not owing by any Account Debtor for which fifty
percent (50%) or more of such Account Debtor's other Accounts (or any
portion thereof) due to Norwich and/or Berry UK, individually, or Norwich
and Berry UK collectively, are non-Eligible UK Receivables;
(i)the Account is not owing by an Account Debtor or a group of
affiliated Account Debtors whose then existing Accounts owing to Norwich
and/or Berry UK, individually, exceed in the aggregate, fifteen percent
(15%) of the total Eligible UK Receivables of Norwich and Berry UK, and is
not owing by an Account Debtor or a group of affiliated Account Debtors
whose then existing Accounts to Norwich and/or Berry UK collectively
exceed, in the aggregate, fifteen percent (15%) of the total Eligible UK
Receivables of Norwich and Berry UK, except that with respect to Accounts
owing by those Account Debtors identified on SCHEDULE 1.1 attached hereto,
as updated with the consent of NationsBank at any time and from time to
time, the Account is not owing by any Account Debtor so named on SCHEDULE
1.1 whose then existing Accounts to Norwich and/or Berry UK, individually,
exceed, in the aggregate, twenty-five percent (25%) of the total Eligible
UK Receivables of Norwich and/or Berry UK, and is not owing by an Account
Debtor so named on SCHEDULE 1.1 whose then existing Accounts to Norwich
and/or Berry UK, collectively, exceed, in the aggregate, twenty-five
percent (25%) of the total Eligible UK Receivables of Norwich and Berry UK;
(j)the Account Debtor has not returned, rejected or refused to
retain, or otherwise notified Norwich or Berry UK of any dispute
concerning, or claimed nonconformity of, any of the Inventory or services
from the sale or furnishing of which the Account arose;
(k)the Account Debtor is not a Subsidiary or Affiliate of
Norwich, Berry UK, the Borrower or any Subsidiary Guarantor or an employee,
officer, director of shareholder of Norwich, Berry UK, the Borrower or any
Subsidiary Guarantor or any Subsidiary or Affiliate of Norwich, Berry UK,
the Borrower or any Subsidiary Guarantor (For purposes of calculating
Eligible Domestic Receivables and Eligible UK Receivables, the term
Affiliate shall not include any Affiliate of any stockholder of the
Parent);
(l)the Account Debtor is not incorporated or organized in, or
primarily located in, any jurisdiction outside of the United Kingdom,
unless the Account Debtor's obligations with respect to such account are
secured by a letter of credit, guaranty or banker's acceptance having terms
and from such issuers and confirmation banks as are reasonably acceptable
to NationsBank in its commercially reasonable discretion (which letter of
credit, guaranty or banker's acceptance is subject to an irrevocable
assignment of proceeds in favor of NationsBank);
(m)the Account Debtor with respect to such Account is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any
kind or of any other proceeding or action;
(n)the Account Debtor is not a Governmental Authority, unless
Norwich shall have complied to the satisfaction of NationsBank with the
applicable Laws, if any, governing the creation and perfection of Liens in
such Accounts
(o)Neither Norwich nor Berry UK is indebted in any manner to the
Account Debtor (as creditor, lessor, supplier otherwise), with the
exception of customary credits, adjustments and/or discounts given to an
Account Debtor;
(p)the Account does not arise from services under or related to
any warranty obligation of Norwich or Berry UK or out of service charges,
finance charges or other fees for the time value of money;
(q)the Account is not evidenced by Chattel Paper or an Instrument
of any kind and is not secured by any letter of credit, except as permitted
under subsection (l) above, unless the original of any such Chattel Paper
and/or Instrument has been delivered to NationsBank;
(r)the title of Norwich or Berry UK, as appropriate, to the
Account is absolute and is not subject to any prior assignment, claim,
Lien, or security interest, except Permitted Liens and Liens in favor of
NationsBank and Liens securing the Obligations;
(s)no bond or other undertaking by a guarantor or surety which is
not reasonably acceptable to NationsBank has been or is required to be
obtained, supporting the Account and any of the Account Debtor's
obligations in respect of the Account, other than as and to the extent
permitted or required under the provisions of subsection (l) above;
(t)Norwich or Berry UK has the full and unqualified right and
power to assign and grant a security interest in, and Lien on, the Account
to NationsBank as security and collateral for the payment of the UK
Obligations;
(u)the Account does not arise out of a contract with, or order
from, an Account Debtor that, by its terms, forbids or makes void or
unenforceable the assignment or grant of a Lien by Norwich or Berry UK to
NationsBank of the Account arising from such contract or order;
(v)the Account is subject to a Lien in favor of NationsBank,
which Lien constitutes a first priority perfected security interest and
Lien, subject only to Permitted Liens;
(w)the Inventory giving rise to the Account was not, at the time
of the sale thereof, subject to any Lien, except those in favor of
NationsBank and other Permitted Liens;
(x)no part of the Account represents a progress billing or a
retainage;
(y)NationsBank in the good faith exercise of its commercially
reasonable discretion has not deemed the Account ineligible because of
uncertainty in any material respect as to the creditworthiness of the
Account Debtor or because NationsBank otherwise considers the collateral
value of such Account to be impaired in any material respect or its ability
to realize such value to be insecure in any material respect.
In the event of any dispute, under the foregoing criteria, as to whether an
account is, or has ceased to be, an Eligible UK Receivable, the decision of
NationsBank in the good faith exercise of its commercially reasonable
discretion shall control.
"ENFORCEMENT COSTS" MEANS ALL COMMERCIALLY REASONABLE EXPENSES, CHARGES,
COSTS AND FEES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, REASONABLE
OUTSIDE AND ALLOCATED IN-HOUSE COUNSEL ATTORNEY'S FEES AND EXPENSES) OF ANY
NATURE WHATSOEVER REASONABLY PAID OR INCURRED BY OR ON BEHALF OF THE AGENT
AND/OR ANY OF THE LENDERS IN CONNECTION WITH (A) ANY OR ALL OF THE
OBLIGATIONS, THIS AGREEMENT AND/OR ANY OF THE OTHER FINANCING DOCUMENTS AND
(B) THE CREATION, PERFECTION, COLLECTION, MAINTENANCE, PRESERVATION,
DEFENSE, PROTECTION, REALIZATION UPON, DISPOSITION, SALE OR ENFORCEMENT OF
ALL OR ANY PART OF THE COLLATERAL, THIS AGREEMENT OR ANY OF THE OTHER
FINANCING DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THOSE COSTS AND
EXPENSES MORE SPECIFICALLY ENUMERATED IN SECTION 3.8 COSTS.
The Borrower agrees to pay, as part of the Enforcement Costs and to the
fullest extent permitted by applicable Laws, on demand all reasonable
costs, fees and expenses incurred by the Agent and/or any of the Lenders in
connection with the taking, perfection, preservation, protection and/or
release of a Lien on the Collateral, including, without limitation, with
respect to all actions required to effect any of the provisions of SECTION
3.7 SUBSIDIARY GUARANTOR ASSETS.
The Borrower agrees that all Obligations are and shall continue to be fully
and unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a
first priority Lien (subject only to Permitted Liens) on all Assets and
properties of each Subsidiary Guarantor. (Subsidiary Guarantor Assets), and
any of the following: (Costs) and SECTION 9.10 ENFORCEMENT COSTS.
The Borrower agrees to pay to the Agent on demand all Enforcement Costs
(including expenses and fees incurred by any Lender to the extent included
in the definition of Enforcement Costs), together with interest thereon
from the date following demand until paid in full at a per annum rate of
interest equal at all times to the Post-Default Rate. The Borrower, Berry
UK and Norwich jointly and severally agree to pay to the Agent on demand
all Enforcement Costs which relate solely to the UK Obligations, together
with interest thereon from the date following demand until paid in full at
a per annum rate of interest equal at all times to the Post-Default Rate.
Enforcement Costs shall be immediately due and payable at the time advanced
or incurred, whichever is earlier. Without implying any limitation on the
foregoing, the Borrower and to the extent appropriate, Berry UK and
Norwich, jointly and severally agree, as part of the Enforcement Costs, to
pay upon demand any and all stamp and other Taxes and fees payable or
determined to be payable in connection with the execution and delivery of
this Agreement and the other Financing Documents and to save the Agent and
the Lenders harmless from and against any and all liabilities with respect
to or resulting from any delay in paying or omission to pay any Taxes or
fees referred to in this Section. The provisions of this Section shall
survive the execution and delivery of this Agreement, the repayment of the
other Obligations and shall survive the termination of this Agreemen
(Enforcement Costs). The Lenders agree that the Borrower shall have no
obligation to reimburse any Lender, other than the Agent, for legal fees
and expenses incurred by such Lender in connection with its review,
execution and delivery of any of the Financing Documents, to the extent
such legal fees and expenses exceed Five Thousand Dollars ($5,000).
"Equipment" means all equipment, machinery, computers, chattels, tools,
parts, machine tools, furniture, furnishings, fixtures and supplies of
every nature, presently existing or hereafter acquired or created and
wherever located, whether or not the same shall be deemed to be affixed to
real property, together with all accessions, additions, fittings,
accessories, special tools, and improvements thereto and substitutions
therefor and all parts and equipment which may be attached to or which are
necessary or beneficial for the operation, use and/or disposition of such
personal property, all licenses, warranties, franchises and general
intangibles related thereto or necessary or beneficial for the operation,
use and/or disposition of the same, together with all Accounts, Chattel
Paper, Instruments and other consideration received by Norwich, Berry UK,
the Borrower or any Subsidiary Guarantor on account of the sale, lease or
other disposition of all or any part of the foregoing, and together with
all rights under or arising out of present or future Documents and
contracts relating to the foregoing and all proceeds (cash and non-cash) of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning described in DEFAULT AND RIGHTS AND
REMEDIES (Default and Rights and Remedies).
"Excess Cash Flow" means for any annual period of determination
thereof and with respect to the Borrower and the Subsidiary Guarantors only
and not including Berry UK or Norwich, an amount equal to fifty percent
(50%) of the sum of (a) EBITDA, less (b) non-financed Capital Expenditures
permitted by Section (F) CAPITAL EXPENDITURES.
Except for Permitted Acquisitions and permitted reinvestments of Permitted
Asset Dispositions, neither the Borrower, Berry UK nor Norwich will or will
permit any Subsidiary to, directly or indirectly, make any Capital
Expenditures in the aggregate for the Borrower, Berry UK, Norwich and their
respective Subsidiaries (taken as a whole) in amount which exceed the
following amounts at any time during the following fiscal years (for each
fiscal year, the "Capital Expenditure Ceiling" (Capital Expenditures), less
(c) cash income Taxes and alternative minimum Taxes, less (d) increases in
working capital, plus (e) decreases in working capital, less (f) Debt
Service, as shown on the annual financial statements for such annual
period, furnished to the Agent in accordance with Section (A) FINANCIAL
STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lender
(Financial Statements); or in the event that the Borrower fails to deliver
such financial statements to the Agent as and when required, the Agent
shall estimate, in its sole, but commercially reasonable discretion, the
amount of Excess Cash Flow for such period.
"Federal Funds Rate" means for any day of determination, the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day) by the
Federal Reserve Bank for the next preceding Business Day) by the Federal
Reserve Bank of Richmond or, if such rate is not so published for any day
that is a Business Day, the average of quotations for such day on such
transactions received by the Agent from three (3) Federal funds brokers of
recognized standing selected by the Agent.
"Fees" means the collective reference to each fee payable to the Agent, for
its own account or for the ratable benefit of the Lenders, under the terms
of this Agreement or under the terms of any of the other Financing
Documents, including, without limitation, the Agency Fees, the Revolving
Credit Unused Line Fees, the Letter of Credit Fees, the Letter of Credit
Fronting Fees, the Bond Letter of Credit Fees, the Bond Letter of Credit
Fronting Fees, the Early Termination Fee, the Term Loan B Fees, the Field
Examination Fees, the UK Commitment Fee and the UK Revolving Credit
Facility Fees.
"Field Examination Fee" and "Field Examination Fees" have the meanings
described in Section (C) FIELD EXAMINATION FEES.
The Borrower shall pay to the Agent for the exclusive benefit of the Agent
an annual field examination fee (the "Field Examination Fee"), which Field
Examination Fee shall be payable quarterly in advance on the first day of
each February, May, August and November of each year commencing on the
first such date following the Closing Date, and continuing until the last
such date prior to which all Obligations arising out of, or under, the
Credit Facilities then outstanding have been paid in full. The Field
Examination Fee shall be in the amount of Forty Thousand Dollars ($40,000)
per annum, and shall also include the amount of all out-of-pocket expenses
reasonably incurred by the Agent in connection with any field examination
of Norwich and/or Berry UK for which the Agent has not been previously
reimbursed. (Field Examination Fees).
"Financing Documents" means at any time collectively this Agreement, the
Notes, the Security Documents, the Letter of Credit Documents, the Bond
Letter of Credit Agreement Documents, the Special Source Bond Documents,
the UK Security Documents, and any other instrument, agreement or document
previously, simultaneously or hereafter executed and delivered by the
Borrower, any Guarantor, Berry UK, Norwich and/or any other Person, singly
or jointly with another Person or Persons, evidencing, securing,
guarantying or in connection with this Agreement, any Note, any of the
Security Documents, any of the Credit Facilities, any of the UK Security
Documents and/or any of the Obligations, all as the same may be amended,
restated, supplemented, replaced or otherwise modified at any time and from
time to time.
"First Closing Date" means January 21, 1997.
"Fixed or Capital Assets" of a Person at any date means all assets which
would, in accordance with GAAP consistently applied, be classified on the
balance sheet of such Person as property, plant or equipment at such date.
"Fixed Charges" means as to the Borrower, Berry UK, Norwich and each of the
Subsidiary Guarantors, on a consolidated basis, for any period of
determination, the scheduled payments of principal and cash interest on
account of all Indebtedness for Borrowed Money and on account of all
Capital Leases, plus cash income Taxes, plus cash dividends declared or
paid. For purposes of calculating "Fixed Charges", the Agent and the
Lenders agree that scheduled payments with respect to the Iowa Bond Letter
of Credit Obligations shall reflect the permitted amortization of a portion
of such Iowa Bond Letter of Credit Obligations pursuant to Section (ii)
Notwithstanding the provisions of paragraph (a) above, as long as no Event
of Default has occurred, any drawing under the Iowa Bond Letter of Credit -
NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond
Standby Credit Agreement, any drawing under the Nevada Bond Letter of
Credit - NB to purchase Nevada Bonds, and any drawing under the South
Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in
each case relating to Bonds which were tendered for purchase by the holders
thereof and which were not remarketed in a timely fashion (each referred to
herein as a "Conversion Drawing"), are not required to be reimbursed to the
Agent ON DEMAND; provided that BIC or the Borrower, as appropriate, make
payments of interest to the Agent at the rates, at the times and otherwise
subject to the provisions for interest on the Loans under Interest.
(Interest), and the principal amount of each such Conversion Drawing is
repaid in equal quarterly payments (i) over the remaining term to expiry of
the Bond Letter of Credit Facility with respect to the Nevada Bond Letter
of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and
(ii) over a period of ten (10) years with respect to the Iowa Bond Letter
of Credit - NB; final payment of all outstanding amounts relating to the
Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of
Credit - NB to be made no later than expiry of the Bond Letter of Credit
Facility or the Revolving Credit Termination Date, whichever is earlier,
and final payment of all outstanding amounts relating to the Iowa Bond
Letter of Credit - NB to be made no later than the date which is ten (10)
years after the date of any Conversion Drawing under the Iowa Bond Letter
of Credit - NB or the Revolving Credit Termination Date, whichever is
earlier. In addition, the Agent and the Lenders agree that in the event
the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about
the business day preceding the expiration or termination of the Iowa Bond
Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust
Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations
resulting from the Draw, shall not be payable ON DEMAND as would otherwise
be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but
shall be repaid by the Borrower in equal consecutive quarterly installments
over a period of ten (10) years, commencing with the first day following
the first full quarterly period after the Draw and continuing on the first
day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter
of Credit Obligations"); provided, that (A) there does not exist a Default
or an Event of Default, (B) the Draw is not the result of an acceleration
of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement
and (C) the Draw is not the result of the occurrence of a "Determination of
Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall
be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the
Agent at the rates, at the times and otherwise subject to the provisions
for interest on the Loans under INTEREST. (Interest), with a final payment
of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB
to be made no later than the date which is ten (10) years after the date of
the Draw or the Revolving Credit Termination Date, whichever is earlier.
(Payments of Bond Letters of Credit).
"Fixed Charge Coverage Ratio" means as to the Borrower, Berry UK, Norwich
and each of the Subsidiary Guarantors, on a consolidated basis, for the
period of any determination thereof, the ratio of (a) EBITDA, less the
aggregate amount of all non-financed Capital Expenditures for such period,
to (b) Fixed Charges.
"Funded Debt" means as to the Borrower, Berry UK, Norwich and each of the
Subsidiary Guarantors, on a consolidated basis, as of any date of
determination, (a) the aggregate of all Indebtedness for Borrowed Money of
the Borrower, Berry UK, Norwich and each of the Subsidiary Guarantors,
whether secured or unsecured (but excluding, without duplication, loans by
the Borrower to one or more of the Subsidiary Guarantors, Berry UK or),
having a final maturity (or which by the terms thereof is renewable or
extendible at the option of the obligor for a period ending) more than a
year after that date, including current maturities of long-term
Indebtedness for Borrowed Money (as determined in accordance with GAAP),
less (b) the aggregate amount of all cash balances and Cash Equivalents of
the Borrower, Berry UK, Norwich and/or any of the Subsidiary Guarantors.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time, except that with respect to Berry
UK and Norwich, GAAP means generally accepted accounting principles in the
United Kingdom in effect from time to time. Notwithstanding the foregoing,
with respect to (i) any financial statements which consolidate Berry UK
and/or Norwich with the Borrower or any other Subsidiary Guarantor or (ii)
any financial covenant relating to Berry UK, Norwich, the Borrower and/or
any Subsidiary Guarantor on a consolidated basis, GAAP shall mean generally
accepted accounting principles in the United States of America in effect
from time to time.
"General Intangibles" means all general intangibles of every nature,
whether presently existing or hereafter acquired or created, and without
implying any limitation of the foregoing, further means all books and
records, claims (including without limitation all claims for income tax and
other refunds), choses in action, claims, causes of action in tort or
equity, contract rights, judgments, customer lists, Patents, Trademarks,
licensing agreements, rights in intellectual property, goodwill (including
goodwill of the business of the Borrower, Berry UK, Norwich or any
Subsidiary Guarantor symbolized by and associated with any and all
Trademarks, trademark licenses, Copyrights and/or service marks), royalty
payments, licenses, rights as lessee under any lease of real or personal
property, literary rights, Copyrights, service names, service marks, logos,
trade secrets, amounts received as an award in or settlement of a suit in
damages, deposit accounts, interests in joint ventures, general or limited
partnerships, or limited liability companies or partnerships, rights in
applications for any of the foregoing, books and records in whatever media
(paper, electronic or otherwise) recorded or stored, with respect to any or
all of the foregoing and all general intangibles necessary or beneficial to
retain, access and/or process the information contained in those books and
records, and all proceeds (cash and non-cash) of the foregoing.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any department, agency or instrumentality
thereof.
"Guarantor" means the Parent or any Subsidiary Guarantor or their
respective successors and assigns, as the case may be; and "Guarantors"
means the Parent, each and every Subsidiary Guarantor, and each of their
respective successors and assigns.
"Guaranty" means collectively each guaranty of payment for the benefit of
the Lenders ratably and the Agent from any or all of the Guarantors or
Norwich, including, without limitation, the Special Source Bond Guaranty
and the UK Credit Facilities Guaranty, as the same may from time to time be
amended, restated, supplemented or otherwise modified.
"Hazardous Materials" means (a) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act of 1976, as amended from time to
time, and regulations promulgated thereunder; (b) any "hazardous substance"
as defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time, and regulations
promulgated thereunder; (c) any substance the presence of which on any
property now or hereafter owned, acquired or operated by the Borrower,
Berry UK, Norwich or any Subsidiary Guarantor is prohibited by any Law
similar to those set forth in this definition; and (d) any other substance
which by Law requires special handling in its collection, storage,
treatment or disposal.
"Hazardous Materials Contamination" means the contamination (whether
presently existing or occurring after the date of this Agreement) by
Hazardous Materials of any property owned, operated or controlled by the
Borrower, Berry UK, Norwich or any Subsidiary Guarantor or for which the
Borrower, Berry UK, Norwich or any Subsidiary Guarantor has responsibility,
including, without limitation, improvements, facilities, soil, ground
water, air or other elements on, or of, any property now or hereafter
owned, acquired or operated by the Borrower, Berry UK, Norwich or any
Subsidiary Guarantor, and any other contamination by Hazardous Materials
for which the Borrower, Berry UK, Norwich or any Subsidiary Guarantor is,
or is claimed to be, responsible.
"Indebtedness" of a Person means at any date the total liabilities of such
Person at such time determined in accordance with GAAP consistently
applied.
"Indebtedness for Borrowed Money" of a Person means at any time the sum at
such time of (a) Indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, (b) any obligations of
such Person in respect of letters of credit, banker's or other acceptances
or similar obligations issued or created for the account of such Person,
(c) Lease Obligations of such Person with respect to Capital Leases, (d)
all liabilities secured by any Lien on any property owned by such Person,
to the extent attached to such Person's interest in such property, even
though such Person has not assumed or become personally liable for the
payment thereof, (e) obligations of third parties which are being
guarantied or indemnified against by such Person or which are secured by
the property of such Person; (f) any obligation of such Person or a
Commonly Controlled Entity to a Multi-employer Plan; and (h) any
obligations, liabilities or indebtedness, contingent or otherwise, under or
in connection with, any interest rate or currency swap agreements, cap,
floor, and collar agreements, currency spot, foreign exchange and forward
contracts and other similar agreements and arrangements; but excluding
trade and other accounts payable in the ordinary course of business in
accordance with customary trade terms and which are not more than thirty
(30) days past due (as determined in accordance with customary trade
practices) or which are being disputed in good faith by such Person and for
which adequate reserves are being provided on the books of such Person in
accordance with GAAP.
"Indenture" means that certain indenture dated as of April 21, 1994 by and
between the Borrower and the United States Trust Company of New York, as
trustee, entered into in connection with the Subordinated Debt, as the same
may be amended, restated supplemented or otherwise modified.
"Installment Payment Date" means the first day of each February, May,
August and November of each calendar year.
"Instrument" means a negotiable instrument (as defined under Article 3 of
the Uniform Commercial Code), a "certificated security" (as defined under
Article 8 of the Uniform Commercial Code), or any other writing which
evidences a right to payment of money and is not itself a security
agreement or lease and is of a type which is in the ordinary course of
business transferred by delivery with any necessary endorsement.
"Interest Coverage Ratio" means as to the Borrower, Berry UK, Norwich and
each of the Subsidiary Guarantors, on a consolidated basis, for any period
of determination thereof the ratio of (a) EBITDA to (b) cash interest
expense, all determined on a consolidated basis in accordance with GAAP
consistently applied.
"Interest Period" means a Dollar Interest Period or a Sterling Interest
Period, as applicable.
"Interest Rate Election Notice" has the meaning described in Section (v)
Neither NationsBank nor the Lenders will be obligated to make Loans, to
convert the Applicable Interest Rate on Loans to another Interest Rate, or
to change Interest Periods, unless NationsBank or the Agent, as
appropriate, shall have received an irrevocable written or telephonic
notice (an "Interest Rate Election Notice") from the Borrower, Berry UK or
Norwich, as appropriate, specifying the following information: (Selection
of Interest Rates).
"Interest Rate/Currency Protection Agreement" means, for any Person,
interest rate swap, cap, floor or collar agreements, currency agreements,
currency spot, foreign exchange and forward contracts or similar
arrangement between such Person and one or more financial institutions
providing for the transfer or mitigation of interest or currency risks
either generally or under specific contingencies..
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the Income Tax Regulations issued and proposed to be
issued thereunder.
"Inventory" means all now owned and hereafter acquired inventory, goods,
merchandise and other personal property furnished under any contract of
service or intended for sale or lease, including, without limitation, all
raw materials, work-in-progress, finished goods and materials and supplies
of any kind, nature or description which are used or consumed in the
business, or are or might be used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods,
merchandise and other licenses, warranties, franchises, general
intangibles, personal property and all Documents or documents relating to
the same and all proceeds (cash and non-cash) of the foregoing.
"Iowa Bond Letter of Credit - NB" means (a) that certain irrevocable letter
of credit issued by the Agent for the account of the Borrower or BIC to
replace the Iowa Bond Letter of Credit and (b) that certain standby credit
line made available by the Agent to replace the Iowa Bond Standby Credit
Agreement, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Iowa Bond Letter of Credit" means that certain irrevocable letter of
credit dated March 13, 1996, as amended by Amendment No. 1 dated March 13,
1996, issued by Fleet National Bank of Connecticut in the original amount
of $6,025,810, for the account of BIC, for the benefit of State Street Bank
and Trust Company, as trustee, and as security for the Iowa Bonds, as the
same may be amended, restated, reissued, renewed, supplemented, replaced or
otherwise modified at any time and from time to time.
"Iowa Bond Letter of Credit Agreement" means that certain letter of credit
reimbursement agreement by and between the Agent and the Borrower pursuant
to which the Borrower will agree to reimburse the Agent for any amounts
drawn under the Iowa Bond Letter of Credit - NB and to pay certain fees,
interest and other amounts payable to the Agent with respect to the Iowa
Bond Letter of Credit - NB, as the same may be amended, restated,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Iowa Bond Letter of Credit Agreement Documents - Bonds" means all
instruments, agreements or documents previously, simultaneously or
hereafter executed and delivered by the Borrower, any Guarantor and/or any
other Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with the Iowa Bond Letter of Credit,
the Iowa Bond Standby Credit Agreement (prior to the date on which the
Agent is a party thereto), and/or any or all of the Iowa Bonds, all as the
same may be amended, restated, supplemented, replaced or otherwise modified
at any time and from time to time.
"Iowa Bond Letter of Credit Agreement Documents - NB" means the Iowa Bond
Letter of Credit Agreement and any other instrument, agreement or document
previously, simultaneously or hereafter executed and delivered by the
Borrower, any Guarantor and/or any other Person, singly or jointly with
another Person or Persons, evidencing, securing, guarantying or in
connection with the Iowa Bond Letter of Credit - NB, the Iowa Bond Standby
Letter of Credit Agreement (but only after such date as the Agent is a
party thereto) and/or any or all of the Iowa Bond Letter of Credit
Obligations, all as the same may be amended, restated, supplemented,
replaced or otherwise modified at any time and from time to time.
"Iowa Bond Letter of Credit Obligations" means the collective reference to
all Obligations of the Borrower under and with respect to the Iowa Letter
of Credit - NB, the Iowa Bond Letter of Credit Agreement, and/or any of the
Iowa Bond Letter of Credit Agreement Documents.
"Iowa Bond Rollover Payments" means the collective reference to payments
made to the bondholders or to the Iowa Trustee pursuant to a Draw or a
Conversion Drawing.
"Iowa Bond Standby Credit Agreement" means that certain Standby Credit
Agreement among BIC, The First National Bank of Boston, as prior Iowa Bond
Trustee, and Barclays Bank, PLC, New York Branch, dated as of February 1,
1995; all of the obligations and rights of Barclays Bank PLC, New York
Branch, having been assigned to and assumed by Fleet National Bank of
Connecticut pursuant to an Amendment, Assignment and Assumption Agreement
dated March 13, 1996, by and among BIC, Fleet Capital Corporation, Barclays
Bank PLC, New York Branch, The First National Bank of Boston, as
remarketing agent, and State Street Bank and Trust Company, as Iowa Bond
Trustee, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time. The Agent has delivered a standby line of credit to replace the line
of credit described in the Iowa Bond Standby Credit Agreement and a new
Iowa Bond Standby Credit Agreement has been executed and delivered among
the Agent, BIC and the Iowa Bond Trustee and other necessary persons, if
any, and all references to the term Iowa Bond Standby Credit Agreement
shall be to such replacement agreement to which the Agent is a party, as
the same may be amended, restated, reissued, supplemented, replaced or
otherwise modified at any time and from time to time.
"Iowa Bond Trust Agreement" means that certain loan and trust agreement
dated as of August 30, 1988 by and among the Iowa Bond Trustee, The City of
Iowa Falls, Iowa, Genpak Corporation and Canadian Imperial Bank of Commerce
(New York), relating to the Iowa Bonds, as supplemented by the Supplemental
Agreement dated as of September 27, 1990, and as amended by the Amendment
to Loan and Trust Agreement dated as of February 12, 1992, and the Second
Amendment to Loan and Trust Agreement dated as of April 21, 1994, and as
subsequently amended, restated, supplemented or otherwise modified at any
time and from time to time.
"Iowa Bond Trustee" means State Street Bank and Trust Company, and its
successors and assigns, as trustee under the Iowa Bond Trust Agreement.
"Iowa Bonds" means the City of Iowa Falls Flexible Mode Industrial
Development Revenue Refunding Bonds (Berry Iowa Corporation Project),
Series 1988, issued by the City of Iowa Falls, Iowa in the original
aggregate principal amount of Five Million Four Hundred Thousand Dollars
($5,400,000).
"Item of Payment" means each check, draft, cash, money, instrument, item,
and other remittance in payment or on account of payment of any Collateral,
including, without limitation, cash proceeds of any returned, rejected or
repossessed goods, the sale or lease of which gave rise to an Account, and
other proceeds of Collateral; and "Items of Payment" means the collective
reference to all of the foregoing.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any Governmental Authority or political
subdivision or agency thereof, or any court or similar entity established
by any thereof.
"Lease Obligations" of a Person means for any period the rental commitments
of such Person for such period under leases for real and/or personal
property.
"Lending Office" means a Dollar LIBOR Lending Office or a Sterling LIBOR
Lending Office, as applicable.
"Letter of Credit" and "Letters of Credit" shall have the meanings
described in Section (A) LETTERS OF CREDIT.
Subject to and upon the provisions of this Agreement, and as a part of the
Revolving Credit Commitments, the Borrower may obtain standby or commercial
letters of credit (as the same may from time to time be amended,
supplemented or otherwise modified, each a "Letter of Credit" and
collectively the "Letters of Credit") from the Agent from time to time from
the First Closing Date until the Business Day preceding the Revolving
Credit Termination Date. The Borrower will not be entitled to obtain a
Letter of Credit unless (a) the Borrower is then able to obtain a Revolving
Loan from the Lenders in an amount not less than the proposed stated amount
of the Letter of Credit requested by the Borrower, and (b) the sum of the
then Outstanding Letter of Credit Obligations (including the amount of the
requested Letter of Credit) does not exceed Five Million Dollars
($5,000,000) (the "Letter of Credit Committed Amount"). (Letters of
Credit).
"Letter of Credit Agreement" means the collective reference to each letter
of credit application and agreement substantially in the form of the
Agent's then standard form of application for letter of credit or such
other form as may be approved by the Agent, executed and delivered by the
Borrower in connection with the issuance of a Letter of Credit (other than
any of the Bond Letters of Credit), as the same may from time to time be
amended, restated, supplemented or modified; and "Letter of Credit
Agreements" means all of the foregoing in effect at any time and from time
to time. The Agent and the Lenders agree that if the provisions of any
Letter of Credit Agreement conflict with the provisions of this Agreement,
the provisions of this Agreement shall control.
"Letter of Credit Commitment" means the agreement of the Agent relating to
the issuance of the Letters of Credit and the agreement of a Lender to
purchase a participating interest in any Letter of Credit Obligations with
respect to such Letters of Credit, all subject to and in accordance with
the provisions of this Agreement; and "Letter of Credit Commitments" means
the collective reference to the Letter of Credit Commitment of the Agent
and each of the Lenders.
"Letter of Credit Committed Amount" has the meaning given such term in
Section (A) LETTERS OF CREDIT.
Subject to and upon the provisions of this Agreement, and as a part of the
Revolving Credit Commitments, the Borrower may obtain standby or commercial
letters of credit (as the same may from time to time be amended,
supplemented or otherwise modified, each a "Letter of Credit" and
collectively the "Letters of Credit") from the Agent from time to time from
the First Closing Date until the Business Day preceding the Revolving
Credit Termination Date. The Borrower will not be entitled to obtain a
Letter of Credit unless (a) the Borrower is then able to obtain a Revolving
Loan from the Lenders in an amount not less than the proposed stated amount
of the Letter of Credit requested by the Borrower, and (b) the sum of the
then Outstanding Letter of Credit Obligations (including the amount of the
requested Letter of Credit) does not exceed Five Million Dollars
($5,000,000) (the "Letter of Credit Committed Amount"). (Letters of
Credit).
"Letter of Credit Documents" means any and all drafts under or purporting
to be under a Letter of Credit, any Letter of Credit Agreement, and any
other instrument, document or agreement executed and/or delivered by the
Borrower or any other Person under, pursuant to or in connection with a
Letter of Credit or any Letter of Credit Agreement.
"Letter of Credit Facility" means the facility established pursuant to THE
LETTER OF CREDIT FACILITY. (Letter of Credit Facility).
"Letter of Credit Fee" and "Letter of Credit Fees" have the meanings
described in Section (B) LETTER OF CREDIT FEES. (Letter of Credit Fees).
"Letter of Credit Fronting Fee" and "Letter of Credit Fronting Fees" have
the meanings described in Section (B) LETTER OF CREDIT FEES. (Letter of
Credit Fees).
"Letter of Credit Obligations" means the collective reference to all
Obligations of the Borrower with respect to the Letters of Credit and the
Letter of Credit Agreements.
"Liabilities" means at any date all liabilities that in accordance with
GAAP consistently applied should be classified as liabilities on a
consolidated balance sheet of the Borrower and its Subsidiaries.
"LIBOR Base Rate" means the Dollar LIBOR Base Rate or the Sterling LIBOR
Base Rate, as applicable.
"LIBOR Loan" means a Dollar LIBOR Loan or a Sterling LIBOR Loan, as
applicable.
"LIBOR Rate" means the Dollar LIBOR Rate or the Sterling LIBOR Rate, as
applicable.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, lien, hypothecation, or
charge of any kind, whether perfected or unperfected, avoidable or
unavoidable, including, without limitation, any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing
of any financing statement under the Uniform Commercial Code of any
jurisdiction, excluding the precautionary filing of any financing statement
by any lessor in a true lease transaction, by any bailor in a true bailment
transaction or by any consignor in a true consignment transaction under the
Uniform Commercial Code of any jurisdiction or the agreement to give any
financing statement by any lessee in a true lease transaction, by any
bailee in a true bailment transaction or by any consignee in a true
consignment transaction.
"Loan" means each of the Revolving Loan, a Term Loan A, a Term Loan B, the
UK Revolving Loan, or a UK Term Loan, as the case may be, and "Loans" means
the collective reference to the Revolving Loan, the Term Loans A, the Term
Loans B, the UK Revolving Loan and the UK Term Loans.
"Loan Notice" has the meaning described in Section (B) PROCEDURE FOR MAKING
ADVANCES UNDER THE REVOLVING LOAN. (Procedure for Making Advances).
"Lockbox" has the meaning described in Section (H) THE COLLATERAL ACCOUNT.
Upon demand by the Agent following a Borrowing Base Trigger Event, the
Borrower will deposit, or cause to be deposited, all Items of Payment to a
bank account designated by the Agent and from which the Agent alone has
power of access and withdrawal (the "Collateral Account"). Each deposit
shall be made not later than the next Business Day after the date of
receipt of the Items of Payment. The Items of Payment shall be deposited
in precisely the form received, except for the endorsements of the Borrower
where necessary to permit the collection of any such Items of Payment,
which endorsement the Borrower hereby agree to make. In the event the
Borrower fails to do so, the Borrower hereby authorizes the Agent to make
the endorsement in the name of the Borrower. Prior to such a deposit, the
Borrower will not commingle any Items of Payment with the Borrower's other
funds or property, but will hold them separate and apart in trust and for
the account of the Agent for the benefit of the Lenders ratably and the
Agent. The Agent agrees that it shall not demand that the Borrower deposit
or cause to be deposited all Items of Deposit to the Collateral Account at
any time prior to the occurrence of a Borrowing Base Trigger Event. Once
the Agent has so made demand on the Borrower, unless otherwise agreed by
the Agent in writing, the Borrower shall continue to so deposit or cause to
be deposited all Items of Payment to the Collateral Account notwithstanding
that subsequent to such demand the Borrowing Base Trigger Event has been
cured, waived, otherwise remedied or is no longer applicable. (The
Collateral Account).
"Mandatory Liquid Assets Cost Rate" means with respect to each Interest
Period for which the Applicable Interest Rate is the LIBOR Rate the rate
per annum conclusively determined by NationsBank on the first day of such
Interest Period to be that which expresses the prevailing cost to
NationsBank of complying with the requirements for the time being of the
Bank of England in respect of liquidity, reserve assets and special
deposits.
"Multi-employer Plan" means a Plan that is a multi-employer plan as defined
in Section 4001(a)(3) of ERISA.
"NationsBank" means NationsBank, N.A. and its successors and assigns and
shall mean NationsBank, acting through its Sterling LIBOR Lending Office
with respect to all matters relating to the UK Credit Facilities.
"NET OUTSTANDINGS" OF ANY LENDER MEANS, AT ANY TIME, THE SUM OF (A) ALL
AMOUNTS PAID BY SUCH LENDER (OTHER THAN PURSUANT TO SECTION 8.5
INDEMNIFICATION.
Each Lender, severally, agrees to reimburse and indemnify the Agent for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements
including, without limitation, Enforcement Costs, of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any of the
Financing Documents or any action taken or omitted by the Agent under this
Agreement for any of the Financing Documents, in proportion to each
Lender's Pro Rata Share, all of the foregoing as they may arise, be
asserted or be imposed from time to time; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Agent's gross negligence or willful
misconduct. The obligations of the Lenders under this SECTION 8.5
INDEMNIFICATION. shall survive the payment in full of the Obligations and
the termination of this Agreemen (Indemnification)) to the Agent in respect
to the Revolving Loan or otherwise under this Agreement, MINUS (b) all
amounts paid by the Agent to such Lender which are received by the Agent
and which, pursuant to this Agreement, are paid over to such Lender for
application in reduction of the outstanding principal balance of the
Revolving Loan.
"Net Casualty Proceeds", when used with respect to any condemnation awards
or insurance proceeds allocable to any Collateral, means the gross proceeds
from any casualty or condemnation remaining after payment of all expenses
(including attorneys' fees) incurred in the collection of such gross
proceeds.
"Net Proceeds" means gross proceeds (cash and non-cash) or other
consideration paid to, or received by, the Borrower, Norwich or any
Subsidiary of the Borrower from (a) any Asset Disposition (including,
without limitation, issuance or assumption of Indebtedness or the issuance
of Securities), net of customary and reasonable settlement costs, fees,
expenses and Taxes payable in connection with such Asset Disposition or (b)
any sale, issuance or other offering of Indebtedness or Securities, net of
customary and reasonable closing costs, fees and expenses.
"Nevada Bond Letter of Credit - NB" means that certain irrevocable letter
of credit issued by the Agent for the account of the Borrower to replace
the Nevada Bond Letter of Credit, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit" means that certain irrevocable letter of
credit dated April 21, 1995, issued by Barclays Bank PLC in the original
stated amount of $6,271,233, for the account of the Borrower, for the
benefit of the Manufacturers and Traders Trust Company, as Trustee, and as
security for the Nevada Bonds, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit Agreement" means that certain letter of
credit reimbursement agreement by and between the Agent and the Borrower
pursuant to which the Borrower will agree to reimburse the Agent for any
amounts drawn under the Nevada Bond Letter of Credit - NB and to pay
certain fees, interest and other amounts payable to the Agent with respect
to the Nevada Bond Letter of Credit - NB, as the same may be amended,
restated, supplemented, replaced or otherwise modified at any time and from
time to time.
"Nevada Bond Letter of Credit Agreement Documents" means all instruments,
agreements or documents previously, simultaneously or hereafter executed
and delivered by the Borrower, any Guarantor and/or any other Person,
singly or jointly with another Person or Persons, evidencing, securing,
guarantying or in connection with the Nevada Bond Letter of Credit, and/or
any or all of the Nevada Bonds, all as the same may be amended, restated,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Nevada Bond Letter of Credit Agreement Documents - NB" means the Nevada
Bond Letter of Credit Agreement and any other instrument, agreement or
document previously, simultaneously or hereafter executed and delivered by
the Borrower, any Guarantor and/or any other Person, singly or jointly with
another Person or Persons, evidencing, securing, guarantying or in
connection with the Nevada Bond Letter of Credit - NB and/or any or all of
the Nevada Bond Letter of Credit Obligations, all as the same may be
amended, restated, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit Obligations" means the collective reference
to all Obligations of the Borrower under and with respect to the Nevada
Letter of Credit - NB, the Nevada Bond Letter of Credit Agreement, and/or
any of the Nevada Bond Letter of Credit Agreements.
"Nevada Bond Trust Agreement" means that certain trust indenture dated as
of April 1, 1991 by and between the Nevada Trustee and The City of
Henderson, Nevada Public Improvement Trust, relating to the Nevada Bonds,
as amended, restated, supplemented or otherwise modified at any time and
from time to time.
"Nevada Bond Trustee" means Manufacturers and Traders Trust Company, and
its successors and assigns, as trustee under the Nevada Bond Trust
Agreement.
"Nevada Bonds" means the City of Henderson, Nevada Public Improvement Trust
Variable Rate Demand Refunding Bonds (Berry Plastics Corporation Project),
Series 1991, issued by the City of Henderson Nevada Public Improvement
Trust in the original aggregate principal amount of Eight Million Dollars
($8,000,000).
"Non-Ratable Loan" means an advance under the Revolving Loan made by the
Agent in accordance with the provisions of Section (III) NON-RATABLE LOANS
AND PAYMENTS. Between Settlement Dates, the Agent shall request and
NationsBank may (but shall not be obligated to) advance to the Borrower out
of NationsBank's own funds, the entire principal amount of any advance
under the Revolving Loan requested or deemed requested pursuant to Section
(B) PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (Procedure for
Making Advances) (any such advance under the Revolving Loan being referred
to as a "Non-Ratable Loan"). The making of each Non-Ratable Loan by
NationsBank shall be deemed to be a purchase by NationsBank of a 100%
participation in each other Lender's Revolving Credit Pro Rata Share of the
amount of such Non-Ratable Loan. All payments of principal, interest and
any other amount with respect to such Non-Ratable Loan shall be payable to
and received by the Agent for the account of NationsBank. Upon demand by
NationsBank, with notice to the Agent, each other Lender shall pay to
NationsBank, as the repurchase of such participation, an amount equal to
100% of such Lender's Revolving Credit Pro Rata Share of the principal
amount of such Non-Ratable Loan. Any payments received by the Agent
between Settlement Dates which in accordance with the terms of this
Agreement are to be applied to the reduction of the outstanding principal
balance of Revolving Loan shall be paid over to and retained by NationsBank
for such application, and such payment to and retention by NationsBank
shall be deemed, to the extent of each other Lender's Revolving Credit Pro
Rata Share of such payment, to be a purchase by each such other Lender of a
participation in the advance under the Revolving Loan (including the
repurchase of participations in Non-Ratable Loans) made by NationsBank.
Upon demand by another Lender, with notice thereof to the Agent,
NationsBank shall pay to the Agent, for the account of such other Lender,
as a repurchase of such participation, an amount equal to such other
Lender's Revolving Credit Pro Rata Share of any such amounts (after
application thereof to the repurchase of any participations of NationsBank
in such other Lender's Revolving Credit Pro Rata Share of any Non-Ratable
Loans) paid only to NationsBank by the Agent. (Settlement Procedures as to
Revolving Loan).
"Norwich" means Norwich Injection Moulders Limited, a company organized and
existing under the laws of England, and its successors and assigns.
"Norwich Stock" means all capital stock issued by Norwich acquired or to be
acquired by Berry UK, all in accordance with the Norwich Stock Purchase
Transaction, together with any and all proceeds and products thereof.
"Norwich Stock Purchase Agreement" means that certain Agreement for the
Sale and Purchase of the Entire Issued Share Capital of Norwich Injection
Moulders Limited dated as of July 1, 1998 by and among Berry UK, the
Borrower and the shareholders of Norwich, as the same may from time to time
be amended, restated, supplemented or modified, together with any and all
exhibits and schedules thereto, amendments, modifications, and supplements
thereto, restatements thereof, and substitutes therefor.
"Norwich Stock Purchase Documents" means collectively the Norwich Stock
Purchase Agreement and any and all other agreements, documents or
instruments, previously, now or hereafter executed and delivered by Berry
UK, the Borrower, or any other Person in connection with the Norwich Stock
Purchase Transaction, as the same may from time to time be amended,
restated, supplemented and modified.
"Norwich Stock Purchase Transaction" means the acquisition of all issued
and outstanding capital stock of Norwich by Berry UK in accordance with the
provisions of the Norwich Stock Purchase Agreement.
"Note" means any Revolving Credit Note, any Term Loan A Note, any Term Loan
B Note, the UK Revolving Credit Note, or the UK Term Note, as the case may
be, and "Notes" means collectively each Revolving Credit Note, each Term
Loan A Note, each Term Loan B Note, the UK Revolving Credit Note, the UK
Term Note, and any other promissory note which may from time to time
evidence all or any portion of the Obligations.
"Obligations" means and includes all present and future indebtedness,
obligations, and liabilities, whether now existing or contemplated or
hereafter arising, of the Borrower, Norwich and/or Berry UK to the Lenders,
NationsBank with respect to the UK Obligations, and/or the Agent under,
arising pursuant to, in connection with and/or on account of the provisions
of this Agreement, each Note, each Security Document, and/or any of the
other Financing Documents, the Loans, and/or any of the Credit Facilities
including, without limitation, the principal of, and interest on, each
Note, late charges, the Fees, Enforcement Costs, and prepayment fees (if
any), letter of credit fees or fees charged with respect to any guaranty of
any letter of credit; also means and includes all other present and future
indebtedness, liabilities and obligations, whether now existing or
contemplated or hereafter arising, of the Borrower, Berry UK, Norwich
and/or any Subsidiary Guarantor to the Agent and/or to any Lender any/or
any of its or their Affiliates under or in connection with, any Interest
Rate/Currency Protection Agreements; and also means any and all renewals,
extensions, substitutions, amendments, restatements and rearrangements of
any such debts, obligations and liabilities. FOR PURPOSES OF THE
INDENTURE, ALL OBLIGATIONS UNDER AND IN CONNECTION WITH THE CREDIT
FACILITIES CONSTITUTE AND ARE HEREBY DEEMED "DESIGNATED SENIOR
INDEBTEDNESS" AS DEFINED IN THE INDENTURE.
"Outstanding Bond Letter of Credit Obligations" has the meaning described
in TERMS OF BOND LETTERS OF CREDIT. (Terms of Bond Letters of Credit).
"Outstanding Letter of Credit Obligations" has the meaning described in
Terms of Letters of Credit; Post-Expiration Date Letters of Credit. (Terms
of Letters of Credit).
"PAC" means PackerWare Acquisition Corporation, a corporation organized and
existing under the laws of the State of Kansas, and its successors and
assigns.
"PackerWare" means PackerWare Corporation, a corporation organized and
existing under the laws of the State of Kansas, and its successors and
assigns.
"PackerWare Merger Agreement" means that certain Agreement and Plan of
Reorganization dated as of January 14, 1997 by and among the Borrower, PAC,
PackerWare and the shareholders of PackerWare immediately prior to
consummation of the PackerWare Merger Transaction, as amended, restated,
supplemented or otherwise modified.
"PackerWare Merger Agreement Documents" means collectively the PackerWare
Merger Agreement and any and all other agreements, documents or instruments
(together with any and all amendments, modifications, and supplements
thereto, restatements thereof, and substitutes therefor) previously, now or
hereafter executed and delivered by the Borrower, PackerWare, PAC, or any
other Person in connection with the PackerWare Merger Transaction.
"PackerWare Merger Transaction" means the merger of PAC with and into
PackerWare in accordance with the provisions of the PackerWare Merger
Agreement.
"Parent" means BPC Holding Corporation, a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns.
"Patents" means and includes, in each case whether now existing or
hereafter arising, all of the rights, title and interest of the Borrower,
Berry UK, Norwich and each Subsidiary Guarantor in and to (a) any and all
patents and patent applications, (b) any and all inventions and
improvements described and claimed in such patents and patent applications,
(c) reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any patents and patent applications, (d) income,
royalties, damages, claims and payments now or hereafter due and/or payable
under and with respect to any patents or patent applications, including,
without limitation, damages and payments for past and future infringements,
(e) rights to sue for past, present and future infringements of patents,
and (f) all rights corresponding to any of the foregoing throughout the
world.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition" means the acquisition or purchase of, or
investment in, any Person, any operating division or unit of any Person, or
the stock or Assets of any Person or the combination with any Person by the
Borrower or any Subsidiary Guarantor (each individually, a "Subject
Transaction")regardless of the structure of the Subject Transaction,
engaged principally in the lines of business set forth in (G) LINE OF
BUSINESS.
The Borrower, Berry UK and Norwich will continue and, will cause their
Subsidiaries to continue, to engage substantially only in the business of
manufacturing, marketing, selling and distributing plastic products.. (Line
of Business) or in a business reasonably related thereto; provided, however
that:
(i)the aggregate purchase price of, investment in, acquisition expenditures
relating to (excluding customary and reasonable transaction costs), and
assumed Liabilities in connection with, any such Subject Transaction shall
not exceed the lesser of:
(A)the product of (A) the actual EBITDA for the Borrower,
Norwich, Berry UK and each of the Subsidiary Guarantors, calculated on a
consolidated basis, for the then preceding twelve (12) month period after
giving effect to such Subject Transaction (subject to such Pro-forma
adjustments as shall be acceptable to the Agent in its sole and absolute
discretion), and (B) five (5), or
(B)Seven Million Dollars ($7,000,000),
(ii)the aggregate purchase prices of, investments in, acquisition
expenditures relating to (excluding customary and reasonable transaction
costs), and assumed Liabilities in connection with, all Subject
Transactions made on or after the First Closing Date shall not exceed
Thirty Million Dollars ($30,000,000),
(iii)such Subject Transaction shall not otherwise constitute or give rise
to a Default or an Event of Default,
(iv)the Borrower shall have furnished financial projections in form and
content reasonably acceptable to the Agent which give effect to such
Subject Transaction and which project that such Subject Transaction would
not cause a Default or Event of Default (provided that the Agent and the
Lenders agree that such projections shall not constitute a guaranty of
actual performance),
(v)if requested by the Agent or the Requisite Lenders, a Phase I
environmental assessment of any real property to be acquired or purchased
or owned by any Person to be acquired or purchased or owned by any Person
in which the Borrower or any Subsidiary intends to make an investment, has
been performed by a reputable and recognized environmental consulting firm
engaged by the Borrower and reasonably acceptable to the Agent and has
revealed no material Hazardous Materials Contamination or material
violations of any Environmental Laws, the non-remediation of or non-
compliance with which would result in a material Liability not reflected in
the purchase price, if and to the extent the Subject Transaction consists
of the purchase or acquisition of a Person which is to be a Subsidiary of
the Borrower or merged into a Subsidiary of the Borrower created for the
express purpose of consummating the proposed acquisition:
(vi)the Borrower shall execute all documents and take such other actions as
the Agent may reasonably require to grant to the Agent and the Lenders a
first priority Lien on one hundred percent (100%) of the stock of such
Subsidiary (except that with respect to the formation of Berry UK and its
acquisition of Norwich, the Borrower shall be required only to pledge
sixty-five percent (65%) of the stock of Berry UK, as security for all of
the Obligations, excluding the UK Obligations, and to pledge one hundred
percent (100%) of the stock of Berry UK, as security for all of the UK
Obligations, which one hundred percent (100%) pledge shall reduce to sixty-
five percent (65%) at such time as all obligations under the Subordinated
Debt have been paid in full,
(vii)such Subsidiary shall be designated and qualify immediately after the
closing of the Subject Transaction as a Subsidiary Guarantor in accordance
with the terms of Section (B) SUBSIDIARIES. (Subsidiaries), except that
neither Berry UK nor Norwich shall be designated or required to qualify as
a Subsidiary Guarantor,
(viii)after giving effect to any borrowings under the Revolving Loan, if
any, needed to finance the Subject Transaction, the Borrower and the
Subsidiary Guarantors shall have availability under the Revolving Loan in
an amount at least equal to Twenty Million Dollars ($20,000,000) and are
reasonably expected to have such minimum availability for a period of ten
(10) Business Days after closing and consummation of the Subject
Transaction, except that in connection with the Norwich Stock Purchase
Transaction, availability under the Revolving Loan need only be in an
amount at least equal to Fifteen Million Dollars ($15,000,000),
(ix)all legal matters incident to the Subject Transaction shall be
acceptable to the Agent in its reasonable discretion,
(x)the Agent shall have been given no less than thirty (30) days prior
written notice of any proposed Subject Transaction and shall have been
provided with all information which it may have reasonably requested in
connection with such proposed Subject Transaction,
(xi)if requested by the Agent, the Agent shall have received, prior to or
simultaneously with the closing of a Subject Transaction an opinion of
counsel reasonably acceptable to the Agent in all respects covering the
Borrower's or the relevant Subsidiary's, as the case may be, due
incorporation, valid existence, good standing and power and authority to
enter into the documents contemplated by this Agreement and the Subject
Transaction and such other matters as may be reasonably requested by the
Agent,
(xii)unless otherwise agreed by the Requisite Lenders, no Subject
Transaction shall be permitted by the terms of this Agreement if the
Borrower, Berry UK, Norwich and the Subsidiary Guarantors, on a
consolidated basis and taken as a whole, have had, immediately prior to the
date of the closing of such Subject Transaction, three (3) consecutive
months of net operating losses, and
(xiii)the aggregate purchase price of, investment in, acquisition
expenditures relating to (excluding customary and reasonable transaction
costs), and assumed Liabilities in connection with, all Subject
Transactions in any given fiscal year shall not exceed Seven Million
Dollars ($7,000,000); and
(z)the Venture Stock Purchase/Merger Transaction.
The Borrower understands and agrees that the Agent shall have no obligation
or commitment to include any of the assets or properties of any Person
acquired in the Borrowing Base pursuant to a Subject Transaction. The
Agent and the Lenders agree, however, that if after completion and review
of a satisfactory field examination of the Assets and properties which
constitute or are part of a Permitted Acquisition, such Assets and
properties shall be included in the Borrowing Base if the results of such
field examination and audit are reasonably acceptable in all respects to
the Agent in its discretion and such Assets and properties otherwise
satisfy the eligibility criteria for inclusion in the Borrowing Base.
Notwithstanding the foregoing, the Agent and the Lenders agree that the
assets and properties of Berry UK and Norwich shall be included in the UK
Borrowing Base subject to the eligibility criteria set forth in the
definitions of Eligible UK Inventory and Eligible UK Receivables.
"Permitted Asset Disposition" means any one of the following Asset
Dispositions; provided that no such Asset Disposition shall be permitted at
any time following the occurrence of a Default or an Event of Default or if
and to the extent any such Asset Disposition would give rise to a Default
or an Event of Default, unless otherwise agreed in writing by the Requisite
Lenders:
(a)an Asset Disposition which satisfies the following conditions:
(i)the sum of (A) the Net Proceeds to be paid to or received by the
Borrower and/or any Subsidiary with respect to such Asset Disposition, plus
(B) the aggregate amount of all Net Proceeds paid to or received by the
Borrower and/or any or all Subsidiaries, is less than or equal to Five
Hundred Thousand Dollars ($500,000) during any fiscal year, and
(ii)none of the Assets sold under this clause (a) constitute molds used in
the business of the Borrower, Norwich, Berry UK or any Subsidiary
Guarantor.
(b)the sale of, or sale or assignment of lease with respect to,
the property owned by Venture Southeast located in Anderson County, South
Carolina;
(c)sales of Inventory in the ordinary course of business,
(d)the licensing of Patents, Trademarks and/or Copyrights, in the
ordinary course of business,
(e)dispositions of worn, used, surplus or obsolete Equipment in
the ordinary course of business,
(f)dispositions of Assets (including Net Casualty Proceeds) to
the extent such Assets are replaced with Assets of similar kind and
function, provided that the replacement Assets shall be purchased no later
than ninety (90) days following the Asset Disposition, the replacement
Assets (which shall constitute Collateral) shall be free and clear of Liens
other than Permitted Liens that are not Liens securing purchase money or
finance lease arrangements, and the Borrower, Berry UK, Norwich or the
Subsidiary Guarantor, as the case may be, shall give the Agent at least ten
(10) days prior written notice of such Asset Disposition, except for an
Asset Disposition which constitutes a casualty,
(g)intercompany sales, leases or other dispositions of Assets
among and between the Borrower and any and all Subsidiary Guarantors;
provided, that any such Assets sold, leased or otherwise disposed of as
between the Borrower and any and all Subsidiary Guarantors shall remain
subject to the Liens of the Agent and the Lenders under this Agreement and
under the other Financing Documents; no intercompany sales, leases or other
dispositions of Assets among and between Berry UK or Norwich and the
Borrower or any Subsidiary Guarantor shall be permitted without the prior
written consent of the Agent, except that Berry UK and/or Norwich may sell,
lease or otherwise transfer Assets to the Borrower, provided that such
Assets become subject to a first priority perfected Lien of the Agent and
the Lenders (subject only to Permitted Liens) immediately upon any sale or
other transfer.
(h)the sale of any Fixed or Capital Assets acquired by the
Borrower, Berry UK, Norwich or any Subsidiary Guarantor and the leaseback
of such Assets within thirty (30) days of acquisition, but only as
contemplated and required as part of an intended Capital Lease transaction
at the time of acquisition,
(i)the sale of molds by the Borrower, Berry UK, Norwich or any
Subsidiary Guarantor; provided that the aggregate Net Proceeds of any and
all such molds outside the ordinary course of business shall not exceed
Five Hundred Thousand Dollars ($500,000) in any fiscal year,
(j)the termination of the lease for PackerWare's Reno, Nevada
location; provided, that all Assets of PackerWare at such location are
transferred to one or more locations of the Borrower and/or any Subsidiary
Guarantor such that the Agent and the Lenders would have a properly
perfected Lien on, and security interest in, such Assets,
(k)the sale, transfer or other conveyance of the issued and
outstanding capital stock of Venture Southeast and Venture Midwest to the
Borrower, as contemplated by the Venture Stock Purchase/Merger Transaction,
and
(l)transfers made as part of the South Carolina IRB Lease
Transfers.
"Permitted Liens" means: (a) Liens for Taxes (i) which are not delinquent
or (ii) which (1) are being diligently contested in good faith and by
appropriate proceedings, (2) the Borrower, Berry UK, Norwich or the
Subsidiary Guarantor, as appropriate, has the financial ability to pay,
with all penalties and interest, at all times without materially and
adversely affecting the Borrower, Berry UK, Norwich or the Subsidiary
Guarantor, as appropriate, and (3) are not, and will not be with
appropriate filing, the giving of notice and/or the passage of time,
entitled to priority over any Lien of the Agent and/or the Lenders unless
and to the extent that a reserve has been established against the Borrowing
Base (or the UK Borrowing Base, as appropriate) in an amount equal to the
maximum liability under and in connection with such Taxes, which reserve
shall be established by the Agent upon the Borrower's request; (b) deposits
or pledges to secure obligations under workers' compensation, social
security or similar laws, or under unemployment insurance in the ordinary
course of business; (c) Liens securing the Obligations; (d) judgment Liens
to the extent the entry of such judgment does not constitute an Event of
Default under the terms of this Agreement or result in the sale or levy of,
or execution on, any of the Collateral; (e) such other Liens, if any, as
are set forth on SCHEDULE (V) PERFECTION AND PRIORITY OF COLLATERAL.
The Agent and the Lenders have, or upon execution and recording of UCC-1
financing statements and possession of Securities, Documents, Instruments,
Chattel Paper and Instruments will have, and will continue to have as
security for the Obligations (subject to the terms of SECTION 3.7SUBSIDIARY
GUARANTOR ASSETS. (Subsidiary Guarantor Assets) and the terms of (J)
LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS.(Limitations on
Joint and Several Liability), a valid and perfected Lien on and security
interest in all Collateral (except that the UK Collateral shall secure the
UK Obligations only), free of all other Liens, claims and rights of third
parties whatsoever except Permitted Liens, including, without limitation,
those described on SCHEDULE (V) PERFECTION AND PRIORITY OF COLLATERAL..
attached hereto and made a part hereof; (f) deposits, liens or pledges to
secure payments of unemployment and other insurance, old-age pensions or
other social security obligations, or the performance of bids, tenders,
leases, contracts, public or statutory obligations, surety, stay or appeal
bonds, or other similar obligations arising in the ordinary course of
business; (g) statutory mechanics', workers', repairmen's, warehousemen's,
vendors' or carriers' Liens or other similar statutory Liens arising in the
ordinary course of business and securing sums which are not more than
thirty (30) days past due, provided that such statutory Liens do not
materially impair or affect the use or value of any of the Collateral; (h)
statutory landlord's Liens under leases to which the Borrower, Berry UK,
Norwich or any Subsidiary is a party; (i) zoning restrictions, easements,
rights of way, licenses and restrictions on the use of real property or
minor irregularities in title thereto which do not materially impair the
use or value of any such real property; (j) "Permitted Encumbrances" (as
defined in each of the Deeds of Trust); (k) Liens securing Indebtedness for
Borrowed Money permitted by the provisions of Section (vii) Indebtedness
for Borrowed Money incurred by the Borrower, Norwich, Berry UK or any
Subsidiary Guarantor incurred after the Closing Date; provided, that (i)
such Indebtedness for Borrowed Money is incurred on account of purchase
money or finance lease arrangements of Assets (other than real property)
acquired by the Borrower, Norwich, Berry UK or a Subsidiary Guarantor after
the Closing Date, (ii) each such purchase money or finance lease
arrangement does not exceed the cost of the Assets acquired or leased,
(iii) any Lien securing such purchase money or finance lease arrangement
does not extend to any Assets or property other than that purchased or
leased, and (iv) the aggregate amount of Indebtedness for Borrowed Money
under and in connection with all such purchase money and/or finance lease
arrangements shall not exceed, in the aggregate, the sum of Five Hundred
Thousand Dollars ($500,000); (Indebtedness); (l) Liens securing obligations
under Capital Leases to the extent such Capital Leases are permitted by the
provisions of this Agreement, and (m) any Lien arising under any retention
of title arrangements entered into in the ordinary course of trading and
not entered into primarily for the purposes of securing borrowings.
"Permitted Uses" means (a) the acquisition of one hundred percent (100%) of
the capital stock of PackerWare through the PackerWare Merger Transaction
by the Borrower, (b) the acquisition of one hundred percent (100%) of the
capital stock of Venture Holdings pursuant to the Venture Stock
Purchase/Merger Transaction, (c) the refinancing and payment of all
obligations of the Borrower and/or any of the Subsidiary Guarantors to any
lenders with respect to any Indebtedness for Borrowed Money existing as of
the First Closing Date, (d) the refinancing and payment of all obligations
of Venture Holdings, Venture Southeast and/or Venture Midwest to any
lenders with respect to any Indebtedness for Borrowed Money existing as of
the date of the Second Closing, (e) the payment of all costs and expenses
reasonably incurred in connection with the closing and consummation of the
transactions contemplated by this Agreement, including the PackerWare
Merger, the Venture Stock Purchase/Merger Transaction and/or the Norwich
Stock Purchase Transaction, (f) the payment of expenses incurred in the
ordinary course of business of the Borrower or any Subsidiary Guarantor,
(g) the acquisition of any Permitted Acquisition as and to the extent
permitted by the provisions of this Agreement, (h) the payment of all costs
and expenses reasonably incurred in connection with the closing and
consummation of a Permitted Acquisition, (i) with respect to the UK Credit
Facilities and Term Loans B, the acquisition of one hundred percent (100%)
of the capital stock of Norwich through the Norwich Stock Purchase
Transaction and (j) with respect to the Revolving Loan for general
corporate purposes of the Borrower or any Subsidiary Guarantor and with
respect to the UK Revolving Loan for general corporate purposes of Berry UK
or Norwich.
"Person" means and includes an individual, a corporation, a partnership, a
joint venture, a limited liability company or partnership, a trust, an
unincorporated association, a Governmental Authority, or any other
organization or entity.
"Plan" means any pension plan which is covered by Title IV of ERISA and in
respect of which the Borrower, any Subsidiary of the Borrower or a Commonly
Controlled Entity is an "employer" as defined in Section 3 of ERISA.
"Post-Default Rate" means with respect to the principal balance of any of
the Obligations, the then applicable rate of interest on such Obligations,
plus two percent (2%) per annum.
"Post-Expiration Date Letter of Credit" and "Post-Expiration Date Letters
of Credit" have the meanings described in Section TERMS OF LETTERS OF
CREDIT; POST-EXPIRATION DATE LETTERS OF CREDIT. (Terms of Letters of
Credit).
"Prepayment" means a Revolving Loan Mandatory Prepayment, a Revolving Loan
Optional Prepayment, a Term Loan A Mandatory Prepayment, a Term Loan A
Optional Prepayment, a Term Loan B Mandatory Prepayment, a Term Loan B
Optional Prepayment, a UK Revolving Loan Mandatory Prepayment, a UK
Revolving Loan Optional Prepayment, a UK Term Loan Optional Prepayment or a
UK Term Loan Mandatory Prepayment, as the case may be, and "Prepayments"
mean collectively all Revolving Loan Mandatory Prepayments, all Revolving
Loan Optional Prepayments, all Term Loan A Mandatory Prepayments, all Term
Loan A Optional Prepayments, all Term Loan B Mandatory Prepayments, all
Term Loan B Optional Prepayments, all UK Revolving Loan Mandatory
Prepayments, all UK Revolving Loan Optional Prepayments, all UK Term Loan
Mandatory Prepayments and all UK Term Loan Optional Prepayments.
"Pricing Ratio" means as to the Borrower, Berry UK, Norwich and the
Subsidiary Guarantors, on a consolidated basis, the ratio of (a) Funded
Debt to (b) EBITDA.
"Prime Rate" means the floating and fluctuating per annum prime commercial
lending rate of interest of the Agent, as established by the Agent at any
time or from time to time. The Prime Rate shall be adjusted automatically,
without notice, as of the effective date of any change in such prime
commercial lending rate. The Prime Rate does not necessarily represent the
lowest rate of interest charged by the Agent to borrowers.
"PROPOSED ASSIGNEE" HAS THE MEANING DESCRIBED IN ASSIGNMENTS BY LENDERS.
Any Lender may, with the prior written consent of the Agent and the
Borrower, but without notice to or consent of any other Lender, which
consent shall not be unreasonably withheld, delayed or conditioned, assign
to any Person (each an "Assignee" and collectively, the "Assignees") all or
a portion of such Lender's Commitments; provided that (a) the amount
assigned by such Lender must be at least equal to Five Million Dollars
($5,000,000), (b) after giving effect to such assignment, such Lender must
continue to hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000), unless such Lender has assigned one hundred
percent (100%) of such Lender's Commitments, and (c) any amount assigned
shall be divided pro rata among such Lenders' Pro Rata Share of the
Commitments and Obligations. NationsBank agrees that if at any time
NationsBank sells one hundred percent (100%) of all of its Commitments,
NationsBank shall resign as Agent and the remaining Lenders shall select a
replacement Agent in accordance with the provisions of this Agreement. In
addition, NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to hold
a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of
the Lender (other than NationsBank) having the highest Pro Rata Share of
the Commitments. Any Lender which elects to make such an assignment shall
pay to the Agent, for the exclusive benefit of the Agent, an administrative
fee for processing each such assignment in the amount of Three Thousand
Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify
the Agent and the Borrower in writing of the date on which the assignment
is to be effective (the "Adjustment Date"). On or before the Adjustment
Date, the assigning Lender, the Agent, the Borrower and the respective
Assignee shall execute and deliver a written assignment agreement in a form
acceptable to the Agent, which shall constitute an amendment to this
Agreement to the extent necessary to reflect such assignment. Upon the
request of any assigning Lender following an assignment made in accordance
with this Assignments by Lenders., the Borrower, Berry UK and Norwich shall
issue new Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning
Lender. (Assignments by Lenders).
"Pro-forma Financial Projections" has the meaning described in Section (L)
PRO-FORMA FINANCIAL STATEMENTS.
The Borrower has furnished to the Agent a Pro-forma consolidated balance
sheet of the Borrower and the Subsidiaries as of immediately after
consummation of the Norwich Stock Purchase Transaction and the transactions
incident thereto (the "Pro-forma Balance Sheet") together with Pro-forma
financial projections of the Parent for the five-year period subsequent to
the Norwich Stock Purchase Transaction (the "Pro-forma Financial
Projections"). A copy of the Pro-forma Balance Sheet and the Pro-forma
Financial Projections are attached hereto as Exhibits C-1 and C-2,
respectively. The Pro-forma Balance Sheet is correct and complete, has
been prepared in accordance with GAAP, and fairly presents the consolidated
financial condition of the Borrower and the Subsidiaries as of immediately
after consummation of the Norwich Stock Purchase Transaction and the
transactions incident thereto. The Pro-forma Financial Projections
represent the best estimate of the future operations of the Parent and are
based on reasonable and conservative assumptions, but do not constitute a
guaranty of actual performance. (Pro-forma Financial Statements).
"Pro-forma Financial Statements" has the meaning described in Section (l)
Pro-forma Financial Statements.
The Borrower has furnished to the Agent a Pro-forma consolidated balance
sheet of the Borrower and the Subsidiaries as of immediately after
consummation of the Norwich Stock Purchase Transaction and the transactions
incident thereto (the "Pro-forma Balance Sheet") together with Pro-forma
financial projections of the Parent for the five-year period subsequent to
the Norwich Stock Purchase Transaction (the "Pro-forma Financial
Projections"). A copy of the Pro-forma Balance Sheet and the Pro-forma
Financial Projections are attached hereto as Exhibits C-1 and C-2,
respectively. The Pro-forma Balance Sheet is correct and complete, has
been prepared in accordance with GAAP, and fairly presents the consolidated
financial condition of the Borrower and the Subsidiaries as of immediately
after consummation of the Norwich Stock Purchase Transaction and the
transactions incident thereto. The Pro-forma Financial Projections
represent the best estimate of the future operations of the Parent and are
based on reasonable and conservative assumptions, but do not constitute a
guaranty of actual performance. (Pro-forma Financial Statements).
"Pro Rata Share" means at any time and as to any Lender, the percentage
derived by dividing the unpaid principal amount of the Loans, Bond Letter
of Credit Obligations, Letter of Credit Obligations and Special Source Bond
Obligations, owing to that Lender by the aggregate unpaid principal amount
of all Loans, Bond Letter of Credit Obligations, Letter of Credit
Obligations and Special Source Bond Obligations, then outstanding; or if no
Loans, Bond Letter of Credit Obligations, Letter of Credit Obligations or
Special Source Bond Obligations are outstanding, by dividing the total
amount of such Lender's Commitments by the total amount of the Commitments
of the Agent and all of the Lenders.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder.
"Responsible Officer" means for the Borrower, Norwich or Berry UK, as
applicable, its chief executive officer, any vice president or president
or, with respect to financial matters, its chief financial officer.
"Requisite Lenders" means at any time of determination one or more of the
Lenders holding at least fifty-one percent (51%) of the Commitments.
"Reserve Percentage" means, at any time, the then current maximum rate for
which reserves (including any basic, supplemental, marginal and emergency
reserves) are required to be maintained by member banks of the Federal
Reserve System under Regulation D of the Board of Governors of the Federal
Reserve System against "Eurocurrency liabilities", as that term is defined
in Regulation D. The LIBOR Rate shall be adjusted automatically on and as
of the effective date of any change in the Reserve Percentage. The Agent
hereby advises the Borrower and Berry UK that as of the date of this
Agreement, the Reserve Percentage is equal to zero.
"Revolving Credit Commitment" means the agreement of a Lender relating to
the making the Revolving Loan and advances thereunder subject to and in
accordance with the provisions of this Agreement; and "Revolving Credit
Commitments" means the collective reference to the Revolving Credit
Commitment of each of the Lenders.
"Revolving Credit Commitment Period" means the period of time from the
Closing Date to the Business Day preceding the Revolving Credit Termination
Date.
"Revolving Credit Committed Amount" has the meaning described in Section
(A) REVOLVING CREDIT FACILITY.
Subject to and upon the terms of this Agreement, the Lenders collectively,
but severally, establish a revolving credit facility in favor of the
Borrower. The aggregate of all advances under the Revolving Credit
Facility is sometimes referred to in this Agreement collectively as the
"Revolving Loan". (Revolving Credit Facility).
"Revolving Credit Facility" means the facility established by the Lenders
pursuant to SECTION 2.1 THE REVOLVING CREDIT FACILITY. (Revolving Credit
Facility).
"Revolving Credit Note" and "Revolving Credit Notes" have the meanings
described in Section (E) REVOLVING CREDIT NOTES.
The obligation of the Borrower to pay each Lender's Pro Rata Share of the
Revolving Loan, with interest, shall be evidenced by a series of promissory
notes (as from time to time extended, amended, restated, supplemented or
otherwise modified, collectively the "Revolving Credit Notes" and
individually a "Revolving Credit Note"). Each Lender's Revolving Credit
Note shall be dated as of the date of this Agreement, shall be payable to
the order of such Lender at the times provided in the Revolving Credit
Note, and shall be in the principal amount of such Lender's Revolving
Credit Committed Amount. The Borrower acknowledges and agrees that, if the
outstanding principal balance of the Revolving Loan outstanding from time
to time exceeds the aggregate stated amount of the Revolving Credit Notes,
the excess shall bear interest at the rates provided from time to time for
advances under Revolving Loan evidenced by the Revolving Credit Notes and
shall be payable, with accrued interest, ON DEMAND. The Revolving Credit
Notes shall not operate as a novation of any of the Obligations or nullify,
discharge, or release any such Obligations or the continuing contractual
relationship of the parties hereto in accordance with the provisions of
this Agreemen (Revolving Credit Notes).
"Revolving Credit Optional Reduction" and "Revolving Credit Optional
Reductions" have the meanings described in Section (L) OPTIONAL REDUCTION
OF REVOLVING CREDIT COMMITTED AMOUNT (Optional Reduction of Revolving
Credit).
"Revolving Credit Pro Rata Share" has the meaning described in Section (B)
PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (Procedure for
Making Advances).
"REVOLVING CREDIT TERMINATION DATE" MEANS THE EARLIER OF (A) JANUARY 21,
2002, (B) THE REPAYMENT OR PREPAYMENT OF THE TERM LOANS IN FULL, (C) THE
DATE ON WHICH THE REVOLVING CREDIT COMMITMENTS ARE TERMINATED PURSUANT TO
SECTION 7.2 REMEDIES.
Upon the occurrence of any Event of Default, the Agent and/or NationsBank,
as applicable, may, in the exercise of its sole and absolute discretion
from time to time, and shall, at the direction of the Requisite Lenders, at
any time thereafter exercise any one or more of the following rights,
powers or remedies: (Remedies) or otherwise.
"Revolving Credit Unused Line Fee" and "Revolving Credit Unused Line Fees"
have the meanings described in Section (J) REVOLVING CREDIT UNUSED LINE
FEE.
The Borrower shall pay to the Agent for the ratable benefit of the Lenders
a quarterly Revolving Credit Facility fee (collectively, the "Revolving
Credit Unused Line Fees" and individually, a "Revolving Credit Unused Line
Fee") in an amount equal to thirty (30) basis points per annum (calculated
on the basis of actual number of days elapsed in a year of 360 days) and
calculated on average daily unused and undisbursed portion of the Total
Revolving Credit Committed Amount,, each as in effect from time to time
accruing during each quarterly period. The accrued and unpaid Revolving
Credit Unused Line Fee shall be paid by the Borrower to the Agent on the
first day of each quarter, in arrears, commencing on the first such date
following the date hereof, and on the Revolving Credit Termination Date.
(Revolving Credit Unused Line Fee).
"Revolving Loan" has the meaning described in Section (A) REVOLVING CREDIT
FACILITY.
Subject to and upon the terms of this Agreement, the Lenders collectively,
but severally, establish a revolving credit facility in favor of the
Borrower. The aggregate of all advances under the Revolving Credit
Facility is sometimes referred to in this Agreement collectively as the
"Revolving Loan". (Revolving Credit Facility).
"Revolving Loan Account" has the meaning described in SECTION (I) REVOLVING
LOAN ACCOUNT.
The Agent will establish and maintain a loan account on its books (the
"Revolving Loan Account") to which the Agent will (a) DEBIT (i) the
principal amount of each advance under the Revolving Loan made by the
Lenders hereunder as of the date made, (ii) the amount of any interest
accrued on the Revolving Loan as and when due, and (iii) any other amounts
due and payable by the Borrower to the Agent and/or the Lenders from time
to time under the provisions of this Agreement in connection with the
Revolving Loan, including, without limitation, Enforcement Costs, Fees,
late charges, and service, collection and audit fees, as and when due and
payable, and (b) CREDIT all payments made by the Borrower to the Agent on
account of the Revolving Loan as of the date made including, without
limitation, funds credited to the Revolving Loan Account from the
Collateral Account. The Agent may debit the Revolving Loan Account for the
amount of any Item of Payment that is returned to the Agent unpaid. All
credit entries to the Revolving Loan Account are conditional and shall be
readjusted as of the date made if final and indefeasible payment is not
received by the Agent in cash or solvent credits. The Borrower hereby
promises to pay to the order of the Agent for the ratable benefit of the
Lenders, on the Revolving Credit Termination Date, an amount equal to the
excess, if any, of all debit entries over all credit entries recorded in
the Revolving Loan Account under the provisions of this Agreement. Any and
all periodic or other statements or reconciliations, and the information
contained in those statements or reconciliations, of the Revolving Loan
Account shall be presumed conclusively to be correct, and shall constitute
an account stated between the Agent, the Lenders and the Borrower unless
the Agent receives specific written objection thereto from the Borrower
and/or any Lender within thirty (30) Business Days after such statement or
reconciliation shall have been sent by the Agent. Any and all periodic or
other statements or reconciliations, and the information contained in those
statements or reconciliations, of the Revolving Loan Account shall be
final, binding and conclusive upon the Borrower in all respects, absent
manifest error, unless the Agent receives specific written objection
thereto from the Borrower within thirty (30) Business Days after such
statement or reconciliation shall have been sent by the Agent. (Revolving
Loan Account).
"Revolving Loan Mandatory Prepayment" and "Revolving Loan Mandatory
Prepayments" have the meanings described in Section (F) MANDATORY
PREPAYMENTS OF REVOLVING LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity) and in
addition to any mandatory prepayment required by the provisions of Section
(C) MANDATORY PREPAYMENTS OF TERM LOANS A. (Term Loan Mandatory
Prepayments), upon the request of the Agent pursuant to Section (C)
BORROWING BASE. (Borrowing Base) or Section 2.1.13 (Required Availability
under the Revolving Credit Facility), the Borrower shall make mandatory
prepayments (each a "Revolving Loan Mandatory Prepayment" and collectively,
the "Revolving Loan Mandatory Prepayments") of the Revolving Loan at any
time and from time to time in order to cover any Borrowing Base Deficiency
or to ensure compliance with Section 2.1.13, as applicable. (Mandatory
Prepayments).
"Revolving Loan Optional Prepayment" and "Revolving Loan Optional
Prepayments" have the meanings described in Section (G) OPTIONAL
PREPAYMENTS OF REVOLVING LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity), the
Borrower shall have the option at any time and from time to time prepay
(each a "Revolving Loan Optional Prepayment" and collectively the
"Revolving Loan Optional Prepayments") the Revolving Loan, in whole or in
part without premium or penalty. Revolving Loan Optional Prepayments shall
be made following a timely and proper written notice to the Agent with
respect thereto specifying the date and amount of any intended Revolving
Loan Optional Prepayment. The amount to be prepaid shall be paid by the
Borrower to the Agent on the date specified for such prepayment. Any
amounts repaid or prepaid may be readvanced and reborrowed subject to the
provisions of this Agreemen (Optional Prepayments of Revolving Loan).
"RIGHT OF FIRST REFUSAL NOTICE" HAS THE MEANING DESCRIBED IN ASSIGNMENTS BY
LENDERS.
Any Lender may, with the prior written consent of the Agent and the
Borrower, but without notice to or consent of any other Lender, which
consent shall not be unreasonably withheld, delayed or conditioned, assign
to any Person (each an "Assignee" and collectively, the "Assignees") all or
a portion of such Lender's Commitments; provided that (a) the amount
assigned by such Lender must be at least equal to Five Million Dollars
($5,000,000), (b) after giving effect to such assignment, such Lender must
continue to hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000), unless such Lender has assigned one hundred
percent (100%) of such Lender's Commitments, and (c) any amount assigned
shall be divided pro rata among such Lenders' Pro Rata Share of the
Commitments and Obligations. NationsBank agrees that if at any time
NationsBank sells one hundred percent (100%) of all of its Commitments,
NationsBank shall resign as Agent and the remaining Lenders shall select a
replacement Agent in accordance with the provisions of this Agreement. In
addition, NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to hold
a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of
the Lender (other than NationsBank) having the highest Pro Rata Share of
the Commitments. Any Lender which elects to make such an assignment shall
pay to the Agent, for the exclusive benefit of the Agent, an administrative
fee for processing each such assignment in the amount of Three Thousand
Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify
the Agent and the Borrower in writing of the date on which the assignment
is to be effective (the "Adjustment Date"). On or before the Adjustment
Date, the assigning Lender, the Agent, the Borrower and the respective
Assignee shall execute and deliver a written assignment agreement in a form
acceptable to the Agent, which shall constitute an amendment to this
Agreement to the extent necessary to reflect such assignment. Upon the
request of any assigning Lender following an assignment made in accordance
with this ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich shall
issue new Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning
Lender. (Assignments by Lenders).
"Second Closing Date" means August 29, 1997.
"Securities" means the collective reference to each and every certificated
or uncertificated security which constitutes a "security" under the
provisions of Title 8 of the Uniform Commercial Code, and all proceeds
(cash and non-cash) of the foregoing and to each and every "investment
property" under the provisions of Title 9 of the Uniform Commercial Code
(if that definition is included in that Title), and all proceeds (cash and
non-cash) of the foregoing.
"Security Agreement" means (a) that certain security agreement dated as of
the First Closing Date from PackerWare, BIC, BTP, Berry Sterling and
AeroCon, Inc. to the Agent for the benefit of the Lenders, ratably, and the
Agent, (b) that certain security agreement dated May 13, 1997 from Berry
Design to the Agent for the benefit of the Lenders, ratably, and the Agent,
and (c) that certain security agreement dated as of the Second Closing Date
from Berry Venture, Venture Southeast and Venture Midwest, all as amended,
restated, supplemented or otherwise modified in writing at any time and
from time to time.
"Security Documents" means collectively any assignment, pledge agreement,
security agreement, mortgage, deed of trust, deed to secure debt, financing
statement and any similar instrument, document or agreement under or
pursuant to which a Lien is now or hereafter granted to, or for the benefit
of, the Agent and/or the Lenders on any real or personal property of any
Person to secure all or any portion of the Obligations, all as the same may
from time to time be amended, restated, supplemented or otherwise modified,
including, without limitation, this Agreement, the Guaranty, the Stock
Pledge Agreement, the Deeds of Trust, the Security Agreement, the
Assignment of Patents and the Assignment of Trademarks, the Special Source
Security Agreement, the UK Stock Pledge Agreement, and the UK Security
Documents.
"Security Procedures" means the rules, policies and procedures adopted and
implemented by the Agent and its Affiliates at any time and from time to
time with respect to security procedures and measures relating to
electronic funds transfers, all as the same may be amended, restated,
supplemented, terminated, or otherwise modified at any time and from time
to time by the Agent in its sole and absolute discretion.
"Seller" means all of the shareholders of PackerWare immediately prior to
consummation of the PackerWare Merger, all of the shareholders of Venture
Holdings immediately prior to consummation of the Venture Stock
Purchase/Merger Transaction and all shareholders of Norwich immediately
prior to consummation of the Norwich Stock Purchase Transaction.
"Senior Secured Debt - Parent" means that certain Indebtedness for Borrowed
Money of the Parent (and all guarantees thereof by the Borrower and its
Subsidiaries) in favor of First Trust of New York, National Association, as
trustee for the holders of the 12-1/2% Series A Senior Secured Notes due
2006 and the 12-1/2% Series B Secured Notes due 2006 in a stated principal
amount of One Hundred Five Million Dollars ($105,000,000).
"Senior Secured Debt Loan Documents" means any and all promissory notes,
agreements, documents or instruments now or at any time evidencing,
securing, guarantying or otherwise executed and delivered in connection
with the Senior Secured Debt - Parent, as the same may from time to time be
amended, restated, supplemented or modified.
"Settlement Date" means each Business Day after the Closing Date selected
by the Agent in its sole discretion subject to and in accordance with the
provisions of Section (I) IN GENERAL. To the extent and in the manner
hereinafter provided in this Section (C) SETTLEMENT PROCEDURES AS TO
REVOLVING LOAN., settlement among the Lenders as to the Revolving Loan may
occur periodically on Settlement Dates determined from time to time by the
Agent, which may occur before or after the occurrence or during the
continuance of a Default or Event of Default and whether or not all of the
conditions set forth in Section 5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
(Conditions to All Extensions of Credit) have been met. On each Settlement
Date payments shall be made by or to the Lenders in the manner provided in
this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. in accordance
with the Settlement Report delivered by the Agent pursuant to the
provisions of this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN.
in respect of such Settlement Date so that as of each Settlement Date, and
after giving effect to the transactions to take place on such Settlement
Date, each Lender's Net Outstandings shall equal such Lender's Revolving
Credit Pro Rata Share of the Revolving Loan outstanding. (Settlement
Procedures) as of which a Settlement Report is delivered by the Agent and
on which settlement is to be made among the Lenders in accordance with the
provisions of Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN.
(Settlement Procedures).
"Settlement Report" means each report prepared by the Agent and delivered
to each Lender and setting forth, among other things, as of the Settlement
Date indicated thereon and as of the next preceding Settlement Date, the
aggregate outstanding principal balance of the Revolving Loan, each
Lender's Pro Rata Share thereof, each Lender's Net Outstandings and all
Non-Ratable Loans made, and all payments of principal, interest and Fees
received by the Agent from the Borrower during the period beginning on such
next preceding Settlement Date and ending on such Settlement Date.
"South Carolina Bond Letter of Credit" means that certain irrevocable
letter of credit dated April 20, 1995, issued by Bank One, Cleveland, NA in
the original amount of $8,427,637, for the account of Venture Southeast,
for the benefit of Bank One Trust Company, NA, as trustee, and as security
for the South Carolina Bonds, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any time
and from time to time.
"South Carolina Bond Letter of Credit - NB" means that certain irrevocable
letter of credit issued or to be issued by the Agent for the account of the
Borrower or Venture Southeast as security for the South Carolina Bond
Letter of Credit, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time. Subsequent to the date hereof, but on or before the expiration date
of the South Carolina Bond Letter of Credit, the Agent intends to issue an
irrevocable letter of credit to replace the South Carolina Bond Letter of
Credit, in which case the term "South Carolina Bond Letter of Credit - NB"
shall mean such replacement letter of credit, as the same may be amended,
restated, reissued, renewed, supplemented, replaced or otherwise modified
at any time and from time to time.
"South Carolina Bond Letter of Credit Agreement" means that certain letter
of credit reimbursement agreement by and between the Agent and the Borrower
pursuant to which the Borrower will agree to reimburse the Agent for any
amounts drawn under the South Carolina Bond Letter of Credit - NB and to
pay certain fees, interest and other amounts payable to the Agent with
respect to the South Carolina Bond Letter of Credit - NB, as the same may
be amended, restated, supplemented, replaced or otherwise modified at any
time and from time to time.
"South Carolina Bond Letter of Credit Agreement Documents - Bonds" means
all instruments, agreements or documents previously, simultaneously or
hereafter executed and delivered by the Borrower, any Guarantor and/or any
other Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with the South Carolina Bond Letter
of Credit and/or any or all of the South Carolina Bonds, all as the same
may be amended, restated, supplemented, replaced or otherwise modified at
any time and from time to time.
"South Carolina Bond Letter of Credit Agreement Documents - NB" means the
South Carolina Bond Letter of Credit Agreement and any other instrument,
agreement or document previously, simultaneously or hereafter executed and
delivered by the Borrower, any Guarantor and/or any other Person, singly or
jointly with another Person or Persons, evidencing, securing, guarantying
or in connection with the South Carolina Bond Letter of Credit - NB and/or
any or all of the South Carolina Bond Letter of Credit Obligations, all as
the same may be amended, restated, supplemented, replaced or otherwise
modified at any time and from time to time.
"South Carolina Bond Letter of Credit Obligations" means the collective
reference to all Obligations of the Borrower under and with respect to the
South Carolina Letter of Credit - NB, the South Carolina Bond Letter of
Credit Agreement, and/or any of the South Carolina Bond Letter of Credit
Agreement Documents.
"South Carolina Bond Trust Agreement" means that certain trust indenture
dated as of April 1, 1995 by and among the South Carolina Bond Trustee and
the South Carolina Jobs - Economic Development Authority relating to the
South Carolina Bonds, as amended, restated, supplemented or otherwise
modified at any time and from time to time.
"South Carolina Bond Trustee" means Bank One Trust Company, NA, and its
successors and assigns, as trustee under the South Carolina Bond Trust
Agreement.
"South Carolina Bonds" means the South Carolina Jobs - Economic Development
Authority, Adjustable Rate Bonds, Series 1995 (Venture Packaging, Inc.
Project) issued by the South Carolina Jobs - Economic Development Authority
in the original aggregate principal amount of Eight Million Three Hundred
Twenty-five Thousand Dollars ($8,325,000).
"South Carolina IRB" means the Anderson County, South Carolina Industrial
Revenue Bonds, Series 1995 (Venture Packaging Southeast, Inc. Project).
"South Carolina IRB Lease Agreement" means that certain First Amended Lease
Agreement dated as of January 18, 1996, between Anderson County, South
Carolina and Venture Holdings.
"South Carolina IRB Lease Purchase Option" means the option of Venture
Southeast to purchase the assets subject to the South Carolina IRB Lease
Agreement pursuant to Section 10.02 of the South Carolina IRB Lease
Agreement.
"South Carolina IRB Lease Transfers" means transfers of capital assets
related to the real property covered by the Deed of Trust - Anderson and,
pursuant to the terms of the South Carolina IRB Lease Agreement required to
be transferred to the lessor and leased to the lessee under the South
Carolina IRB Lease Agreement.
"Special Source Bond" means that certain $875,000 Anderson County, South
Carolina Special Source Revenue Bond, Series 1995 (Venture Packaging
Southeast, Inc. Project) (the "Special Source Bond").
"Special Source Bond Assignment" means that certain Assignment, Assumption
and Consent Agreement by and among the Borrower, Bank One, Cleveland, N.A.
and NationsBank dated as of August 29, 1997, as the same may be amended,
restated, supplemented or otherwise modified at any time and from time to
time.
"Special Source Bond Commitment" means the agreement of the Agent to
purchase the Special Source Bond and the agreement of each Lender to
purchase a participating interest in the Special Source Bond Obligations,
all subject to and in accordance with the provisions of this Agreement.
"Special Source Bond Documents" means any and all agreements, documents and
instruments which evidence, secure, guaranty or otherwise relate to the
Special Source Bond and/or any or all of the Special Source Bond
Obligations, including, without limitation, the Special Source Bond, the
Special Source Bond Guaranty, and the Special Source Bond Security
Agreement, as the same may be amended, restated, supplemented or otherwise
modified at any time and from time to time.
"Special Source Bond Facility" has the meaning given such term in SECTION
2.6 THE SPECIAL SOURCE BOND FACILITY..1 (The Special Source Bond Facility).
"Special Source Bond Guaranty" means that certain Guaranty of Payment
Agreement - Bond Purchase Obligations dated as of August 29, 1997 from the
Borrower and the Subsidiary Guarantors, as the same may be amended,
restated, supplemented or otherwise modified.
"Special Source Bond Interest Rate" shall have the meaning given such term
in Section (B) CURRENT TERMS OF SPECIAL SOURCE BOND.(Current Terms of
Special Source Bond).
"Special Source Bond Issuer" means Anderson County, South Carolina, and its
successors and assigns.
"Special Source Bond Maturity Date" shall have the meaning given such term
in Section (B) CURRENT TERMS OF SPECIAL SOURCE BOND.(Current Terms of
Special Source Bond).
"Special Source Bond Obligations" means any and all obligations of the
Borrower and each of the Subsidiary Guarantors under and in connection with
the Special Source Bond, including, without limitation, principal and
interest.
"Special Source Bond Security Agreement" means that certain Security
Agreement dated as of August 29, 1997 from the Borrower and the Subsidiary
Guarantors, as the same may be amended, restated, supplemented or otherwise
modified.
"Special Source Bond Settlement Date" has the meaning given such term in
Section (D)PARTICIPATIONS IN THE SPECIAL SOURCE BOND
OBLIGATIONS.(Participations in the Special Source Bond Obligations).
"State" means the State of Maryland.
"Sterling" means British Pounds Sterling.
"Sterling Interest Period" means as to any Sterling LIBOR Loan, the period
commencing on and including the date such Sterling LIBOR Loan is made and
ending on and including the day which is 7 30, 60 or 90 days thereafter, as
selected by Berry UK or Norwich in accordance with the provisions of this
Agreement, and thereafter, each period commencing on the last day of the
then preceding Sterling Interest Period for such Sterling LIBOR Loan and
ending on and including the day which is 7 30, 60 or 90 days thereafter, as
selected by Berry UK or Norwich in accordance with the provisions of this
Agreement; provided, however, that:
(a)the first day of any Sterling Interest Period shall be a
Business Day;
(b)if any Sterling Interest Period would end on a day that is not
a Business Day, such Sterling Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month in which case, such Sterling Interest Period
shall end on the next preceding Business Day;
(c)no Sterling Interest Period shall extend beyond the UK
Revolving Credit Termination Date or the scheduled maturity date of the UK
Term Loan; and
(d)no Sterling Interest Period greater than 30 days may be
selected by Berry UK or Norwich for any Sterling LIBOR Loan made under the
UK Revolving Credit Facility and no Sterling Interest Period which is less
than 30 days may be selected by Berry UK for the UK Term Loan.
"Sterling LIBOR Lending Office" means with respect to NationsBank such
branch or office of NationsBank as designated by NationsBank in the United
Kingdom from time to time as the branch or office through which the
Sterling LIBOR Loans are to be made or maintained.
"Sterling LIBOR Base Rate" means for any Sterling Interest Period with
respect to any Sterling LIBOR Loan, the rate per annum (rounded upward, if
necessary, to the nearest next 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for deposits
in Sterling at approximately 11:00 a.m. (London time) on the first Business
Day of the Sterling Interest Period for a term comparable to such Sterling
Interest Period. If for any reason such rate is not available, the term
"Sterling LIBOR Base Rate" shall mean, for any Sterling LIBOR Loan for any
Sterling Interest Period, therefor, the rate per annum (rounded upward, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Sterling at
approximately 11:00 a.m. (London time) on the first Business Day of the
Sterling Interest Period; PROVIDED, HOWEVER, if more than one rate is
specified on Reuters Screen LIBO page, the applicable rate shall be the
arithmetic mean of all such rates. For purposes of this definition,
Telerate Page 3750 refers to the British Bankers' Association LIBOR Rates
(determined at approximately 11:00 a.m. (London time) that are published by
Dow Jones Telerate, Inc.
"Sterling LIBOR Loan" means any Loan for which interest is to be computed
with reference to the Sterling LIBOR Rate.
"Sterling LIBOR Rate" means for any Sterling Interest Period with respect
to any Sterling LIBOR Loan, (a) the Sterling LIBOR Base Rate, plus (b) the
Applicable Margin, PLUS (c) the Mandatory Liquid Assets Cost Rate for such
Sterling Interest Period
"Stock Pledge Agreement" means (a) that certain stock pledge, assignment
and security agreement dated as of the First Closing Date from the Borrower
to the Agent for the benefit of the Lenders ratably and the Agent, (b) that
certain stock pledge, assignment and security agreement dated as of May 13,
1997 from the Borrower to the Agent for the benefit of the Lenders ratably
and the Agent, (c) that certain stock pledge, assignment and security
agreement dated as of the Second Closing Date from the Borrower to the
Agent for the benefit of the Lenders ratably and the Agent, and (d) the UK
Stock Pledge Agreement, all as the same may from time to time be amended,
restated, supplemented or otherwise modified, which Stock Pledge Agreement
(other than the UK Stock Pledge Agreement) grants, pledges and assigns to
the Agent for the benefit of the Lenders ratably and the Agent, a first
priority pledge and assignment of one hundred percent (100%) of the capital
stock of each Subsidiary Guarantor and which UK Stock Pledge Agreement
grants, pledges and assigns to NationsBank, a pledge and assignment of one
hundred percent (100%) of the capital stock of Berry UK (which one hundred
percent (100%) pledge reduces to sixty-five percent (65%) at such time as
all obligations under the Subordinated Debt have been paid in full) and
grants, pledges and assigns to the Agent for the benefit of the Lenders
ratably and the Agent, a pledge and assignment of sixty-five percent (65%)
of the capital stock of Berry UK.
"Stockholder's Equity" means as to the Borrower, Berry UK, Norwich and each
of the Subsidiary Guarantors, on a consolidated basis, for any date of
determination thereof, the total of capital stock (except treasury stock
and net of any note receivable received upon the issuance of any shares of
capital stock) and contributed capital, as determined in accordance with
GAAP consistently applied, after eliminating all intercompany items.
"Subordinated Debt" means that certain Indebtedness for Borrowed Money of
the Borrower (and all guarantees thereof by the Borrower and its
Subsidiaries) in favor of United States Trust Company of New York, as
trustee for the holders of the 12-1/4% Senior Subordinated Notes due 2004
in a stated principal amount of One Hundred Million Dollars ($100,000,000).
"Subordinated Debt Loan Documents" means any and all promissory notes,
agreements, documents or instruments now or at any time evidencing,
securing, guarantying or otherwise executed and delivered in connection
with the Subordinated Debt, as the same may from time to time be amended,
restated, supplemented or modified.
"Subordinated Indebtedness" means all Indebtedness, including, without
limitation, the Subordinated Debt, incurred at any time by the Borrower as
and to the extent permitted by the provisions of Section (D) INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will create, incur, assume or
suffer to exist, or permit any Subsidiary to create, incur, assume or
suffer to exist, any Indebtedness for Borrowed Money, except
(Indebtedness), which is subordinated to the Obligations, as set forth in
one or more written agreements, all in form and substance satisfactory to
the Agent in its reasonable discretion. The Agent and the Lenders agree
that Subordinated Indebtedness does not include the Senior Secured Debt -
Parent.
"SUBSTITUTE PURCHASER" HAS THE MEANING DESCRIBED IN ASSIGNMENTS BY LENDERS.
Any Lender may, with the prior written consent of the Agent and the
Borrower, but without notice to or consent of any other Lender, which
consent shall not be unreasonably withheld, delayed or conditioned, assign
to any Person (each an "Assignee" and collectively, the "Assignees") all or
a portion of such Lender's Commitments; provided that (a) the amount
assigned by such Lender must be at least equal to Five Million Dollars
($5,000,000), (b) after giving effect to such assignment, such Lender must
continue to hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000), unless such Lender has assigned one hundred
percent (100%) of such Lender's Commitments, and (c) any amount assigned
shall be divided pro rata among such Lenders' Pro Rata Share of the
Commitments and Obligations. NationsBank agrees that if at any time
NationsBank sells one hundred percent (100%) of all of its Commitments,
NationsBank shall resign as Agent and the remaining Lenders shall select a
replacement Agent in accordance with the provisions of this Agreement. In
addition, NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to hold
a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of
the Lender (other than NationsBank) having the highest Pro Rata Share of
the Commitments. Any Lender which elects to make such an assignment shall
pay to the Agent, for the exclusive benefit of the Agent, an administrative
fee for processing each such assignment in the amount of Three Thousand
Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify
the Agent and the Borrower in writing of the date on which the assignment
is to be effective (the "Adjustment Date"). On or before the Adjustment
Date, the assigning Lender, the Agent, the Borrower and the respective
Assignee shall execute and deliver a written assignment agreement in a form
acceptable to the Agent, which shall constitute an amendment to this
Agreement to the extent necessary to reflect such assignment. Upon the
request of any assigning Lender following an assignment made in accordance
with this ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich shall
issue new Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning
Lender. (Assignments by Lenders).
"Subsidiary" means with respect to any Person, any other Person owning the
majority of the voting shares of such first Person.
"Subsidiary Guarantor" means BIC, BTP, AeroCon, Berry Sterling, PackerWare,
Berry Design, Berry Venture, Venture Southeast, Venture Midwest or any
other domestic Subsidiary (organized and existing under the laws of any
state in the United States) of the Borrower or the Parent which is
designated and qualifies as a Subsidiary Guarantor in accordance with the
provisions of Section (B) SUBSIDIARIES. (Subsidiaries), or any of their
respective successors and assigns, as the case may be; and, "Subsidiary
Guarantors" means BIC, BTP, AeroCon, Berry Sterling, Berry Design,
PackerWare, Berry Venture, Venture Southeast, Venture Midwest, and each
other domestic Subsidiary of the Borrower designated and qualified as a
"Subsidiary Guarantor" in accordance with the provisions of Section 6.2.2,
and all of their respective successors and assigns.
"Tangible Capital Funds" means as to the Borrower, Berry UK, Norwich and
each of the Subsidiary Guarantors, on a consolidated basis, for any date of
determination thereof, the total of (a) all Stockholder's Equity, less (b)
all Assets which would be classified as intangible assets under GAAP
consistently applied, plus (c) Subordinated Indebtedness.
"Taxes" means all taxes and assessments whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character
(including all penalties or interest thereon), which at any time shall be
assessed, levied, confirmed or imposed by any Governmental Authority on the
Borrower, any Subsidiary Guarantor, Berry UK, Norwich or any of its or
their properties or Assets or any part thereof or in respect of any of its
or their franchises, businesses, income or profits.
"Term Loan A" and "Term Loans A" have the meanings described in THE TERM
LOAN A FACILITY. (Term Loan A Facility).
"Term Loan B" and "Term Loans B" have the meanings described in Section
(A) TERM LOAN B COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan B"; and collectively, the "Term
Loans B") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan B Committed
Amount"). The total of each Lender's Term Loan B Committed Amount is
herein called the "Total Term Loan B Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan B Pro Rata Share": (Term Loan B Commitments).
"Term Loan A Commitment" and "Term Loan A Commitments" have the meanings
described in Section (A) TERM LOAN A COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan A"; and collectively, the "Term
Loans A") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan A Committed
Amount"). The total of each Lender's Term Loan A Committed Amount is
herein called the "Total Term Loan A Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan A Pro Rata Share": (Term Loan A Commitments).
"Term Loan B Commitment" and "Term Loan B Commitments" have the meanings
described in Section (A) TERM LOAN B COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan B"; and collectively, the "Term
Loans B") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan B Committed
Amount"). The total of each Lender's Term Loan B Committed Amount is
herein called the "Total Term Loan B Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan B Pro Rata Share": (Term Loan B Commitments).
"Term Loan A Committed Amount" has the meaning described in Section (A)
TERM LOAN A COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan A"; and collectively, the "Term
Loans A") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan A Committed
Amount"). The total of each Lender's Term Loan A Committed Amount is
herein called the "Total Term Loan A Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan A Pro Rata Share": (Term Loan A Commitments).
"Term Loan B Committed Amount" has the meaning described in Section (A)
TERM LOAN B COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan B"; and collectively, the "Term
Loans B") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan B Committed
Amount"). The total of each Lender's Term Loan B Committed Amount is
herein called the "Total Term Loan B Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan B Pro Rata Share": (Term Loan B Commitments).
"Term Loan A Facility" means the facility established by the Lenders
pursuant to THE TERM LOAN A FACILITY. (Term Loan A Facility).
"Term Loan B Facility" means the facility established by the Lenders
pursuant to TERM LOAN B FACILITY. (Term Loan B Facility).
"Term Loan B Fee" and "Term Loan B Fees" have the meaning described in
Section (E) TERM LOAN B FEES. (Term Loan B Fees).
"Term Loan B Increase" has the meaning described in Section (A) TERM LOAN
B COMMITMENTS. (Term Loan B Commitments)
"Term Loan A Mandatory Prepayment" and "Term Loan A Mandatory Prepayments"
have the meanings described in Section (C) MANDATORY PREPAYMENTS OF TERM
LOANS A.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower shall
make the following mandatory prepayments (each a "Term Loan A Mandatory
Prepayment" and collectively the "Term Loan A Mandatory Prepayments") of
the Term Loans A to the Agent for the ratable benefit of the Lenders:
(Mandatory Prepayments of Term Loan A).
"Term Loan B Mandatory Prepayment" and "Term Loan B Mandatory Prepayments"
have the meanings described in Section (C) MANDATORY PREPAYMENTS OF TERM
LOAN B.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower shall
make mandatory prepayments (each a "Term Loan B Mandatory Prepayment" and
collectively the "Term Loan B Mandatory Prepayments") of the Term Loans B
to the Agent for the ratable benefit of the Lenders annually. Each Term
Loan B Mandatory Prepayment shall be in the amount of the Excess Cash Flow
for the then preceding fiscal year and shall be payable on the date the
Borrower shall furnish to the Agent the annual financial statements
referred to in (A) FINANCIAL STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lenders:
(Financial Statements). If, however, the Borrower fails to furnish such
financial statements in any given year as and when required, the Borrower
shall be required to pay the Term Loan B Mandatory Prepayment payable
during such calendar year on the date which is ninety (90) days after the
close of the Borrower's then preceding fiscal year. The Borrower shall pay
to the Agent on the date of each required Term Loan B Mandatory Prepayment
accrued interest to such date on the amount prepaid. Each partial Term
Loan B Mandatory Prepayment shall be applied as follows: (i) fifty percent
(50%) to principal against the principal installments of the Term Loans B
in the inverse order of their maturities and (ii) fifty percent (50%) to
all of the remaining principal installments due on account of the Term
Loans B on a pro rata basis. Notwithstanding anything to the contrary
contained herein, the Borrower shall not be required to pay an Early
Termination Fee as the result of a Term Loan B Mandatory Prepayment.
(Mandatory Prepayments of Term Loan B).
"Term Loan A Optional Prepayment" and "Term Loan A Optional Prepayments"
have the meanings described in Section OPTIONAL PREPAYMENTS OF TERM LOANS
A.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower may,
at its option, at any time and from time to time, prepay (each a "Term Loan
A Optional Prepayment" and collectively the "Term Loan A Optional
Prepayments") the Term Loans A, in whole or in part, upon five (5) Business
Days prior written notice, specifying the date and amount of prepayment.
The amount to be so prepaid, together with interest accrued thereon to date
of prepayment if the amount is intended as a prepayment of the Term Loans A
in whole, shall be paid by the Borrower to the Agent for the ratable
benefit of the Lenders on the date specified for such prepayment. Partial
Term Loan A Optional Prepayments shall be applied to all of the remaining
principal installments due on account of the Term Loans A on a pro rata
basis. (Optional Prepayments of Term Loans A).
"Term Loan B Optional Prepayment" and "Term Loan B Optional Prepayments"
have the meanings described in Section (D) OPTIONAL PREPAYMENTS OF TERM
LOANS B.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower may,
at its option, at any time and from time to time, prepay (each a "Term Loan
B Optional Prepayment" and collectively the "Term Loan B Optional
Prepayments") the Term Loans B, in whole or in part, upon five (5) Business
Days prior written notice, specifying the date and amount of prepayment.
The amount to be so prepaid, together with interest accrued thereon to date
of prepayment if the amount is intended as a prepayment of the Term Loans B
in whole, shall be paid by the Borrower to the Agent for the ratable
benefit of the Lenders on the date specified for such prepayment. Partial
Term Loan B Optional Prepayments shall be applied as follows: (a) fifty
percent (50%) to principal against the principal installments of the Term
Loans B in the inverse order of their maturities and (b) fifty percent
(50%) to all of the remaining principal installments due on account of the
Term Loans B on a pro rata basis. (Optional Prepayments of Term Loan B).
"Term Loan A Pro Rata Share" has the meaning described in THE TERM LOAN A
FACILITY. (Term Loan A Facility).
"Term Loan B Pro Rata Share" has the meaning described in Section (A) TERM
LOAN B COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan B"; and collectively, the "Term
Loans B") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan B Committed
Amount"). The total of each Lender's Term Loan B Committed Amount is
herein called the "Total Term Loan B Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan B Pro Rata Share": (Term Loan B Commitments).
"Term Loan A Note" and "Term Loan A Notes" have the meaning described in
Section (B) AMORTIZATION OF TERM LOANS A; THE TERM LOAN A NOTES.
(Amortization of Term Loans A).
"Term Loan B Note" and "Term Loan B Notes" have the meaning described in
Section (B) AMORTIZATION OF TERM LOANS B; THE TERM LOAN B NOTES.
(Amortization of Term Loans B).
"Term Loan" means either a Term Loan A, a Term Loan B or a UK Term Loan;
and "Term Loans" means each Term Loan A, Term Loan B and each UK Term Loan.
"Term Note" means a Term Loan A Note, a Term Loan B Note or a UK Term Loan
Note; "Term Notes" means each Term Loan A Note, each Term Loan B Note and
each UK Term Loan Note.
"Total Revolving Credit Committed Amount" has the meaning described in
Section (A) REVOLVING CREDIT FACILITY.
Subject to and upon the terms of this Agreement, the Lenders collectively,
but severally, establish a revolving credit facility in favor of the
Borrower. The aggregate of all advances under the Revolving Credit
Facility is sometimes referred to in this Agreement collectively as the
"Revolving Loan". (Revolving Credit Facility).
"Total Term Loan A Committed Amount" has the meaning described in Section
(A) TERM LOAN A COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan A"; and collectively, the "Term
Loans A") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan A Committed
Amount"). The total of each Lender's Term Loan A Committed Amount is
herein called the "Total Term Loan A Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan A Pro Rata Share": (Term Loan A Commitments).
"Total Term Loan B Committed Amount" has the meaning described in Section
(A) TERM LOAN B COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan B"; and collectively, the "Term
Loans B") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan B Committed
Amount"). The total of each Lender's Term Loan B Committed Amount is
herein called the "Total Term Loan B Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan B Pro Rata Share": (Term Loan B Commitments).
"Trademarks" means and includes in each case whether now existing or
hereafter arising, all of the Borrower's or any Subsidiary's rights, title
and interest in and to (a) any and all trademarks (including service
marks), trade names and trade styles, and applications for registration
thereof and the goodwill of the business symbolized by any of the
foregoing, (b) any and all licenses of trademarks, service marks, trade
names and/or trade styles, whether as licensor or licensee, (c) any
renewals of any and all trademarks, service marks, trade names, trade
styles and/or licenses of any of the foregoing, (d) income, royalties,
damages and payments now or hereafter due and/or payable with respect
thereto, including, without limitation, damages, claims, and payments for
past, present and future infringements thereof, (e) rights to sue for past,
present and future infringements of any of the foregoing, including the
right to settle suits involving claims and demands for royalties owing, and
(f) all rights corresponding to any of the foregoing throughout the world.
"UK Borrowing Base" has the meaning described in Section (C) UK BORROWING
BASE. (UK Borrowing Base).
"UK Borrowing Base Deficiency" has the meaning described in Section (C) UK
BORROWING BASE. (UK Borrowing Base).
"UK Borrowing Base Report" has the meaning described in Section (D) UK
BORROWING BASE REPORT. (UK Borrowing Base Report).
"UK Collateral" means the collective reference to all property of Norwich
and Berry UK from time to time to subject to the Liens of this Agreement,
the UK Security Documents and the other Financing Documents, together with
any and all cash and non-cash proceeds and products thereof.
"UK Commitment Fee" has the meaning described in Section (D) UK COMMITMENT
FEE. (the UK Commitment Fee).
"UK Credit Facilities Guaranty" means (i) the guaranty of payment of the
UK Obligations to NationsBank from the Parent, the Borrower and each
Subsidiary Guarantor and (ii) the guaranty of payment of the UK Obligations
of Berry UK to NationsBank from Norwich. each as the same may from time to
time be amended, restated, supplemented or otherwise modified.
"UK Credit Facility" means the UK Revolving Credit Facility or the UK Term
Loan Facility, as the case may be, and "UK Credit Facilities" means
collectively the UK Revolving Credit Facility and the UK Term Loan
Facility, and any and all other credit facilities now or hereafter extended
to Berry UK or Norwich under or secured by this Agreement and/or any of the
UK Security Documents.
"UK Excess Cash Flow" means for any annual period of
determination thereof and with respect to Berry UK and Norwich only, an
amount equal to fifty percent (50%) of the sum of (a) EBITDA, less (b) non-
financed Capital Expenditures permitted by Section (F) CAPITAL
EXPENDITURES.
Except for Permitted Acquisitions and permitted reinvestments of Permitted
Asset Dispositions, neither the Borrower, Berry UK nor Norwich will or will
permit any Subsidiary to, directly or indirectly, make any Capital
Expenditures in the aggregate for the Borrower, Berry UK, Norwich and their
respective Subsidiaries (taken as a whole) in amount which exceed the
following amounts at any time during the following fiscal years (for each
fiscal year, the "Capital Expenditure Ceiling" (Capital Expenditures), less
(c) cash income Taxes and alternative minimum Taxes, less (d) increases in
working capital, plus (e) decreases in working capital, less (f) Debt
Service, as shown on the annual financial statements for such annual
period, furnished to the Agent in accordance with Section (A) FINANCIAL
STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lender
(Financial Statements); or in the event that the Borrower fails to deliver
such financial statements to the Agent as and when required, the Agent
shall estimate, in its sole, but commercially reasonable discretion, the
amount of UK Excess Cash Flow for such period.
"UK Obligations" means and includes all present and future indebtedness,
obligations, and liabilities, whether now existing or contemplated or
hereafter arising, of Berry UK and/or Norwich to NationsBank under, arising
pursuant to, in connection with and/or on account of the provisions of this
Agreement, the UK Revolving Credit Note, the UK Term Note, or each UK
Security Document,. FOR PURPOSES OF THE INDENTURE, ALL UK OBLIGATIONS
UNDER AND IN CONNECTION WITH THE UK CREDIT FACILITIES CONSTITUTE AND ARE
HEREBY DEEMED "SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE.
"UK Revolving Credit Commitment" means the agreement of a Lender relating
to purchase of an undivided participating interest in the UK Revolving Loan
and advances thereunder subject to and in accordance with the provisions of
this Agreement; and "UK Revolving Credit Commitments" means the collective
reference to the UK Revolving Credit Commitment of each of the Lenders.
"UK Revolving Credit Commitment Period" means the period of time from the
Closing Date to the Business Day preceding the UK Revolving Credit
Termination Date.
"UK Revolving Credit Committed Amount" has the meaning described in Section
(A) UK REVOLVING CREDIT FACILITY. (UK Revolving Credit Facility).
"UK Revolving Credit Facility" means the facility established by
NationsBank pursuant to Section (A) UK REVOLVING CREDIT FACILITY. (UK
Revolving Credit Facility).
"UK Revolving Credit Note" has the meaning described in Section (E) UK
REVOLVING CREDIT NOTE. (UK Revolving Credit Notes).
"UK Revolving Credit Pro Rata Share" has the meaning described in Section
(B) PROCEDURE FOR MAKING ADVANCES UNDER THE UK REVOLVING LOAN. (Procedure
for Making Advances).
"UK Revolving Credit Termination Date" means the Revolving Credit
Termination Date.
"UK Revolving Credit Facility Fee" and "UK Revolving Credit Facility Fees"
have the meanings described in Section (I) UK REVOLVING CREDIT FACILITY
FEE. (UK Revolving Credit Facility Fee).
"UK Revolving Loan" has the meaning described in Section (A) UK REVOLVING
CREDIT FACILITY. (UK Revolving Credit Facility).
"UK Revolving Loan Account" has the meaning described in Section (H) UK
REVOLVING LOAN ACCOUNT. (UK Revolving Loan Account).
"UK Revolving Loan Mandatory Prepayment" and "UK Revolving Loan Mandatory
Prepayments" have the meanings described in Section (F) MANDATORY
PREPAYMENTS OF UK REVOLVING LOAN. (Mandatory Prepayments of UK Revolving
Loan).
"UK Revolving Loan Optional Prepayment" and "UK Revolving Loan Optional
Prepayments" have the meanings described in Section (G) OPTIONAL
PREPAYMENTS OF UK REVOLVING LOAN. (Optional Prepayments of UK Revolving
Loan).
"UK Security Agreement" means those certain debentures from Berry UK and
Norwich dated the date of this Agreement pursuant to which a Lien is
granted to NationsBank as security for the UK Obligations, as the same may
be amended, restated, supplemented or otherwise modified.
"UK Security Documents" means collectively any assignment, pledge
agreement, security agreement, mortgage, deed of trust, deed to secure
debt, financing statement and any similar instrument, document or agreement
under or pursuant to which a Lien is now or hereafter granted to, or for
the benefit of, NationsBank on any real or personal property of Berry UK
and/or Norwich solely to secure all or any portion of the UK Obligations,
including, obligations of Norwich under the UK Credit Facilities Guaranty
and the UK Security Agreement, all as the same may from time to time be
amended, restated, supplemented or otherwise modified.
"UK Stock Pledge Agreement" means that certain stock pledge, assignment and
security agreement dated as of the Closing Date from the Borrower to
NationsBank, in its capacity as Agent and in its individual capacity,
acting through its Sterling LIBOR Lending Office, as the same may from time
to time be amended, restated, supplemented or otherwise modified, which UK
Stock Pledge Agreement grants, pledges and assigns to NationsBank, as
security for the UK Obligations, and pledges and assigns to the Agent for
the ratable benefit of the Lenders and the Agent, as security for all of
the Obligations (other than the UK Obligations), a pledge and assignment of
sixty-five percent (65%) of the capital stock of Berry UK and grants,
pledges and assigns to NationsBank, as security for the UK Obligations, a
pledge and assignment of one hundred percent (100%) of the capital stock of
Berry UK, which one hundred percent (100%) pledge shall reduce to sixty-
five percent (65%) at such time as all obligations under the Subordinated
Debt have been paid in full.
"UK Term Loan" has the meaning described in SECTION 2.8UK TERM LOAN
FACILITY. (UK Term Loan Facility).
"UK Term Loan Commitment" and "UK Term Loan Commitments" have the meanings
described in Section (A) UK TERM LOAN COMMITMENTS. (UK Term Loan
Commitments).
"UK Term Loan Committed Amount" has the meaning described in Section (A) UK
TERM LOAN COMMITMENTS. (UK Term Loan Commitments).
"UK Term Loan Facility" means the facility established by NationsBank
pursuant to Section 2.8 (UK Term Loan Facility).
"UK Term Loan Mandatory Prepayment" and "UK Term Loan Mandatory
Prepayments" have the meanings described in Section 2.8.3 (Mandatory
Prepayments of UK Term Loan).
"UK Term Loan Optional Prepayment" and "UK Term Loan Optional Prepayments"
have the meanings described in Section 2.8.4 (Optional Prepayments of UK
Term Loans).
"UK Term Loan Pro Rata Share" has the meaning described in 2.8.1 (UK Term
Loan Facility).
"UK Term Loan Note" has the meaning described in Section 2.8.2
(Amortization of UK Term Loans).
"Uniform Commercial Code" means, unless otherwise provided in this
Agreement, the Uniform Commercial Code as adopted by and in effect from
time to time in the State or in any other jurisdiction, as applicable.
"Venture Holdings" means Venture Packaging, Inc., a corporation organized
and existing under the laws of the State Delaware, and its successors and
assigns.
"Venture Midwest" means Venture Packaging Midwest, Inc., a corporation
organized and existing under the laws of the State of Ohio, and its
successors and assigns.
"Venture Southeast" means Venture Packaging Southeast, Inc., a corporation
organized and existing under the laws of the State of South Carolina, and
its successors and assigns.
"Venture Stock" means all capital stock issued by Venture Holdings acquired
or to be acquired by Berry Venture, all in accordance with the Venture
Stock Purchase/Merger Transaction, together with any and all proceeds and
products thereof.
"Venture Stock Purchase/Merger Agreement" means that certain Agreement and
Plan of Merger dated as of August 29, 1997 by and among the Borrower, Berry
Venture, Venture Holdings, the Parent, Venture Southeast, Venture Midwest
and the shareholders of Venture Holdings, as the same may from time to time
be amended, restated, supplemented or modified, together with any and all
exhibits and schedules thereto, amendments, modifications, and supplements
thereto, restatements thereof, and substitutes therefor.
"Venture Stock Purchase/Merger Documents" means collectively the Venture
Stock Purchase Agreement and any and all other agreements, documents or
instruments, previously, now or hereafter executed and delivered by Venture
Holdings, Venture Southeast, Venture Midwest, Berry Venture, the Borrower,
or any other Person in connection with the Venture Stock Purchase/Merger
Transaction, as the same may from time to time be amended, restated,
supplemented and modified.
"Venture Stock Purchase/Merger Transaction" means (a the acquisition of all
issued and outstanding capital stock of Venture Holdings by Berry Venture
through a merger, (b) the merger of Venture Holdings into Berry Venture,
(c) the transfer to the Borrower of all issued and outstanding stock of
Venture Southeast and/or Venture Midwest by Berry Venture and/or Venture
Holdings, as contemplated by the Venture Stock Purchase/Merger Agreement,
and (d) the merger, consolidation, dissolution or liquidation of Berry
Venture.
"Virginia Design" means Virginia Design Packaging Corp., a corporation
organized and existing under the laws of the Commonwealth of Virginia, and
its successors and assigns.
"Virginia Design NewCo" means Berry Plastics Design Corporation, a
corporation organized and existing under the laws of the State of Delaware,
and its successors and assigns.
"Virginia Design Purchase Agreement" means that certain asset purchase
agreement dated as of May 13, 1997 by and among the Borrower, Virginia
Design NewCo, Virginia Design and the shareholders of Virginia Design, as
the same may from time to time be amended, restated, supplemented or
modified, together with any and all exhibits and schedules thereto,
amendments, modifications, and supplements thereto, restatements thereof,
and substitutes therefor.
"Virginia Design Purchase Agreement Documents" means collectively the
Virginia Design Purchase Agreement and any and all other agreements,
documents or instruments, previously, now or hereafter executed and
delivered by Virginia Design, Virginia Design NewCo, the Borrower, or any
other Person in connection with the Virginia Design Purchase Agreement
Transaction, as the same may from time to time be amended, restated,
supplemented and modified.
"Virginia Design Purchase Agreement Transaction" means the asset purchase
transaction contemplated by the Virginia Design Purchase Agreement.
"Wholly Owned Subsidiary" means any domestic United States Person all the
shares of stock or other equity interests of all classes of which (other
than directors' qualifying shares) at the time are owned directly or
indirectly by the Borrower and/or by one or more Wholly Owned Subsidiaries
of the Borrower.
"Wire Transfer Procedures" means the rules, policies and procedures adopted
and implemented by the Agent and its Affiliates at any time and from time
to time with respect to electronic funds transfers, including, without
limitation, the Security Procedures, all as the same may be amended,
restated, supplemented, terminated or otherwise modified at any time and
from time to time by the Agent upon notice to the Borrower in its
reasonable discretion.
SECTION 1.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS.
Unless otherwise defined herein, as used in this Agreement and in any
certificate, report or other document made or delivered pursuant hereto,
accounting terms not otherwise defined herein, and accounting terms only
partly defined herein, to the extent not defined, shall have the respective
meanings given to them under GAAP. Unless otherwise defined herein, all
terms used herein which are defined by the Uniform Commercial Code shall
have the same meanings as assigned to them by the Uniform Commercial Code
unless and to the extent varied by this Agreement. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references are references to articles, sections or
subsections of, or schedules or exhibits to, as the case may be, this
Agreement unless otherwise specified. As used herein, the singular number
shall include the plural, the plural the singular and the use of the
masculine, feminine or neuter gender shall include all genders, as the
context may require. Reference to any one or more of the Financing
Documents shall mean the same as the foregoing may from time to time be
amended, restated, substituted, extended, renewed, supplemented or
otherwise modified. Notwithstanding the foregoing, the Agent and the
Lenders agree that if GAAP at any time changes and such changes have an
affect on the computation of any of the covenants contained in FINANCIAL
COVENANTS. (Financial Covenants), the Agent, the Lenders and the Borrower
will negotiate in good faith to revise any such affected covenants so as to
reverse the effect of such change in GAAP. Whenever a term is used in
this Agreement to determine whether a threshold level or basket amount has
been achieved or exceeded, or to calculate a financial ratio or any other
amount and such term includes amounts in U.S. Dollars and amounts
denominated in Sterling, or solely in Sterling, the terms shall be
construed and/or calculated for purposes of this Agreement by (i)
determining the Dollar Currency Equivalent of each such amount to be
included in the aggregate as at the date of calculation, and adding all
such amounts to (ii) the amounts, if any, which are already in U.S.
Dollars.
ARTICLE II
THE CREDIT FACILITIES
SECTION 2.1 THE REVOLVING CREDIT FACILITy.
(A)REVOLVING CREDIT FACILITY.
Subject to and upon the terms of this Agreement, the Lenders collectively,
but severally, establish a revolving credit facility in favor of the
Borrower. The aggregate of all advances under the Revolving Credit
Facility is sometimes referred to in this Agreement collectively as the
"Revolving Loan".
The amount set forth below opposite each Lender's name is herein called
such Lender's "Revolving Credit Committed Amount" and the total of each
Lender's Revolving Credit Committed Amount is herein called the "Total
Revolving Credit Committed Amount". The proportionate share set forth
below opposite each Lender's name is herein called such Lender's "Revolving
Credit Pro Rata Share":
<TABLE>
<CAPTION>
Lender Revolving Credit Committed Revolving Credit Pro Rata Share
Amount
<S> <C> <C>
Fleet $11,926,000 23.8525%
GE Capital $14,607,500 29.215%
NationsBank $14,607,500 29.215%
Heller $8,859,000 17.7175%
Total Revolving Credit Committed $50,000,000 100%
Amount
</TABLE>
Article INeither the Agent nor any of the Lenders shall be responsible for
the Revolving Credit Commitment of any other Lender, nor will the failure
of any Lender to perform its obligations under its Revolving Credit
Commitment in any way relieve any other Lender from performing its
obligations under its Revolving Credit Commitment.
During the Revolving Credit Commitment Period, the Borrower may request
advances under the Revolving Credit Facility in accordance with the
provisions of this Agreement; provided that after giving effect to the
Borrower's request:
(i)the outstanding principal balance of each Lender's Pro Rata Share of the
Revolving Loan, the Letter of Credit Obligations, and the Special Source
Bond Obligations would not exceed the lesser of (i) such Lender's Pro Rata
Share of the Revolving Loan, the Letter of Credit Obligations, and the
Special Source Bond Obligations or (ii) such Lender's Pro Rata Share of the
Borrowing Base; and,
(ii)the aggregate outstanding principal balance of the Revolving Loan, all
Letter of Credit Obligations, and the Special Source Bond Obligations would
not exceed the lesser of (i) the Total Revolving Credit Committed Amount or
(ii) the Borrowing Base. In addition, the aggregate outstanding principal
balance of the Revolving Loan, all Letter of Credit Obligations, all
Special Source Bond Obligations and the UK Revolving Loan cannot exceed the
Total Revolving Credit Committed Amount.
(B)PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN.
The Borrower may borrow under the Revolving Credit Facility on any Business
Day. Advances under the Revolving Loan shall be deposited to a demand
deposit account of the Borrower with the Agent or shall be otherwise
applied as directed by the Borrower, which direction the Agent may require
to be in writing. Not later than 11:00 a.m. (Baltimore City Time) on the
date of the requested borrowing, the Borrower shall give the Agent oral or
written notice (a "Loan Notice") of the amount and (if requested by the
Agent) the purpose of the requested borrowing. Any oral Loan Notice shall
be confirmed in writing by the Borrower within three (3) Business Days
after the making of the requested advance under the Revolving Loan. At any
time within three (3) hours prior to funding, the Borrower may revoke a
Loan Notice; provided, that the Borrower shall pay to each Lender, as the
case may be, any amounts which may be due to such Lender under (D)
INDEMNITY. (Indemnity) by reason of such Lender having taken action in
reliance on the Loan Notice. Upon receipt of any such Loan Notice, the
Agent shall promptly notify each Lender of the amount of each advance to be
made by such Lender on the requested borrowing date under such Lender's
Revolving Credit Commitment.
NOT LATER THAN 1:00 P.M. (BALTIMORE CITY TIME) ON EACH REQUESTED BORROWING
DATE FOR THE MAKING OF ADVANCES UNDER THE REVOLVING LOAN, EACH LENDER
SHALL, IF IT HAS RECEIVED TIMELY NOTICE FROM THE AGENT OF THE BORROWER'S
REQUEST FOR SUCH ADVANCES, MAKE AVAILABLE TO THE AGENT, IN FUNDS
IMMEDIATELY AVAILABLE TO THE AGENT AT THE AGENT'S OFFICE SET FORTH IN
SECTION 9.1 NOTICES.
All notices, requests and demands to or upon the parties to this Agreement
shall be in writing and shall be deemed to have been given or made when
delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail,
return receipt requested, or when sent by overnight courier, on the
Business Day next following the day on which the notice is delivered to
such overnight courier, addressed as follow (Notices), such Lender's Pro
Rata Share of the advances to be made on such date.
IN ADDITION, THE BORROWER HEREBY IRREVOCABLY AUTHORIZES THE LENDERS AT ANY
TIME AND FROM TIME TO TIME, WITHOUT FURTHER REQUEST FROM OR NOTICE TO THE
BORROWER, TO MAKE ADVANCES UNDER THE REVOLVING LOAN WHICH THE AGENT, IN ITS
SOLE AND ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO PROTECT THE
INTERESTS OF THE AGENT AND/OR ANY OR ALL OF THE LENDERS UNDER THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ADVANCES UNDER THE REVOLVING LOAN
MADE TO COVER DEBIT BALANCES IN THE REVOLVING LOAN ACCOUNT, TO PAY
PRINCIPAL OF, AND/OR INTEREST ON, ANY LOAN, INCLUDING ANY TERM LOAN, THE
OBLIGATIONS (INCLUDING ANY LETTER OF CREDIT OBLIGATIONS AND ANY BOND LETTER
OF CREDIT OBLIGATIONS), AND/OR ENFORCEMENT COSTS, PRIOR TO, ON, OR AFTER
THE TERMINATION OF OTHER ADVANCES UNDER THIS AGREEMENT, REGARDLESS OF
WHETHER THE OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING LOAN WHICH THE
LENDERS MAY ADVANCE HEREUNDER EXCEEDS THE TOTAL REVOLVING CREDIT COMMITTED
AMOUNT. THE AGENT ACKNOWLEDGES AND AGREES THAT (A) THE OBLIGATION OF THE
LENDERS TO MAKE ADVANCES TO OR FOR THE ACCOUNT OF THE BORROWER PURSUANT TO
THIS PARAGRAPH SHALL BE SUBJECT TO THE PROVISIONS OF DISSEMINATION OF
INFORMATION.
The Agent will provide the Lenders with any information received by the
Agent from the Borrower, Berry UK or Norwich which is required to be
provided to the Agent or to the Lenders hereunder; PROVIDED, HOWEVER, that
the Agent shall not be liable to any one or more the Lenders for any
failure to do so, except to the extent that such failure is attributable to
the Agent's gross negligence or willful misconduct (Dissemination of
Information) and (b) no Lender shall have any obligation or commitment to
make any advance to or for the account of the Borrower under the Revolving
Loan (including any obligation or commitment to reimburse the Agent for
advances made by the Agent to or for the account of the Borrower under this
paragraph, except for advances made to cover Enforcement Costs for which
the Agent has not been duly reimbursed by the Borrower) unless otherwise
agreed in writing by such Lender, if and to the extent such Lender's Pro
Rata Share of the Revolving Loan and of the Letter of Credit Obligations
would exceed, with the making of such advance or reimbursement, such
Lender's Revolving Credit Committed Amount. Each Lender, however, shall
continue to be obligated to reimburse the Agent for any and all Enforcement
Costs incurred by the Agent in accordance with the provisions of this
Agreement if and to the extent the Borrower fails to reimburse the Agent
for such Enforcement Costs.
(C)BORROWING BASE.
As used in this Agreement, the term "Borrowing Base" means at any time, an
amount equal to the aggregate of (a) eighty-five percent (85%) of the
amount of Eligible Domestic Receivables, plus (b) the lesser of (i) sixty-
five percent (65%) of the amount of Eligible Domestic Inventory or (ii)
Twenty-five Million Dollars ($25,000,000).
The Borrowing Base shall be computed based on the Borrowing Base Report
most recently delivered to and accepted by the Agent in its reasonable
discretion. In the event the Borrower fails to furnish a Borrowing Base
Report required by Section (D) BORROWING BASE REPORT. (Borrowing Base
Report) the Agent may, in its reasonable discretion exercised from time to
time and without limiting other rights and remedies under this Agreement,
direct the Lenders to suspend the making of or limit advances under the
Revolving Loan. The Borrowing Base shall be reduced by all amounts
credited to the Collateral Account (if and to the extent a Collateral
Account is required by the terms of this Agreement) since the date of the
most recent Borrowing Base Report and by the amount of any Account or any
Inventory which was included in the Borrowing Base, but which the Agent
determines fails to meet the respective criteria applicable from time to
time for Eligible Domestic Receivables or Eligible Domestic Inventory.
If at any time the total of the aggregate principal amount of the Revolving
Loan and Outstanding Letter of Credit Obligations exceeds the Borrowing
Base, a borrowing base deficiency ("Borrowing Base Deficiency") shall
exist. Each time a Borrowing Base Deficiency exists, the Borrower, at the
sole and absolute discretion of the Agent exercised from time to time,
shall pay the Borrowing Base Deficiency ON DEMAND to the Agent for the
benefit of the Lenders from time to time.
Without implying any limitation on the Agent's discretion with respect to
the Borrowing Base, the criteria for Eligible Domestic Receivables and for
Eligible Domestic Inventory contained in the respective definitions of
Eligible Domestic Receivables and of Eligible Domestic Inventory are in
part based upon the business operations of the Borrower and the Subsidiary
Guarantors existing on or about the date of this Agreement and upon
information and records furnished to the Agent by the Borrower and the
Subsidiary Guarantors. If at any time or from time to time hereafter, the
business operations of the Borrower and/or any of the Subsidiary Guarantors
change in any material respect or such information and records furnished to
the Agent are materially incorrect or misleading, the Agent in its
reasonable discretion, may at any time and from time to time during the
duration of this Agreement change such criteria, add new criteria, make
existing criteria less onerous, or remove existing criteria; provided,
however, that any such change in, or addition or removal of criteria shall
be effective only after notice thereof from the Agent to the Borrower.
Except in emergency circumstances, the Agent agrees to use its commercially
reasonable efforts to consult with the Borrower prior to the effective date
of any addition to, or change in, eligibility criteria, but that the Agent
shall have no obligation or duty to reach an agreement with the Borrower as
a condition of, or prior to, imposing any changes in, or additions to,
eligibility criteria. The Agent shall communicate such changed or
additional criteria to the Borrower from time to time either orally or in
writing.
(D) BORROWING BASE REPORT.
The Borrower will furnish to the Agent no less frequently than monthly, as
soon as available, but in any event within twenty (20) days of the end of
each fiscal month, and, upon the occurrence of an Event of Default or as
otherwise provided in this Section (D) BORROWING BASE REPORT., at such
other times as may be requested by the Agent a report of the Borrowing Base
in the form attached hereto as Exhibit A-1 (each a "Borrowing Base Report";
collectively, the "Borrowing Base Reports") in the form required from time
to time by the Agent, appropriately completed and duly signed. The
Borrowing Base Report shall contain the amount and payments on the
Accounts, the value of Inventory, and the calculations of the Borrowing
Base, all in such detail, and accompanied by such supporting and other
information, as the Agent may from time to time reasonably request. Upon
the Agent's request and upon the creation of any Accounts, the Borrower
will provide the Agent with (a) confirmatory assignment schedules; (b)
copies of Account Debtor invoices; (c) evidence of shipment or delivery;
and (d) such further schedules, documents and/or information regarding the
Accounts and the Inventory as the Agent may reasonably require. The items
to be provided under this subsection shall be in form reasonably
satisfactory to the Agent, and certified as true and correct by a
Responsible Officer, and delivered to the Agent from time to time solely
for the Agent's convenience in maintaining records of the Collateral. The
Borrower's failure to deliver any such items to the Agent shall not affect,
terminate, modify, or otherwise limit the Liens of the Agent and the
Lenders in the Collateral. Notwithstanding the foregoing, the Borrower
acknowledges and agrees that the Agent, at its option, may require that the
Borrower furnish to the Agent weekly and, if requested by the Agent, daily
Borrowing Base Reports if any one of the following events occur (i) the
Borrower's and Subsidiary Guarantors' collective aggregate availability
under the Revolving Loan is at any times less than or equal to Fifteen
Million Dollars ($15,000,000), (ii) the Borrower and the Subsidiary
Guarantors, on a consolidated basis, incur three (3) consecutive months of
net operating losses, or (iii) the occurrence of an Event of Default (each
of the aforementioned events are herein called a "Borrowing Base Trigger
Event"). The Agent agrees that it shall not be entitled to require that
the Borrower furnish weekly or daily Borrowing Base Reports solely as the
result of the occurrence of a Borrowing Base Trigger Event, if the Agent
fails to so notify the Borrower within ninety (90) days of the date that
the Borrower has cured the Borrowing Base Trigger Event to the reasonable
satisfaction of the Agent. The foregoing sentence, however, shall not
prevent the Agent from later requiring more frequent Borrowing Base Reports
following the occurrence of any subsequent Borrowing Base Trigger Event;
provided, that the Agent so notifies the Borrower within ninety (90) days
of date that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of the Agent.
(E)REVOLVING CREDIT NOTES.
The obligation of the Borrower to pay each Lender's Pro Rata Share of the
Revolving Loan, with interest, shall be evidenced by a series of promissory
notes (as from time to time extended, amended, restated, supplemented or
otherwise modified, collectively the "Revolving Credit Notes" and
individually a "Revolving Credit Note"). Each Lender's Revolving Credit
Note shall be dated as of the date of this Agreement, shall be payable to
the order of such Lender at the times provided in the Revolving Credit
Note, and shall be in the principal amount of such Lender's Revolving
Credit Committed Amount. The Borrower acknowledges and agrees that, if the
outstanding principal balance of the Revolving Loan outstanding from time
to time exceeds the aggregate stated amount of the Revolving Credit Notes,
the excess shall bear interest at the rates provided from time to time for
advances under Revolving Loan evidenced by the Revolving Credit Notes and
shall be payable, with accrued interest, ON DEMAND. The Revolving Credit
Notes shall not operate as a novation of any of the Obligations or nullify,
discharge, or release any such Obligations or the continuing contractual
relationship of the parties hereto in accordance with the provisions of
this Agreement.
(F)MANDATORY PREPAYMENTS OF REVOLVING LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity) and in
addition to any mandatory prepayment required by the provisions of Section
(C) MANDATORY PREPAYMENTS OF TERM LOANS A. (Term Loan Mandatory
Prepayments), upon the request of the Agent pursuant to Section (C)
BORROWING BASE. (Borrowing Base) or Section 2.1.13 (Required Availability
under the Revolving Credit Facility), the Borrower shall make mandatory
prepayments (each a "Revolving Loan Mandatory Prepayment" and collectively,
the "Revolving Loan Mandatory Prepayments") of the Revolving Loan at any
time and from time to time in order to cover any Borrowing Base Deficiency
or to ensure compliance with Section 2.1.13, as applicable.
(G)OPTIONAL PREPAYMENTS OF REVOLVING LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity), the
Borrower shall have the option at any time and from time to time prepay
(each a "Revolving Loan Optional Prepayment" and collectively the
"Revolving Loan Optional Prepayments") the Revolving Loan, in whole or in
part without premium or penalty. Revolving Loan Optional Prepayments shall
be made following a timely and proper written notice to the Agent with
respect thereto specifying the date and amount of any intended Revolving
Loan Optional Prepayment. The amount to be prepaid shall be paid by the
Borrower to the Agent on the date specified for such prepayment. Any
amounts repaid or prepaid may be readvanced and reborrowed subject to the
provisions of this Agreement.
(H)THE COLLATERAL ACCOUNT.
Upon demand by the Agent following a Borrowing Base Trigger Event, the
Borrower will deposit, or cause to be deposited, all Items of Payment to a
bank account designated by the Agent and from which the Agent alone has
power of access and withdrawal (the "Collateral Account"). Each deposit
shall be made not later than the next Business Day after the date of
receipt of the Items of Payment. The Items of Payment shall be deposited
in precisely the form received, except for the endorsements of the Borrower
where necessary to permit the collection of any such Items of Payment,
which endorsement the Borrower hereby agree to make. In the event the
Borrower fails to do so, the Borrower hereby authorizes the Agent to make
the endorsement in the name of the Borrower. Prior to such a deposit, the
Borrower will not commingle any Items of Payment with the Borrower's other
funds or property, but will hold them separate and apart in trust and for
the account of the Agent for the benefit of the Lenders ratably and the
Agent. The Agent agrees that it shall not demand that the Borrower deposit
or cause to be deposited all Items of Deposit to the Collateral Account at
any time prior to the occurrence of a Borrowing Base Trigger Event. Once
the Agent has so made demand on the Borrower, unless otherwise agreed by
the Agent in writing, the Borrower shall continue to so deposit or cause to
be deposited all Items of Payment to the Collateral Account notwithstanding
that subsequent to such demand the Borrowing Base Trigger Event has been
cured, waived, otherwise remedied or is no longer applicable.
In addition, if the Agent has so made demand, if so directed by the Agent,
the Borrower shall direct the mailing of all Items of Payment from its
Account Debtors to one or more post-office boxes designated by the Agent,
or to such other additional or replacement post-office boxes pursuant to
the request of the Agent from time to time (collectively, the "Lockbox").
The Agent shall have unrestricted and exclusive access to the Lockbox.
Subject to the provisions of this Section, the Borrower hereby authorizes
the Agent to inspect all Items of Payment, and deposit such Items of
Payment in the Collateral Account. The Agent reserves the right, exercised
in its reasonable discretion from time to time, to provide to the
Collateral Account credit prior to final collection of an Item of Payment
and to disallow credit for any Item of Payment prior to final collection
which is reasonably unsatisfactory to the Agent. In the event Items of
Payment are returned to the Agent for any reason whatsoever, the Agent may,
in the exercise of its reasonable discretion from time to time, forward
such Items of Payment a second time. Any returned Items of Payment shall
be charged back to the Collateral Account, the Revolving Loan Account, or
other account, as appropriate.
The Agent will apply the whole or any part of the collected funds credited
to the Collateral Account against the Revolving Loan (or with respect to
Items for Payments which are not proceeds of Accounts or Inventory or after
a Default or an Event of Default, against any of the Obligations) or credit
such collected funds to a depository account of the Borrower with the
Agent, the order and method of such application to be in the sole
discretion of the Agent. Notwithstanding the foregoing, the Agent agrees
that prior to the occurrence of an Event of Default, the Agent shall use
its best efforts to apply collected funds credited to the Collateral
Account to the Obligations so as to avoid or minimize any amounts which
would be due under Section (D) INDEMNITY. (Indemnity) by reason of any
such application.
Notwithstanding the foregoing, the Agent agrees that it shall not be
entitled to require establishment of the Collateral Account and/or the
Lockbox as the result of the occurrence of a Borrowing Base Trigger Event,
if the Agent fails to so notify the Borrower within ninety (90) days of the
date that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of the Agent. The foregoing sentence, however,
shall not prevent the Agent from later requiring establishment of the
Collateral Account and/or a Lockbox following the occurrence of any
subsequent Borrowing Base Trigger Event; provided, that the Agent so
notifies the Borrower within ninety (90) days of the date that the Borrower
has cured the Borrowing Base Trigger Event to the reasonable satisfaction
of the Agent.
(I) REVOLVING LOAN ACCOUNT.
The Agent will establish and maintain a loan account on its books (the
"Revolving Loan Account") to which the Agent will (a) DEBIT (i) the
principal amount of each advance under the Revolving Loan made by the
Lenders hereunder as of the date made, (ii) the amount of any interest
accrued on the Revolving Loan as and when due, and (iii) any other amounts
due and payable by the Borrower to the Agent and/or the Lenders from time
to time under the provisions of this Agreement in connection with the
Revolving Loan, including, without limitation, Enforcement Costs, Fees,
late charges, and service, collection and audit fees, as and when due and
payable, and (b) CREDIT all payments made by the Borrower to the Agent on
account of the Revolving Loan as of the date made including, without
limitation, funds credited to the Revolving Loan Account from the
Collateral Account. The Agent may debit the Revolving Loan Account for the
amount of any Item of Payment that is returned to the Agent unpaid. All
credit entries to the Revolving Loan Account are conditional and shall be
readjusted as of the date made if final and indefeasible payment is not
received by the Agent in cash or solvent credits. The Borrower hereby
promises to pay to the order of the Agent for the ratable benefit of the
Lenders, on the Revolving Credit Termination Date, an amount equal to the
excess, if any, of all debit entries over all credit entries recorded in
the Revolving Loan Account under the provisions of this Agreement. Any and
all periodic or other statements or reconciliations, and the information
contained in those statements or reconciliations, of the Revolving Loan
Account shall be presumed conclusively to be correct, and shall constitute
an account stated between the Agent, the Lenders and the Borrower unless
the Agent receives specific written objection thereto from the Borrower
and/or any Lender within thirty (30) Business Days after such statement or
reconciliation shall have been sent by the Agent. Any and all periodic or
other statements or reconciliations, and the information contained in those
statements or reconciliations, of the Revolving Loan Account shall be
final, binding and conclusive upon the Borrower in all respects, absent
manifest error, unless the Agent receives specific written objection
thereto from the Borrower within thirty (30) Business Days after such
statement or reconciliation shall have been sent by the Agent.
(J)REVOLVING CREDIT UNUSED LINE FEE.
The Borrower shall pay to the Agent for the ratable benefit of the Lenders
a quarterly Revolving Credit Facility fee (collectively, the "Revolving
Credit Unused Line Fees" and individually, a "Revolving Credit Unused Line
Fee") in an amount equal to thirty (30) basis points per annum (calculated
on the basis of actual number of days elapsed in a year of 360 days) and
calculated on average daily unused and undisbursed portion of the Total
Revolving Credit Committed Amount,, each as in effect from time to time
accruing during each quarterly period. The accrued and unpaid Revolving
Credit Unused Line Fee shall be paid by the Borrower to the Agent on the
first day of each quarter, in arrears, commencing on the first such date
following the date hereof, and on the Revolving Credit Termination Date.
(K)EARLY TERMINATION FEE.
In the event of the termination of the Revolving Credit Commitments, the
Borrower shall pay a fee to the Agent for the benefit of the Lenders
ratably (the "Early Termination Fee"), equal to following amount at the
following times:
<TABLE>
<CAPTION>
Period Early Termination Fee
<S> <C>
First Closing Date, through and including the day 2% of the sum of the Total Revolving Credit
preceding the first anniversary date of the First Committed Amount
Closing Date
First anniversary date of the First Closing Date 1% of the sum of the Total Revolving Credit
through and including the day preceding the second Committed Amount
anniversary date of the First Closing Date
Second anniversary date of the First Closing Date 1/2 % of the sum of the Total Revolving Credit
through and including the day preceding the third Committed Amount
anniversary date of the First Closing Date
</TABLE>
In the event of a partial reduction of the Revolving Credit Commitments,
the Borrower shall pay to the Agent for the benefit of the Lenders ratably,
an Early Termination Fee equal to following amount at the following times:
<TABLE>
<CAPTION>
Period Early Termination Fee
<S> <C>
First Closing Date, through and including the day 2% of the Total Revolving Credit Optional
preceding the first anniversary date of the First Reduction
Closing Date
First anniversary date of the First Closing Date 1% of the Total Revolving Credit Optional
through and including the day preceding the second Reduction
anniversary date of the First Closing Date
Second anniversary date of the First Closing Date 1/2 % of the Total Revolving Credit Optional
through and including the day preceding the third Reduction
anniversary date of the First Closing Date
</TABLE>
In the event the Term Loans are refinanced or replaced with the proceeds of
Indebtedness for Borrowed Money, in whole or in part, the Borrower shall
pay to the Agent for the benefit of the Lenders ratably, an Early
Termination Fee equal to following amount at the following times:
<TABLE>
<CAPTION>
Period Early Termination Fee
<S> <C>
First Closing Date, through and including the day 2% of the amount prepaid
preceding the first anniversary date of the First
Closing Date
First anniversary date of the First Closing Date 1% of the amount prepaid
through and including the day preceding the second
anniversary date of the First Closing Date
Second anniversary date of the First Closing Date 1/2 % of the amount prepaid
through and including the day preceding the third
anniversary date of the First Closing Date
</TABLE>
Notwithstanding the foregoing, the Borrower shall not be required to pay
the Early Termination Fee in connection with such a refinancing or
replacement of the Term Loans and the termination or partial reduction of
the Revolving Credit Commitments from the proceeds of a public offering of
Securities by the Borrower or the Parent. Nothing contained in this
Section shall be deemed a waiver by the Agent or any Lender of any Default
or Event of Default which results from any such public offering of
Securities by the Borrower and/or the closing of a purchase, acquisition or
investment otherwise prohibited by the provisions of this Agreement, which
does not result in a prepayment of all Obligations and a termination of all
Letters of Credit, all Bond Letters of Credit and Commitments.
In addition, if the Borrower, Berry UK or Norwich requests that the
Requisite Lenders consent to the purchase or acquisition of, or investment
in, any assets or any Person which would not otherwise be permitted by the
provisions of this Agreement, and the Requisite Lenders refuse to agree and
consent to any such purchase, acquisition or investment, the Borrower,
Berry UK or Norwich may, at their option, prepay all of the Obligations in
full and terminate all of the Commitments and shall have no obligation to
pay an Early Termination Fee in connection with any such prepayment and
termination; provided, that (a) all Letters of Credit and all Bond Letters
of Credit are terminated or otherwise secured by the issuance of one or
more back-to-back letters of credit from an issuer and containing terms
reasonably acceptable to the Agent, (b) all Obligations are paid in full,
(c) all Commitments are terminated, and (d) to the extent the Borrower or
any Subsidiary intends to finance such purchase, acquisition or investment,
any one of the Lenders have not agreed to provide such financing after
having been first offered the opportunity by the Borrower or such
Subsidiary to provide such financing substantially on the same terms and
conditions as are actually proposed to the Borrower or such Subsidiary from
another lender or financial institution. A Lender shall be deemed to have
so declined to provide the requested financing for the proposed
acquisition, purchase or other investment unless such Lender has otherwise
notified the Borrower or such Subsidiary in writing within fifteen (15)
days of its receipt of all proposed material terms and conditions of the
proposed acquisition, purchase or investment and any requested financing
that such Lender wishes to participate in such financing. The Lenders
understand and agree that the Borrower or any Subsidiary shall be required
only to furnish to the Agent and the Lenders a term sheet summarizing the
proposed terms for such financing to be prepared by the Borrower or any
Subsidiary based on actual terms proposed by such other lender or financial
institution, and that neither the Borrower, any Subsidiary nor any such
other lender or financial institution shall have any obligation to furnish
to the Agent or the Lenders copies of actual commitments, proposals or
correspondence from such other lender or financial institution or
independent verification of any such proposed terms.
Payment of all or any portion of the Obligations relating to the Revolving
Loan and/or the Term Loans and/or termination or reduction of any of the
Commitments, in whole or in part, by or on behalf of the Borrower or any
Subsidiary, by court order or otherwise, following and as a result of the
institution of any bankruptcy proceeding by or against the Borrower or any
Subsidiary, shall be deemed to be a prepayment of the Revolving Loan and
the Term Loans, and/or termination or reduction of the Commitments, as
appropriate, subject to payment of the Early Termination Fee provided in
this subsection if any or all of the Obligations are actually paid and/or
any or all of the Commitments are terminated or reduced at any time during
the periods set forth above. All Early Termination Fees shall be paid to
the Agent for the ratable benefit of the Lenders.
(L) OPTIONAL REDUCTION OF REVOLVING CREDIT COMMITTED AMOUNT.
Subject to the provisions of Section (K) EARLY TERMINATION FEE. (Early
Termination Fee), the Borrower shall have the right to reduce permanently
(each a "Revolving Credit Optional Reduction" and collectively the
"Revolving Credit Optional Reductions") the Total Revolving Credit
Committed Amount in effect from time to time in the amount of any integral
multiple of Five Hundred Thousand Dollars ($500,000), upon at least five
(5) Business Days prior written notice to the Agent specifying the date and
amount of such Revolving Credit Optional Reduction; provided, that no
Revolving Credit Optional Reduction shall be permitted if, after giving
effect thereto and to any Revolving Loan Optional Prepayment made on the
effective date thereof, the then outstanding principal amount of the
Revolving Loan and Outstanding Letter of Credit Obligations exceeds the
Total Revolving Credit Committed Amount as so reduced. Such notice shall
be irrevocable as to the amount and date of such Revolving Credit Optional
Reduction. After each such Revolving Credit Optional Reduction, the
Revolving Credit Unused Line Fee provided for in Section (J) REVOLVING
CREDIT UNUSED LINE FEE. (Revolving Credit Unused Line Fees) and the Early
Termination Fee, if any, provided for in Section (K) EARLY TERMINATION FEE.
(Early Termination Fee) shall be calculated with respect to the Revolving
Credit Committed Amount as so reduced. Any Revolving Credit Optional
Reduction shall be made to each Lender's Revolving Credit Commitment in
accordance with its Pro Rata Share of such Revolving Credit Optional
Reduction.
(M)REQUIRED AVAILABILITY UNDER THE REVOLVING CREDIT FACILITY.
On an average monthly basis, tested of the last day of each calendar month,
commencing with the first such date following the Closing Date, the
outstanding principal amount of the Revolving Loan shall not exceed an
amount equal to (i) the lesser of the Borrowing Base, or (ii) the Total
Revolving Credit Committed Amount, MINUS $10,000,000 (the "Required
Availability"). The Borrower shall make a Revolving Loan Mandatory
Prepayment pursuant to the provisions of Section (F) MANDATORY PREPAYMENTS
OF REVOLVING LOAN. to the extent necessary to achieve and maintain
compliance with this Section. The failure of the Borrower to make any such
Revolving Loan Mandatory Prepayment shall constitute a Default, but shall
not constitute an Event of Default unless such failure to make the required
Revolving Loan Mandatory Prepayment continues uncured for a period of
fourteen (14) days or the Borrower otherwise fails to attain and maintain
the Required Availability within such fourteen (14) day period.
SECTION 2.2THE TERM LOAN A FACILITY.
(A)TERM LOAN A COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally
agrees to make a loan (each a "Term Loan A"; and collectively, the "Term
Loans A") to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan A Committed
Amount"). The total of each Lender's Term Loan A Committed Amount is
herein called the "Total Term Loan A Committed Amount". The proportionate
share set forth below opposite each Lender's name is herein called such
Lender's "Term Loan A Pro Rata Share":
<PAGE>
<TABLE>
<CAPTION>
Lender Term Loan A Committed Amount Term Loan A Pro Rata Share
<S> <C> <C>
Fleet $6,608,534 23.8525%
GE Capital $8,094,308 29.215%
Heller $4,908,850 17.7175%
NationsBank 8,094,308 29.215%
Total Term Loan A Committed Amount $27,706,000 100%
</TABLE>
The Borrower understands and agrees that the Term Loans A have been fully
funded and that none of the Lenders shall have any further obligation or
commitment to advance any additional portion of their respective Term Loan A
Committed Amount.
The obligation of each Lender to make a Term Loan A is several and is limited
to its Term Loan A Committed Amount, and such obligation of each Lender is
herein called its "Term Loan A Commitment". The Term Loan A Commitment of each
of the Lenders are herein collectively referred to as the "Term Loan A
Commitments". The Agent shall not be responsible for the Term Loan A
Commitment of any Lender; and similarly, none of the Lenders shall be
responsible for the Term Loan A Commitment of any of the other Lenders; the
failure, however, of any Lender to perform its Term Loan A Commitment shall not
relieve any of the other Lenders from the performance of their respective Term
Loan A Commitments.
(B)AMORTIZATION OF TERM LOANS A; THE TERM LOAN A NOTES.
The unpaid principal balance of the Term Loans A shall be due and payable in
quarterly installments of principal on each Installment Payment Date, each in
the following amounts at the following times:
<TABLE>
<CAPTION>
DUE DATE AMOUNT
<S> <C>
August 1, 1998 $297,000
November 1, 1998 $297,000
February 1, 1999 $753,000
May 1, 1999 $753,000
August 1, 1999 $753,000
November 1, 1999 $753,000
February 1, 2000 $1,200,000
May 1, 2000 $1,200,000
August 1, 2000 $1,200,000
November 1, 2000 $1,200,000
February 1, 2001 $1,700,000
May 1, 2001 $1,700,000
August 1, 2001 $1,700,000
November 1, 2001 $1,700,000
January 21, 2002 $12,500,000
</TABLE>
Unless sooner paid, the unpaid principal balance of the Term Loans A, together
with interest accrued and unpaid thereon, shall be due and payable in full on
the Revolving Credit Termination Date.
The obligation of the Borrower to pay the Term Loans A, with interest, shall be
evidenced by a series of amended and restated promissory notes (each as from
time to time extended, amended, restated, supplemented or otherwise modified, a
"Term Loan A Note" and collectively, the "Term Loan A Notes"). Each Term Loan
A Note shall be dated as the Second Closing Date and shall be payable to the
order of a Lender at the times provided in the Term Loan A Note, and shall be
in the principal amount of such Lender's Term Loan A Committed Amount.
(C)MANDATORY PREPAYMENTS OF TERM LOANS A.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower shall
make the following mandatory prepayments (each a "Term Loan A Mandatory
Prepayment" and collectively the "Term Loan A Mandatory Prepayments") of the
Term Loans A to the Agent for the ratable benefit of the Lenders:
(i)To the extent the Net Proceeds of any Asset Disposition (excluding any Asset
Disposition by Berry UK or Norwich) (including the sale and issuance of any
Securities, but excluding (i) the sale or transfer of all Securities issued by
Venture Southeast and/or Venture Southwest to the Borrower and (ii) the merger,
liquidation, consolidation or dissolution of Berry Venture, as contemplated by
the Venture Stock Purchaser/Merger Transaction) by the Borrower or any
Subsidiary Guarantor cause the aggregate of all such Asset Dispositions in any
fiscal year to exceed Two Hundred Fifty Thousand Dollars ($250,000), all of
such excess shall be paid to the Agent as a Term Loan A Mandatory Prepayment,
or if the Term Loans A have been paid in full shall be paid to the Agent as a
Term Loan B Mandatory Prepayment, or if the Term Loans B have been paid in full
shall be paid to the Agent as a Revolving Loan Mandatory Prepayment.
Notwithstanding the foregoing, the Borrower shall not be required to make a
Term Loan A Mandatory Prepayment in connection with any public, private or Rule
144(a) offering of Securities which does not generate any proceeds (other than
nominal proceeds), including, for example, the issuance or exercise of warrants
with registration rights or the issuance of a resale prospectus for any
existing shares of capital stock. In addition, the Borrower shall not be
required to make a Term Loan A Mandatory Prepayment to the extent of any non-
cash Net Proceeds which are Indebtedness for Borrowed Money received by the
Borrower or any Subsidiary Guarantor in payment of the purchase price of an
Asset which is the subject of a Permitted Asset Disposition; provided that,
upon the Agent's demand, the Borrower and/or the Subsidiary Guarantor, as the
case may, shall take all such actions as shall be reasonably requested by the
Agent to grant to the Agent for its benefit and the ratable benefit of the
Lenders a perfected Lien on any such Indebtedness for Borrowed Money and
provided further that the principal amount of all such Indebtedness for
Borrowed Money, together with the Indebtedness for Borrowed Money referenced in
(C) MANDATORY PREPAYMENTS OF TERM LOAN B.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower shall
make mandatory prepayments (each a "Term Loan B Mandatory Prepayment" and
collectively the "Term Loan B Mandatory Prepayments") of the Term Loans B to
the Agent for the ratable benefit of the Lenders annually. Each Term Loan B
Mandatory Prepayment shall be in the amount of the Excess Cash Flow for the
then preceding fiscal year and shall be payable on the date the Borrower shall
furnish to the Agent the annual financial statements referred to in (A)
FINANCIAL STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lenders:
(Financial Statements). If, however, the Borrower fails to furnish such
financial statements in any given year as and when required, the Borrower shall
be required to pay the Term Loan B Mandatory Prepayment payable during such
calendar year on the date which is ninety (90) days after the close of the
Borrower's then preceding fiscal year. The Borrower shall pay to the Agent on
the date of each required Term Loan B Mandatory Prepayment accrued interest to
such date on the amount prepaid. Each partial Term Loan B Mandatory Prepayment
shall be applied as follows: (i) fifty percent (50%) to principal against the
principal installments of the Term Loans B in the inverse order of their
maturities and (ii) fifty percent (50%) to all of the remaining principal
installments due on account of the Term Loans B on a pro rata basis.
Notwithstanding anything to the contrary contained herein, the Borrower shall
not be required to pay an Early Termination Fee as the result of a Term Loan B
Mandatory Prepayment.(a) (Mandatory Prepayments of Term Loan B) shall not
exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000).
(ii)Immediately upon closing and consummation of any public or
private offering of Indebtedness by the Borrower or any Subsidiary Guarantor
(excluding (i) the sale or transfer of all Securities issued by Venture
Southeast and/or Venture Southwest to the Borrower and (ii) the merger,
liquidation, consolidation or dissolution of Berry Venture, as contemplated by
the Venture Stock Purchaser/Merger Transaction), except for Indebtedness for
Borrowed Money permitted by (D) INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will create, incur, assume
or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, any Indebtedness for Borrowed Money, except: (Indebtedness), other
than subsection (d) of (D) INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will create, incur, assume
or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, any Indebtedness for Borrowed Money, except, the Borrower shall make
a Term Loan A Mandatory Prepayment in an amount equal to one hundred percent
(100%) of the Net Proceeds of such public or private offering; provided that a
Term Loan A Mandatory Prepayment shall not be required as the result of the
issuance of Indebtedness by the Borrower or any Subsidiary Guarantor, if (A)
such Indebtedness is issued pursuant to and is permitted by subsection (d) of
(D) INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will create, incur, assume
or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer
to exist, any Indebtedness for Borrowed Money, excep and such Indebtedness
constitutes a "Refinancing Indebtedness" as defined in subsection (n) of (D)
INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will create, incur, assume or suffer
to exist, or permit any Subsidiary to create, incur, assume or suffer to exist,
any Indebtedness for Borrowed Money, excep, (B) if the Net Proceeds of such
Indebtedness are used, in whole, to finance a Permitted Acquisition or Capital
Expenditures as and to the extent permitted by the provisions of this
Agreement; and (C) the aggregate amount of Indebtedness under subsections (i)
and (ii) of this subsection (b) and the amount of Indebtedness under
subsections (i) and (ii) of (C) MANDATORY PREPAYMENTS OF TERM LOAN B.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower shall
make mandatory prepayments (each a "Term Loan B Mandatory Prepayment" and
collectively the "Term Loan B Mandatory Prepayments") of the Term Loans B to
the Agent for the ratable benefit of the Lenders annually. Each Term Loan B
Mandatory Prepayment shall be in the amount of the Excess Cash Flow for the
then preceding fiscal year and shall be payable on the date the Borrower shall
furnish to the Agent the annual financial statements referred to in (A)
FINANCIAL STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lenders:
(Financial Statements). If, however, the Borrower fails to furnish such
financial statements in any given year as and when required, the Borrower shall
be required to pay the Term Loan B Mandatory Prepayment payable during such
calendar year on the date which is ninety (90) days after the close of the
Borrower's then preceding fiscal year. The Borrower shall pay to the Agent on
the date of each required Term Loan B Mandatory Prepayment accrued interest to
such date on the amount prepaid. Each partial Term Loan B Mandatory Prepayment
shall be applied as follows: (i) fifty percent (50%) to principal against the
principal installments of the Term Loans B in the inverse order of their
maturities and (ii) fifty percent (50%) to all of the remaining principal
installments due on account of the Term Loans B on a pro rata basis.
Notwithstanding anything to the contrary contained herein, the Borrower shall
not be required to pay an Early Termination Fee as the result of a Term Loan B
Mandatory Prepayment.(b) (Mandatory Prepayments of Term Loan B), do not exceed
Twenty Million Dollars ($20,000,000).
The Borrower shall pay to the Agent on the date of each required Term Loan A
Mandatory Prepayment accrued interest to such date on the amount prepaid. Each
partial Term Loan A Mandatory Prepayment shall be applied to all of the
remaining principal installments due on account of the Term Loans A on a pro
rata basis. Notwithstanding anything to the contrary contained herein, the
Borrower shall not be required to pay an Early Termination Fee as the result of
a Term Loan A Mandatory Prepayment.
(D)OPTIONAL PREPAYMENTS OF TERM LOANS A.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower may, at
its option, at any time and from time to time, prepay (each a "Term Loan A
Optional Prepayment" and collectively the "Term Loan A Optional Prepayments")
the Term Loans A, in whole or in part, upon five (5) Business Days prior
written notice, specifying the date and amount of prepayment. The amount to be
so prepaid, together with interest accrued thereon to date of prepayment if the
amount is intended as a prepayment of the Term Loans A in whole, shall be paid
by the Borrower to the Agent for the ratable benefit of the Lenders on the date
specified for such prepayment. Partial Term Loan A Optional Prepayments shall
be applied to all of the remaining principal installments due on account of the
Term Loans A on a pro rata basis.
SECTION 2.3TERM LOAN B FACILITY.
(A)TERM LOAN B COMMITMENTS.
Subject to and upon the terms of this Agreement, each Lender severally agrees
to make a loan (each a "Term Loan B"; and collectively, the "Term Loans B") to
the Borrower in the principal amount set forth below opposite such Lender's
name (herein called such Lender's "Term Loan B Committed Amount"). The total
of each Lender's Term Loan B Committed Amount is herein called the "Total Term
Loan B Committed Amount". The proportionate share set forth below opposite
each Lender's name is herein called such Lender's "Term Loan B Pro Rata Share":
<TABLE>
<CAPTION>
Lender Term Loan B Committed Amount Term Loan B Pro Rata Share
<S> <C> <C>
Fleet $8,595,846 23.8525%
GE Capital $10,528,136 29.215%
Heller $6,384,632 17.7175%
NationsBank $10,528,136 29.215%
Total Term Loan B Committed $36,036,750 100%
Amount
</TABLE>
At the request of the Borrower, the Lenders agreed to increase the Total Term
Loan B Committed Amount from $30,000,000 to $36,036,750 (the "Term Loan B
Increase"). The Borrower covenants and agrees to use the Term Loan B Increase
solely to make an equity contribution and/or intercompany loan to Berry UK to
enable Berry UK to finance the acquisition of the Norwich Stock in accordance
with the provisions of the Norwich Stock Purchase Transaction or for other
Permitted Uses in connection with the purchase of the Norwich Stock. The
Borrower represents and warrants to the Agent and the Lenders that as of the
Closing Date the Term Loan B Increase is equal to the lesser of (i) Eight
Million Dollars ($8,000,000) and (ii) the difference between (x) the total
purchase price (including fees and expenses reasonably incurred in connection
with the closing and consummation of the Norwich Stock Purchase Transaction) to
be paid by Berry UK for the Norwich Stock in accordance with the terms of the
Norwich Stock Purchase Agreement and (y) the Total UK Term Loan Committed
Amount.
The obligation of each Lender to make a Term Loan B (including its Pro Rata
Share of the Term Loan B Increase) is several and is limited to its Term Loan B
Committed Amount, and such obligation of each Lender is herein called its "Term
Loan B Commitment". The Term Loan B Commitment of each of the Lenders are
herein collectively referred to as the "Term Loan B Commitments". The Agent
shall not be responsible for the Term Loan B Commitment of any Lender; and
similarly, none of the Lenders shall be responsible for the Term Loan B
Commitment of any of the other Lenders; the failure, however, of any Lender to
perform its Term Loan B Commitment shall not relieve any of the other Lenders
from the performance of their respective Term Loan B Commitments.
(B)AMORTIZATION OF TERM LOANS B; THE TERM LOAN B NOTES.
The unpaid principal balance of the Term Loans B shall be due and payable in
quarterly installments of principal on each Installment Payment Date, each in
the following amounts at the following times:
<TABLE>
<CAPTION>
DUE DATE AMOUNT
<S> <C>
July 1, 1998 $1,000,000
October 1, 1998 $3,185,160
January 1, 1999 $3,185,160
April 1, 1999 $3,185,160
July 1, 1999 $3,185,160
October 1, 1999 $3,185,160
January 1, 1999 $3,185,160
April 1, 2000 $3,185,160
July 1, 2000 $3,185,160
October 1, 2000 $3,185,160
January 1, 2000 $3,185,160
April 1, 2001 $3,185,150
</TABLE>
Unless sooner paid, the unpaid principal balance of the Term Loans B, together
with interest accrued and unpaid thereon, shall be due and payable in full on
April 1, 2001.
The obligation of the Borrower to pay the Term Loans B, with interest, shall be
evidenced by a series of promissory notes (each as from time to time extended,
amended, restated, supplemented or otherwise modified, the "Term Loan B Note"
and collectively, the "Term Loan B Notes"). Each Term Loan B Note shall be
dated as the date hereof and shall be payable to the order of a Lender at the
times provided in the Term Loan B Note, and shall be in the principal amount of
such Lender's Term Loan B Committed Amount, including its Pro Rata Share of the
Term Loan B Increase.
(C)MANDATORY PREPAYMENTS OF TERM LOAN B.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower shall
make mandatory prepayments (each a "Term Loan B Mandatory Prepayment" and
collectively the "Term Loan B Mandatory Prepayments") of the Term Loans B to
the Agent for the ratable benefit of the Lenders annually. Each Term Loan B
Mandatory Prepayment shall be in the amount of the Excess Cash Flow for the
then preceding fiscal year and shall be payable on the date the Borrower shall
furnish to the Agent the annual financial statements referred to in (A)
FINANCIAL STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lender
(Financial Statements). If, however, the Borrower fails to furnish such
financial statements in any given year as and when required, the Borrower shall
be required to pay the Term Loan B Mandatory Prepayment payable during such
calendar year on the date which is ninety (90) days after the close of the
Borrower's then preceding fiscal year. The Borrower shall pay to the Agent on
the date of each required Term Loan B Mandatory Prepayment accrued interest to
such date on the amount prepaid. Each partial Term Loan B Mandatory Prepayment
shall be applied as follows: (i) fifty percent (50%) to principal against the
principal installments of the Term Loans B in the inverse order of their
maturities and (ii) fifty percent (50%) to all of the remaining principal
installments due on account of the Term Loans B on a pro rata basis.
Notwithstanding anything to the contrary contained herein, the Borrower shall
not be required to pay an Early Termination Fee as the result of a Term Loan B
Mandatory Prepayment.
(D) OPTIONAL PREPAYMENTS OF TERM LOANS B.
Subject to the provisions of (D) INDEMNITY. (Indemnity), the Borrower may, at
its option, at any time and from time to time, prepay (each a "Term Loan B
Optional Prepayment" and collectively the "Term Loan B Optional Prepayments")
the Term Loans B, in whole or in part, upon five (5) Business Days prior
written notice, specifying the date and amount of prepayment. The amount to be
so prepaid, together with interest accrued thereon to date of prepayment if the
amount is intended as a prepayment of the Term Loans B in whole, shall be paid
by the Borrower to the Agent for the ratable benefit of the Lenders on the date
specified for such prepayment. Partial Term Loan B Optional Prepayments shall
be applied as follows: (a) fifty percent (50%) to principal against the
principal installments of the Term Loans B in the inverse order of their
maturities and (b) fifty percent (50%) to all of the remaining principal
installments due on account of the Term Loans B on a pro rata basis.
(E)TERM LOAN B FEES.
The Borrower shall pay to the Agent for the ratable benefit of the Lenders, a
quarterly fee, in arrears commencing with the earlier of (a) any quarter in
which an Event of Default existed or (b) the quarter ending September 30, 1998,
(collectively, the "Term Loan B Fees" and individually, a "Term Loan B Fee"),
in an amount to be determined based on the Pricing Ratio and calculated on the
average quarterly outstanding balance of the Term Loans B during such quarterly
period, as follows:
<TABLE>
<CAPTION>
Pricing Ratio Per annum Quarterly Term
Loan B Fee
<S> <C>
Greater than or equal to 6.0 to 1.0 37.5 basis .points
Greater than or equal to 5.0 to 1.0, but 25 basis points
less than 5.99 to 1.0
Greater than or equal to 4.50 to 1.0, but 12.5 basis points
less than 4.99 to 1.0
less than 4.50 to 1.0 0 basis points
</TABLE>
Each accrued and unpaid Term Loan B Fee shall be paid by the Borrower to the
Agent at the time the quarterly statements are furnished under (iii) Quarterly
STATEMENTS AND CERTIFICATES. The Borrower shall furnish to the Agent for
distribution to the Lenders as soon as available, but in no event more than
forty-five (45) days after the close of the Borrower's fiscal quarters (other
than the final fiscal quarter), consolidated and consolidating balance sheets
of the Borrower, Berry UK, Norwich and all other Subsidiaries as of the close
of such period, consolidated and consolidating income, cash flows and changes
in shareholders equity statements for such period, and a Compliance
Certificate, in substantially the form attached to this Agreement as EXHIBIT D,
containing a detailed computation of each financial covenant in this Agreement
which is applicable for the period reported, each prepared by a Responsible
Officer of or on behalf of the Borrower in a format acceptable to the Agent,
all as prepared and certified by a Responsible Officer of the Borrower and
accompanied by a certificate of that officer stating whether any event has
occurred which constitutes a Default or an Event of Default hereunder, and, if
so, stating the facts with respect thereto. (Quarterly Statements), in arrears,
commencing September 30, 1998, and on the maturity date of the Term Loans B;
provided, however, in the event that the Borrower fails to deliver such
financial statements to the Agent as and when required, the Agent may estimate,
in its reasonable discretion and without waiving any Default or Event of
Default, the amount of the Term Loan B Fee, which amount shall be due and
payable ON DEMAND by the Agent.
SECTION 2.4 THE LETTER OF CREDIT FACILITY.
(A)LETTERS OF CREDIT.
Subject to and upon the provisions of this Agreement, and as a part of the
Revolving Credit Commitments, the Borrower may obtain standby or commercial
letters of credit (as the same may from time to time be amended, supplemented
or otherwise modified, each a "Letter of Credit" and collectively the "Letters
of Credit") from the Agent from time to time from the First Closing Date until
the Business Day preceding the Revolving Credit Termination Date. The Borrower
will not be entitled to obtain a Letter of Credit unless (a) the Borrower is
then able to obtain a Revolving Loan from the Lenders in an amount not less
than the proposed stated amount of the Letter of Credit requested by the
Borrower, and (b) the sum of the then Outstanding Letter of Credit Obligations
(including the amount of the requested Letter of Credit) does not exceed Five
Million Dollars ($5,000,000) (the "Letter of Credit Committed Amount").
(B)LETTER OF CREDIT FEES.
(i) The Borrower shall pay to the Agent, for its own account, an issuance fee
of one-quarter of one percent (1/4%) per annum of the stated amount of the
Letter of Credit without regard for provisions contained in the Letters of
Credit which may give rise to a reduction in the stated amount thereof unless
such reduction has actually occurred (each a "Letter of Credit Fronting Fee"
and collectively, the "Letter of Credit Fronting Fees"). The Letter of Credit
Fronting Fees shall be paid upon the opening of each Letter of Credit and upon
each anniversary thereof, if any. In addition, the Borrower shall pay to the
Agent all other reasonable and customary negotiation, processing, transfer or
other fees to the extent and as and when required by the provisions of any
Letter of Credit Agreement. All Letter of Credit Fronting Fees and all such
other additional fees are included in and are a part of the "Fees" payable by
the Borrower under the provisions of this Agreement and are for the sole and
exclusive benefit of the Agent and are a part of the Agent's Obligations.
(ii) In addition and in connection with each Letter of Credit, the Borrower
shall pay to the Agent for the ratable benefit of the Lenders quarterly, in
arrears, a letter of credit fee (each a "Letter of Credit Fee" and collectively
the "Letter of Credit Fees") in an amount equal to one hundred seventy-five
(175) basis points per annum (calculated on the basis of actual number of days
elapsed in a year of 360 days) of the stated amount of each such Letter of
Credit without regard for provisions contained in the Letters of Credit which
may give rise to a reduction in the stated amount thereof unless such reduction
has actually occurred. The accrued and unpaid portion of each Letter of Credit
Fee shall be paid by the Borrower to the Agent on the first day of each
February, May, August and November, commencing on the first such date following
the date hereof, and on the expiration or termination date of the respective
Letter of Credit.
(C)TERMS OF LETTERS OF CREDIT; POST-EXPIRATION DATE LETTERS OF
CREDIT.
Each Letter of Credit shall (a) be opened pursuant to a Letter of Credit
Agreement and (b) expire on a date not later than the Business Day preceding
the Revolving Credit Termination Date; provided, however, if any Letter of
Credit does have an expiration date later than the Business Day preceding the
Revolving Credit Termination Date (each a "Post-Expiration Date Letter of
Credit" and collectively, the "Post-Expiration Date Letters of Credit"),
effective as of the Business Day preceding the Revolving Credit Termination
Date and without prior notice to or the consent of the Borrower, the Lenders
shall make advances under the Revolving Loan for the account of the Borrower in
the aggregate stated amount of all such Letters of Credit. The amount of each
Lender's advance shall be equal to its Revolving Credit Pro Rata Share of the
aggregate stated amount of all such Letters of Credit. The Agent shall deposit
the proceeds of such advances into one or more non-interest bearing accounts
with and in the name of the Agent and over which the Agent alone shall have
exclusive power of access and withdrawal (collectively, the "Letter of Credit
Cash Collateral Account"). The Letter of Credit Cash Collateral Account is to
be held by the Agent, for the ratable benefit of the Lenders, as additional
collateral and security for any Letter of Credit Obligations relating to the
Post-Expiration Date Letters of Credit. The Borrower hereby assigns, pledges,
grants and sets over to the Agent, for the ratable benefit of the Lenders, a
first priority security interest in, and Lien on, all of the funds on deposit
in the Letter of Credit Cash Collateral Account, together with any and all
proceeds (cash and non-cash) and products thereof as additional collateral and
security for the Letter of Credit Obligations relating to the Post-Expiration
Date Letters of Credit. The Borrower acknowledges and agrees that the Agent
shall be entitled to fund any draw or draft on any Post-Expiration Date Letter
of Credit from the monies on deposit in the Letter of Credit Cash Collateral
Account without notice to or consent of the Borrower or any of the Lenders so
long as the drawing request substantially complied with the requirements of any
such Letter of Credit. The Borrower further acknowledges and agrees that the
Agent's election to fund any draw or draft on any Post-Expiration Date Letter
of Credit from the Letter of Credit Cash Collateral shall in no way limit,
impair, lessen, reduce, release or otherwise adversely affect the Borrower's
obligation to pay any unpaid Letter of Credit Obligations under or relating to
the Post-Expiration Date Letters of Credit. At such time as all Post-
Expiration Date Letters of Credit have expired and all Letter of Credit
Obligations relating to the Post-Expiration Date Letters of Credit have been
paid in full, the Agent agrees to apply the amount of any remaining funds on
deposit in the Letter of Credit Cash Collateral Account to the then unpaid
balance of the Obligations under the Revolving Credit Facility in such order
and manner as the Agent shall determine in its reasonable discretion in
accordance with the provisions of this Agreement.
Each Letter of Credit shall be issued for the sole purpose of a Permitted Use.
The aggregate stated amount of all Letters of Credit at any one time
outstanding and issued by the Agent pursuant to the provisions of this
Agreement, including, without limitation, any and all Post-Expiration Date
Letters of Credit, plus the amount of any unpaid Letter of Credit Fees and
Letter of Credit Fronting Fees accrued, and less the aggregate amount of all
drafts issued under such Letters of Credit that have been paid by the Agent and
for which the Agent has been reimbursed by the Borrower in full in accordance
with Section (E) TERM LOAN B FEES. (Term Loan B Fees) and the Letter of Credit
Agreements, and for which the Agent has no further obligation or commitment to
restore all or any portion of the amounts drawn and reimbursed, is herein
called the "Outstanding Letter of Credit Obligations".
(D)PROCEDURES FOR LETTERS OF CREDIT.
The Borrower shall give the Agent written notice at least five (5) Business
Days prior to the date on which the Borrower desires the Agent to issue a
Letter of Credit. Such notice shall be accompanied by a duly executed Letter
of Credit Agreement specifying, among other things: (a) the name and address
of the intended beneficiary of the Letter of Credit, (b) the requested stated
amount of the Letter of Credit, (c) whether the Letter of Credit is to be
revocable or irrevocable, (d) the Business Day on which the Letter of Credit is
to be opened and the date on which the Letter of Credit is to expire, (e) the
terms of payment of any draft or drafts which may be drawn under the Letter of
Credit, and (f) any other terms or provisions the Borrower desire to be
contained in the Letter of Credit. Such notice shall also be accompanied by
such other information, certificates, confirmations, and other items as the
Agent may reasonably require to assure that the Letter of Credit is to be
issued in accordance with the provisions of this Agreement and a Letter of
Credit Agreement. In the event of any conflict between the provisions of this
Agreement and the provisions of a Letter of Credit Agreement, the provisions of
this Agreement shall prevail and control unless otherwise expressly provided in
the Letter of Credit Agreement. Upon (y) receipt of such notice, (z) payment
of all Letter of Credit Fronting Fees and all other Fees payable in connection
with the issuance of such Letter of Credit, and (iii) receipt of a duly
executed Letter of Credit Agreement, the Agent shall process such notice and
Letter of Credit Agreement in accordance with its customary procedures and open
such Letter of Credit on the Business Day specified in such notice.
(E)PAYMENTS OF LETTERS OF CREDIT.
The Borrower hereby promises to pay to the Agent, ON DEMAND and in United
States Dollars, the following which are herein collectively referred to as the
"Current Letter of Credit Obligations":
(i)the amount which the Agent has paid under each draft or draw on a Letter of
Credit, whether such demand be in advance of the Agent's payment or for
reimbursement for such payment;
(ii)any and all reasonable charges and expenses which the Agent may pay or
incur relative to the Letter of Credit and/or such draws or drafts; and
(iii)interest on the amounts described in (a) and (b) not paid by the Borrower
as and when due and payable under the provisions of (a) and (b) above from the
day the same are due and payable until paid in full at a rate per annum equal
to the then current highest rate of interest on the Revolving Loan.
In addition, the Borrower hereby promises to pay any and all other Letter of
Credit Obligations as and when due and payable in accordance with the
provisions of this Agreement and the Letter of Credit Agreements. The
obligation of the Borrower to pay Current Letter of Credit Obligations and all
other Letter of Credit Obligations shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or any other account party may have or
have had against the beneficiary of such Letter of Credit, the Agent, any of
the Lenders, or any other Person, including, without limitation, any defense
based on the failure of any draft or draw to conform to the terms of such
Letter of Credit, any draft or other document proving to be forged, fraudulent
or invalid, or the legality, validity, regularity or enforceability of such
Letter of Credit, any draft or other documents presented with any draft, any
Letter of Credit Agreement, this Agreement, or any of the other Financing
Documents, all whether or not the Agent or any of the Lenders had actual or
constructive knowledge of the same, and irrespective of any Collateral,
security or guarantee therefor or right of offset with respect thereto and
irrespective of any other circumstances whatsoever which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower for
any Letter of Credit Obligations, in bankruptcy or otherwise; PROVIDED,
HOWEVER, that the Borrower shall not be obligated to reimburse the Agent for
any wrongful payment under such Letter of Credit made as a result of the
Agent's willful misconduct or gross negligence. The obligation of the Borrower
to pay the Letter of Credit Obligations shall not be conditioned or contingent
upon the pursuit by the Agent or any other Person at any time of any right or
remedy against any Person which may be or become liable in respect of all or
any part of such obligation or against any Collateral, security or guarantee
therefor or right of offset with respect thereto.
The Letter of Credit Obligations shall continue to be effective, or be
reinstated, as the case may be, if at any time payment of all or any portion of
the Letter of Credit Obligations is rescinded or must otherwise be restored or
returned by the Agent or any of the Lenders upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Person, or upon or as a
result of the appointment of a receiver, intervenor, or conservator of, or
trustee or similar officer for, any Person, or any substantial part of such
Person's property, all as though such payments had not been made.
All payments by the Agent and the Lenders with respect to any of the Current
Letter of Credit Obligations shall be deemed to be advances under the Revolving
Loan contemporaneously as of the date any such Current Letter of Credit
Obligations due and owing; the proceeds of each such advance shall be used to
pay Current Letter of Credit Obligations in the amount of such advance.
SECTION 2.5 THE BOND LETTER OF CREDIT FACILITY.
(A)BOND LETTERS OF CREDIT.
Subject to and upon the provisions of the Bond Letter of Credit Agreements, the
Agent has agreed to issue the Bond Letters of Credit for the period commencing
on the First Closing Date and ending on the Revolving Credit Termination Date
(the "Bond Letter of Credit Commitment"). The Agent shall have no obligation
or commitment to issue a Bond Letter of Credit if the aggregate stated amount
of all Bond Letters of Credit then outstanding or proposed to be issued exceeds
Eighteen Million Eight Hundred Fifty-Two Thousand Dollars ($18,852,000) (the
"Bond Letter of Credit Committed Amount").
(B)BOND LETTER OF CREDIT FEES.
(i)The Borrower shall pay to the Agent, for its own account, an issuance fee of
one-quarter of one percent (1/4%) per annum of the stated amount of each Bond
Letter of Credit, without regard for provisions contained in the Bond Letter of
Credit which may give rise to a reduction in the stated amount thereof unless
such reduction has actually occurred (each a "Bond Letter of Credit Fronting
Fee" and collectively, the "Bond Letter of Credit Fronting Fees"). The Bond
Letter of Credit Fronting Fees shall be paid upon the issuance of each Bond
Letter of Credit and upon each anniversary thereof, if any. In addition, the
Borrower shall pay to the Agent all other reasonable and customary negotiation,
processing, transfer or other fees to the extent and as and when required by
the provisions of any Bond Letter of Credit Agreement. All Bond Letter of
Credit Fronting Fees and all such other additional fees are included in and are
a part of the "Fees" payable by the Borrower under the provisions of this
Agreement and are for the sole and exclusive benefit of the Agent and are a
part of the Agent's Obligations.
(ii) In addition and in connection with each Bond Letter of Credit, the
Borrower shall pay to the Agent for the ratable benefit of the Lenders
quarterly, in arrears, a letter of credit fee (each a "Bond Letter of Credit
Fee" and collectively the "Bond Letter of Credit Fees") in an amount equal to
one hundred seventy-five (175) basis points per annum (calculated on the basis
of actual number of days elapsed in a year of 360 days) of the stated amount of
each such Bond Letter of Credit, without regard for provisions contained in the
Bond Letter of Credit which may give rise to a reduction in the stated amount
thereof unless such reduction has actually occurred. The accrued and unpaid
portion of each Bond Letter of Credit Fee shall be paid by the Borrower to the
Agent, for the ratable benefit of the Lenders, on the first day of each
February, May, August and November, commencing on the first such date following
the date hereof, and on the expiration or termination date of the respective
Bond Letter of Credit.
(C)TERMS OF BOND LETTERS OF CREDIT.
Each Bond Letter of Credit shall (a) be issued pursuant to a Bond Letter of
Credit Agreement and (b) expire on a date not later than the Business Day
preceding the Revolving Credit Termination Date; provided, however, that (i)
the initial Iowa Bond Letter of Credit - NB issued as security for the Iowa
Bond Letter of Credit and the Iowa Bond Standby Credit Agreement shall expire
on the expiry date of the Iowa Bond Letter of Credit and Iowa Bond Standby
Credit Agreement, (ii) the initial Nevada Bond Letter of Credit - NB issued as
security for the Nevada Bond Letter of Credit shall expire on the expiry date
of the Nevada Bond Letter of Credit and (iii) the initial South Carolina Bond
Letter of Credit - NB issued as security for the South Carolina Bond Letter of
Credit shall expire on the expiry date of the South Carolina Bond Letter of
Credit. Each Bond Letter of Credit shall be issued for the sole purpose of
providing collateral for the Iowa Bonds, the Nevada Bonds, the South Carolina
Bonds, the Iowa Bond Letter of Credit, the Nevada Bond Letter of Credit or the
South Carolina Bond Letter of Credit or for any other purposes required by the
Nevada Bonds, the Iowa Bonds or the South Carolina Bonds. The aggregate stated
amount of all Bond Letters of Credit at any one time outstanding and issued by
the Agent pursuant to the provisions of this Agreement, plus the amount of any
unpaid Bond Letter of Credit Fees and Bond Letter of Credit Fronting Fees
accrued or scheduled to accrue thereon, and less the aggregate amount of all
drafts drawn under or purporting to have been drawn under such Bond Letters of
Credit that have been paid by the Agent and for which the Agent has been
reimbursed by the Borrower in full in accordance with Section (E) PAYMENTS OF
BOND LETTERS OF CREDIT. (Payments of Bond Letters of Credit) and the Bond
Letter of Credit Agreements, and for which the Agent has no further obligation
or commitment to restore all or any portion of the amounts drawn and
reimbursed, is herein called the "Outstanding Bond Letter of Credit
Obligations".
(D)PROCEDURES FOR BOND LETTERS OF CREDIT.
The Borrower shall give the Agent written notice at least five (5) Business
Days prior to the date on which the Borrower desires the Agent to issue a Bond
Letter of Credit. Such notice shall be accompanied by a duly executed Bond
Letter of Credit Agreement specifying, among other things: (a) the name and
address of the intended beneficiary of the Bond Letter of Credit, (b) the
requested stated amount of the Bond Letter of Credit, (c) that the Bond Letter
of Credit is to be irrevocable, (d) the Business Day on which the Bond Letter
of Credit is to be issued and the date on which the Bond Letter of Credit is to
expire, (e) the terms of payment of any draft or drafts which may be drawn
under the Bond Letter of Credit, and (f) any other terms or provisions the
Borrower desire to be contained in the Bond Letter of Credit. Such notice
shall also be accompanied by such other information, certificates,
confirmations, and other items as the Agent may reasonably require to assure
that the Bond Letter of Credit is to be issued in accordance with the
provisions of this Agreement and a Bond Letter of Credit Agreement. In the
event of any conflict between the provisions of this Agreement and the
provisions of a Bond Letter of Credit Agreement, the provisions of this
Agreement shall prevail and control unless otherwise expressly provided in the
Bond Letter of Credit Agreement. Upon (x) receipt of such notice, (y) payment
of all Bond Letter of Credit Fronting Fees and all other Fees payable in
connection with the issuance of such Bond Letter of Credit, and (z) receipt of
a duly executed Bond Letter of Credit Agreement, the Agent shall process such
notice and Bond Letter of Credit Agreement in accordance with its customary
procedures and issue such Bond Letter of Credit on the Business Day specified
in such notice, subject to compliance by all parties with the requirements of
the Iowa Bond Trust Agreement, the Nevada Bond Trust Agreement and the South
Carolina Bond Trust Agreement, pertaining to the replacement of credit
enhancement and liquidity facilities relating to the Iowa Bonds, the Nevada
Bonds, and the South Carolina Bonds, respectively.
(E)PAYMENTS OF BOND LETTERS OF CREDIT.
(i)Subject to the provisions of paragraph (b) below, the Borrower hereby
promises to pay to the Agent, ON DEMAND and in United States Dollars, the
following which are herein collectively referred to as the "Current Bond Letter
of Credit Obligations":
(A) the amount which the Agent has paid under each draft or draw
on a Bond Letter of Credit, whether such demand be in advance of the Agent's
payment or for reimbursement for such payment;
(B) any and all reasonable charges and expenses which the Agent
may pay or incur relative to the Bond Letter of Credit and/or such draws or
drafts; and
(C) interest on the amounts described in (i) and (ii) not paid
by the Borrower as and when due and payable under the provisions of (i) and
(ii) above from the day the same are due and payable until paid in full at a
rate per annum equal to the then current highest rate of interest on the
Revolving Loan.
(ii) Notwithstanding the provisions of paragraph (a) above, as long as no Event
of Default has occurred, any drawing under the Iowa Bond Letter of Credit - NB
to redeem Iowa Bonds purchased with a drawing under the Iowa Bond Standby
Credit Agreement, any drawing under the Nevada Bond Letter of Credit - NB to
purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter of
Credit - NB to purchase South Carolina Bonds, in each case relating to Bonds
which were tendered for purchase by the holders thereof and which were not
remarketed in a timely fashion (each referred to herein as a "Conversion
Drawing"), are not required to be reimbursed to the Agent ON DEMAND; provided
that BIC or the Borrower, as appropriate, make payments of interest to the
Agent at the rates, at the times and otherwise subject to the provisions for
interest on the Loans under INTEREST. (Interest), and the principal amount of
each such Conversion Drawing is repaid in equal quarterly payments (i) over the
remaining term to expiry of the Bond Letter of Credit Facility with respect to
the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of
Credit - NB and (ii) over a period of ten (10) years with respect to the Iowa
Bond Letter of Credit - NB; final payment of all outstanding amounts relating
to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter
of Credit - NB to be made no later than expiry of the Bond Letter of Credit
Facility or the Revolving Credit Termination Date, whichever is earlier, and
final payment of all outstanding amounts relating to the Iowa Bond Letter of
Credit - NB to be made no later than the date which is ten (10) years after the
date of any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the
Revolving Credit Termination Date, whichever is earlier. In addition, the
Agent and the Lenders agree that in the event the Iowa Bond Trustee draws on
the Iowa Bond Letter of Credit on or about the business day preceding the
expiration or termination of the Iowa Bond Letter of Credit, as contemplated by
Section 505 of the Iowa Bond Trust Agreement (the "Draw"), the Iowa Bond Letter
of Credit Obligations resulting from the Draw, shall not be payable ON DEMAND
as would otherwise be required by this Section (E) PAYMENTS OF BOND LETTERS OF
CREDIT., but shall be repaid by the Borrower in equal consecutive quarterly
installments over a period of ten (10) years, commencing with the first day
following the first full quarterly period after the Draw and continuing on the
first day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter
of Credit Obligations"); provided, that (A) there does not exist a Default or
an Event of Default, (B) the Draw is not the result of an acceleration of the
Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C)
the Draw is not the result of the occurrence of a "Determination of Taxability"
(as defined in the Iowa Bond Trust Agreement). Interest shall be payable on
the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the
rates, at the times and otherwise subject to the provisions for interest on the
Loans under INTEREST. (Interest), with a final payment of all outstanding
amounts relating to the Iowa Bond Letter of Credit - NB to be made no later
than the date which is ten (10) years after the date of the Draw or the
Revolving Credit Termination Date, whichever is earlier.
In the event that any of the payments required by this paragraph (b) are not
made when due or an Event of Default occurs, all of the foregoing amounts shall
be immediately due and payable ON DEMAND.
(iii)In addition, the Borrower hereby promises to pay any and all other Bond
Letter of Credit Obligations as and when due and payable in accordance with the
provisions of this Agreement and the Bond Letter of Credit Agreements. The
obligation of the Borrower to pay Current Bond Letter of Credit Obligations and
all other Bond Letter of Credit Obligations shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or any other account party may have or
have had against the beneficiary of such Bond Letter of Credit, the Agent, any
of the Lenders, or any other Person, including, without limitation, any defense
based on the failure of any draft or draw to conform to the terms of such Bond
Letter of Credit, any draft or other document proving to be forged, fraudulent
or invalid, or the legality, validity, regularity or enforceability of such
Bond Letter of Credit, any draft or other documents presented with any draft,
any Bond Letter of Credit Agreement, this Agreement, any of the Bond Letter of
Credit Agreement Documents, or any of the other Financing Documents, all
whether or not the Agent or any of the Lenders had actual or constructive
knowledge of the same, and irrespective of any Collateral, security or
guarantee therefor or right of offset with respect thereto and irrespective of
any other circumstances whatsoever which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for any Bond Letter
of Credit Obligations, in bankruptcy or otherwise; PROVIDED, HOWEVER, that the
Borrower shall not be obligated to reimburse the Agent for any wrongful payment
under such Bond Letter of Credit made as a result of the Agent's willful
misconduct or gross negligence. The obligation of the Borrower to pay the Bond
Letter of Credit Obligations shall not be conditioned or contingent upon the
pursuit by the Agent or any other Person at any time of any right or remedy
against any Person which may be or become liable in respect of all or any part
of such obligation or against any Collateral, security or guarantee therefor or
right of offset with respect thereto.
The Bond Letter of Credit Obligations shall continue to be effective, or be
reinstated, as the case may be, if at any time payment of all or any portion of
the Bond Letter of Credit Obligations is rescinded or must otherwise be
restored or returned by the Agent or any of the Lenders upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any Person, or upon
or as a result of the appointment of a receiver, intervenor, or conservator of,
or trustee or similar officer for, any Person, or any substantial part of such
Person's property, all as though such payments had not been made.
SECTION 2.6 THE SPECIAL SOURCE BOND FACILITY.
(A)SPECIAL SOURCE BOND.
Subject to the provisions of the Special Source Bond Assignment, the Agent
purchased the Special Source Bond and the Special Source Bond Documents from
Bank One, Cleveland, N.A. as of August 29, 1997 (the "Special Source Bond
Facility"). The Borrower acknowledges and agrees that as of August 29, 1997,
the unpaid balance of the Special Source Bond Obligations was Eight Hundred
Sixty Thousand Five Hundred Seventy-five Dollars and Seven Cents ($860,575.07),
which consisted of (i) an unpaid principal balance of Eight Hundred Fifty-five
Thousand Dollars ($855,000.00) and (ii) unpaid and accrued interest in the
amount of Five Thousand Five Hundred Seventy-five Dollars and Seven Cents
($5,575.07).
(B)CURRENT TERMS OF SPECIAL SOURCE BOND.
The Borrower acknowledges and agrees that as of the date of the Agent's
purchase of the Special Source Bond (i) the unpaid principal balance of the
Special Source Bond Obligations bears interest at the "Prime Rate", which is
defined in the Special Source Bond as the variable rate established and quoted
by Banc One, Cleveland, N.A. as its "prime rate" (the "Special Source Bond
Interest Rate"), (ii) accrued interest is payable by the Special Source Bond
Issuer on the first day of each February and August of each calendar year until
maturity, (iii) the Special Source Bond matures and becomes due and payable in
full on February 1, 2006 (the "Special Source Bond Maturity Date"), and (iv)
the unpaid principal balance of the Special Source Bond is due and payable in
consecutive annual installments on the first day of each February in each year,
commencing on February 1, 1998 and continuing on the first day of each February
thereafter, up to and including, February 1, 2006 in the following amounts:
<TABLE>
<CAPTION>
YEAR OF PAYMENT AMOUNT OF PAYMENT
<S> <C>
1998 $ 50,000
1999 $ 65,000
2000 $105,000
2001 $125,000
2002 $115,000
2003 $105,000
2004 $100,000
2005 $ 95,000
2006 $ 95,000
</TABLE>
(C)MANDATORY PREPAYMENT OF SPECIAL SOURCE BOND.
If the Special Source Bond Obligations have not been prepaid in full on or
before the Revolving Credit Termination Date, the Borrower shall prepay the
Special Source Bond Obligations in full and all Special Source Bond Obligations
shall be deemed due and payable in full on the Revolving Credit Termination
Date.
(D)PARTICIPATIONS IN THE SPECIAL SOURCE BOND OBLIGATIONS.
Effective as of March 5, 1998 (the "Special Source Bond Settlement Date"), each
Lender shall have an undivided participating interest in (i) the rights and
obligations of the Agent under the Special Source Bond and each of the Special
Source Bond Documents and (ii) the Special Source Bond Obligations, in an
amount equal to each Lender's Pro Rata Share of the Special Source Bond
Obligations. Each Lender shall pay its Pro Rata Share of the Special Source
Obligations to the Agent on the Special Source Bond Settlement Date in
immediately available funds, without any setoff, counterclaim or deduction of
any kind. Any payment by a Lender hereunder shall in no way release, discharge
or lessen the obligation of the Borrower and the Subsidiary Guarantors to pay
the Special Source Bond Obligations to the Agent in accordance with the
provisions of this Agreement and the Special Source Bond Documents.
SECTION 2.7 THE UK REVOLVING CREDIT FACILITY.
(A)UK REVOLVING CREDIT FACILITY.
Subject to and upon the terms of this Agreement, NationsBank establishes a
revolving credit facility in favor of Berry UK and Norwich in an amount equal
to One Million Five Hundred Thousand Pounds Sterling (?1,500,000) (the "UK
Revolving Credit Committed Amount"). The aggregate of all advances under the
UK Revolving Credit Facility is sometimes referred to in this Agreement
collectively as the "UK Revolving Loan". Each Lender hereby irrevocably
authorizes NationsBank to make advances under the UK Revolving Loan, acting
through its Sterling LIBOR Lending Office, in accordance with the provisions of
this Agreement. Subject to the terms and conditions of Section (E)
PARTICIPATIONS IN THE UK CREDIT FACILITIES., as of the date each advance is
made by NationsBank, acting through its Sterling LIBOR Lending Office, under
the UK Revolving Loan pursuant to the provisions of this Agreement, each Lender
shall have an undivided participating interest in (a) the rights and
obligations of NationsBank in each advance and (b) the UK Obligations with
respect to such advance in an amount equal to the proportionate share set forth
below opposite each Lender's name (herein called such Lender's "UK Revolving
Credit Pro Rata Share"):
<TABLE>
<CAPTION>
Lender UK Revolving Credit Committed UK Revolving Credit Pro Rata
Amount Share
<S> <C> <C>
Fleet $357,785 23.8525%
GE Capital $438,225 29.215%
NationsBank $438,225 29.215%
Heller $265,765 17.7175%
UK Revolving Credit Committed $1,500,000 100%
Amount
</TABLE>
During the UK Revolving Credit Commitment Period, Berry UK and/or Norwich may
request advances under the UK Revolving Credit Facility in accordance with the
provisions of this Agreement; provided that after giving effect to a borrowing
request the aggregate outstanding principal balance of the UK Revolving Loan
would not exceed the lesser of (i) the UK Revolving Credit Committed Amount or
(ii) the UK Borrowing Base.
All advances under the UK Revolving Loan shall be made in Pounds Sterling.
(B)PROCEDURE FOR MAKING ADVANCES UNDER THE UK REVOLVING LOAN.
Berry UK and/or Norwich may borrow under the UK Revolving Credit Facility
on any Business Day. Each advance shall be in an amount at least equal to,
and in increments of, One Hundred Fifty Thousand Pounds Sterling
(?150,000). Advances under the UK Revolving Loan shall be applied as
directed by Berry UK, which direction NationsBank may require to be in
writing. Not later than 10:00 a.m. (London Time) on the date of the
requested borrowing, Berry UK shall give NationsBank a Loan Notice of the
amount (denominated in Sterling) and (if requested by NationsBank) the
purpose of the requested borrowing. Any oral Loan Notice shall be
confirmed in writing by Berry UK, within three (3) Business Days after the
making of the requested advance under the UK Revolving Loan.
In addition, Berry UK and Norwich each hereby irrevocably authorize
NationsBank, with the consent of the Requisite Lenders, at any time and
from time to time, without further request from or notice to Berry UK or
Norwich, to make advances, acting through its Sterling LIBOR Lending
Office, under the UK Revolving Loan which NationsBank, deems necessary or
appropriate to protect the interests of NationsBank (and/or any of the
Lenders) under this Agreement, including, without limitation, advances
under the UK Revolving Loan made to cover debit balances in the UK
Revolving Loan Account, to pay principal of, and/or interest on, any Loan
to Berry UK and/or Norwich, the UK Obligations, and/or Enforcement Costs to
the extent such Enforcement Costs relate solely to the UK Obligations,
prior to, on, or after the termination of other advances under this
Agreement, regardless of whether the outstanding principal amount of the UK
Revolving Loan which NationsBank may advance hereunder exceeds the UK
Revolving Credit Committed Amount. NationsBank acknowledges and agrees
that no Lender shall have any obligation to purchase a participation
interest in any such advances unless otherwise agreed in writing by such
Lender, if and to the extent such Lender's Pro Rata Share of the UK
Revolving Loan would exceed, with the purchase of a participation in any
such advances, such Lender's UK Revolving Credit Committed Amount.
(C)UK BORROWING BASE.
As used in this Agreement, the term "UK Borrowing Base" means at any time,
an amount equal to the aggregate of (a) eighty-five percent (85%) of the
amount of Eligible UK Receivables, plus (b) the lesser of (i) sixty percent
(60%) of the amount of Eligible UK Inventory or (ii) Five Hundred Thousand
Pounds Sterling (?500,000).
The UK Borrowing Base shall be computed based on the UK Borrowing Base
Report most recently delivered to and accepted by NationsBank in its
reasonable discretion. In the event Berry UK and Norwich fail to furnish a
UK Borrowing Base Report required by Section (D) UK BORROWING BASE REPORT.
(UK Borrowing Base Report), NationsBank may suspend the making of or limit
advances under the UK Revolving Loan. The UK Borrowing Base shall be
reduced by the amount of any Account or any Inventory which was included in
the UK Borrowing Base, but which NationsBank determines fails to meet the
respective criteria applicable from time to time for Eligible UK
Receivables or Eligible UK Inventory.
If at any time the total of the aggregate principal amount of the UK
Revolving Loan exceeds the UK Borrowing Base, a borrowing base deficiency
(each a "UK Borrowing Base Deficiency") shall exist. Each time a UK
Borrowing Base Deficiency exists, Berry UK and Norwich, at the sole and
absolute discretion of NationsBank exercised from time to time, jointly and
severally shall pay the UK Borrowing Base Deficiency ON DEMAND to
NationsBank from time to time.
Without implying any limitation on NationsBank's discretion with respect to
the UK Borrowing Base, the criteria for Eligible UK Receivables and for
Eligible UK Inventory contained in the respective definitions of Eligible
UK Receivables and of Eligible UK Inventory are in part based upon the
business operations of Norwich and Berry UK existing on or about the date
of this Agreement and upon information and records furnished to NationsBank
by Berry UK and Norwich. If at any time or from time to time hereafter,
the business operations of Norwich or Berry UK changes in any material
respect or such information and records furnished to NationsBank are
materially incorrect or misleading, NationsBank in its reasonable
discretion, may at any time and from time to time during the duration of
this Agreement change such criteria, add new criteria, make existing
criteria less onerous, or remove existing criteria; provided, however, that
any such change in, or addition or removal of criteria shall be effective
only after notice thereof from NationsBank to Berry UK or Norwich. Except
in emergency circumstances, NationsBank agrees to use its commercially
reasonable efforts to consult with Berry UK or Norwich prior to the
effective date of any addition to, or change in, eligibility criteria, but
that NationsBank shall have no obligation or duty to reach an agreement
with Berry UK or Norwich as a condition of, or prior to, imposing any
changes in, or additions to, eligibility criteria. NationsBank shall
communicate such changed or additional criteria to Berry UK or Norwich from
time to time either orally or in writing.
(D)UK BORROWING BASE REPORT.
Norwich and Berry UK will furnish to NationsBank no less frequently than
monthly, as soon as available, but in any event within thirty (30) days of
the end of each fiscal month, and, upon the occurrence of an Event of
Default or as otherwise provided in this Section (D) UK BORROWING BASE
REPORT., at such other times as may be requested by NationsBank a report of
the UK Borrowing Base in the form attached hereto as Exhibit A-2 (each a
"UK Borrowing Base Report"; collectively, the "UK Borrowing Base Reports")
in the form required from time to time by NationsBank, appropriately
completed and duly signed. The UK Borrowing Base Report shall contain the
amount and payments on the Accounts included in the UK Borrowing Base, the
value of Inventory included in the UK Borrowing Base, and the calculations
of the UK Borrowing Base, all in such detail, and accompanied by such
supporting and other information, as NationsBank may from time to time
reasonably request. Upon NationsBank's request and upon the creation of
any Accounts included in the UK Borrowing Base, Norwich and/or Berry UK, as
appropriate, will provide NationsBank with (a) confirmatory assignment
schedules; (b) copies of Account Debtor invoices; (c) evidence of shipment
or delivery; and (d) such further schedules, documents and/or information
regarding such Accounts and such Inventory as NationsBank may reasonably
require. The items to be provided under this subsection shall be in form
reasonably satisfactory to NationsBank, and certified as true and correct
by a Responsible Officer, and delivered to NationsBank from time to time
solely for NationsBank's convenience in maintaining records of the UK
Collateral. The failure of Norwich or Berry UK to deliver any such items
to NationsBank shall not affect, terminate, modify, or otherwise limit the
Liens of NationsBank in the UK Collateral. Notwithstanding the foregoing,
Berry UK and Norwich acknowledge and agree that NationsBank, at its option,
may require that Norwich and Berry UK furnish to NationsBank weekly and, if
requested by NationsBank, daily UK Borrowing Base Reports upon the
occurrence of a Borrowing Base Trigger Event. NationsBank agrees that it
shall not be entitled to require that Norwich or Berry UK furnish weekly or
daily UK Borrowing Base Reports solely as the result of the occurrence of a
Borrowing Base Trigger Event, if NationsBank fails to so notify Berry UK
and Norwich within ninety (90) days of the date that the Borrower has cured
the Borrowing Base Trigger Event to the reasonable satisfaction of
NationsBank. The foregoing sentence, however, shall not prevent
NationsBank from later requiring more frequent UK Borrowing Base Reports
following the occurrence of any subsequent Borrowing Base Trigger Event;
provided, that NationsBank so notifies the Borrower within ninety (90) days
of date that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of NationsBank.
(E) UK REVOLVING CREDIT NOTE.
The joint and several obligation of Berry UK and Norwich to pay the UK
Revolving Loan, with interest, shall be evidenced by a promissory note (as
from time to time extended, amended, restated, supplemented or otherwise
modified, the "UK Revolving Credit Note"). The UK Revolving Credit Note
shall be dated as of the date of this Agreement, shall be payable to the
order of NationsBank at the times provided in the UK Revolving Credit Note,
and shall be in the principal amount of the UK Revolving Credit Committed
Amount. Berry UK and Norwich acknowledge and agree that, if the
outstanding principal balance of the UK Revolving Loan outstanding from
time to time exceeds the stated amount of the UK Revolving Credit Note, the
excess shall bear interest at the rates provided from time to time for
advances under the UK Revolving Loan evidenced by the UK Revolving Credit
Note and shall be payable, with accrued interest, ON DEMAND to NationsBank,
acting through its Sterling LIBOR Lending Office. The UK Revolving Credit
Note shall not operate as a novation of any of the UK Obligations or
nullify, discharge, or release any such UK Obligations or the continuing
contractual relationship of the parties hereto in accordance with the
provisions of this Agreement.
(F)MANDATORY PREPAYMENTS OF UK REVOLVING LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity), upon the
request of NationsBank pursuant to Section (C) UK BORROWING BASE. (UK
Borrowing Base), Berry UK and Norwich jointly and severally shall make
mandatory prepayments (each a "UK Revolving Loan Mandatory Prepayment" and
collectively, the "UK Revolving Loan Mandatory Prepayments") of the UK
Revolving Loan at any time and from time to time in order to cover any UK
Borrowing Base Deficiency.
(G)OPTIONAL PREPAYMENTS OF UK REVOLVING LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity), Berry UK
and Norwich shall have the option at any time and from time to time prepay
(each a "UK Revolving Loan Optional Prepayment" and collectively the "UK
Revolving Loan Optional Prepayments") the UK Revolving Loan, in whole or in
part without premium or penalty. UK Revolving Loan Optional Prepayments
shall be made following a timely and proper written notice to NationsBank
with respect thereto specifying the date and amount of any intended UK
Revolving Loan Optional Prepayment. The amount to be prepaid shall be paid
by Berry UK or Norwich to NationsBank on the date specified for such
prepayment. Any amounts repaid or prepaid may be readvanced and reborrowed
subject to the provisions of this Agreement.
(H)UK REVOLVING LOAN ACCOUNT.
NationsBank will establish and maintain a loan account on its books (the
"UK Revolving Loan Account") to which NationsBank will (a) DEBIT (i) the
principal amount of each advance under the UK Revolving Loan made by
NationsBank hereunder, acting through its Sterling LIBOR Lending Office, as
of the date made, (ii) the amount of any interest accrued on the UK
Revolving Loan as and when due, and (iii) any other amounts due and payable
by Berry UK and/or Norwich to NationsBank from time to time under the
provisions of this Agreement in connection with the UK Obligations, as and
when due and payable, and (b) CREDIT all payments made by Berry UK and/or
Norwich to NationsBank on account of the UK Revolving Loan as of the date
made. All credit entries to the UK Revolving Loan Account are conditional
and shall be readjusted as of the date made if final and indefeasible
payment is not received by NationsBank, at its Sterling LIBOR Lending
Office, in cash or solvent credits. Berry UK and Norwich hereby jointly
and severally promise to pay to the order of NationsBank, on the UK
Revolving Credit Termination Date, an amount equal to the excess, if any,
of all debit entries over all credit entries recorded in the UK Revolving
Loan Account under the provisions of this Agreement. Any and all periodic
or other statements or reconciliations, and the information contained in
those statements or reconciliations, of the UK Revolving Loan Account shall
be presumed conclusively to be correct, and shall constitute an account
stated between NationsBank, Norwich and Berry UK unless NationsBank
receives specific written objection thereto from Berry UK or Norwich within
thirty (30) Business Days after such statement or reconciliation shall have
been sent by NationsBank. Any and all periodic or other statements or
reconciliations, and the information contained in those statements or
reconciliations, of the UK Revolving Loan Account shall be final, binding
and conclusive upon Berry UK and Norwich in all respects, absent manifest
error, unless NationsBank receives specific written objection thereto from
Berry UK or Norwich within thirty (30) Business Days after such statement
or reconciliation shall have been sent by NationsBank.
(I)UK REVOLVING CREDIT FACILITY FEE.
Berry UK and Norwich jointly and severally shall pay to NationsBank in
Pounds Sterling (for the benefit of NationsBank and each of the other
Lenders) annually, in advance, a UK Revolving Credit Facility fee
(collectively, the "UK Revolving Credit Facility Fees" and individually, a
"UK Revolving Credit Facility Fee") in an amount equal to one-eighth of one
percent (1/8%) per annum (calculated on the basis of actual number of days
elapsed in a year of 365 days) of the UK Revolving Credit Committed Amount
in effect from time to time. The accrued and unpaid UK Revolving Credit
Facility Fee shall be paid by Berry UK and Norwich to NationsBank on the
Closing Date and on each anniversary date thereof. NationsBank agrees to
remit to each other Lender its UK Revolving Credit Pro Rata Share of each
UK Revolving Credit Facility Fee promptly following the receipt by
NationsBank, in collected funds and in Pounds Sterling, of payment from
Berry UK and/or Norwich of such UK Revolving Credit Facility Fee.
SECTION 2.8 UK TERM LOAN FACILITY.
(A)UK TERM LOAN COMMITMENTS.
Subject to and upon the terms of this Agreement, NationsBank agrees to make
a loan acting through its Sterling LIBOR Lending Office, (the "UK Term
Loan") to Berry UK in the principal amount of Four Million Five Hundred
Thousand Pounds Sterling (<pound-sterling>4,500,000) (the "UK Term Loan
Committed Amount"). Subject to the terms and conditions of Section (E)
PARTICIPATIONS IN THE UK CREDIT FACILITIES., as of the date the UK Term
Loan is made by NationsBank, each Lender shall have an undivided
participating interest in (a) the rights and obligations of NationsBank in
the UK Term Loan, and (b) the UK Obligations with respect to such advance
in an amount equal to the proportionate share set forth below opposite each
Lender's name (herein called such Lender's "UK Term Loan Pro Rata Share"):
<TABLE>
<CAPTION>
Lender UK Term Loan Committed Amount UK Term Loan Pro Rata Share
<S> <C> <C>
Fleet $1,073,385 23.8525%
GE Capital $1,314,675 29.215%
Heller $797,310 17.7175%
NationsBank $1,314,675 29.215%
UK Term Loan Committed Amount $4,500,000 100%
</TABLE>
Berry UK covenants and agrees to use the UK Term Loan solely to finance the
acquisition of the Norwich Stock in accordance with the provisions of the
Norwich Stock Purchase Transaction and for other Permitted Uses in
connection with the transactions contemplated thereby. Berry UK represents
and warrants as of the Closing Date to NationsBank that the UK Term Loan
Committed Amount is equal to the lesser of (i) Four Million Five Hundred
Thousand Sterling (?4,500,000) and (ii) the sum of (x) eighty percent (80%)
of the orderly liquidation value of the Fixed and Capital Assets of Norwich
and Berry UK, (y) seventy-five percent (75%) of the fair market value of
all real property owned by Norwich and Berry UK as of the date of this
Agreement (after deduction of the outstanding principal amounts secured by
any Liens which will not be released as part of the closing and
consummation of the Norwich Stock Purchase Transaction), and (z)
?1,500,000. Berry UK further represents and warrants that as of the
Closing Date, the sum of the UK Term Loan Committed Amount, plus the Term
Loan B Increase, plus the UK Revolving Credit Committed Amount is not
greater than Fifteen Million Dollars ($15,000,000). For purposes of this
Section 2.8.1, in calculating the U.S. Dollar equivalent of the UK Term
Loan Committed Amount and the UK Revolving Credit Committed Amount, the
Agent shall use the Dollar Currency Equivalent of Sterling.
The obligation of NationsBank to make the UK Term Loan and each Lender to
purchase a participation interest in the UK Term Loan is herein called its
"UK Term Loan Commitment". The UK Term Loan Commitment of NationsBank and
each of the Lenders are herein collectively referred to as the "UK Term
Loan Commitments". None of the Lenders shall be responsible for the UK Term
Loan Commitment of any of the other Lenders; the failure, however, of any
Lender to perform its UK Term Loan Commitment shall not relieve any of the
other Lenders from the performance of their respective UK Term Loan
Commitments.
(B)AMORTIZATION OF UK TERM LOAN; THE UK TERM LOAN NOTE.
The unpaid principal balance of the UK Term Loan shall be due and payable
in monthly installments of principal on the first day of each calendar
month, each in the following amounts during the following periods:
<TABLE>
<CAPTION>
Period Amount
<S> <C>
October 1, 1998 through and $60,415
including September 1, 1999
October 1, 1999 through and 470,835
including September 1, 2000
All times thereafter 480,835
</TABLE>
Unless sooner paid, the unpaid principal balance of the UK Term Loan,
together with interest accrued and unpaid thereon, shall be due and payable
in full on the UK Revolving Credit Termination Date.
The obligation of Berry UK to pay the UK Term Loan, with interest, shall be
evidenced by a promissory note (as from time to time extended, amended,
restated, supplemented or otherwise modified, the "UK Term Loan Note").
The UK Term Loan Note shall be dated as the date hereof and shall be
payable to the order of NationsBank at the times provided in the UK Term
Loan Note, and shall be in the principal amount of the UK Term Loan
Committed Amount.
(C)MANDATORY PREPAYMENTS OF UK TERM LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity), Berry UK
shall make mandatory prepayments (each a "UK Term Loan Mandatory
Prepayment" and collectively the "UK Term Loan Mandatory Prepayments") of
the UK Term Loan to NationsBank annually. Each UK Term Loan Mandatory
Prepayment shall be in the amount of (a) any portion of the purchase price
for the Norwich Stock which is returned to Berry UK or the Borrower as a
purchase price adjustment resulting from any event other than the
indemnification of losses resulting from a breach of a representation or
warranty by the Seller, all in accordance with the terms of the Norwich
Stock Purchase Agreement and shall be payable on the date Berry UK or the
Borrower receives such amount from or on behalf of the Seller and (b) the
UK Excess Cash Flow for the then preceding fiscal year and shall be payable
on the date the Borrower shall furnish to the Agent the annual financial
statements referred to in Section (A) FINANCIAL STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lender
(Financial Statements). If, however, the Borrower fails to furnish such
financial statements in any given year as and when required, Berry UK shall
be required to pay the UK Term Loan Mandatory Prepayment payable during
such calendar year on the date which is ninety (90) days after the close of
Norwich's then preceding fiscal year. Berry UK shall pay to NationsBank on
the date of each required UK Term Loan Mandatory Prepayment accrued
interest to such date on the amount prepaid. Each partial UK Term Loan
Mandatory Prepayment shall be applied against the principal installments of
the UK Term Loan in the inverse order of their maturities. Notwithstanding
anything to the contrary contained herein, the Borrower shall not be
required to pay an Early Termination Fee as the result of a UK Term Loan
Mandatory Prepayment. In addition to the foregoing, the Borrower shall
make a UK Term Loan Mandatory Prepayment on behalf of Berry UK to the
extent of any Excess Cash Flow remaining after payment of the Term Loans B
in full.
(D)OPTIONAL PREPAYMENTS OF UK TERM LOAN.
Subject to the provisions of Section (D) INDEMNITY. (Indemnity), Berry UK
may, at its option, at any time and from time to time, prepay (each a "UK
Term Loan Optional Prepayment" and collectively the "UK Term Loan Optional
Prepayments") the UK Term Loan, in whole or in part, upon five (5) Business
Days prior written notice, specifying the date and amount of prepayment.
The amount to be so prepaid, together with interest accrued thereon to date
of prepayment if the amount is intended as a prepayment of the UK Term Loan
in whole, shall be paid by Berry UK to NationsBank at its Sterling LIBOR
Lending Office on the date specified for such prepayment. Partial UK Term
Loan Optional Prepayments shall be applied against the principal
installments of the UK Term Loan in the inverse order of their maturities.
SECTION 2.9GENERAL LETTER OF CREDIT PROVISIONS AND PARTICIPATION PROVISIONS
FOR UK CREDIT FACILITIES.
(A)PROCEDURES FOR LETTERS OF CREDIT AND BOND LETTERS OF CREDIT.
If any change after the Closing Date in any law or regulation or in the
interpretation thereof by any court or other Governmental Authority charged
with the administration thereof shall either (a) impose, modify or deem
applicable any reserve, special deposit or similar requirement against
Letters of Credit or Bond Letters of Credit issued by the Agent, or (b)
impose on the Agent or any of the Lenders any other condition regarding
this Agreement, any Letter of Credit or any Bond Letter of Credit, and the
result of any event referred to in clauses (a) or (b) above shall be to
increase the cost to the Agent of issuing, maintaining or extending the
Letter of Credit or the Bond Letter of Credit or the cost to any of the
Lenders of funding any obligation under or in connection with the Letter of
Credit or the Bond Letter of Credit (which increase in cost shall be the
result of the Agent's reasonable allocation of the aggregate of such cost
increases resulting from such events), then, upon demand by the Agent, the
Borrower shall immediately pay to the Agent from time to time as specified
by the Agent, additional amounts which shall be sufficient to compensate
the Agent and the Lenders for such increased cost, together with interest
on each such amount from the date demanded until payment in full thereof at
a rate per annum equal to the then highest current rate of interest on the
Revolving Loan. A certificate as to such increased cost incurred by the
Agent and/or any of the Lenders, submitted by the Agent to the Borrower,
shall be conclusive, absent manifest error.
(B)GENERAL LETTER OF CREDIT PROVISIONS.
The Borrower hereby instructs the Agent to pay any draft complying with the
terms of any Letter of Credit or any Bond Letter of Credit irrespective of
any instructions of the Borrower to the contrary. The Borrower assume all
risks of the acts and omissions of the beneficiary and other users of any
Letter of Credit or any Bond Letter of Credit. The Agent, the Lenders and
their respective branches, Affiliates and/or correspondents shall not be
responsible for and the Borrower hereby indemnifies and holds the Agent,
the Lenders and their respective branches, Affiliates and/or correspondents
harmless from and against all liability, loss and expense (including
reasonable attorney's fees and costs) incurred by the Agent, the Lenders
and/or their respective branches, Affiliates and/or correspondents relative
to and/or as a consequence of (a) any failure by the Borrower to perform
the agreements hereunder and under any Letter of Credit Agreement or under
any Bond Letter of Credit Agreement, (b) any Letter of Credit Agreement,
any Bond Letter of Credit Agreement, this Agreement, any Letter of Credit,
any Bond Letter of Credit and any draft, draw and/or acceptance under or
purported to be under any Letter of Credit or any Bond Letter of Credit,
(c) any action taken or omitted by the Agent, any of the Lenders and/or any
of their respective branches, Affiliates and/or correspondents at the
request of the Borrower, other than acts of willful misconduct and gross
negligence, (d) any failure or inability to perform in accordance with the
terms of any Letter of Credit or any Bond Letter of Credit by reason of any
control or restriction rightfully or wrongfully exercised by any defacto or
dejure Governmental Authority, group or individual asserting or exercising
governmental or paramount powers, and/or (e) any consequences arising from
causes beyond the control of the Agent, any of the Lenders and/or any of
their respective branches, Affiliates and/or correspondents.
Except for willful misconduct and gross negligence, the Agent, the Lenders
and their respective branches, Affiliates and/or correspondents, shall not
be liable or responsible in any respect for any (a) error, omission,
interruption or delay in transmission, dispatch or delivery of any one or
more messages or advices in connection with any Letter of Credit or any
Bond Letter of Credit, whether transmitted by cable, telegraph, mail or
otherwise and despite any cipher or code which may be employed, and/or (b)
action, inaction or omission which may be taken or suffered by it or them
in good faith or through inadvertence in identifying or failing to identify
any beneficiary or otherwise in connection with any Letter of Credit or any
Bond Letter of Credit.
Any Letter of Credit or any Bond Letter of Credit may be amended, modified
or revoked only upon the receipt by the Agent from the Borrower and the
beneficiary (including any transferee and/or assignee of the original
beneficiary), of a written consent and request therefor.
If any Laws, order of court and/or ruling or regulation of any Governmental
Authority of the United States (or any state thereof) and/or any country
other than the United States permits a beneficiary under a Letter of Credit
or a Bond Letter of Credit to require the Agent, the Lenders and/or any of
their respective branches, Affiliates and/or correspondents to pay drafts
under or purporting to be under a Letter of Credit or a Bond Letter of
Credit after the expiration date of the Letter of Credit or the Bond Letter
of Credit, respectively, the Borrower shall reimburse the Agent and the
Lenders, as appropriate, for any such payment pursuant to provisions of
Section (E) PAYMENTS OF LETTERS OF CREDIT. (Payments of Letter of Credit)
or Section (E) PAYMENTS OF BOND LETTERS OF CREDIT. (Payments of Bond
Letters of Credit), as appropriate.
Except as may otherwise be specifically provided in a Letter of Credit, a
Bond Letter of Credit, a Letter of Credit Agreement or a Bond Letter of
Credit Agreement, the laws of the State of Maryland and the Uniform Customs
and Practice for Documentary Credits, 1995 Revision, International Chamber
of Commerce Publication No. 500 shall govern the Letters of Credit and the
Bond Letters of Credit. The Laws, rules, provisions and regulations of the
Uniform Customs and Practice for Documentary Credits are hereby
incorporated by reference. In the event of a conflict between the Uniform
Customs and Practice for Documentary Credits and the laws of the State of
Maryland, the Uniform Customs and Practice for Documentary Credits shall
prevail.
(C)PARTICIPATIONS IN THE LETTERS OF CREDIT AND THE BOND LETTERS
OF CREDIT.
Each Lender hereby irrevocably authorizes the Agent to issue Letters of
Credit and the Bond Letters of Credit in accordance with the provisions of
this Agreement. As of the date each Letter of Credit or each Bond Letter
of Credit is opened or issued by the Agent pursuant to the provisions of
this Agreement, each Lender shall have an undivided participating interest
in (a) the rights and obligations of the Agent under each such Letter of
Credit and each such Bond Letter of Credit, and (b) the Outstanding Letter
of Credit Obligations and the Outstanding Bond Letter of Credit Obligations
of the Borrower with respect to such Letter of Credit and Bond Letter of
Credit, as appropriate, in an amount equal to each Lender's Revolving
Credit Pro Rata Share of such Outstanding Letter of Credit Obligations and
Outstanding Bond Letter of Credit Obligations.
(D)PAYMENTS BY THE LENDERS TO THE AGENT.
If the Borrower fails to pay to the Agent any Current Letter of Credit
Obligations or any Current Bond Letter of Credit Obligations as and when
due and payable, the Agent shall promptly notify each of the Lenders and
shall demand payment from each of the Lenders such Lender's Revolving
Credit Pro Rata Share of such unpaid Current Letter of Credit Obligations
and unpaid Current Bond Letter of Credit Obligations, as appropriate. In
addition, if any amount paid to the Agent on account of Current Letter of
Credit Obligations or any Current Bond Letter of Credit Obligations is
rescinded or required to be restored or turned over by the Agent upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver,
intervenor, trustee, conservator or similar officer for the Borrower, or is
otherwise not indefeasibly covered by an advance under the Revolving Loan,
the Agent shall promptly notify each of the Lenders and shall demand
payment from each of the Lenders of its Revolving Credit Pro Rata Share of
its portion of the Current Letter of Credit Obligations and/or Current Bond
Letter of Credit Obligations to be remitted to the Borrower.
Each of the Lenders irrevocably and unconditionally agrees to honor any
such demands for payment under this Section and promises to pay to the
Agent's account on the same Business Day as demanded the amount of its
Revolving Credit Pro Rata Share of the Current Letter of Credit Obligations
and Current Bond Letter of Credit Obligations, as appropriate, in
immediately available funds, without any setoff, counterclaim or deduction
of any kind. Any payment by a Lender hereunder shall in no way release,
discharge or lessen the obligation of the Borrower to pay Current Letter of
Credit Obligations or to pay Current Bond Letter of Credit Obligations to
the Agent in accordance with the provisions of this Agreement.
The obligation of each of the Lenders to remit the amounts of its Revolving
Credit Pro Rata Share of Current Letter of Credit Obligations and Current
Bond Letter of Credit Obligations for the account of the Agent pursuant to
this Section shall be unconditional and irrevocable under any and all
circumstances and may not be terminated, suspended or delayed for any
reason whatsoever, provided that all payments of such amounts by each of
the Lenders shall be without prejudice to the rights of each of the Lenders
with respect to the Agent's alleged willful misconduct. Any claim any
Lender may have against the Agent as a result of the Agent's alleged
willful misconduct may be brought by such Lender in a separate action
against the Agent but may not be used as a defense to payment under the
provisions of this Section.
No failure of any Lender to remit the amount of its Revolving Credit Pro
Rata Share of Current Letter of Credit Obligations and/or Current Bond
Letter of Credit Obligations to the Agent pursuant to this Section shall
affect the obligations of the Agent under any Letter of Credit or under any
Bond Letter of Credit, and if any Lender does not remit to the Agent the
amount of its Revolving Credit Pro Rata Share of Current Letter of Credit
Obligations and/or Current Bond Letter of Credit Obligations on the same
day as demanded, then without limiting such Lender's obligation to transmit
funds on the same Business Day as demanded, such Lender shall be obligated
to pay, on demand of the Agent and without setoff, counterclaim or
deduction of any kind whatsoever interest on the unpaid amount at the
Federal Funds Rate for each day from the date such amount shall be due and
payable to the Agent until the date such amount shall have been paid in
full to the Agent by such Lender.
No Lender shall have any obligation to pay to the Agent such Lender's Pro
Rata Share of unpaid Current Letter of Credit Obligations and/or unpaid
Current Bond Letter of Credit Obligations, if the Borrower shall not be
obligated to reimburse the Agent for such unpaid Current Letter of Credit
Obligations and/or unpaid Current Bond Letter of Credit Obligations,
respectively, because of the Agent's wrongful payment of a Letter of Credit
and/or Bond Letter of Credit made as a result of the Agent's willful
misconduct or gross negligence.
(E)PARTICIPATIONS IN THE UK CREDIT FACILITIES.
Each Lender hereby irrevocably authorizes NationsBank to make advances
under the UK Revolving Loan, acting through its Sterling LIBOR Lending
Office and to make the UK Term Loan in accordance with the provisions of
this Agreement. As of the date each such Loan is made, each Lender shall
have an undivided participating interest in (a) the rights and obligations
of NationsBank under each such Loan, and (b) the UK Obligations with
respect to such Loan, in an amount equal to each Lender's Pro Rata Share
thereof, subject to the rights of NationsBank to receive and retain payment
of all or a portion of the interest on the UK Obligations as set forth in
this Section. If Berry UK or Norwich fail to pay to NationsBank any UK
Obligations as and when due and payable, NationsBank shall promptly notify
each of the Lenders and shall demand payment from each of the Lenders of
such Lender's Pro Rata Share of such unpaid UK Obligations. In addition,
if any amount paid to NationsBank on account of the UK Obligations is
rescinded or required to be restored or turned over by NationsBank upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of Berry
UK or Norwich or upon or as a result of the appointment of a receiver,
intervenor, trustee, conservator or similar officer for Berry UK or
Norwich, NationsBank shall promptly notify each of the Lenders and shall
demand payment from each of the Lenders of its Pro Rata Share of its
portion of the UK Obligations to be remitted to Berry UK or Norwich. Each
of the Lenders irrevocably and unconditionally agrees to honor any such
demands for payment under this Section and promises to pay to the account
of NationsBank on the same Business Day as demanded the amount of its Pro
Rata Share of the UK Obligations in Pounds Sterling, in immediately
available funds, without any setoff, counterclaim or deduction of any kind.
Any payment by a Lender hereunder shall in no way release, discharge or
lessen the obligation of Berry UK or Norwich to pay the UK Obligations to
NationsBank in accordance with the provisions of this Agreement. The date
on which a payment is made by a Lender to NationsBank shall be referred to
as a "UK Payment Date".
The obligation of each of the Lenders to remit the amounts of its Pro Rata
Share of the UK Obligations for the account of NationsBank pursuant to this
Section shall be unconditional and irrevocable under any and all
circumstances and may not be terminated, suspended or delayed for any
reason whatsoever, provided that all payments of such amounts by each of
the Lenders shall be without prejudice to the rights of each of the Lenders
with respect to the alleged willful misconduct of NationsBank. Any claim
any Lender may have against NationsBank as a result of the alleged willful
misconduct of NationsBank may be brought by such Lender in a separate
action against NationsBank but may not be used as a defense to payment
under the provisions of this Section.
All interest on the unpaid principal balance of the UK Obligations shall be
payable to, and retained by, NationsBank, except with respect to those UK
Obligations for which NationsBank has demanded and received payment from a
Lender pursuant to the provisions of this Section (each a "UK Lender
Payment"), in which case, the Lender making such payment shall be entitled
to receive from Berry UK and Norwich all interest payable on the UK
Obligations represented by such UK Lender Payment at all times from and
after the UK Payment Date for such UK Lender Payment, excluding, however,
any portion of the UK Obligations consisting of the Mandatory Liquid Assets
Cost Rate on such UK Obligations (the "Lender's Share of UK Interest").
Any payments received by NationsBank which are payable to a Lender shall be
paid to such Lender in Sterling in accordance with all payments to be made
by the Agent to a Lender under the provisions of Section 2.12.
Notwithstanding the foregoing, NationsBank agrees that if the Mandatory
Liquid Assets Cost Rate payable by NationsBank to the Bank of England is
decreased as a result of a UK Lender Payment made by a Lender and such
Lender as a result must pay a Mandatory Liquid Assets Cost Rate, such
Lender shall be entitled to its Pro Rata Share of the Mandatory Liquid
Assets Cost Rate relating to such UK Lender Payment.
Except to the extent that NationsBank shall have made demand on the Lenders
for payment of their Pro Rata Share of the UK Obligations (the "UK
Obligations Demand Date"), NationsBank shall remit to each Lender from time
to time (but at least once monthly) such Lender's Pro Rata Share of that
portion of the interest paid to, and received by, NationsBank, in collected
funds on account of such Lender's unfunded UK Obligations calculated at the
Applicable Margin (excluding the Mandatory Liquid Assets Cost Rate) for
such UK Obligations only; NationsBank shall retain all interest calculated
at the LIBOR Base Rate. Such payments shall be payable to the Lenders in
consideration of their agreement to purchase a participation interest in
the UK Obligations in accordance with the provisions of this Agreement, but
shall be payable only if and to the extent NationsBank has received the
interest payment which is the basis for such fee.
SECTION 2.10 INTEREST.
(A)APPLICABLE INTEREST RATES.
(i)Each Loan shall bear interest until maturity (whether by acceleration,
declaration, extension or otherwise) at either the Alternate Base Rate or
the LIBOR Rate, as selected and specified by the Borrower, Berry UK or
Norwich, as appropriate, in an Interest Rate Election Notice furnished to
the Agent or NationsBank, as appropriate, in accordance with the provisions
of Section (v) Neither NationsBank nor the Lenders will be obligated to
make Loans, to convert the Applicable Interest Rate on Loans to another
Interest Rate, or to change Interest Periods, unless NationsBank or the
Agent, as appropriate, shall have received an irrevocable written or
telephonic notice (an "Interest Rate Election Notice") from the Borrower,
Berry UK or Norwich, as appropriate, specifying the following information:
(Selection of Interest Rates), or as otherwise determined in accordance
with the provisions of this INTEREST., and as may be adjusted from time to
time in accordance with the provisions of Section INABILITY TO DETERMINE
LIBOR BASE RATE. (Inability to Determine LIBOR Base Rate). Notwithstanding
the foregoing, all Loans made to Berry UK and/or Norwich under the UK
Credit Facilities must bear interest at the LIBOR Rate only; neither Berry
UK nor Norwich may select the Alternate Base Rate as the Applicable
Interest Rate for any Loan made to Berry UK or Norwich under any of the
Credit Facilities.
(ii)Notwithstanding the foregoing, following the occurrence and during the
continuance of an Event of Default, at the option of the Agent and
NationsBank, all Loans and all other Obligations shall bear interest at the
Post-Default Rate.
(iii)The Applicable Margin for (i) LIBOR Loans, other than the UK Term
Loans shall be two hundred (200) basis points per annum, (ii) LIBOR Loans
consisting of the UK Term Loans, shall be two hundred fifty (250) basis
points per annum, and (iii) Base Rate Loans shall be fifty (50) basis
points per annum unless and until a change is required by the operation of
Section (A) APPLICABLE INTEREST RATES.(iv) Subsequent to the Agent's
receipt of the Borrower's quarterly financial statements for the period
ending June 30, 1998 to be furnished to the Agent pursuant to (iii)
QUARTERLY STATEMENTS AND CERTIFICATES. The Borrower shall furnish to the
Agent for distribution to the Lenders as soon as available, but in no event
more than forty-five (45) days after the close of the Borrower's fiscal
quarters (other than the final fiscal quarter), consolidated and
consolidating balance sheets of the Borrower, Berry UK, Norwich and all
other Subsidiaries as of the close of such period, consolidated and
consolidating income, cash flows and changes in shareholders equity
statements for such period, and a Compliance Certificate, in substantially
the form attached to this Agreement as EXHIBIT D, containing a detailed
computation of each financial covenant in this Agreement which is
applicable for the period reported, each prepared by a Responsible Officer
of or on behalf of the Borrower in a format acceptable to the Agent, all as
prepared and certified by a Responsible Officer of the Borrower and
accompanied by a certificate of that officer stating whether any event has
occurred which constitutes a Default or an Event of Default hereunder, and,
if so, stating the facts with respect thereto. (Quarterly Statements),
changes in the Applicable Margin for all Loans (other than Loans under the
UK Credit Facilities) may be made, but not more frequently than one such
change per quarter based on the Borrower's Pricing Ratio, tested as of the
end of each fiscal quarter and the end of each fiscal year, determined by
the Agent based on the annual and quarterly financial statements required
by (I) ANNUAL STATEMENTS AND CERTIFICATES. The Borrower shall furnish to
the Agent for distribution to the Lenders as soon as available, but in no
event more than ninety (90) days after the close of the Borrower's fiscal
years, (i) a copy of the annual consolidated and consolidating financial
statements in reasonable detail satisfactory to the Agent relating to the
Borrower, Berry UK, Norwich and all other Subsidiaries, prepared in
accordance with GAAP and examined and certified by independent certified
public accountants satisfactory to the Agent, which financial statements
shall include a consolidated and consolidating balance sheet of the
Borrower, Berry UK, Norwich and all other Subsidiaries as of the end of
such fiscal year and consolidated and consolidating statements of income,
cash flows and changes in shareholders equity of the Borrower, Berry UK,
Norwich and all other Subsidiaries for such fiscal year, and (ii) a
Compliance Certificate, in substantially the form attached to this
Agreement as EXHIBIT D, containing a detailed computation of each financial
covenant in this Agreement which is applicable for the period reported, a
certification that no change has occurred to the information contained in
the Collateral Disclosure List (except as set forth any schedule attached
to the certification) and (iii) a management letter in the form prepared by
the Borrower's independent certified public accountants, but only if and to
the extent customarily obtained by the Borrower. The Agent agrees that any
one of the "Big 4" accounting firms is satisfactory to the Agent for
purposes of this Section (a)(i), except to the extent the Agent in its
reasonable discretion and based on good faith and legitimate concerns
determines that any such accounting firm would be unacceptable because of
any conflict of interest or any material adverse change affecting such
firm's reliability or financial viability. (Annual Statements) and (iii)
QUARTERLY STATEMENTS AND CERTIFICATES. The Borrower shall furnish to the
Agent for distribution to the Lenders as soon as available, but in no event
more than forty-five (45) days after the close of the Borrower's fiscal
quarters (other than the final fiscal quarter), consolidated and
consolidating balance sheets of the Borrower, Berry UK, Norwich and all
other Subsidiaries as of the close of such period, consolidated and
consolidating income, cash flows and changes in shareholders equity
statements for such period, and a Compliance Certificate, in substantially
the form attached to this Agreement as EXHIBIT D, containing a detailed
computation of each financial covenant in this Agreement which is
applicable for the period reported, each prepared by a Responsible Officer
of or on behalf of the Borrower in a format acceptable to the Agent, all as
prepared and certified by a Responsible Officer of the Borrower and
accompanied by a certificate of that officer stating whether any event has
occurred which constitutes a Default or an Event of Default hereunder, and,
if so, stating the facts with respect thereto. (Quarterly Statements), as
appropriate. Any change in the Applicable Margin shall be effective as of
the test date of the Pricing Ratio, as appropriate, but shall not effect
any change to the Applicable Margins for the UK Credit Facilities. The
Applicable Margin shall vary depending upon the Borrower's Pricing Ratio,
as follows:. In addition, the Mandatory Liquid Asset Cost Rate shall be
added to the Applicable Margin for each LIBOR Loan made or to be made under
the UK Credit Facilities.
(iv)Subsequent to the Agent's receipt of the Borrower's quarterly financial
statements for the period ending June 30, 1998 to be furnished to the Agent
pursuant to (iii) QUARTERLY STATEMENTS AND CERTIFICATES. The Borrower
shall furnish to the Agent for distribution to the Lenders as soon as
available, but in no event more than forty-five (45) days after the close
of the Borrower's fiscal quarters (other than the final fiscal quarter),
consolidated and consolidating balance sheets of the Borrower, Berry UK,
Norwich and all other Subsidiaries as of the close of such period,
consolidated and consolidating income, cash flows and changes in
shareholders equity statements for such period, and a Compliance
Certificate, in substantially the form attached to this Agreement as
EXHIBIT D, containing a detailed computation of each financial covenant in
this Agreement which is applicable for the period reported, each prepared
by a Responsible Officer of or on behalf of the Borrower in a format
acceptable to the Agent, all as prepared and certified by a Responsible
Officer of the Borrower and accompanied by a certificate of that officer
stating whether any event has occurred which constitutes a Default or an
Event of Default hereunder, and, if so, stating the facts with respect
thereto. (Quarterly Statements), changes in the Applicable Margin for all
Loans (other than Loans under the UK Credit Facilities) may be made, but
not more frequently than one such change per quarter based on the
Borrower's Pricing Ratio, tested as of the end of each fiscal quarter and
the end of each fiscal year, determined by the Agent based on the annual
and quarterly financial statements required by (i) ANNUAL STATEMENTS AND
CERTIFICATES. The Borrower shall furnish to the Agent for distribution to
the Lenders as soon as available, but in no event more than ninety (90)
days after the close of the Borrower's fiscal years, (i) a copy of the
annual consolidated and consolidating financial statements in reasonable
detail satisfactory to the Agent relating to the Borrower, Berry UK,
Norwich and all other Subsidiaries, prepared in accordance with GAAP and
examined and certified by independent certified public accountants
satisfactory to the Agent, which financial statements shall include a
consolidated and consolidating balance sheet of the Borrower, Berry UK,
Norwich and all other Subsidiaries as of the end of such fiscal year and
consolidated and consolidating statements of income, cash flows and changes
in shareholders equity of the Borrower, Berry UK, Norwich and all other
Subsidiaries for such fiscal year, and (ii) a Compliance Certificate, in
substantially the form attached to this Agreement as EXHIBIT D, containing
a detailed computation of each financial covenant in this Agreement which
is applicable for the period reported, a certification that no change has
occurred to the information contained in the Collateral Disclosure List
(except as set forth any schedule attached to the certification) and (iii)
a management letter in the form prepared by the Borrower's independent
certified public accountants, but only if and to the extent customarily
obtained by the Borrower. The Agent agrees that any one of the "Big 4"
accounting firms is satisfactory to the Agent for purposes of this Section
(A) FINANCIAL STATEMENTS., except to the extent the Agent in its reasonable
discretion and based on good faith and legitimate concerns determines that
any such accounting firm would be unacceptable because of any conflict of
interest or any material adverse change affecting such firm's reliability
or financial viability. (Annual Statements) and (iii) QUARTERLY STATEMENTS
AND CERTIFICATES. The Borrower shall furnish to the Agent for distribution
to the Lenders as soon as available, but in no event more than forty-five
(45) days after the close of the Borrower's fiscal quarters (other than the
final fiscal quarter), consolidated and consolidating balance sheets of the
Borrower, Berry UK, Norwich and all other Subsidiaries as of the close of
such period, consolidated and consolidating income, cash flows and changes
in shareholders equity statements for such period, and a Compliance
Certificate, in substantially the form attached to this Agreement as
EXHIBIT D, containing a detailed computation of each financial covenant in
this Agreement which is applicable for the period reported, each prepared
by a Responsible Officer of or on behalf of the Borrower in a format
acceptable to the Agent, all as prepared and certified by a Responsible
Officer of the Borrower and accompanied by a certificate of that officer
stating whether any event has occurred which constitutes a Default or an
Event of Default hereunder, and, if so, stating the facts with respect
thereto. (Quarterly Statements), as appropriate. Any change in the
Applicable Margin shall be effective as of the test date of the Pricing
Ratio, as appropriate, but shall not effect any change to the Applicable
Margins for the UK Credit Facilities. The Applicable Margin shall vary
depending upon the Borrower's Pricing Ratio, as follows:
<TABLE>
<CAPTION>
Pricing Ratio Applicable Margin for Applicable Margin for
LIBOR Loans Base Rate Loans
<S> <C> <C>
greater than or equal to 5.5 to 1.0 250 b.p. 100 b.p.
greater than or equal to 5.0 to 1.0, but less 225 b.p. 75 b.p.
than 5.5 to 1.0
greater than or equal to 3.5 to 1.0, but less 200 b.p. 50 b.p.
than 5.0 to 1.0
greater than or equal to 2.75 to 1.0, but less 175 b.p. 25 b.p.
than 3.5 to 1.0
less than 2.75 to 1.0 150 b.p. 0 b.p.
</TABLE>
(B)SELECTION OF INTEREST RATES.
(i)The Borrower may select the initial Applicable Interest Rate or Applicable
Interest Rates to be charged on the Loans under the Domestic Credit Facilities
and Berry UK or Norwich may select an initial Sterling LIBOR Rate or Sterling
LIBOR Rates to be charged on the Loans under the UK Credit Facilities.
(ii)From time to time after the date of this Agreement as provided in this
Section, by a proper and timely Interest Rate Election Notice furnished to the
Agent or NationsBank, as appropriate, in accordance with the provisions of
Section SELECTION OF INTEREST RATES., the Borrower, Berry UK or Norwich, as
appropriate, may select an initial Applicable Interest Rate or Applicable
Interest Rates for any Loans or may convert the Applicable Interest Rate and,
when applicable, the Interest Period, for any existing Loan to any other
Applicable Interest Rate or, when applicable, any other Interest Period.
(iii)The selection of an Applicable Interest Rate and/or an Interest Period,
the election to convert an Applicable Interest Rate and/or an Interest Period
to another Applicable Interest Rate or Interest Period, and any other
adjustments in an interest rate are subject to the following limitations:
(A)neither the Borrower, Berry UK nor Norwich shall at any time
select or change to an Interest Period that extends beyond the Revolving Credit
Termination Date in the case of the Revolving Loan, or the UK Revolving Credit
Termination Date in the case of the UK Revolving Loan or the UK Term Loans or
beyond the scheduled maturity of the Term Loans in the case of the Term Loans.
In addition, only a Sterling Interest Period may be selected for a Sterling
LIBOR Loan and only a Dollar Interest Period may be selected for a Dollar LIBOR
Loan,
(B)no change from the LIBOR Rate to the Alternate Base Rate
shall become effective on a day other than a Business Day and so long as
NationsBank or the Lenders, as appropriate, receive any compensation payable
pursuant to Section (D) INDEMNITY. (Indemnity), on a day which is the last day
of the then current Interest Period, no change of an Interest Period shall
become effective on a day other than the last day of the then current Interest
Period, and no change from the Alternate Base Rate to the LIBOR Rate shall
become effective on a day other than a day which is a Business Day. Neither
the Alternate Base Rate nor the Dollar LIBOR Rate is available at any time as
an Applicable Interest Rate for any Loans under the UK Credit Facilities, and
the Sterling LIBOR Rate is not available at any time as an applicable Interest
Rate for any Loans under the Domestic Credit Facilities.
(C)any Applicable Interest Rate change for any Loan to be
effective on a date on which any principal payment on account of such Loan is
scheduled to be paid shall be made only after such payment shall have been
made,
(D)no more than three (3) different LIBOR Rates may be
outstanding at any time and from time to time with respect to each of the
Revolving Loan or the UK Revolving Loan,
(E)no more than two (2) different LIBOR Rates may be outstanding
at any time and from time to time with respect to each of the Term Loans or the
UK Term Loans,
(F)the first day of each Interest Period shall be a Business
Day,
(G)as of the effective date of a selection, there shall not
exist a Default or an Event of Default, and
(H)the minimum principal amount of a LIBOR Loan under the
Domestic Credit Facilities shall be One Million Dollars ($1,000,000) and the
minimum principal amount of a LIBOR Loan under the UK Credit Facilities shall
be One Hundred Fifty Thousand Pounds Sterling (<pound-sterling>150,000).
(iv)If a request for an advance under the Loans is not accompanied by an
Interest Rate Election Notice or does not otherwise include a selection of an
Applicable Interest Rate and, if applicable, an Interest Period, or if, after
having made a selection of an Applicable Interest Rate and, if applicable, an
Interest Period, the Borrower, Berry UK or Norwich fails or is not otherwise
entitled under the provisions of this Agreement to continue such Applicable
Interest Rate or Interest Period, the Borrower shall be deemed to have selected
the Alternate Base Rate as the Applicable Interest Rate until such time as the
Borrower shall have selected a different Applicable Interest Rate and specified
an Interest Period in accordance with, and subject to, the provisions of this
Section and Berry UK and Norwich shall be deemed to have selected a 30-day
Interest Period and the LIBOR Rate.
(v)Neither NationsBank nor the Lenders will be obligated to make Loans, to
convert the Applicable Interest Rate on Loans to another Interest Rate, or to
change Interest Periods, unless NationsBank or the Agent, as appropriate, shall
have received an irrevocable written or telephonic notice (an "Interest Rate
Election Notice") from the Borrower, Berry UK or Norwich, as appropriate,
specifying the following information:
(A)the amount to be borrowed or converted,
(B)a selection of the Alternate Base Rate or the LIBOR Rate
(except that the Alternate Base Rate shall not be available as an Applicable
Interest Rate on any Loans made or to be made under the UK Credit Facilities),
(C)the length of the Interest Period if the Applicable Interest
Rate selected is the LIBOR Rate, and
(D)the requested date on which such election is to be effective.
Article IIAny telephonic notice must be confirmed in writing within three (3)
Business Days. Each Interest Rate Election Notice for a Loan under the
Domestic Credit Facilities must be received by the Agent not later than 10:00
a.m. (Baltimore City Time) on the Business Day of any requested borrowing or
conversion in the case of a selection of the Alternate Base Rate and not later
than 10:00 a.m. (Baltimore City Time) on the third Business Day before the
effective date of any requested borrowing or conversion in the case of a
selection of the LIBOR Rate. Each Interest Rate Election Notice for a Loan
under the UK Credit Facilities must be received by NationsBank not later than
10:00 a.m. (London Time) on the Business Day of any requested borrowing or
conversion.
(C)INABILITY TO DETERMINE LIBOR BASE RATE.
In the event that (a) the Agent or NationsBank shall have determined that, by
reason of circumstances affecting the London interbank market, adequate and
reasonable means do not exist for ascertaining the LIBOR Base Rate for any
requested Interest Period with respect to a Loan, the Borrower, Berry UK and/or
Norwich, as appropriate, shall have requested to be made or to be converted to
a LIBOR Loan or (b) the Agent or NationsBank shall determine that the LIBOR
Base Rate for any requested Interest Period with respect to a Loan the
Borrower, Berry UK and/or Norwich, as appropriate, shall have requested to be
made or to be converted to a LIBOR Loan does not adequately and fairly reflect
the cost to NationsBank or the Lenders, as appropriate, of funding or
converting such Loan, the Agent or NationsBank, as applicable, shall give
telephonic or written notice of such determination to the Borrower, Berry UK
and/or Norwich, as appropriate, at least one (1) day prior to the proposed date
for funding or converting such Loan. If such notice is given, any request for
a Dollar LIBOR Loan shall be made or converted to an Alternate Base Rate Loan
and any Sterling LIBOR Loan shall accrue interest at the rate certified by
NationsBank to be the rate at which it currently offers loans in Sterling to
its best customers. Until such notice has been withdrawn by the Agent or
NationsBank, the Borrower, Berry UK and Norwich will not request that any Loan
be made or converted to a LIBOR Loan.
(D)INDEMNITY.
The Borrower agrees to indemnify and reimburse the Lenders and to hold the
Lenders harmless from any loss, cost (including administrative costs) or
expense which any one or more of the Agent or the Lenders may sustain or incur
as a consequence of (a) a default by the Borrower, Berry UK or Norwich in
payment when due of the principal amount of or interest on any LIBOR Loan,
including, any LIBOR Loan made under the UK Credit Facilities, (b) the failure
of the Borrower, Berry UK or Norwich to make, or convert the Applicable
Interest Rate of, a LIBOR Loan after the Borrower, Berry UK or Norwich has
given a Loan Notice or an Interest Rate Election Notice, (c) the failure of the
Borrower, Berry UK or Norwich to make any prepayment of a LIBOR Loan after the
Borrower, Berry UK or Norwich has given notice of such intention to make such a
prepayment, and/or (d) the making by the Borrower, Berry UK or Norwich of a
prepayment of a LIBOR Loan on a day which is not the last day of the Interest
Period for such LIBOR Loan, calculated as provided in the following paragraph,
including, without limitation, any such loss or expense arising from the
reemployment of funds obtained by the Agent and/or any of the Lenders to
maintain any LIBOR Loan or from fees payable to terminate the deposits from
which such funds were obtained. Berry UK and Norwich jointly and severally
agree to indemnify and reimburse the Lenders and to hold the Lenders harmless
from any loss, cost (including administrative costs) or expense which any one
or more of the Lenders may sustain or incur as a consequence of (a) a default
by Berry UK or Norwich in payment when due of the principal amount of or
interest on any LIBOR Loan made under the UK Credit Facilities, (b) the failure
of Berry UK or Norwich to make, or convert the Applicable Interest Rate of, a
LIBOR Loan made under the UK Credit Facilities after Berry UK or Norwich has
given a Loan Notice or an Interest Rate Election Notice, (c) the failure of
Berry UK or Norwich to make any prepayment of a LIBOR Loan made under the UK
Credit Facilities after Berry UK or Norwich has given notice of such intention
to make such a prepayment, and/or (d) the making by Berry UK or Norwich of a
prepayment of a LIBOR Loan made under the UK Credit Facilities on a day which
is not the last day of the Interest Period for such LIBOR Loan, calculated as
provided in the following paragraph, including, without limitation, any such
loss or expense arising from the reemployment of funds obtained by any of the
Lenders to maintain any LIBOR Loan made under the UK Credit Facilities or from
fees payable to terminate the deposits from which such funds were obtained, but
excluding loss of anticipated profits. This agreements and covenants of the
Borrower, Berry UK and Norwich shall survive termination or expiration of this
Agreement and payment of the Obligations.
Contemporaneously with any prepayment of principal of a LIBOR Loan, a
prepayment fee shall be due and payable to the Lenders in an amount equal to
any loss or expense (other than loss of anticipated profits) arising from the
reemployment of funds obtained by any Lender to fund or maintain any LIBOR Loan
or from fees payable to terminate the deposits from which such funds were
obtained. Neither the Agent nor any of the Lenders shall be obligated to
accept any prepayment of principal unless it is accompanied by the prepayment
fee, if any, due in connection therewith as calculated pursuant to the
provisions of this paragraph. No prepayment fee payable in connection herewith
shall in any event or under any circumstances be deemed or construed as a
penalty. The Borrower shall be liable for the payment of all prepayment fees
due under this Section 2.10.4, whether relating to the Domestic Credit
Facilities or the UK Credit Facilities; Berry UK and Norwich, however, shall be
jointly and severally liable only for the payment of those prepayment fees
which relate solely to the UK Credit Facilities.
(E)PAYMENT OF INTEREST.
(i)Unpaid and accrued interest on any Base Rate Loan shall be paid monthly, in
arrears, on the first day of each calendar month, commencing on the first such
date after the date of this Agreement, and on the first day of each calendar
month thereafter, and at maturity (whether by acceleration, declaration,
extension or otherwise).
(ii)Notwithstanding the foregoing, any and all unpaid and accrued interest on
any Base Rate Loan converted to a LIBOR Loan or prepaid shall be paid
immediately upon such conversion and/or prepayment, as appropriate.
(iii)Unpaid and accrued interest on any LIBOR Loan shall be paid, in arrears,
on the last day of the applicable LIBOR Interest Period and at maturity
(whether by acceleration, declaration, extension or otherwise).
Notwithstanding anything to the contrary contained herein, the Agent and
NationsBank agree that neither the Borrower, Berry UK nor Norwich shall have
any obligation to make any payment pursuant to the provisions of Section (D)
INDEMNITY. (Indemnity) resulting solely from the payment of accrued interest on
a date other than the expiration date of an Interest Period.
SECTION 2.11GENERAL FINANCING PROVISIONS.
(A)BORROWER'S REPRESENTATIVES.
(i) The Borrower hereby represents and warrants to the Agent and the Lenders
that the Borrower and each Subsidiary Guarantor will derive benefits, directly
and indirectly, from each Letter of Credit, from each Bond Letter of Credit and
from each Loan, both in their separate capacity and as a member of the
integrated group to which the Borrower and each Subsidiary Guarantor belongs
and because (i) the successful operation of the integrated group is dependent
upon the continued successful performance of the functions of the integrated
group as a whole, (ii) this financing enabled the PackerWare Merger Transaction
and the Venture Stock Purchase Merger/Transaction and is enabling the Norwich
Stock Purchase Transaction, (iii) the terms of the consolidated financing
provided under this Agreement are more favorable than would otherwise would be
obtainable by the Borrower, Berry UK, Norwich and any Subsidiary Guarantor
individually, and (iv) the Borrower's additional administrative and other costs
and reduced flexibility associated with individual financing arrangements which
would otherwise be required if obtainable would substantially reduce the value
to the Borrower of such financings.
(ii) The Borrower hereby irrevocably authorizes each of the Lenders to make
Loans to the Borrower, and hereby irrevocably authorizes the Agent to issue
Letters of Credit and Bond Letters of Credit for the account of the Borrower,
pursuant to the provisions of this Agreement upon the written, oral or
telephone request of any one of the Persons who is from time to time a
Responsible Officer of the Borrower under the provisions of the most recent
certificate of corporate resolutions of the Borrower on file with the Agent and
also upon the written, oral or telephone request of any one of the Persons who
is from time to time a Responsible Officer of the Borrower under the provisions
of the most recent certificate of corporate resolutions and/or incumbency for
the Borrower on file with the Agent. Berry UK and Norwich each hereby
irrevocably authorizes NationsBank to make Loans to Berry UK and/or Norwich,
pursuant to the provisions of this Agreement upon the written, oral or
telephone request of any one of the Persons who is from time to time a
Responsible Officer of Berry UK or Norwich under the provisions of the most
recent certificate of corporate resolutions of Berry UK or Norwich on file with
NationsBank and also upon the written, oral or telephone request of any one of
the Persons who is from time to time a Responsible Officer of Berry UK or
Norwich under the provisions of the most recent certificate of corporate
resolutions and/or incumbency for Berry UK or Norwich on file with NationsBank.
(iii)Neither the Agent nor any of the Lenders assumes any responsibility or
liability for any errors, mistakes, and/or discrepancies in the oral,
telephonic, written or other transmissions of any instructions, orders,
requests and confirmations between the Agent or NationsBank and the Borrower,
Berry UK and/or Norwich or the Agent or NationsBank and any of the Lenders in
connection with the Credit Facilities, any Loan, any Letter of Credit, any Bond
Letter of Credit or any other transaction in connection with the provisions of
this Agreement, except for acts of willful misconduct and gross negligence.
(B)USE OF PROCEEDS OF THE LOANS.
The proceeds of each Loan shall be used by the Borrower, Berry UK, Norwich and
the Subsidiary Guarantors, as applicable, for Permitted Uses, and for no other
purposes except as may otherwise be agreed by the Requisite Lenders in writing.
(C)FIELD EXAMINATION FEES.
The Borrower shall pay to the Agent for the exclusive benefit of the Agent an
annual field examination fee (the "Field Examination Fee"), which Field
Examination Fee shall be payable quarterly in advance on the first day of each
February, May, August and November of each year commencing on the first such
date following the Closing Date, and continuing until the last such date prior
to which all Obligations arising out of, or under, the Credit Facilities then
outstanding have been paid in full. The Field Examination Fee shall be in the
amount of Forty Thousand Dollars ($40,000) per annum, and shall also include
the amount of all out-of-pocket expenses reasonably incurred by the Agent in
connection with any field examination of Norwich and/or Berry UK for which the
Agent has not been previously reimbursed.
(D)UK COMMITMENT FEE.
The Borrower, Berry UK and Norwich jointly and severally shall pay to the Agent
for the ratable benefit of the Lenders a commitment fee (the "First UK
Commitment Fee") in the amount of Fifty-two Thousand Five Hundred Dollars
($52,500). In addition, the Borrower, Berry UK and Norwich jointly and
severally shall pay to NationsBank and GE Capital an additional commitment fee
in the amount of One Hundred Thirty-five Thousand Dollars ($135,000) to be
shared equally between NationsBank and GE Capital (the "Second UK Commitment
Fee") (the First UK Commitment Fee and the Second UK Commitment Fee are herein
collectively referred to as the "UK Commitment Fee"). The UK Commitment Fee
shall be payable on or before the Closing Date and shall be deemed fully earned
on the date paid and is non-refundable.
(E)COMPUTATION OF INTEREST AND FEES.
All applicable Fees and interest shall be calculated on the basis of a year of
360 days (or in the case of Sterling, 365 days) for the actual number of days
elapsed. Any change in the interest rate on any of the Obligations resulting
from a change in the Alternate Base Rate shall become effective as of the
opening of business on the day on which such change in the Alternate Base Rate
is announced.
(F)PAYMENTS.
ALL PAYMENTS TO BE MADE BY THE BORROWER TO THE AGENT AND/OR ANY OF THE LENDERS
UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS WITH RESPECT TO
THE OBLIGATIONS, OTHER THAN THE UK OBLIGATIONS, SHALL BE MADE IN US DOLLARS
(UNLESS OTHERWISE AGREED TO OR REQUIRED BY THE AGENT OR ANY LENDER), WITHOUT
SET-OFF OR COUNTERCLAIM AND FREE AND CLEAR OF, AND WITHOUT DEDUCTION FOR OR ON
ACCOUNT OF, ANY PRESENT OR FUTURE INCOME, STAMP OR OTHER TAXES, LEVIES,
IMPOSTS, DUTIES, CHARGES, FEES, DEDUCTIONS, WITHHOLDINGS OR RESTRICTIONS OR
CONDITIONS OF ANY NATURE WHATSOEVER NOW OR HEREAFTER IMPOSED, LEVIED,
COLLECTED, WITHHELD OR ASSESSED AGAINST THE BORROWER, OTHER THAN INCOME AND
FRANCHISE TAXES IMPOSED ON ANY LENDER (THE "ASSESSMENTS"). ALL PAYMENTS TO BE
MADE BY BERRY UK OR NORWICH TO NATIONSBANK UNDER THIS AGREEMENT OR ANY OF THE
OTHER FINANCING DOCUMENTS WITH RESPECT TO THE UK OBLIGATIONS SHALL BE MADE IN
STERLING (UNLESS OTHERWISE AGREED TO OR REQUIRED BY NATIONSBANK), WITHOUT SET-
OFF OR COUNTERCLAIM AND FREE AND CLEAR OF, AND WITHOUT DEDUCTION FOR OR ON
ACCOUNT OF, ANY PRESENT OR FUTURE ASSESSMENTS. IF ANY ASSESSMENTS ARE IMPOSED
AND REQUIRED TO BE WITHHELD FROM ANY SUCH PAYMENT, THE BORROWER, BERRY UK OR
NORWICH, AS APPROPRIATE, SHALL (A) INCREASE THE AMOUNT OF SUCH PAYMENT SO THAT
NATIONSBANK WILL RECEIVE A NET AMOUNT (AFTER GIVING EFFECT TO THE PAYMENT OF
SUCH ADDITIONAL AMOUNT AND TO THE DEDUCTION OF ALL ASSESSMENTS) EQUAL TO THE
AMOUNT DUE HEREUNDER, AND (B) PAY SUCH ASSESSMENTS TO THE APPROPRIATE TAXING
AUTHORITY FOR THE ACCOUNT OF NATIONSBANK AND, AS PROMPTLY AS POSSIBLE
THEREAFTER, SEND NATIONSBANK AN ORIGINAL RECEIPT (OR A COPY THEREOF THAT HAS
BEEN STAMPED BY THE APPROPRIATE TAXING AUTHORITY TO CERTIFY PAYMENT) SHOWING
PAYMENT THEREOF, TOGETHER WITH SUCH ADDITIONAL DOCUMENTARY EVIDENCE AS
NATIONSBANK MAY FROM TIME TO TIME REASONABLY REQUIRE. IF THE BORROWER, BERRY
UK OR NORWICH FAIL TO PERFORM ITS OBLIGATIONS TO THE AGENT AND/OR ANY OF THE
LENDERS UNDER THE FOREGOING, THE BORROWER, BERRY UK AND NORWICH (SUBJECT TO THE
LIMITATIONS OF SECTION (J) IMITATIONS ON JOINT AND SEVERAL LIABILITY FOR
OBLIGATIONS. (Limitations on Liability) shall indemnify the Agent and the
Lenders for any such Assessments that are paid by the Agent and/or any of the
Lenders, plus all incremental Assessments, interest or penalties that may
become payable as a consequence of such failure. All payments of the
Obligations (other than the UK Obligations), including, without limitation,
principal, interest, Prepayments, and Fees, shall be paid by the Borrower to
the Agent (except as otherwise provided herein) at the Agent's office specified
IN SECTION 9.1 NOTICES.
All notices, requests and demands to or upon the parties to this Agreement
shall be in writing and shall be deemed to have been given or made when
delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail, return
receipt requested, or when sent by overnight courier, on the Business Day next
following the day on which the notice is delivered to such overnight courier,
addressed as follow (Notices) in immediately available funds not later than
2:00 p.m. (Baltimore City Time) on the due date of such payment and all
payments of the UK Obligations shall be paid by Berry UK and Norwich to
NationsBank at its Sterling LIBOR Lending Office specified in Section 9.1
(Notices) in immediately available funds not later than 2:00 p.m. (London time)
on the due date of such payments. All payments received by the Agent or
NationsBank, as applicable, after such time shall be deemed to have been
received by the Agent and/or NationsBank, as applicable, for purposes of
computing interest and Fees and otherwise as of the next Business Day or
Business Day, as appropriate. Payments shall not be considered received by the
Agent or NationsBank, as applicable, until such payments are paid to the Agent
and/or NationsBank, as applicable, in immediately available funds. This
Section 2.11.7 shall be the only Section of this Agreement pursuant to which
the Borrower, Norwich or Berry UK shall be obligated to gross up any Lender for
Taxes.
(G)LIENS; SETOFF.
The Borrower hereby grants to the Agent and to the Lenders a continuing Lien
for all of the Obligations (including, without limitation, the Agent's
Obligations) upon any and all monies, securities, and other cash deposits of
the Borrower and the proceeds thereof, now or hereafter held or received by or
in transit to, the Agent, any of the Lenders, and/or any Affiliate of the Agent
and/or any of the Lenders, from or for the Borrower, and also upon any and all
deposit accounts (general or special) and credits of the Borrower, if any, with
the Agent, any of the Lenders or any Affiliate of the Agent or any of the
Lenders, at any time existing, excluding any deposit accounts held by the
Borrower in its capacity as trustee for Persons who are not Affiliates or
Subsidiaries of the Borrower. Berry UK and Norwich each hereby grants to
NationsBank a continuing Lien for all of the UK Obligations upon any and all
monies, securities, and other cash deposits of Berry UK and/or Norwich and the
proceeds thereof, now or hereafter held or received by or in transit to,
NationsBank and/or any Affiliate of NationsBank, from or for Berry UK and/or
Norwich, and also upon any and all deposit accounts (general or special) and
credits of Berry UK and/or Norwich, if any, with NationsBank or any Affiliate
of NationsBank, at any time existing, excluding any deposit accounts held by
Berry UK and/or Norwich in its capacity as trustee for Persons who are not
Affiliates or Subsidiaries of the Borrower, Berry UK or Norwich. Without
implying any limitation on any other rights the Agent and/or any of the Lenders
may have under the Financing Documents or applicable Laws, during the
continuance of an Event of Default, the Agent is hereby authorized by the
Borrower at any time and from time to time, without notice to the Borrower, to
set off, appropriate and apply any or all items hereinabove referred to against
all Obligations (including, without limitation, the Agent's Obligations) then
outstanding (whether or not then due), all in such order and manner as shall be
determined by the Agent in its sole and absolute discretion.
(H)REQUIREMENTS OF LAW.
IN THE EVENT THAT ANY LENDER SHALL HAVE DETERMINED IN GOOD FAITH THAT (A) THE
ADOPTION OF ANY LAWS AFTER THE CLOSING DATE REGARDING CAPITAL ADEQUACY, OR (B)
ANY CHANGE IN OR IN THE INTERPRETATION OR APPLICATION OF ANY LAWS, OR (C)
COMPLIANCE BY SUCH LENDER OR ANY CORPORATION CONTROLLING SUCH LENDER WITH ANY
REQUEST OR DIRECTIVE REGARDING CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE
FORCE OF LAW) FROM ANY CENTRAL BANK OR GOVERNMENTAL AUTHORITY, DOES OR SHALL
HAVE THE EFFECT OF REDUCING THE RATE OF RETURN ON THE CAPITAL OF SUCH LENDER OR
ANY CORPORATION CONTROLLING SUCH LENDER, AS A CONSEQUENCE OF THE OBLIGATIONS OF
THE SUCH LENDER HEREUNDER TO A LEVEL BELOW THAT WHICH SUCH LENDER OR ANY
CORPORATION CONTROLLING SUCH LENDER WOULD HAVE ACHIEVED BUT FOR SUCH ADOPTION,
CHANGE OR COMPLIANCE (TAKING INTO CONSIDERATION THE POLICIES OF SUCH LENDER AND
THE CORPORATION CONTROLLING SUCH LENDER, WITH RESPECT TO CAPITAL ADEQUACY) BY
AN AMOUNT DEEMED BY SUCH LENDER TO BE MATERIAL, THEN FROM TIME TO TIME, AFTER
SUBMISSION BY SUCH LENDER TO THE BORROWER OF A WRITTEN REQUEST THEREFOR AND A
STATEMENT OF THE BASIS FOR SUCH DETERMINATION, THE BORROWER SHALL PAY TO SUCH
LENDER SUCH ADDITIONAL AMOUNT OR AMOUNTS IN ORDER TO COMPENSATE FOR SUCH
REDUCTION. THE AGENT AND THE LENDERS AGREE THAT THE BORROWER SHALL BE
ENTITLED, AT ITS OPTION, TO REQUIRE THAT ANY LENDER WHICH DEMANDS PAYMENT OF
ANY AMOUNTS UNDER THIS SECTION (H) REQUIREMENTS OF LAW. assign one hundred
percent (100%) of its Commitments and Obligations to one or more other lenders
or financial institutions as shall be acceptable to the Borrower and the Agent;
provided that any such assignment is effected in accordance with the provisions
of ASSIGNMENTS BY LENDERS.
Any Lender may, with the prior written consent of the Agent and the Borrower,
but without notice to or consent of any other Lender, which consent shall not
be unreasonably withheld, delayed or conditioned, assign to any Person (each an
"Assignee" and collectively, the "Assignees") all or a portion of such Lender's
Commitments; provided that (a) the amount assigned by such Lender must be at
least equal to Five Million Dollars ($5,000,000), (b) after giving effect to
such assignment, such Lender must continue to hold a Pro Rata Share of the
Commitments at least equal to Ten Million Dollars ($10,000,000), unless such
Lender has assigned one hundred percent (100%) of such Lender's Commitments,
and (c) any amount assigned shall be divided pro rata among such Lenders' Pro
Rata Share of the Commitments and Obligations. NationsBank agrees that if at
any time NationsBank sells one hundred percent (100%) of all of its
Commitments, NationsBank shall resign as Agent and the remaining Lenders shall
select a replacement Agent in accordance with the provisions of this Agreement.
In addition, NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to hold a
Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the
Lender (other than NationsBank) having the highest Pro Rata Share of the
Commitments. Any Lender which elects to make such an assignment shall pay to
the Agent, for the exclusive benefit of the Agent, an administrative fee for
processing each such assignment in the amount of Three Thousand Five Hundred
Dollars ($3,500). Such Lender and its Assignee shall notify the Agent and the
Borrower in writing of the date on which the assignment is to be effective (the
"Adjustment Date"). On or before the Adjustment Date, the assigning Lender,
the Agent, the Borrower and the respective Assignee shall execute and deliver a
written assignment agreement in a form acceptable to the Agent, which shall
constitute an amendment to this Agreement to the extent necessary to reflect
such assignment. Upon the request of any assigning Lender following an
assignment made in accordance with this ASSIGNMENTS BY LENDERS., the Borrower,
Berry UK and Norwich shall issue new Notes to the assigning Lender and its
Assignee reflecting such assignment, in exchange for the existing Notes held by
the assigning Lender. (Assignments by Lenders).
(I)FUNDS TRANSFER SERVICES.
(i)The Borrower, Berry UK and Norwich acknowledge that the Agent has made
available to the Borrower, Berry UK and Norwich, the Agent's Wire Transfer
Procedures a copy of which is attached to this Agreement as EXHIBIT B and which
includes a description of security procedures regarding funds transfers
executed by the Agent or an Affiliate bank at the request of the Borrower (the
"Security Procedures"). The Borrower, Berry UK, Norwich and the Agent agree
that the Security Procedures are commercially reasonable. The Borrower, Berry
UK and Norwich further acknowledge that the full scope of the Security
Procedures which the Agent or such Affiliate bank offers and strongly
recommends is available only if the Borrower, Berry UK and Norwich communicates
directly with the Agent or such Affiliate bank as applicable in accordance with
said procedures. If the Borrower, Berry UK or Norwich attempts to communicate
by any other method or otherwise not in accordance with the Security
Procedures, the Agent or such Affiliate bank, as applicable, shall not be
required to execute such instructions, but if the Agent or such Affiliate bank,
as applicable, does so, the Borrower, Berry UK and Norwich will be deemed to
have refused the Security Procedures that the Agent or such Affiliate bank as
applicable offers and strongly recommends, and the Borrower, Berry UK and
Norwich will be bound by any funds transfer, whether or not authorized, which
is issued in the name of the Borrower, Berry UK and/or Norwich and accepted by
the Agent or such Affiliate bank, as applicable, in good faith. The Agent or
such Affiliate bank, as applicable, may modify Wire Transfer Procedures upon
notice to the Borrower, including, without limitation, the Security Procedures
at such time or times and in such manner as the Agent or such Affiliate bank,
as applicable, in its reasonable discretion, deems appropriate to meet
prevailing standards of good banking practice. By continuing to use the
Agent's or such Affiliate bank's, as applicable, wire transfer services after
receipt of any modification of the Wire Transfer procedures including, without
limitation, the Security Procedures, the Borrower, Berry UK and Norwich agree
that the Security Procedures, as modified, are likewise commercially
reasonable. Neither the Agent nor any Affiliate bank is responsible for
detecting any error in payment order sent by the Borrower, Berry UK or Norwich
to the Agent or any of the Lenders unless due to the willful misconduct or
gross negligence of the Agent or any such Affiliate bank.
(ii) The Agent or such Affiliate bank, as applicable, will generally use the
Fedwire funds transfer system for domestic funds transfers, and the funds
transfer system operated by the Society for Worldwide International Financial
Telecommunication (SWIFT) for international funds transfers. International
funds transfers may also be initiated through the Clearing House InterBank
Payment System (CHIPs) or international cable. However, the Agent or such
Affiliate bank, as applicable, may use any means and routes that the Agent or
such Affiliate bank, as applicable, in its reasonable discretion, may consider
suitable for the transmission of funds. Each payment order, or cancellation
thereof, carried out through a funds transfer system or a clearinghouse will be
governed by all applicable funds transfer system rules and clearing house rules
and clearing arrangements, whether or not the Agent or such Affiliate bank, as
applicable, is a member of the system, clearinghouse or arrangement and the
Borrower, Berry UK and Norwich acknowledge that the Agent's or such Affiliate
bank's, as applicable, right to reverse, adjust, stop payment or delay posting
of an executed payment order is subject to the laws, regulations, rules,
circulars and arrangements described herein.
(J) LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS.
Notwithstanding anything to the contrary contained in this Agreement or in any
of the other Financing Documents, Berry UK and Norwich shall be liable for
payment and performance only of (i) the UK Revolving Loan and the UK Term Loans
(including principal and interest) and (iii) those Fees and Enforcement Costs
attributable solely to any of the foregoing (the "UK Obligations"). The
Borrower shall be jointly and severally liable for all of the Obligations,
including, without limitation, the UK Obligations.
SECTION 2.12 SETTLEMENT AMONG LENDERS.
(A)TERM LOANS; SPECIAL SOURCE BOND.
The Agent shall pay to each Lender on each date on which a payment of principal
and/or interest on the Term Loans and/or Special Source Bond, such Lender's
ratable share of all payments received by the Agent in immediately available
funds on account of the Term Loans and/or the Special Source Bond, net of any
amounts payable by such Lender to the Agent, by wire transfer of same day
funds; the amount payable to each Lender shall be based on the principal amount
of the Term Loans owing to such Lender and the Lender's Pro Rata Share of the
Special Source Bond Obligations, respectively.
(B)REVOLVING LOAN.
It is agreed that each Lender's Net Outstandings are intended by the Lenders to
be equal at all times to such Lender's Revolving Credit Pro Rata Share of the
aggregate outstanding principal amount of the Revolving Loan outstanding,
including, without limitation, unpaid and accrued interest thereon.
Notwithstanding such agreement, the several and not joint obligation of each
Lender to fund the Revolving Loan made in accordance with the terms of this
Agreement ratably in accordance with such Lender's Revolving Credit Pro Rata
Share, and each Lender's right to receive its ratable share of principal and
interest payments on the Revolving Loan in accordance with its Revolving Credit
Pro Rata Share, the Lenders agree that in order to facilitate the
administration of this Agreement and the Financing Documents that settlement
among them may take place on a periodic basis in accordance with the provisions
of this Section (B) REVOLVING LOAN..
(C)SETTLEMENT PROCEDURES AS TO REVOLVING LOAN.
(I) IN GENERAL. To the extent and in the manner hereinafter provided in this
Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN., settlement among the
Lenders as to the Revolving Loan may occur periodically on Settlement Dates
determined from time to time by the Agent, which may occur before or after the
occurrence or during the continuance of a Default or Event of Default and
whether or not all of the conditions set forth in SECTION 5.2 CONDITIONS TO ALL
EXTENSIONS OF CREDIT. (Conditions to All Extensions of Credit) have been met.
On each Settlement Date payments shall be made by or to the Lenders in the
manner provided in this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING
LOAN. in accordance with the Settlement Report delivered by the Agent pursuant
to the provisions of this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING
LOAN. in respect of such Settlement Date so that as of each Settlement Date,
and after giving effect to the transactions to take place on such Settlement
Date, each Lender's Net Outstandings shall equal such Lender's Revolving Credit
Pro Rata Share of the Revolving Loan outstanding.
(II)SELECTION OF SETTLEMENT DATES. If the Agent elects, in its discretion, but
subject to the consent of NationsBank, to settle accounts among the Lenders
with respect to principal amounts of Revolving Loan less frequently than each
Business Day, then the Agent shall designate periodic Settlement Dates which
may occur on any Business Day after the Closing Date; provided, however, that
the Agent shall designate as a Settlement Date any Business Day which is
payment date; and provided further, that a Settlement Date shall occur at least
once during each seven-day period. The Agent shall designate a Settlement Date
by delivering to each Lender a Settlement Report not later than 12:00 noon
(Baltimore City Time) on the proposed Settlement Date, which Settlement Report
shall be with respect to the period beginning on the next preceding Settlement
Date and ending on such designated Settlement Date.
(III)NON-RATABLE LOANS AND PAYMENTS. Between Settlement Dates, the Agent shall
request and NationsBank may (but shall not be obligated to) advance to the
Borrower out of NationsBank's own funds, the entire principal amount of any
advance under the Revolving Loan requested or deemed requested pursuant to
Section (B) PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (Procedure
for Making Advances) (any such advance under the Revolving Loan being referred
to as a "Non-Ratable Loan"). The making of each Non-Ratable Loan by
NationsBank shall be deemed to be a purchase by NationsBank of a 100%
participation in each other Lender's Revolving Credit Pro Rata Share of the
amount of such Non-Ratable Loan. All payments of principal, interest and any
other amount with respect to such Non-Ratable Loan shall be payable to and
received by the Agent for the account of NationsBank. Upon demand by
NationsBank, with notice to the Agent, each other Lender shall pay to
NationsBank, as the repurchase of such participation, an amount equal to 100%
of such Lender's Revolving Credit Pro Rata Share of the principal amount of
such Non-Ratable Loan. Any payments received by the Agent between Settlement
Dates which in accordance with the terms of this Agreement are to be applied to
the reduction of the outstanding principal balance of Revolving Loan shall be
paid over to and retained by NationsBank for such application, and such payment
to and retention by NationsBank shall be deemed, to the extent of each other
Lender's Revolving Credit Pro Rata Share of such payment, to be a purchase by
each such other Lender of a participation in the advance under the Revolving
Loan (including the repurchase of participations in Non-Ratable Loans) made by
NationsBank. Upon demand by another Lender, with notice thereof to the Agent,
NationsBank shall pay to the Agent, for the account of such other Lender, as a
repurchase of such participation, an amount equal to such other Lender's
Revolving Credit Pro Rata Share of any such amounts (after application thereof
to the repurchase of any participations of NationsBank in such other Lender's
Revolving Credit Pro Rata Share of any Non-Ratable Loans) paid only to
NationsBank by the Agent.
(IV)NET DECREASE IN OUTSTANDINGS. If on any Settlement Date the increase, if
any, in the dollar amount of any Lender's Net Outstandings which is required to
comply with the first sentence of Section (B)REVOLVING LOAN. (Revolving Loan)
is less than such Lender's Revolving Credit Pro Rata Share (and/or UK Revolving
Credit Pro Rata Share, as appropriate) of amounts received by the Agent but
paid only to NationsBank since the next preceding Settlement Date, such Lender
and the Agent, in their respective records, shall apply such Lender's Revolving
Credit Pro Rata Share of such amounts to the increase in such Lender's Net
Outstandings, and NationsBank shall pay to the Agent, for the account of such
Lender, the excess allocable to such Lender.
(V)NET INCREASE IN OUTSTANDINGS. If on any Settlement Date the increase, if
any, in the dollar amount of any Lender's Net Outstandings which is required to
comply with the first sentence of Section (B) REVOLVING LOAN. (Revolving Loan)
exceeds such Lender's Revolving Credit Pro Rata Share of amounts received by
the Agent but paid only to NationsBank since the next preceding Settlement
Date, such Lender and the Agent, in their respective records, shall apply such
Lender's Revolving Credit Pro Rata Share of such amounts to the increase in
such Lender's Net Outstandings, and such Lender shall pay to the Agent, for the
account of NationsBank, any excess.
(VI)NO CHANGE IN OUTSTANDINGS. If a Settlement Report indicates that no
advance under the Revolving Loan has been made during the period since the next
preceding Settlement Date, then such Lender's Revolving Credit Pro Rata Share
of any amounts received by the Agent but paid only to NationsBank shall be paid
by NationsBank to the Agent, for the account of such Lender. If a Settlement
Report indicates that the increase in the dollar amount of a Lender's Net
Outstandings which is required to comply with the first sentence of Section (B)
REVOLVING LOAN. (Revolving Loan) is exactly equal to such Lender's Revolving
Credit Pro Rata Share of amounts received by the Agent but paid only to
NationsBank since the next preceding Settlement Date, such Lender and the
Agent, in their respective records, shall apply such Lender's Revolving Credit
Pro Rata Share of such amounts to the increase in such Lender's Net
Outstandings.
(VII) RETURN OF PAYMENTS. If any amounts received by NationsBank in respect of
the Obligations are later required to be returned or repaid by NationsBank to
the Borrower or any other obligor or their respective representatives or
successors in interest, whether by court order, settlement or otherwise, in
excess of the NationsBank's Revolving Credit Pro Rata Share of all such amounts
required to be returned by all Lenders, each other Lender shall, upon demand by
NationsBank with notice to the Agent, pay to the Agent for the account of
NationsBank, an amount equal to the excess of such Lender's Revolving Credit
Pro Rata Share of all such amounts required to be returned by all Lenders over
the amount, if any, returned directly by such Lender.
(viii)Payments to Agent, Lenders.
(E)Payment by any Lender to the Agent shall be made not later
than 4:00 p.m. (Baltimore City Time) on the Business Day such payment is due,
provided that if such payment is due on demand by another Lender, such demand
is made on the paying Lender not later than 12:00 p.m. (Baltimore City Time) on
such Business Day. Payment by the Agent to any Lender shall be made by wire
transfer, promptly following the Agent's receipt of funds for the account of
such Lender and in the type of funds received by the Agent, provided that if
the Agent receives such funds at or prior to 12:00 p.m. noon (Baltimore City
Time), the Agent shall pay such funds to such Lender by 4:00 p.m. (Baltimore
City Time) on such Business Day. If a demand for payment is made after the
applicable time set forth above, the payment due shall be made by 4:00 p.m.
(Baltimore City Time) on the first Business Day following the date of such
demand.
(F)If a Lender shall, at any time, fail to make any payment to
the Agent required hereunder, the Agent may, but shall not be required to,
retain payments that would otherwise be made to such Lender hereunder and apply
such payments to such Lender's defaulted obligations hereunder, at such time,
and in such order, as the Agent may elect in its sole discretion. In addition,
if a Lender shall default in its obligation to fund its Pro Rata Share of any
requested advance of the Revolving Loan and the Agent elects not to fund such
defaulting Lender's Pro Rata Share of that advance, then the defaulting Lender,
at the Agent's option, shall not be entitled to receive any payments of
principal of or interest on its Pro Rata Share of any of the Obligations or its
Pro Rata Share of any Fees, unless and until (A) all of the Obligations have
been paid in full or (B) the defaulting Lender cures its default by funding its
Pro Rata Share of the requested Revolving Loan advance. Interest and Fees which
would be payable to the defaulting Lender except for the provisions of this
subsection, instead shall be payable to the other Lenders in accordance with
their respective Pro Rata Shares. In addition, for so long as the defaulting
Lender shall remain in default under its obligations under this Agreement, for
purposes of voting on matters with respect to this Agreement and/or any of the
Financing Documents, such defaulting Lender shall be deemed not to be a
"Lender" and such Lender's Pro Rata Share of the Commitments and the
Obligations shall be deemed to be zero. No Commitment of any Lender shall be
increased or otherwise affected by the default of any other Lender nor shall
the Agent have any obligation to fund any amounts not funded by a defaulting
Lender.
(G)With respect to the payment of any funds under this Section
(C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN., whether from the Agent to a
Lender or from a Lender to the Agent, the party failing to make full payment
when due pursuant to the terms hereof shall, upon demand by the other party,
pay such amount together with interest on such amount at the Federal Funds
Rate.
(D)SETTLEMENT OF OTHER OBLIGATIONS.
All other amounts received by the Agent on account of, or applied by the Agent
to the payment of, any Obligation owed to the Lenders (including, without
limitation, Fees payable to the Lenders and proceeds from the sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default) that are received by the Agent not later than 11:00 a.m. (Baltimore
City Time) on a Business Day will be paid by the Agent to each Lender on the
same Business Day, and any such amounts that are received by the Agent after
11:00 a.m. (Baltimore City Time) will be paid by the Agent to each Lender on
the following Business Day. Unless otherwise stated herein, the Agent shall
distribute Fees payable to the Lenders ratably to the Lenders based on each
Lender's Revolving Credit Pro Rata Share and shall distribute proceeds from the
sale of, or other realization upon, all or any part of the Collateral following
an Event of Default ratably to the Lenders based on the amount of the
Obligations then owing to each Lender.
(E)PRESUMPTION OF PAYMENT.
(i)Unless the Agent shall have received notice from a Lender prior to 12:00
p.m. noon (Baltimore City Time) on the date of the requested date for the
making of advances under the Revolving Loan or prior to 12:00 p.m. noon
(Baltimore City Time) that such Lender will not make available to the Agent,
such Lender's Revolving Credit Pro Rata Share of the advances to be made on
such date, the Agent may assume that such Lender has made such amount available
to the Agent on such date in accordance with this Section (e) Presumption of
Payment., and the Agent, in its sole discretion may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount
on behalf of such Lender.
(ii)If and to the extent such Lender shall not have so made available to the
Agent its Revolving Credit Pro Rata Share of the advances under the Revolving
Loan made on such date, and the Agent shall have so made available to the
Borrower a corresponding amount on behalf of such Lender, such Lender shall, on
demand, pay to the Agent such corresponding amount, together with interest
thereon, at the Federal Funds Rate, for each day from the date such
corresponding amount shall have been so available by the Agent to the Borrower
until the date such amount shall have been repaid to the Agent. Such Lender
shall not be entitled to payment of any interest which accrues on the amount
made available by the Agent to the Borrower for the account of such Lender
until such time as such Lender reimburses the Agent for such amount, together
with interest thereon, as provided in this Section (E) PRESUMPTION OF PAYMENT..
(iii) A certificate of the Agent submitted to any Lender with respect to any
amounts owing to the Agent by such Lender under this Section (e) Presumption of
Payment. shall be conclusive and binding on such Lender, absent manifest error.
If such Lender does not pay such amounts to the Agent promptly upon the Agent's
demand, the Agent shall promptly notify the Borrower of such Lender's failure
to make payment, and the Borrower shall immediately repay such amounts to the
Agent, together with accrued interest thereon at the applicable rate on the
Revolving Loan, all without prejudice to the rights and remedies of the Agent
against any defaulting Lender. Any and all amounts due and payable to the
Agent by the Borrower under this Section (e) Presumption of Payment. constitute
and shall be part of the Agent's Obligations.
(iv) Unless the Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Agent that the Borrower will not make
such payment in full, the Agent may assume that the Borrower have made such
payment in full to the Agent on such date and the Agent in its sole discretion
may, in reliance upon such assumption, cause to be distributed to each Lender
on such due date an amount equal to the amount then due such Lender. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent and the Agent shall have distributed to any Lender all or any portion of
such amount, such Lender shall repay to the Agent on demand the amount so
distributed to such Lender, together with interest thereon at the Federal Funds
Rate, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Agent.
ARTICLE III
THE COLLATERAL
Section 3.1 DEBT AND OBLIGATIONS SECURED.
All property and Liens assigned, pledged or otherwise granted under or in
connection with this Agreement (including, without limitation, those under
Section 3.2 Grant of Liens.
The Borrower hereby assigns, pledges and grants to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent's Obligations and to NationsBank with respect to the UK Obligations, and
agrees that NationsBank, the Agent and the Lenders shall have a perfected and
continuing security interest in, and Lien on, (a) all of the Borrower's
Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment,
Securities, and General Intangibles, whether now owned or existing or hereafter
acquired or arising, (b) all returned, rejected or repossessed goods, the sale
or lease of which shall have given or shall give rise to an Account or Chattel
Paper, (c) all insurance policies relating to the foregoing, (d) all books and
records in whatever media (paper, electronic or otherwise) recorded or stored,
with respect to the foregoing and all equipment and general intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, and (e) all cash and non-cash proceeds
and products of the foregoing. The Borrower further agrees that the Agent, for
the ratable benefit of the Lenders and for the benefit of the Agent with
respect to the Agent's Obligations, shall have in respect thereof all of the
rights and remedies of a secured party under the Uniform Commercial Code as
well as those provided in this Agreement, under each of the other Financing
Documents and under applicable Laws. Notwithstanding anything to the contrary
contained herein, the Collateral shall not include any rights of the Borrower
under any Capital Leases of Equipment or any other agreements if and to the
extent any such Capital Leases or other agreements prohibit the collateral
assignment or pledge of the Borrower's interest therein, and such prohibition
has not been waived by the respective Perso (Grant of Liens)) or any of the
Financing Documents shall, subject to the terms, conditions and limitations, if
any, set forth in this Agreement or in any of the Financing Documents, secure
(a) the payment of all of the Obligations, including, without limitation, any
and all Outstanding Letter of Credit Obligations, all Outstanding Bond Letter
of Credit Obligations, all Special Source Bond Obligations, all UK Obligations
and any and all Agent's Obligations, and (b) the performance, compliance with
and observance by the Borrower of the provisions of this Agreement and all of
the other Financing Documents or otherwise under the Obligations. The security
interest and Lien of each Lender in such property shall rank equally in
priority with the interest of each other Lender, but the security interest and
Lien of the Agent with respect to the Agent's Obligations shall be superior and
paramount to the security interest and Lien of the Lender. Notwithstanding the
foregoing, the security interest and Lien of the Agent and/or any Lender with
respect to any Obligations under or in connection with, any interest rate or
currency swap agreements, cap, floor, and collar agreements, currency spot,
foreign exchange and forward contracts and other similar agreements and
arrangements permitted by the provisions of this Agreement shall be junior and
subordinate to the security interest and Lien of the Agent with respect to the
Agent's Obligations and junior and subordinate to the security interest and
Lien of the Lender with respect to all other Obligations. In addition,
notwithstanding the foregoing, the Agent and the Lenders acknowledge and agree
that the Special Source Bond Obligations shall be secured by the Collateral
granted to the Agent and the Lenders pursuant to Section 3.2 of this Agreement
and pursuant to the Special Source Bond Security Agreement but, unless
otherwise agreed to by the Borrower, shall not be secured by any of the Deeds
of Trust.
The Agent, the Lenders, the Borrower, Berry UK and Norwich agree that this
Article 3 is intended to grant and govern Liens on the assets of the Borrower
only and not assets of Berry UK or Norwich. The UK Security Documents are
intended to grant Liens on the assets of Berry UK and Norwich to NationsBank
with respect to the UK Obligations only. Any and all references to Collateral
included elsewhere in this Agreement (other than in this Section) are intended
to include and govern the Collateral of the Borrower, Berry UK and Norwich,
whether the Liens on such Collateral arise under the provisions of this
Agreement or under any of the other Security Documents (including the UK
Security Documents).
SECTION 3.2GRANT OF LIENS.
The Borrower hereby assigns, pledges and grants to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent's Obligations and to NationsBank with respect to the UK Obligations, and
agrees that NationsBank, the Agent and the Lenders shall have a perfected and
continuing security interest in, and Lien on, (a) all of the Borrower's
Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment,
Securities, and General Intangibles, whether now owned or existing or hereafter
acquired or arising, (b) all returned, rejected or repossessed goods, the sale
or lease of which shall have given or shall give rise to an Account or Chattel
Paper, (c) all insurance policies relating to the foregoing, (d) all books and
records in whatever media (paper, electronic or otherwise) recorded or stored,
with respect to the foregoing and all equipment and general intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, and (e) all cash and non-cash proceeds
and products of the foregoing. The Borrower further agrees that the Agent, for
the ratable benefit of the Lenders and for the benefit of the Agent with
respect to the Agent's Obligations, shall have in respect thereof all of the
rights and remedies of a secured party under the Uniform Commercial Code as
well as those provided in this Agreement, under each of the other Financing
Documents and under applicable Laws. Notwithstanding anything to the contrary
contained herein, the Collateral shall not include any rights of the Borrower
under any Capital Leases of Equipment or any other agreements if and to the
extent any such Capital Leases or other agreements prohibit the collateral
assignment or pledge of the Borrower's interest therein, and such prohibition
has not been waived by the respective Person.
Without implying any limitation to the foregoing, as additional Collateral and
security for the Obligations, the Borrower hereby assigns to the Agent, for the
ratable benefit of the Lenders and for the benefit of the Agent with respect to
the Agent's Obligations and to NationsBank with respect to the UK Obligations,
all of its rights, title and interest in, to, and under, the PackerWare Merger
Agreement, the Virginia Design Purchase Agreement, the Venture Stock
Purchase/Merger Agreement, the tax covenants, restrictive covenants and
warranties of the Norwich Stock Purchase Agreement (the "Norwich Assignable
Interest"), all of the PackerWare Merger Agreement Documents, all of the
Virginia Design Purchase Agreement Documents, all of the Venture Stock
Purchase/Merger Documents, and all of the Norwich Stock Purchase Documents,
including, without limitation, all of the benefits of any representations and
warranties provided by the Seller, and any and all rights of the Borrower to
indemnification from the Seller or any other Person contained therein. The
Borrower agrees that neither the assignment to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent's Obligations, nor any other provision contained in this Agreement or any
of the other Financing Documents shall impose on the Agent or any of the
Lenders any obligation or liability of the Borrower under the PackerWare Merger
Agreement, under the Virginia Design Purchase Agreement, under the Venture
Stock Purchase/Merger Agreement, under the Norwich Assignable Interest, under
any of the PackerWare Merger Agreement Documents, and/or under any of the
Virginia Design Purchase Agreement Documents, under any of the other Venture
Stock Purchase/Merger Documents. The Borrower hereby agrees to indemnify the
Agent and each of the Lenders and hold the Agent and each of the Lenders
harmless from any and all claims, actions, suits, losses, damages, costs,
expenses, fees, obligations and liabilities which may be incurred by or imposed
upon the Agent and/or any of the Lenders by virtue of the assignment of and
Lien on each of the Borrower's rights, title and interest in, to, and under the
PackerWare Merger Agreement, Virginia Design Purchase Agreement, the Venture
Stock Purchase/Merger Agreement, the Norwich Assignable Interest, the
PackerWare Merger Agreement Documents, the Virginia Design Purchase Agreement
Documents, and the Venture Stock Purchase/Merger Documents, unless due to the
gross negligence or willful misconduct of the Agent and/or any of the Lenders.
The Borrower further acknowledges and agrees that following the occurrence of
an Event of Default, the Agent, with the consent of the Requisite Lenders,
shall be entitled to enforce any and all rights and remedies available to the
Borrower under the PackerWare Merger Agreement, under the Virginia Design
Purchase Agreement, under the Venture Stock Purchase/Merger Agreement, under
the Norwich Assignable Interest, under any or all of the PackerWare Merger
Agreement Documents, under any or all of the Virginia Design Purchase Agreement
Documents, under any or all of the Venture Stock Purchase/Merger Documents, ,
and under applicable Laws with respect to the PackerWare Merger Transaction,
Virginia Design Purchase Agreement Transaction, the Venture Stock
Purchase/Merger Transaction and/or the Norwich Stock Purchase Transaction.
SECTION 3.3 COLLATERAL DISCLOSURE LIST.
On or prior to the date of this Agreement, the Borrower, Berry UK and Norwich
shall deliver to the Agent one or more lists (collectively, the "Collateral
Disclosure List") which shall contain such information with respect to the
business and real and personal property of the Borrower, Berry UK, Norwich and
each Subsidiary Guarantor as of its date of delivery as the Agent may require
and shall be certified by a Responsible Officer of the Borrower, Berry UK,
Norwich and each Subsidiary Guarantor, as appropriate, all in the form provided
to the Borrower by the Agent. Promptly after demand by the Agent, the Borrower
shall furnish and shall cause Berry UK, Norwich and each Subsidiary Guarantor
to furnish to the Agent an update of the information contained in the
Collateral Disclosure List at any time and from time to time as may be
requested by the Agent.
SECTION 3.4PERSONAL PROPERTY.
The Borrower, Berry UK and Norwich acknowledge and agree that it is the
intention of the parties to this Agreement that (i) the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent's Obligations, except as otherwise expressly provided in Section 3.2Grant
of Liens. (Grant of Liens), shall have a first priority, perfected Lien (except
that the Agent acknowledges and agrees that the Lien on the Fixed and Capital
Assets of the Borrower located in the State of Nevada, including, without
limitation, the real property owned by the Borrower in the State of Nevada
shall be a second priority Lien, subject to first priority Liens as set forth
in SCHEDULE (v)
Perfection and Priority of Collateral.
The Agent and the Lenders have, or upon execution and recording of UCC-1
financing statements and possession of Securities, Documents, Instruments,
Chattel Paper and Instruments will have, and will continue to have as security
for the Obligations (subject to the terms of Section 3.7 Subsidiary Guarantor
Assets. (Subsidiary Guarantor Assets) and the terms of (j) Limitations on Joint
and Several Liability for Obligations.(Limitations on Joint and Several
Liability), a valid and perfected Lien on and security interest in all
Collateral (except that the UK Collateral shall secure the UK Obligations
only), free of all other Liens, claims and rights of third parties whatsoever
except Permitted Liens, including, without limitation, those described on
Schedule (v)
Perfection and Priority of Collateral.), in form and substance reasonably
satisfactory to the Agent and its counsel, on all of the personal property of
the Borrower and of each Subsidiary Guarantor of any kind and nature
whatsoever, whether now owned or hereafter acquired, as security for all of the
Obligations, subject only to the Permitted Liens, if any and (ii) that
NationsBank shall have a first priority, perfected Lien, in form and substance
reasonably satisfactory to NationsBank and its counsel, on all of the personal
property of Berry UK and Norwich of any kind and nature whatsoever, whether now
owned or hereafter acquired, as security for the UK Obligations, subject only
to the Permitted Liens. In furtherance of the foregoing:
(A)SECURITIES, CHATTEL PAPER, PROMISSORY NOTES, ETC.
(i)As of the date of this Agreement and without implying any limitation on the
scope of Section 3.2 Grant of Liens.
The Borrower hereby assigns, pledges and grants to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent's Obligations and to NationsBank with respect to the UK Obligations, and
agrees that NationsBank, the Agent and the Lenders shall have a perfected and
continuing security interest in, and Lien on, (a) all of the Borrower's
Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment,
Securities, and General Intangibles, whether now owned or existing or hereafter
acquired or arising, (b) all returned, rejected or repossessed goods, the sale
or lease of which shall have given or shall give rise to an Account or Chattel
Paper, (c) all insurance policies relating to the foregoing, (d) all books and
records in whatever media (paper, electronic or otherwise) recorded or stored,
with respect to the foregoing and all equipment and general intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, and (e) all cash and non-cash proceeds
and products of the foregoing. The Borrower further agrees that the Agent, for
the ratable benefit of the Lenders and for the benefit of the Agent with
respect to the Agent's Obligations, shall have in respect thereof all of the
rights and remedies of a secured party under the Uniform Commercial Code as
well as those provided in this Agreement, under each of the other Financing
Documents and under applicable Laws. Notwithstanding anything to the contrary
contained herein, the Collateral shall not include any rights of the Borrower
under any Capital Leases of Equipment or any other agreements if and to the
extent any such Capital Leases or other agreements prohibit the collateral
assignment or pledge of the Borrower's interest therein, and such prohibition
has not been waived by the respective Perso (Grant of Liens), the Borrower
shall deliver and shall cause each Subsidiary Guarantor to deliver (or shall
have delivered or caused to be delivered) to the Agent, for the ratable benefit
of the Lenders and for the benefit of the Agent with respect to the Agent's
Obligations, all originals of all of letters of credit, Securities, Chattel
Paper, Documents and Instruments owned or held by the Borrower and/or any
Subsidiary Guarantor, and, if the Agent so requires, shall execute and deliver
and, shall cause each Subsidiary Guarantor to execute and deliver (or shall
have executed and delivered or caused to be delivered), a separate pledge,
assignment and security agreement in form and content acceptable to the Agent,
which pledge, assignment and security agreement shall assign, pledge and grant
a Lien to the Agent, for the ratable benefit of the Lenders and for the benefit
of the Agent with respect to the Agent's Obligations on all of the letters of
credit, Securities, Chattel Paper, Documents and Instruments of the Borrower
and each Subsidiary Guarantor, as the case may be. In addition, the Borrower
agrees to endorse to the order of the Agent any and all Instruments that
constitute or evidence all or any portion of the Collateral. As of the date of
this Agreement, Berry UK and Norwich shall deliver (or shall have delivered to
NationsBank, all originals of all of letters of credit, Securities, Chattel
Paper, Documents and Instruments owned or held by Berry UK and/or Norwich, and,
if NationsBank so requires, shall execute and deliver (or shall have executed
and delivered), a separate pledge, assignment and security agreement in form
and content acceptable to NationsBank, which pledge, assignment and security
agreement shall assign, pledge and grant a Lien to NationsBank with respect to
the UK Obligations on all of the letters of credit, Securities, Chattel Paper,
Documents and Instruments of Berry UK and/or Norwich, as the case may be. In
addition, Berry UK and Norwich agree to endorse to the order of NationsBank any
and all Instruments that constitute or evidence all or any portion of the UK
Collateral.
(ii) In the event that the Borrower or any Subsidiary Guarantor shall acquire
(or have acquired) after the Closing Date any letters of credit, Securities,
Chattel Paper, Documents or Instruments, the Borrower shall promptly so notify
the Agent and deliver the originals of all of the foregoing to the Agent
promptly and in any event within thirty (30) days of each acquisition. In the
event that Berry UK or Norwich shall acquire (or have acquired) after the
Closing Date any letters of credit, Securities, Chattel Paper, Documents or
Instruments, Berry UK and Norwich shall promptly so notify NationsBank and
deliver the originals of all of the foregoing to NationsBank promptly and in
any event within thirty (30) days of each acquisition.
(iii) All letters of credit, Securities, Chattel Paper, Documents and
Instruments to be delivered hereunder shall be delivered to the Agent and/or
NationsBank, as applicable, endorsed and/or assigned as required by the pledge,
assignment and security agreement and/or as the Agent and/or NationsBank, as
applicable, may require and, if applicable, shall be accompanied by blank
irrevocable and unconditional stock or bond powers.
(B) PATENTS, COPYRIGHTS AND OTHER PROPERTY REQUIRING ADDITIONAL STEPS
TO PERFECT.
As of the date of this Agreement and without implying any limitation on the
scope of Section 3.2 Grant of Liens. (Grant of Liens), the Borrower shall
execute and deliver and, shall cause each Subsidiary Guarantor, as appropriate,
to execute and deliver (or shall have executed and delivered or caused to be
executed and delivered), all Financing Documents and take all actions requested
by the Agent in order to perfect a first priority assignment of Patents,
Copyrights, Trademarks, customer lists or any other type or kind of
intellectual property acquired by the Borrower or any Subsidiary Guarantor
after the Closing Date. As of the date of this Agreement, Berry UK and Norwich
shall execute and deliver (or shall have executed and delivered), all Financing
Documents and take all actions reasonably requested by NationsBank in order to
perfect a first priority assignment of Patents, Copyrights, Trademarks,
customer lists or any other type or kind of intellectual property acquired by
Berry UK and/or Norwich after the Closing Date.
SECTION 3.5 RECORD SEARCHES.
As of the Closing Date and thereafter, as determined by the Agent, at the time
any Financing Document is executed and delivered by the Borrower, Berry UK,
Norwich or any Subsidiary Guarantor pursuant to this THE COLLATERAL or any
other Section of this Agreement, the Agent shall, in its reasonable discretion
and if requested, have received, in form and substance satisfactory to the
Agent, such Lien or record searches with respect to the Borrower, Berry UK,
Norwich, each Subsidiary Guarantor and/or any other Person who may be an
obligor or pledgor with respect to any of the Obligations, as appropriate, and
the property covered by such Financing Document showing that the Lien of such
Financing Document will be a perfected first priority Lien on the property
covered by such Financing Document subject only to Permitted Liens or to such
other Liens or matters as the Agent may approve. Notwithstanding the
foregoing, the Agent acknowledges and agrees that the Borrower shall be
obligated to reimburse the Agent only for actual out-of-pocket costs and
expenses relating to Lien and record searches and only to the extent ordered by
the Agent (a) one-time only after the Closing Date to confirm the due filing
and Lien priority of the Agent and the Lenders, (b) not more frequently than
once in any given calendar year after the Closing Date prior to the occurrence
of a Default or an Event of Default, and (c) in addition, at any time following
the occurrence of a Default or an Event of Default.
SECTION 3.6REAL PROPERTY.
The Borrower acknowledges and agrees that it is the intention of the parties to
this Agreement that the Agent, for the ratable benefit of the Lenders and for
the benefit of the Agent with respect to the Agent's Obligations, shall have a
first priority, perfected Lien, in form and substance satisfactory to the Agent
and its counsel, on all real property of any kind and nature whatsoever,
whether now owned or hereafter acquired by the Borrower or any Subsidiary
Guarantor, subject only to the Permitted Liens, excluding, however, any real
property leased by the Borrower or any Subsidiary Guarantor. Berry UK and
Norwich acknowledge and agree that it is the intention of the parties to this
Agreement that NationsBank shall have a first priority, perfected Lien, in form
and substance satisfactory to NationsBank and its counsel, on all real property
of any kind and nature whatsoever, whether now owned or hereafter acquired by
Berry UK or Norwich, subject only to the Permitted Liens and to the limitations
on liability set forth in (j) Limitations on Joint and Several Liability for
Obligations. (Limitations on Joint and Several Liability), if any, and subject
to the provisions of Section 3.7 below, excluding, however, any real property
leased by Berry UK or Norwich.
WITH RESPECT TO EACH PARCEL OF REAL PROPERTY NOW OWNED BY THE BORROWER, BERRY
UK, NORWICH AND/OR A SUBSIDIARY GUARANTOR ), THE BORROWER, BERRY UK AND
NORWICH, AS APPROPRIATE, SHALL EXECUTE AND DELIVER AND, SUBJECT TO THE TERMS OF
SECTION 3.7 SUBSIDIARY GUARANTOR ASSETS.
The Borrower agrees that all Obligations are and shall continue to be fully and
unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a first
priority Lien (subject only to Permitted Liens) on all Assets and properties of
each Subsidiary Guarantor (Subsidiary Guarantor Assets), shall cause each
Subsidiary Guarantor, as appropriate, to execute and deliver (or to have
executed and delivered), as of the date of this Agreement, a deed of trust or a
mortgage or other document, including, any amendments or confirmations of the
existing Deeds of Trust as may be required by the Agent or NationsBank, as
appropriate, which deed of trust, mortgage and/or other document shall be
included among the Financing Documents. With respect to real property acquired
in fee by the Borrower, Berry UK, Norwich or any Subsidiary Guarantor after the
Closing Date (whether by merger or otherwise), the Borrower, Berry UK and/or
Norwich, as appropriate, shall grant and, subject to the terms of Section 3.7
Subsidiary Guarantor Assets.
The Borrower agrees that all Obligations are and shall continue to be fully and
unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a first
priority Lien (subject only to Permitted Liens) on all Assets and properties of
each Subsidiary Guarantor (Subsidiary Guarantor Assets), shall cause each
Subsidiary Guarantor, as appropriate, to grant (or shall have granted or caused
to be granted), promptly after acquisition thereof, a Lien covering such real
property to the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent's Obligations or to NationsBank,
as appropriate, under the provisions of a mortgage, deed of trust or other
document, as appropriate. Each Financing Document to be executed and delivered
pursuant hereto shall:
(a)be in form and substance reasonably satisfactory to the Agent and
NationsBank, as appropriate;
(b)create a first priority Lien in such real property in favor of the
Agent, for the ratable benefit of the Lenders and for the benefit of the Agent
with respect to the Agent's Obligations or in favor of NationsBank, as
appropriate, subject only to Permitted Liens, zoning ordinances, and such other
matters as the Agent and/or NationsBank, as applicable, may approve, but
subject to the limitations set forth on liability in Section (J)LIMITATIONS ON
JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS. (Limitations on Joint and Several
Liability);
(c)be accompanied by a current survey reasonably satisfactory in all
respects to the Agent and/or NationsBank, as appropriate, of the subject real
property, prepared by a registered land surveyor or engineer reasonably
satisfactory to the Agent and NationsBank, as appropriate;
(d)be accompanied by evidence reasonably satisfactory to the Agent
and/or NationsBank, as appropriate, regarding the current and past pollution
control practices at such real property in connection with the discharge,
emission, handling, disposal or existence of Hazardous Materials, which may
include, at the Agent's or NationsBank's request, an environmental audit of
such real property prepared by a person or firm reasonably acceptable to the
Agent and/or NationsBank, as applicable;
(e)be accompanied by a mortgagee's title insurance policy or marked-
up commitment or binder for such insurance in form and substance reasonably
satisfactory to the Agent and issued by a title insurance company reasonably
satisfactory to the Agent, except for any real property located in a
jurisdiction outside of the United States unless mortgagee's title insurance
coverage is customary in such jurisdiction; and
(f)upon request of the Agent or NationsBank, be accompanied by a
signed opinion of counsel addressed to the Agent and each of the Lenders or
NationsBank, as appropriate, in form and substance reasonably satisfactory to
the Agent and NationsBank, as applicable.
SECTION 3.7SUBSIDIARY GUARANTOR ASSETS.
The Borrower agrees that all Obligations are and shall continue to be fully and
unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a first
priority Lien (subject only to Permitted Liens) on all Assets and properties of
each Subsidiary Guarantor.
SECTION 3.8COSTS.
The Borrower agrees to pay, as part of the Enforcement Costs and to the fullest
extent permitted by applicable Laws, on demand all reasonable costs, fees and
expenses incurred by the Agent and/or any of the Lenders in connection with the
taking, perfection, preservation, protection and/or release of a Lien on the
Collateral, including, without limitation, with respect to all actions required
to effect any of the provisions of Section 3.7 Subsidiary Guarantor Assets.
The Borrower agrees that all Obligations are and shall continue to be fully and
unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a first
priority Lien (subject only to Permitted Liens) on all Assets and properties of
each Subsidiary Guarantor. Section 3.7Subsidiary Guarantor Assets.
The Borrower agrees that all Obligations are and shall continue to be fully and
unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a first
priority Lien (subject only to Permitted Liens) on all Assets and properties of
each Subsidiary Guarantor (Subsidiary Guarantor Assets), and any of the
following:
(a)customary reasonable fees and expenses incurred by the Agent
and/or any of the Lenders in preparing, reviewing, negotiating and finalizing
the Financing Documents from time to time (including, without limitation,
reasonable attorneys' fees incurred in connection with preparing, reviewing,
negotiating, and finalizing any of the Financing Documents, including, any
amendments and supplements thereto);
(b)all filing and/or recording taxes or fees;
(c)all title insurance premiums and costs;
(d)all costs of Lien and record searches;
(e)reasonable attorneys' fees in connection with all legal opinions
required;
(f)appraisal and/or survey costs; and
(g)all related reasonable costs, fees and expenses.
SECTION 3.9RELEASE.
Upon the payment and performance of all Obligations of the Borrower, Berry UK,
Norwich and all obligations and liabilities of each other Subsidiary Guarantor,
under this Agreement and/or under any or all other Financing Documents, the
termination and/or expiration of all of the Commitments, all Letters of Credit,
all Bond Letters of Credit, all Outstanding Bond Letter of Credit Obligations,
and all Outstanding Letter of Credit Obligations, upon the Borrower's request
and at the Borrower's sole cost and expense, the Agent shall release and/or
terminate the Liens of any and all of the Financing Documents.
SECTION 3.10INCONSISTENT PROVISIONS.
In the event that the provisions of any Financing Document directly conflict
with any provision of this Agreement, the provisions of this Agreement shall
govern.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1REPRESENTATIONS AND WARRANTIES.
The Borrower, Berry UK and Norwich each represents and warrants to the Agent
and the Lenders, as follows:
(A)SUBSIDIARIES.
The Borrower, Berry UK and Norwich owns the Subsidiaries listed on the
Collateral Disclosure List attached hereto and made a part hereof and no
others, as updated from time to time pursuant to the provisions of this
Agreement. Each of the Subsidiaries is a Wholly Owned Subsidiary except as
shown on the Collateral Disclosure List, as updated from time to time pursuant
to the provisions of this Agreement, which correctly indicates the nature and
amount of the Borrower's, Berry UK's and/or Norwich's ownership interests
therein, as applicable.
(B)GOOD STANDING.
Each of the Borrower and its Subsidiaries (a) is a corporation duly organized,
existing and in good standing under the laws of the jurisdiction of its
incorporation, (b) has the corporate power to own its property and to carry on
its business as now being conducted, and (c) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned by it therein or in which the transaction of its business
makes such qualification necessary or where such non-qualification would have a
materially adverse effect on the Borrower and its Subsidiaries taken as a whole
or would otherwise impair the ability of the Agent to collect or realize upon
any of the Collateral.
(C)POWER AND AUTHORITY.
Each of the Borrower and its Subsidiaries has full corporate power and
authority to execute and deliver this Agreement, the other Financing Documents,
and the Norwich Stock Purchase Documents to which it is a party, to make the
borrowings and request Letters of Credit and Bond Letters of Credit under this
Agreement, to close and consummate each aspect of the Norwich Stock Purchase
Transaction, as appropriate and to incur and perform the Obligations whether
under this Agreement, the other Financing Documents, the Norwich Stock Purchase
Documents, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of shareholders or any creditors of
the Borrower or any Subsidiary, and no consent, approval, filing or
registration with or notice to any Governmental Authority on the part of the
Borrower or any Subsidiary, is required as a condition to the execution,
delivery, validity or enforceability of this Agreement, the other Financing
Documents, any of the Norwich Stock Purchase Documents, the performance by the
Borrower of the Obligations or the closing and consummation of the Norwich
Stock Purchase Transaction, in each case, if required, the same has been duly
obtained.
(D)
<PAGE>
BINDING AGREEMENTS.
This Agreement and the other Financing Documents executed and delivered by the
Borrower and/or any of its Subsidiaries have been properly executed and
delivered and constitute the valid and legally binding obligations of the
Borrower and its Subsidiaries, respectively, and are fully enforceable against
the Borrower and its Subsidiaries in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other laws of
general applications affecting the rights and remedies of creditors and secured
parties, and general principles of equity regardless of whether applied in a
proceeding in equity or at law.
(E)NO CONFLICTS.
Neither the execution, delivery and performance of the terms of this Agreement
or of any of the other Financing Documents executed and delivered by the
Borrower or any of the Subsidiaries nor the consummation of the transactions
contemplated by this Agreement will conflict with, violate or be prevented by
(a) the charter or bylaws of the Borrower or any of the Subsidiaries, (b) any
existing mortgage, indenture, contract or agreement binding on the Borrower or
any of the Subsidiaries or affecting any of its or their property, or (c) any
Laws.
(F)NO DEFAULTS, VIOLATIONS. AS OF THE DATE OF THIS AGREEMENT:
(i)No Default or Event of Default has occurred and is continuing.
(i)Neither the Borrower nor any of the Subsidiaries is in material default
under any existing mortgage, indenture, contract or agreement binding on it or
them or affecting its or their property in any respect which would be
materially adverse to the business, operations, property or financial condition
of the Borrower and the Subsidiaries, taken as a whole, or which would
materially adversely affect the ability of the Borrower and the Subsidiaries,
taken as a whole to perform their obligations under this Agreement or under any
of the other Financing Documents to which the Borrower and/or any of the
Subsidiaries is a party.
(G)COMPLIANCE WITH LAWS.
Neither the Borrower nor any of the Subsidiaries is in violation of any
applicable Laws (including, without limitation, any Laws relating to employment
practices, to environmental, occupational and health standards and controls) or
order, writ, injunction, decree or demand of any court, arbitrator, or any
Governmental Authority affecting the Borrower, any Subsidiary or any of its or
their properties, the violation of which, considered in the aggregate, would
materially adversely affect the business, operations or properties of the
Borrower and/or any Subsidiary taken as a whole.
(H)MARGIN STOCK.
None of the proceeds of the Loans will be used, directly or indirectly, by the
Borrower or any Subsidiary for the purpose of purchasing or carrying, or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any "margin security" within the meaning of
Regulation G (12 CFR Part 207), or "margin stock" within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal
Reserve System or for any other purpose which would make the transactions
contemplated in this Agreement a "purpose credit" within the meaning of said
Regulation G or Regulation U, or cause this Agreement to violate any other
regulation of the Board of Governors of the Federal Reserve System or the
Securities Exchange Act of 1934 or the Small Business Investment Act of 1958,
as amended, or any rules or regulations promulgated under any of such statutes.
(I)INVESTMENT COMPANY ACT; MARGIN SECURITIES.
Neither the Borrower nor any Subsidiary is an investment company within the
meaning of the Investment Company Act of 1940, as amended, nor is it, directly
or indirectly, controlled by or acting on behalf of any Person which is an
investment company within the meaning of said Act. Neither the Borrower nor
any Subsidiary is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
"margin security" within the meaning of Regulation G (12 CFR Part 207), or
"margin stock" within the meaning of Regulation U (12 CFR Part 221), of the
Board of Governors of the Federal Reserve System.
(J)LITIGATION.
Except as otherwise disclosed on SCHEDULE (J) LITIGATION. attached to and made
a part of this Agreement, there are no proceedings, actions or investigations
pending or, so far as the Borrower knows, threatened before or by any court,
arbitrator any Governmental Authority which, in any one case or in the
aggregate, if determined adversely to the interests of the Borrower or any
Subsidiary, would have a material adverse effect on the business, properties,
condition (financial or otherwise) or operations, present or prospective, of
the Borrower or any of the Subsidiaries taken as a whole.
(K)FINANCIAL CONDITION.
The consolidated financial statements of the Borrower and the Subsidiaries
dated as of March 31, 1998, are complete and correct and fairly present the
financial position of the Borrower and the Subsidiaries and the results of
their operations as of the date and for the period referred to and have been
prepared in accordance with GAAP applied on a consistent basis throughout the
period involved. There are no material liabilities, direct or indirect, fixed
or contingent, of the Borrower or any Subsidiary as of the date of such
financial statements that are not reflected therein. There has been no
materially adverse change in the financial condition or operations of the
Borrower or any Subsidiary since the date of such financial statements and to
the Borrower's knowledge no such materially adverse change is pending. Except
as permitted by the provisions of Section Investments, Loans and Other
Transactions. (Investments), neither the Borrower nor any Subsidiary has
guaranteed the obligations of, or made any investment in or advances to, any
Person (other than the Borrower or any Subsidiary Guarantor), except as
disclosed in such financial statements and except that the Borrower and/or any
or all of the Subsidiary Guarantors may have guaranteed one or more leases
under which the Borrower and/or a Subsidiary Guarantor is a tenant or lessee,
as of the date of this Agreement.
(L)PRO-FORMA FINANCIAL STATEMENTS.
The Borrower has furnished to the Agent a Pro-forma consolidated balance sheet
of the Borrower and the Subsidiaries as of immediately after consummation of
the Norwich Stock Purchase Transaction and the transactions incident thereto
(the "Pro-forma Balance Sheet") together with Pro-forma financial projections
of the Parent for the five-year period subsequent to the Norwich Stock Purchase
Transaction (the "Pro-forma Financial Projections"). A copy of the Pro-forma
Balance Sheet and the Pro-forma Financial Projections are attached hereto as
Exhibits C-1 and C-2, respectively. The Pro-forma Balance Sheet is correct and
complete, has been prepared in accordance with GAAP, and fairly presents the
consolidated financial condition of the Borrower and the Subsidiaries as of
immediately after consummation of the Norwich Stock Purchase Transaction and
the transactions incident thereto. The Pro-forma Financial Projections
represent the best estimate of the future operations of the Parent and are
based on reasonable and conservative assumptions, but do not constitute a
guaranty of actual performance.
(M)FULL DISCLOSURE.
The financial statements referred to in Section (K)FINANCIAL CONDITION.
(Financial Condition) of this Agreement and the statements, reports or
certificates furnished by the Borrower in connection with the Financing
Documents (a) do not contain any untrue statement of a material fact and (b)
when taken in their entirety, do not omit any material fact necessary to make
the statements contained therein not misleading. There is no fact known to the
Borrower which the Borrower has not disclosed to the Agent and the Lenders in
writing prior to the date of this Agreement with respect to the transactions
contemplated by the Financing Documents which materially and adversely affects
or in the future would, in the reasonable opinion of the Borrower materially
adversely affect the condition, financial or otherwise, results of operations,
business, or assets of the Borrower and the Subsidiaries, taken as a whole.
(N)INDEBTEDNESS FOR BORROWED MONEY.
As of the date of this Agreement, except for the Obligations and except as set
forth in SCHEDULE (N) INDEBTEDNESS FOR BORROWED MONEY. attached to and made a
part of this Agreement, neither the Borrower, Berry UK nor Norwich has any
Indebtedness for Borrowed Money. The Agent has received photocopies of all
promissory notes evidencing any Indebtedness for Borrowed Money set forth in
SCHEDULE (N)INDEBTEDNESS FOR BORROWED MONEY., together with any and all
material subordination agreements, other agreements, documents, or instruments
securing, evidencing, guarantying or otherwise executed and delivered in
connection therewith.
(O)SUBORDINATED DEBT; SENIOR SECURED DEBT.
None of the Subordinated Debt Loan Documents nor any of the Senior Secured Debt
Loan Documents in effect prior to the date of this Agreement have been amended,
supplemented, restated or otherwise modified except as otherwise disclosed to
the Agent in writing on or before the date of this Agreement. In addition, the
Borrower has furnished copies of each amendment, supplement, restatement or
other modification to any of the Subordinated Debt Loan Documents executed on
or before the date of this Agreement. In addition, there does not exist any
default or any event which upon notice or lapse of time or both would
constitute a default under the terms of any of the Subordinated Debt Loan
Documents or any of the Senior Secured Debt Loan Documents.
(P)TAXES.
The Borrower and the Subsidiaries have filed all returns, reports and forms for
all material Taxes which, to the knowledge of the Borrower, are required to be
filed, and have paid all such Taxes as shown on such returns or on any
assessment received by it, to the extent that such Taxes have become due,
unless and to the extent only that such Taxes, assessments and governmental
charges are currently contested in good faith and by appropriate proceedings by
the Borrower, such Taxes are not the subject of any Liens other than Permitted
Liens, and adequate reserves therefor have been established as required under
GAAP. All tax liabilities of the Borrower and the Subsidiaries were as of the
date of audited financial statements referred to in Section (k) Financial
Condition. (Financial Condition), and are now, adequately provided for on the
books of the Borrower and the Subsidiaries, as appropriate. No tax liability
has been asserted by the Internal Revenue Service or any state or local
authority against the Borrower or any Subsidiary for Taxes in excess of those
already paid, except that the Agent and the Lenders understand that PackerWare
is to be the subject of an audit by the Internal Revenue Service, but that such
audit, to the Borrower's knowledge, is not the result of any claimed or actual
non-compliance with any Laws.
(Q)ERISA.
With respect to any "pension plan" as defined in SECTION 3(2) of ERISA, which
plan is now or previously has been maintained or contributed to by the Borrower
and/or any Subsidiary and/or by any commonly controlled entity: (a) no
"accumulated funding deficiency" as defined in Code <section>412 or ERISA
<section>302 has occurred, whether or not that accumulated funding deficiency
has been waived; (b) no Reportable Event has occurred; (c) no termination of
any plan subject to Title IV of ERISA has occurred; (d) no Borrower, Subsidiary
nor any commonly controlled entity (as defined under ERISA) has incurred a
"complete withdrawal" within the meaning of ERISA <section>4203 from any Multi-
employer Plan; (e) no Borrower, Subsidiary nor any commonly controlled entity
has incurred a "partial withdrawal" within the meaning of ERISA <section>4205
with respect to any Multi-employer Plan; (f) no Multi-employer Plan to which
the Borrower, any Subsidiary or any commonly controlled entity has an
obligation to contribute is in "reorganization" within the meaning of ERISA
<section>4241 nor has notice been received by the Borrower, any Subsidiary or
any commonly controlled entity that such a Multi-employer Plan will be placed
in "reorganization".
(R)TITLE TO PROPERTIES.
Each of the Borrower and the Subsidiaries has good title to all of its and
their respective properties, including, without limitation, the Collateral and
the properties and assets reflected in the balance sheets described in Section
(k) Financial Condition. (Financial Condition), subject to any minor
imperfections in title which do not significantly detract from the use thereof.
The Borrower and each Subsidiary have legal, enforceable and uncontested rights
to use freely such property and assets.
(S)PATENTS, TRADEMARKS, ETC.
Each of the Borrower and the Subsidiaries owns, possesses, or has the right to
use all necessary Patents, licenses, Trademarks, Copyrights, permits and
franchises to own its properties and to conduct its business as now conducted,
without known conflict with the rights of any other Person. Any and all
obligations to pay royalties or other charges with respect to such properties
and assets are properly reflected on the financial statements described in
Section (K)FINANCIAL CONDITION. (Financial Condition).
(T)EMPLOYEE RELATIONS.
Except as disclosed on SCHEDULE (T) EMPLOYEE RELATIONS. attached hereto and
made a part hereof, as updated from time to time, (a) no Borrower nor any
Subsidiary nor the Borrower's or any Subsidiary's employees is subject to any
collective bargaining agreement, (b) to the Borrower's knowledge, no petition
for certification or union election is pending with respect to the employees of
the Borrower or any Subsidiary and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of the
Borrower, and (c) as of the date of this Agreement, there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
the Borrower after due inquiry, threatened between the Borrower and its
employees. Hours worked and payments made to the employees of any one or more
of the Borrower have not been in violation of the Fair Labor Standards Act or
any other applicable law dealing with such matters. All payments due from the
Borrower or any Subsidiary or for which any claim may be made against the
Borrower or any Subsidiary, on account of wages and employee and retiree health
and welfare insurance and other benefits have been paid or accrued as a
liability on its or their books, as appropriate.
(U)PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS
CONTAMINATION.
To the best of the Borrower's knowledge and except as disclosed in writing to
the Agent in SCHEDULE (U) PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS
MATERIALS CONTAMINATION. hereof with respect to any matters existing as of the
date of this Agreement and except as hereafter disclosed in writing to the
Agent with respect to any matters arising after the date of this Agreement, (a)
no Hazardous Materials are located on any real property owned, controlled or
operated by the Borrower or any Subsidiary or for which the Borrower or any
Subsidiary is, or is claimed to be, responsible, except for reasonable
quantities of necessary supplies for use by the Borrower and/or the
Subsidiaries any of their respective tenants in the ordinary course of its or
their current lines of business and stored, used and disposed in accordance
with applicable Laws; and (b) no property owned, controlled or operated by the
Borrower or any Subsidiary or for which the Borrower or any Subsidiary has, or
is claimed to have, responsibility is affected by any material Hazardous
Materials Contamination at any other property.
In addition, as of the date of this Agreement, the Borrower represents and
warrants that it has no existing monitoring or observation wells located at
Lawrence, Kansas (including Aeroquip); Evansville, Indiana; Indian Trail, North
Carolina; and Reno, Nevada properties from which groundwater can be sampled and
analyzed.
(V)
<PAGE>
PERFECTION AND PRIORITY OF COLLATERAL.
The Agent and the Lenders have, or upon execution and recording of UCC-1
financing statements and possession of Securities, Documents, Instruments,
Chattel Paper and Instruments will have, and will continue to have as security
for the Obligations (subject to the terms of SECTION 3.7SUBSIDIARY GUARANTOR
ASSETS. (Subsidiary Guarantor Assets) and the terms of (J)LIMITATIONS ON JOINT
AND SEVERAL LIABILITY FOR OBLIGATIONS.(Limitations on Joint and Several
Liability), a valid and perfected Lien on and security interest in all
Collateral (except that the UK Collateral shall secure the UK Obligations
only), free of all other Liens, claims and rights of third parties whatsoever
except Permitted Liens, including, without limitation, those described on
SCHEDULE (V)
PERFECTION AND PRIORITY OF COLLATERAL..
(W) PLACES OF BUSINESS AND LOCATION OF COLLATERAL.
The information contained in the Collateral Disclosure List, as updated
annually and at such other times as shall be determined by the Borrower at any
time prior to the occurrence of a Default or an Event of Default and as shall
be determined by the Agent at any time following the occurrence of a Default or
an Event of Default, is complete and correct in all material respects. The
Collateral Disclosure List completely and accurately identifies the address of
(a) the chief executive office of the Borrower, Berry UK, Norwich and each of
the Subsidiary Guarantors, (b) any and each other place of business of the
Borrower, Berry UK, Norwich or any of the Subsidiary Guarantors, (c) the
location of all books and records pertaining to the Collateral, and (d) each
location, other than the foregoing, where any of the Collateral is located.
The legally required places to file financing statements with respect to the
Collateral within the meaning of the Uniform Commercial Code are the filing
offices for those jurisdictions in which the Borrower and/or any Subsidiary
Guarantor, as appropriate, maintains a place of business as identified on the
Collateral Disclosure List.
(X) BUSINESS NAMES AND ADDRESSES.
Except as set forth in SCHEDULE (X) BUSINESS NAMES AND ADDRESSES. attached
hereto and made a part hereof, in the five (5) years preceding the date hereof,
neither the Borrower, Berry UK, Norwich nor any of its Subsidiaries (other than
PAC) has changed its name, identity or corporate structure, has conducted
business under any name other than its current name, and has conducted its
business in any jurisdiction other than those disclosed on the Collateral
Disclosure List.
(Y)EQUIPMENT.
No equipment is held by the Borrower, Berry UK, Norwich or any Subsidiary
Guarantor on a sale on approval basis.
(Z)INVENTORY.
All material portions of the Inventory of the Borrower, Berry UK, Norwich and
each Subsidiary Guarantor included in the Borrowing Base and/or the UK
Borrowing Base, conform to the eligibility criteria set forth in the definition
of Eligible Domestic Inventory and/or Eligible UK Inventory, as applicable.
Except as disclosed in the Collateral Disclosure List, no goods offered for
sale by the Borrower or any Subsidiary are consigned to or held on sale or
return terms by the Borrower or any Subsidiary.
(AA)ACCOUNTS.
All material portions of the Accounts included in the Borrowing Base and the UK
Borrowing Base conform to the eligibility criteria set forth in the definition
of Eligible Domestic Receivables and Eligible UK Receivables, as applicable.
(BB)PACKERWARE MERGER TRANSACTION.
The Agent has received true and correct photocopies of the PackerWare Merger
Agreement and each of the other PackerWare Merger Agreement Documents,
executed, delivered and/or furnished on or before the Closing Date in
connection with the PackerWare Merger Transaction. Neither the PackerWare
Merger Agreement nor any of the other PackerWare Merger Agreement Documents
have been modified, changed, supplemented, canceled, amended or otherwise
altered, except as otherwise disclosed to the Agent in writing on or before the
Closing Date. The PackerWare Merger Transaction has been effected, closed and
consummated pursuant to, and in accordance with, the terms and conditions of
the PackerWare Merger Agreement and with all applicable Laws.
(CC)VENTURE STOCK PURCHASE/MERGER TRANSACTION.
The Agent has received true and correct photocopies of the Venture Stock
Purchase/Merger Agreement and each of the other Venture Stock Purchase/Merger
Documents, executed, delivered and/or furnished on or before the date of this
Agreement in connection with the Venture Stock Purchase/Merger Transaction.
Neither the Venture Stock Purchase/Merger Agreement nor any of the other
Venture Stock Purchase/Merger Documents have been modified, changed,
supplemented, canceled, amended or otherwise altered, except as otherwise
disclosed to the Agent in writing on or before the date of this Agreement. The
Venture Stock Purchase/Merger Transaction has been effected, closed and
consummated pursuant to, and in accordance with, the terms and conditions of
the Venture Stock Purchase/Merger Agreement and with all applicable Laws. As
of the date of this Agreement, Venture Southeast and Venture Midwest are
Wholly-Owned Subsidiaries of the Borrower.
(DD)NORWICH STOCK PURCHASE TRANSACTION.
The Agent has received true and correct photocopies of the Norwich Stock
Purchase Agreement and each of the other Norwich Stock Purchase Documents,
executed, delivered and/or furnished on or before the date of this Agreement in
connection with the Norwich Stock Purchase Transaction. Neither the Norwich
Stock Purchase Agreement nor any of the other Norwich Stock Purchase Documents
have been modified, changed, supplemented, canceled, amended or otherwise
altered, except as otherwise disclosed to the Agent in writing on or before the
date of this Agreement. The Norwich Stock Purchase Transaction has been
effected, closed and consummated pursuant to, and in accordance with, the terms
and conditions of the Norwich Stock Purchase Agreement and with all applicable
Laws.
(EE)HART-SCOTT-RODINO.
The Borrower, the Seller and all other necessary Persons, as appropriate, have
made such filings as may be required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and have provided such supplemental
information that may be required by such Act, with respect to the sales
contemplated by the PackerWare Merger Transaction, the Venture Stock
Purchase/Merger Transaction, the Norwich Stock Purchase Transaction and/or the
Container Purchase Agreement Transaction. The waiting periods under such Act
have terminated or expired.
(FF)CREDIT FACILITIES.
The Borrower hereby represents and warrants that none of the Credit Facilities
nor the obligations of the Borrower, Berry UK, Norwich and the Subsidiary
Guarantors under and with respect to any of the Obligations are in violation of
or otherwise constitute a default under the provisions of the Indenture. In
particular, the Term Loans (including the Term Loan B Increase) and the
Revolving Loan constitute "Senior Indebtedness" under the provisions of the
Indenture. The Borrower further represents and warrants that neither its
agreement nor the agreement of any Subsidiary Guarantor to guaranty payment of
the Special Source Bond Obligations or the UK Credit Facilities and to grant
liens on their respective assets and properties are in violation of or
otherwise constitute a default under the provisions of the Indenture.
(GG)YEAR 2000 COMPLIANCE
As of the Closing Date, the Borrower has (i) initiated a review and assessment
of all areas within its and each of the Subsidiaries' (excluding Norwich)
business and operations (including those affected by suppliers and vendors)
that could be adversely affected by the "Year 2000 Problem" (that is, the risk
that computer applications used by the Borrower or any Subsidiary may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable, but in any event
on or before March 31, 1999. The Borrower reasonably believes that all
computer applications that are material to it or any Subsidiary's (including
Norwich's)_ business and operations will on a timely basis (but in any event on
or before March 31, 1999) be able to perform properly date-sensitive functions
for all dates before and after January 1, 2000 (that is, be "Year 2000
Compliant"), except to the extent that a failure to do so would not reasonably
be expected to have a material adverse effect on the business, properties,
condition (financial or otherwise) or operations, present or prospective, of
the Borrower or any Subsidiary taken as a whole. Although as of the Closing
Date, the Borrower has not initiated a review and assessment to determine
whether Norwich will be Year 2000 Compliant, the Borrower intends to initiate
and complete such a review and assessment promptly following the Closing Date
and in any event within six (6) months of the Closing Date.
SECTION 4.2SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in or made under or in connection
with this Agreement and the other Financing Documents shall survive the date of
this Agreement, the making of any advance under the Loans and extension of
credit made hereunder, and the incurring of any other Obligations and shall be
deemed to have been made at the time of the making of each advance under the
Loans or the issuance of each Letter of Credit and/or each Bond Letter of
Credit, except that (a) representations and warranties which relate to a
specific date need only be true and correct as of such date, and (b) the
representations and warranties which relate to financial statements which are
referred to in (K)FINANCIAL CONDITION. (Financial Condition), shall also be
deemed to cover financial statements furnished from time to time to the Agent
and the Lenders pursuant to (a) Financial Statements.
The Borrower shall furnish to the Agent for distribution to the Lender
(Financial Statements). The Borrower, Berry UK and Norwich shall have the
right from time to time to modify or supplement any of the Schedules and/or the
Collateral Disclosure List referred to in this REPRESENTATIONS AND WARRANTIES,
and following any such modification or supplement the representations in this
REPRESENTATIONS AND WARRANTIES shall be deemed to refer to such Schedules and
Collateral Disclosure List as so modified or supplemented; provided, that the
Borrower, Berry UK and/or Norwich, as applicable, will be deemed to have
represented at the time of delivery of any such modification or supplement that
the modifications of and supplements to such Schedules and/or Collateral
Disclosure List after the date of this Agreement do not relate to events or
circumstances which individually or in the aggregate have resulted in a
material adverse change in the business or operations of the Borrower, Berry
UK, Norwich and its Subsidiaries taken as a whole or which would otherwise
constitute a Default or an Event of Default.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1CONDITIONS TO THE INITIAL ADVANCE AND INITIAL LETTER OF CREDIT.
The making of the initial advance under the Loans and the issuance of the
initial Letter of Credit and the initial Bond Letter of Credit are subject to
the fulfillment on or before the date of this Agreement of the following
conditions precedent in a manner reasonably satisfactory in form and substance
to the Agent and its counsel:
(A)ORGANIZATIONAL DOCUMENTS - BORROWER, BERRY UK AND NORWICH.
The Agent shall have received for the Borrower, Berry UK and Norwich:
(i)for the Borrower only, a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority, of the state
of incorporation of the Borrower, if applicable;
(ii)for the Borrower only, a certificate of qualification to do business
certified by the Secretary of State or other Governmental Authority of each
state in which the Borrower conducts business, as applicable;
(iii)a certificate dated as of the date of this Agreement by the Secretary or
an Assistant Secretary of each of the Borrower, Berry UK and Norwich covering:
(A)true and complete copies of its corporate charter, bylaws,
and all amendments thereto;
(B)true and complete copies of the resolutions of its Board of
Directors authorizing (A) the execution, delivery and performance of the
Financing Documents and the Norwich Stock Purchase Documents to which it is a
party, (B) the borrowings hereunder, (C) the granting of the Liens contemplated
by this Agreement and the Financing Documents to which it is a party, and (D)
the Norwich Stock Purchase Transaction;
(C)the incumbency, authority and signatures of the officers
authorized to sign this Agreement and the other Financing Documents to which it
is a party; and
(D)the identity of its current directors, common stock holders
and other equity holders, as well as their respective percentage ownership
interests.
(B)OPINION OF COUNSEL.
The Agent shall have received the favorable opinion of counsel for the
Borrower, Berry UK, Norwich and the Subsidiary Guarantors addressed to the
Agent and the Lenders in form satisfactory to the Agent. The Agent agrees that
local counsel opinion shall be required only for England.
(C)ORGANIZATIONAL DOCUMENTS - SUBSIDIARY GUARANTORS.
The Agent shall have received for each Subsidiary Guarantor:
(i)a certificate of good standing certified by the Secretary of State, or other
appropriate Governmental Authority, of the state of incorporation;
(ii)a certificate of qualification to do business certified by the Secretary of
State or other Governmental Authority of each state in which each Subsidiary
Guarantor conducts business;
(iii)a certificate dated as of the date of this Agreement by the Secretary or
an Assistant Secretary of each Corporate Guarantor covering:
(A)true and complete copies of the its corporate charter,
bylaws, and all amendments thereto;
(B)true and complete copies of the resolutions of it's Board of
Directors authorizing the execution, delivery and performance of the Financing
Documents to which it is a party and the granting of the Liens contemplated by
any of the Financing Documents to which it is a party;
(C)the incumbency, authority and signatures of its officers to
sign the Guaranty and all other Financing Documents to which it is a party;
(D)the identity of it's current directors, common stock holders
and other equity holders, as well as their respective percentage ownership
interests;
(iv)the favorable opinion of counsel for the Subsidiary Guarantors addressed to
the Agent and the Lenders and in form satisfactory to the Agent.
(D)CONSENTS, LICENSES, APPROVALS, ETC.
The Agent shall have received copies of all consents, licenses and approvals,
required in connection with the execution, delivery, performance, validity and
enforceability of the Financing Documents, and the Norwich Stock Purchase
Documents, and such consents, licenses and approvals shall be in full force and
effect.
(E)NOTES.
The Agent shall have received for delivery to each of the Lenders the UK Term
Note, the UK Revolving Credit Notes, the Term Notes and the Revolving Credit
Notes, each conforming to the requirements hereof and executed by a Responsible
Officer of the Borrower, Berry UK and Norwich, as applicable, and attested by a
duly authorized representative of the Borrower, Berry UK and Norwich, as
applicable.
(F)FINANCING DOCUMENTS AND COLLATERAL.
The Borrower, Berry UK, Norwich and each Subsidiary Guarantor shall have
executed and delivered the Financing Documents to be executed by it, including,
without limitation, the UK Security Documents, the UK Credit Facilities
Guaranty and the UK Security Agreement and shall have delivered original
Chattel Paper, Instruments, Securities, and related Collateral and all
opinions, title insurance, and other documents contemplated by THE COLLATERAL
(The Collateral).
(G)OTHER FINANCING DOCUMENTS.
In addition to the Financing Documents to be delivered by the Borrower, Berry
UK and/or Norwich, the Agent shall have received the Financing Documents duly
executed and delivered by Persons other than the Borrower, Berry UK or Norwich.
(H)OTHER DOCUMENTS, ETC.
The Agent shall have received such other certificates, opinions, documents and
instruments confirmatory of or otherwise relating to the transactions
contemplated hereby as may have been reasonably requested by the Agent.
(I)PAYMENT OF FEES.
The Agent and the Lenders shall have received payment of any Fees due on or
before the date of this Agreement.
(J)COLLATERAL DISCLOSURE LIST.
The Borrower, Berry UK, Norwich and each Subsidiary Guarantor shall have
delivered the Collateral Disclosure List required under the provisions of
COLLATERAL DISCLOSURE LIST. (Collateral Disclosure List) hereof duly executed
by a Responsible Officer of the Borrower, Berry UK, Norwich and each Subsidiary
Guarantor, as appropriate. The Agent and the Lenders acknowledge and agree
that the Borrower and each Subsidiary Guarantor previously delivered a
Collateral Disclosure List to the Agent on the First Closing Date and an
additional Collateral Disclosure List relating to Berry Design on or about May
13, 1997, and that, accordingly, neither the Borrower nor any Subsidiary
Guarantor shall be required to furnish to the Agent a new Collateral Disclosure
List, but shall be required only to update the information contained in the
previous Collateral Disclosure Lists furnished to the Agent to the extent such
information has changed in any material respect.
(K)RECORDINGS AND FILINGS.
The Borrower, Berry UK, Norwich and each Subsidiary Guarantor, as appropriate,
shall have: (a) executed and delivered all Financing Documents (including,
without limitation, UCC-1 and UCC-3 statements) required to be filed,
registered or recorded in order to create, in favor of the Agent and the
Lenders, a perfected Lien in the Collateral (subject only to the Permitted
Liens) in form and in sufficient number for filing, registration, and recording
in each office in each jurisdiction in which such filings, registrations and
recordations are required, and (b) delivered such evidence as the Agent may
deem satisfactory that all necessary filing fees and all recording and other
similar fees, and all Taxes and other expenses related to such filings,
registrations and recordings will be or have been paid in full.
(L)INSURANCE CERTIFICATE.
The Agent shall have received an insurance certificate in accordance with the
provisions of (h) Insurance.
The Borrower, Berry UK and Norwich will, and will cause each of their
Subsidiaries to, at all times maintain with "A" (or its English equivalent with
respect to Berry UK and Norwich) or better rated insurance companies such
insurance as is required by applicable Laws and such other insurance, in such
amounts, of such types and against such risks, hazards, liabilities, casualties
and contingencies as are usually insured against in the same geographic areas
by business entities engaged in the same or similar business. Without limiting
the generality of the foregoing, the Borrower, Berry UK and Norwich will, and
will cause each of their Subsidiaries to, keep adequately insured all of their
property against loss or damage resulting from fire or other risks insured
against by extended coverage and maintain public liability insurance against
claims for personal injury, death or property damage occurring upon, in or
about any properties occupied or controlled by them, or arising in any manner
out of the businesses carried on by them. The Borrower shall deliver to the
Agent on the Closing Date (and thereafter on each date there is a material
change in the insurance coverage) a certificate of a Responsible Officer of the
Borrower containing a detailed list of the insurance then in effect and stating
the names of the insurance companies, the types, the amounts and rates of the
insurance, dates of the expiration thereof and the properties and risks covered
thereb (Insurance) and (q) Insurance With Respect to Equipment and Inventory.
(Insurance With Respect to Equipment and Inventory) of this Agreement. The
Agent and the Lenders acknowledge and agree that a series of insurance
certificates acceptable to the Agent were furnished to the Agent on or about
the First Closing Date and again on May 13, 1997 and that additional insurance
certificates will not be required except with respect to the insurance
coverages of Berry UK and Norwich.
(M)LANDLORD'S WAIVERS.
Unless otherwise agreed by the Agent, the Agent shall have received a
landlord's waiver from each landlord of each and every business premise leased
by the Borrower and/or any Subsidiary Guarantor and on which any of the
Collateral is or may hereafter be located, which landlords' waivers must be
reasonably acceptable to the Agent and its counsel in their sole and absolute
discretion.
(N)BAILEE ACKNOWLEDGEMENTS.
Unless otherwise agreed by the Agent, the Agent shall have received an
agreement acknowledging the Liens of the Agent and the Lender from each bailee,
warehouseman, consignee or similar third party which has possession of any of
the Collateral, which agreements must be reasonably acceptable to the Agent and
its counsel in their sole and absolute discretion.
(O)
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FIELD EXAMINATION.
The Agent shall have completed a field examination and audit of the business,
operations and income of the Borrower, Berry UK, Norwich and each Subsidiary
Guarantor, the results of which field examination and audit shall be in all
respects acceptable to the Agent in its sole and absolute discretion and shall
include reference discussions with key customers and vendors.
(P)APPRAISAL.
The Agent shall have received appraisals of all real and personal property
owned by the Borrower, Berry UK, Norwich and/or each Subsidiary Guarantor, all
of which appraisals shall be performed by one or more appraisers satisfactory
in all respects to the Agent, shall be in such form and content as may be
required by the Agent.
(Q)PRO-FORMA BALANCE SHEET AND PROJECTIONS.
The Agent shall have received and approved the Borrower's Pro-forma Balance
Sheet and Pro-forma Financial Projections, which Pro-forma Balance Sheet and
Pro-forma Financial Projections must be in form and content acceptable to the
Agent in its sole and absolute discretion.
(R)STOCK CERTIFICATES AND STOCK POWERS.
The Agent shall have received all of the original stock certificates of each
Subsidiary Guarantor and all original certificates representing one hundred
percent (100%) of the stock issued by Berry UK and fully executed irrevocable
stock powers from the holders of all such stock certificates.
(S)NORWICH STOCK PURCHASE AGREEMENT TRANSACTION.
(i)The Norwich Stock Purchase Transaction shall have been completed and closed
prior to or simultaneously herewith upon terms and conditions reasonably
satisfactory to the Agent, in accordance with the Norwich Stock Purchase
Agreement and all applicable Laws.
(ii)The Agent shall have received photocopies of all Norwich Stock Purchase
Documents executed, delivered and/or furnished in connection with the Norwich
Stock Purchase Transaction, together with a certificate signed by a Responsible
Officer of the Borrower, Berry UK and Norwich certifying that the Norwich Stock
Purchase Agreement and the other Norwich Stock Purchase Documents furnished to
the Agent are true, correct, in full force and effect and the provisions
thereof have not been in any way modified, amended or waived, except as
otherwise disclosed in writing to the Agent on or before the date of this
Agreement.
(T)
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ENVIRONMENTAL REPORTS.
The Agent shall have received and reviewed a Phase I environmental assessment
for each parcel of real property owned or leased by the Borrower, Berry UK,
Norwich or any Subsidiary Guarantor, each of which environmental assessment has
been performed by a reputable and recognized environmental consulting firm
acceptable to the Agent and has revealed no material Hazardous Materials
Contamination or material violations of any Environmental Laws, and shall
otherwise be in all respects acceptable to the Agent.
(U)FINANCIAL STATEMENTS.
The Agent shall have received and reviewed copies of the annual audited
financial statements in reasonable detail satisfactory to the Agent relating to
the Borrower and its Subsidiaries for the fiscal year ending December 31, 1997
and for Norwich for the fiscal year ending October 31, 1997, prepared in
accordance with GAAP, which financial statements shall include a consolidated
and consolidating balance sheet of the Borrower and its Subsidiaries as of the
end of each such fiscal year and consolidated and consolidating statements of
income, cash flows and changes in shareholders equity of the Borrower and its
Subsidiaries for each such fiscal year. In addition, the Agent shall have
received and reviewed copies of the most recent interim monthly financial
statements for Norwich, the Borrower and its Subsidiaries for fiscal years ,
all prepared in accordance with GAAP.
SECTION 5.2CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The making of all advances under the Loans and the issuance of all Letters of
Credit and all Bond Letters of Credit is subject to the fulfillment of the
following conditions precedent in a manner reasonably satisfactory in form and
substance to the Agent:
(A)DEFAULT.
There shall exist no Event of Default or Default hereunder.
(B)REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Borrower, Berry UK and Norwich
contained among the provisions of this Agreement shall be true and with the
same effect as though such representations and warranties had been made at the
time of the making of, and of the request for, each advance under the Loans or
the issuance of each Letter of Credit or Bond Letter of Credit, except that (a)
the representations and warranties which relate to a specific date need only be
true and correct as of such date and (b) the representations and warranties
which relate to financial statements which are referred to in (K)FINANCIAL
CONDITION. (Financial Condition), shall also be deemed to cover financial
statements furnished from time to time to the Agent pursuant to (a)Financial
Statements.
The Borrower shall furnish to the Agent for distribution to the Lender
(Financial Statements).
(C)ADVERSE CHANGE.
No material adverse change shall have occurred in the condition (financial or
otherwise), operations or business of the Borrower, Berry UK, Norwich or any
Subsidiary Guarantor which would, in the good faith judgment of the Agent,
materially impair the ability of the Borrower, Berry UK, Norwich or any
Subsidiary Guarantor to pay or perform any of the Obligations.
(D)LEGAL MATTERS.
All legal documents incident to each advance under the Loans and each of the
Letters of Credit and Bond Letters of Credit shall be reasonably satisfactory
to the Agent.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.1AFFIRMATIVE COVENANTS.
So long as any of the Obligations (or any the Commitments therefor) shall be
outstanding hereunder, the Borrower, Berry UK and Norwich agree jointly and
severally with the Agent and the Lenders as follows:
(A)FINANCIAL STATEMENTS.
The Borrower shall furnish to the Agent for distribution to the Lenders:
(I)ANNUAL STATEMENTS AND CERTIFICATES. The Borrower shall furnish to the Agent
for distribution to the Lenders as soon as available, but in no event more than
ninety (90) days after the close of the Borrower's fiscal years, (i) a copy of
the annual consolidated and consolidating financial statements in reasonable
detail satisfactory to the Agent relating to the Borrower, Berry UK, Norwich
and all other Subsidiaries, prepared in accordance with GAAP and examined and
certified by independent certified public accountants satisfactory to the
Agent, which financial statements shall include a consolidated and
consolidating balance sheet of the Borrower, Berry UK, Norwich and all other
Subsidiaries as of the end of such fiscal year and consolidated and
consolidating statements of income, cash flows and changes in shareholders
equity of the Borrower, Berry UK, Norwich and all other Subsidiaries for such
fiscal year, and (ii) a Compliance Certificate, in substantially the form
attached to this Agreement as EXHIBIT D, containing a detailed computation of
each financial covenant in this Agreement which is applicable for the period
reported, a certification that no change has occurred to the information
contained in the Collateral Disclosure List (except as set forth any schedule
attached to the certification) and (iii) a management letter in the form
prepared by the Borrower's independent certified public accountants, but only
if and to the extent customarily obtained by the Borrower. The Agent agrees
that any one of the "Big 4" accounting firms is satisfactory to the Agent for
purposes of this Section (A)FINANCIAL STATEMENTS., except to the extent the
Agent in its reasonable discretion and based on good faith and legitimate
concerns determines that any such accounting firm would be unacceptable because
of any conflict of interest or any material adverse change affecting such
firm's reliability or financial viability.
(II)ANNUAL OPINION OF ACCOUNTANT. The Borrower shall furnish to the Agent for
distribution to the Lenders as soon as available, but in no event more than
ninety (90) days after the close of the Borrower's fiscal years, a letter or
opinion of the accounting firm which examined and certified the annual
financial statement relating to the Borrower, Berry UK, Norwich and all other
Subsidiaries stating whether anything in such accounting firm's examination has
revealed the occurrence of a Default or an Event of Default hereunder, and, if
so, stating the facts with respect thereto.
(III)QUARTERLY STATEMENTS AND CERTIFICATES. The Borrower shall furnish to the
Agent for distribution to the Lenders as soon as available, but in no event
more than forty-five (45) days after the close of the Borrower's fiscal
quarters (other than the final fiscal quarter), consolidated and consolidating
balance sheets of the Borrower, Berry UK, Norwich and all other Subsidiaries as
of the close of such period, consolidated and consolidating income, cash flows
and changes in shareholders equity statements for such period, and a Compliance
Certificate, in substantially the form attached to this Agreement as EXHIBIT D,
containing a detailed computation of each financial covenant in this Agreement
which is applicable for the period reported, each prepared by a Responsible
Officer of or on behalf of the Borrower in a format acceptable to the Agent,
all as prepared and certified by a Responsible Officer of the Borrower and
accompanied by a certificate of that officer stating whether any event has
occurred which constitutes a Default or an Event of Default hereunder, and, if
so, stating the facts with respect thereto.
(IV)MONTHLY STATEMENTS AND CERTIFICATES. The Borrower shall furnish to the
Agent for distribution to the Lenders as soon as available, but in no event
more than thirty-five (35) days after the close of the Borrower's fiscal
months, consolidated and consolidating balance sheets of the Borrower, Berry
UK, Norwich and all other Subsidiaries as of the close of such period,
consolidated and consolidating income, cash flows and changes in shareholders
equity statements for such period, and a detailed computation of each financial
covenant in this Agreement which is applicable for the period reported, all as
prepared and certified by a Responsible Officer of the Borrower and accompanied
by a certificate of that officer stating whether any event has occurred which
constitutes a Default or an Event of Default hereunder, and, if so, stating the
facts with respect thereto.
(V) MONTHLY REPORTS - BORROWING BASE. As part of the Borrowing Base
Certificate, the Borrower shall furnish to the Agent for distribution to the
Lenders within twenty (20) days after the end of each fiscal month, a report
containing the following information:
(E) a detailed aging schedule of all Accounts for the Borrower
and each Subsidiary Guarantor by Account Debtor, in such detail, and
accompanied by such supporting information, as the Agent may from time to time
reasonably request;
(F) a detailed aging of all accounts payable by supplier, in
such detail, and accompanied by such supporting information, as the Agent may
from time to time reasonably request; and
(G) a listing of all Inventory of the Borrower and each
Subsidiary Guarantor by component, category and location, in such detail, and
accompanied by such supporting information as the Agent may from time to time
reasonably request.
(VI) MONTHLY REPORTS - UK BORROWING BASE. As part of the UK Borrowing Base
Certificate, Berry UK and Norwich shall furnish to the Agent for distribution
to the Lenders within twenty (20) days after the end of each fiscal month, a
report containing the following information:
(A) a detailed aging schedule of all Accounts for Berry UK and
Norwich by Account Debtor, in such detail, and accompanied by such supporting
information, as the Agent may from time to time reasonably request;
(B) a detailed aging of all accounts payable by supplier, in
such detail, and accompanied by such supporting information, as the Agent may
from time to time reasonably request; and
(C) a listing of all Inventory of Berry UK and Norwich by
component, category and location, in such detail, and accompanied by such
supporting information as the Agent may from time to time reasonably request.
(VII) ANNUAL BUDGET AND PROJECTIONS. Commencing with fiscal year 1997, the
Borrower shall furnish to the Lender as soon as available, but in no event
later than the 10th day before the end of each fiscal year:
(A) a consolidated and consolidating budget and pro forma
financial statements on a month-to-month basis for the following fiscal year,
and
(B) three-year financial projections or financial projections
for such lesser or greater period to the extent routinely prepared by the
Borrower in the ordinary course of its business, which projections shall
include both consolidated and consolidating projections with respect to the
Borrower, Berry UK, Norwich and all other Subsidiaries.
(VIII) AMENDMENTS TO SUBORDINATED DEBT LOAN DOCUMENTS. The Borrower will
furnish copies of each amendment, supplement, restatement or other modification
to any of the Subordinated Debt Loan Documents executed at any time after the
Closing Date on or before the effective date of such amendment, supplement,
restatement or other modification.
(IX) ADDITIONAL REPORTS AND INFORMATION. The Borrower, Berry UK and Norwich
shall furnish to the Agent for distribution to the Lenders promptly, such
additional information, reports or statements as the Agent and/or any of the
Lenders may from time to time reasonably request.
(B)REPORTS TO SEC AND TO STOCKHOLDERS.
The Borrower will furnish to the Agent for distribution to the Lenders,
promptly upon the filing or making thereof, at least one (1) copy of all
reports, notices and proxy statements sent by the Parent, the Borrower or any
of their respective Subsidiaries to its stockholders, and of all regular and
other reports filed by the Parent, the Borrower or any of their respective
Subsidiaries with the Securities and Exchange Commission.
(C)RECORDKEEPING, RIGHTS OF INSPECTION, FIELD EXAMINATION, ETC.
(i) The Borrower, Berry UK and Norwich shall, and shall cause each of the
Subsidiaries to, maintain (i) a standard system of accounting in accordance
with GAAP, and (ii) proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its
properties, business and activities.
(ii) The Borrower, Berry UK and Norwich shall, and shall cause each of the
Subsidiaries to, permit authorized representatives of the Agent and any of the
Lenders to visit and inspect the properties of the Borrower, Berry UK, Norwich
and the Subsidiaries, to review, audit, check and inspect the Collateral at any
time with reasonable prior notice prior to the occurrence of an Event of
Default, and without notice at any time on or after the occurrence of an Event
of Default, to review, audit, check and inspect the other books of record of
the Borrower, Berry UK, Norwich and the Subsidiaries at any time with or
without notice and to make abstracts and photocopies thereof, and to discuss
the affairs, finances and accounts of the Borrower, Berry UK, Norwich and the
Subsidiaries, with the officers, directors, employees and other representatives
of the Borrower, Berry UK, Norwich and the Subsidiaries and their respective
accountants, all at such times during normal business hours and other
reasonable times and as often as the Agent and/or any of the Lenders may
reasonably request.
(iii) The Borrower, Berry UK and Norwich each hereby irrevocably authorizes and
directs all accountants and auditors employed by the Borrower, Berry UK,
Norwich and/or any Subsidiary at any time prior to the repayment in full of the
Obligations to exhibit and deliver to the Agent for distribution to the Lenders
copies of any and all of the financial statements, trial balances, management
letters, or other accounting records of any nature of the Borrower, Berry UK,
Norwich and/or any or all Subsidiaries in the accountant's or auditor's
possession, and to disclose to the Agent and any of the Lenders any information
they may have concerning the financial status and business operations of the
Borrower, Berry UK, Norwich and/or any or all Subsidiaries. Further, the
Borrower, Berry UK, and Norwich each hereby authorizes all Governmental
Authorities to furnish to the Agent for distribution to the Lenders copies of
reports or examinations relating to the Borrower, Berry UK, Norwich and/or any
or all Subsidiaries, whether made by the Borrower, Berry UK, Norwich or
otherwise. The Agent agrees that it shall not request any of the foregoing
items directly from any accountants or auditors employed by the Borrower, Berry
UK, Norwich or any Subsidiary at any time prior to the occurrence of an Event
of Default unless (i) the Agent shall have first requested such items from the
Borrower and the Borrower shall have failed or is unable to furnish the
requested items promptly and (ii) the Agent shall have notified the Borrower
and/or the respective Subsidiary, as appropriate. Upon the Borrower's request,
the Agent will furnish copies of all items obtained by the Agent from any
accountants or auditors for the Borrower unless the Agent is legally prohibited
from so doing.
(iv) All reasonable costs and expenses incurred by, or on behalf of, the Agent
in connection with the conduct of any of the foregoing shall be part of the
Enforcement Costs and shall be payable to the Agent upon demand. The Borrower
acknowledges and agrees that such expenses may include, but shall not be
limited to, any and all out-of-pocket costs and expenses of the Agent's
employees and agents in, and when, travelling to any of the facilities of the
Borrower, Berry UK, Norwich or any Subsidiary Guarantor.
(D)CORPORATE EXISTENCE.
Except in connection with consummation of those transactions permitted by (A)
CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure),
the Borrower, Berry UK and Norwich shall maintain, and shall cause each of
their Subsidiaries to maintain, its corporate existence in good standing in the
jurisdiction in which it is incorporated and in each other jurisdiction where
it is required to register or qualify to do business if the failure to do so in
such other jurisdiction would have a material adverse effect (a) on the ability
of the Borrower, Berry UK, Norwich or any Subsidiary Guarantor to perform the
Obligations, (b) on the conduct of the operations of the Borrower, Berry UK,
Norwich and the Subsidiary Guarantors, taken as a whole, (c) on the
consolidated financial condition of the Borrower and the Subsidiaries, taken as
a whole, or (d) on the value of, or the ability of the Agent and the Lenders to
realize upon, any of the Collateral.
(E)COMPLIANCE WITH LAWS.
The Borrower, Berry UK and Norwich shall comply, and shall cause each of their
Subsidiaries to comply, with all applicable Laws and observe the valid
requirements of all Governmental Authorities, the noncompliance with or the
nonobservance of which would have a material adverse effect (a) on the ability
of the Borrower, Berry UK, Norwich or any Subsidiary Guarantor to perform the
Obligations, (b) on the conduct of the operations of the Borrower, Berry UK,
Norwich and the Subsidiary Guarantors, taken as a whole, (c) on the
consolidated financial condition of the Borrower and the Subsidiaries, taken as
a whole, or (d) on the value of, or the ability of the Agent and the Lenders to
realize upon, any of the Collateral.
(F)PRESERVATION OF PROPERTIES.
Except as otherwise expressly permitted by the provisions of this Agreement,
the Borrower, Berry UK and Norwich will, and will cause each of their
Subsidiaries to, at all times (a) maintain, preserve, protect and keep its
material properties, whether owned or leased, in good operating condition,
working order and repair (ordinary wear and tear excepted), and from time to
time will make all proper repairs, maintenance, replacements, additions and
improvements thereto needed to maintain such properties in good operating
condition, working order and repair, and (b) do or cause to be done all things
necessary to preserve and to keep in full force and effect its material
franchises, leases of real and personal property, trade names, patents,
trademarks and permits which are necessary for the orderly continuance of its
business.
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(G) LINE OF BUSINESS.
The Borrower, Berry UK and Norwich will continue and, will cause their
Subsidiaries to continue, to engage substantially only in the business of
manufacturing, marketing, selling and distributing plastic products.
(H)INSURANCE.
The Borrower, Berry UK and Norwich will, and will cause each of their
Subsidiaries to, at all times maintain with "A" (or its English equivalent with
respect to Berry UK and Norwich) or better rated insurance companies such
insurance as is required by applicable Laws and such other insurance, in such
amounts, of such types and against such risks, hazards, liabilities, casualties
and contingencies as are usually insured against in the same geographic areas
by business entities engaged in the same or similar business. Without limiting
the generality of the foregoing, the Borrower, Berry UK and Norwich will, and
will cause each of their Subsidiaries to, keep adequately insured all of their
property against loss or damage resulting from fire or other risks insured
against by extended coverage and maintain public liability insurance against
claims for personal injury, death or property damage occurring upon, in or
about any properties occupied or controlled by them, or arising in any manner
out of the businesses carried on by them. The Borrower shall deliver to the
Agent on the Closing Date (and thereafter on each date there is a material
change in the insurance coverage) a certificate of a Responsible Officer of the
Borrower containing a detailed list of the insurance then in effect and stating
the names of the insurance companies, the types, the amounts and rates of the
insurance, dates of the expiration thereof and the properties and risks covered
thereby.
(I)TAXES.
Except to the extent that the validity or amount thereof is being contested in
good faith and by appropriate proceedings, the Borrower, Berry UK and Norwich
will, and will cause each of their Subsidiaries, to pay and discharge all Taxes
prior to the date when the failure to pay such Taxes will give rise to a
Default or an Event of Default. The Borrower shall furnish to the Agent at
such times as the Agent may require proof satisfactory to the Agent of the
making of payments or deposits required by applicable Laws including, without
limitation, payments or deposits with respect to amounts withheld by the
Borrower, Berry UK, Norwich and/or any Subsidiary Guarantor from wages and
salaries of employees and amounts contributed by the Borrower, Berry UK,
Norwich and/or any Subsidiary Guarantor on account of federal and other income
or wage taxes and amounts due under the Federal Insurance Contributions Act, as
amended.
(J)ERISA.
The Borrower will, and will cause each of their Subsidiaries and Affiliates to,
comply with the funding requirements of ERISA with respect to employee pension
benefit plans for its respective employees. The Borrower will not permit, and
will not allow any Subsidiary to permit, with respect to any employee benefit
plan or plans covered by Title IV of ERISA (a) any prohibited transaction or
transactions under ERISA or the Internal Revenue Code, which results, or would
result, in any material liability of the Borrower and/or any of its
Subsidiaries and Affiliates, or (b) any Reportable Event if, upon termination
of the plan or plans with respect to which one or more such Reportable Events
shall have occurred, there is or would be any material liability of the
Borrower and/or any of the Subsidiaries and Affiliates to the PBGC. Upon the
Agent's request, the Borrower will deliver to the Agent a copy of the most
recent actuarial report, financial statements and annual report completed with
respect to any "defined benefit plan", as defined in ERISA.
(K)NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE DEVELOPMENTS.
The Borrower, Berry UK and Norwich shall promptly notify the Agent and the
Lenders upon obtaining knowledge of the occurrence of:
(i)any Event of Default;
(ii)any Default;
(iii)any litigation instituted or threatened against the Borrower, Berry UK,
Norwich or any of their Subsidiaries and of the entry of any judgment or Lien
(other than any Permitted Liens) against any of the assets or properties of the
Borrower, Berry UK, Norwich or any Subsidiary where the claims against the
Borrower, Berry UK, Norwich or any Subsidiary exceed One Million Dollars
($1,000,000) and are not covered by insurance;
(iv)the receipt by the Borrower, Berry UK, Norwich or any Subsidiary Guarantor
of any notice, claim or demand from any Governmental Authority which alleges
that the Borrower, Berry UK, Norwich or any Subsidiary Guarantor is in material
violation of any of the terms of, or has failed to comply with any applicable
material Laws regulating its operation and business, including, but not limited
to, the Occupational Safety and Health Act and the Environmental Protection
Act, the noncompliance with which would have a materially adverse effect on the
Borrower, Berry UK, Norwich and the Subsidiary Guarantors, taken as a whole;
(v)any other development in the business or affairs of the Borrower, Berry UK,
Norwich or any of their Subsidiaries which is materially adverse to the
Borrower and its Subsidiaries taken as a whole; and
(vi)any discovery or determination by the Borrower or any Subsidiary that any
computer applications that is material to any of their respective business and
operations will not be Year 2000 Compliant
in each case describing in detail satisfactory to the Agent the nature thereof
and the action the Borrower or any Subsidiary, as the case may be, proposes to
take, if any, with respect thereto.
(L)HAZARDOUS MATERIALS; CONTAMINATION.
The Borrower, Berry UK and Norwich each agrees to:
(i)give notice to the Agent immediately upon acquiring knowledge of the
presence of any Hazardous Materials or any Hazardous Materials Contamination on
any property owned, operated or controlled by the Borrower, Berry UK, Norwich
or any Subsidiary Guarantor or for which the Borrower, Berry UK, Norwich or any
Subsidiary Guarantor is, or is claimed to be, responsible (provided that such
notice shall not be required for Hazardous Materials placed or stored on such
property in accordance with applicable Laws in the ordinary course (including,
without limitation, quantity) of the line of business expressly described in
this Agreement or as described in any Phase I environmental assessments
expressly referenced herein or in any schedule attached hereto), with a full
description thereof;
(ii)promptly comply with any Laws, the noncompliance with which would have a
materially adverse effect on the Borrower, Berry UK, Norwich and the Subsidiary
Guarantors, taken as a whole or on the value of any material portion of the
Collateral or the ability of the Agent to realize upon the value of any such
Collateral requiring the removal, treatment or disposal of Hazardous Materials
or Hazardous Materials Contamination and provide the Agent with reasonably
satisfactory evidence of such compliance;
(iii)as part of the Obligations, defend, indemnify and hold harmless the Agent,
each of the Lenders and each of their respective agents, employees, trustees,
successors and assigns from any and all claims which may now or in the future
(whether before or after the termination of this Agreement) be asserted as a
result of the presence of any Hazardous Materials or any Hazardous Materials
Contamination on any property owned, operated or controlled by the Borrower,
Berry UK, Norwich or any Subsidiary Guarantor for which the Borrower, Berry UK,
Norwich or any Subsidiary Guarantor is, or is claimed to be, responsible which
claims relate to the financing and/or Liens contemplated by this Agreement, but
which claims do not arise out of the gross negligence or willful misconduct of
the Agent or any of the Lenders. The Borrower, Berry UK and Norwich each
acknowledges and agrees that this indemnification shall survive the termination
of this Agreement and the Commitments and the payment and performance of all of
the other Obligations. The Agent and the Lenders agree that the liability of
Berry UK and Norwich with respect to such indemnification shall be limited to
claims which arise solely from property owned, operated or controlled by Berry
UK and/or Norwich.
(M)FINANCIAL COVENANTS.
(I)TANGIBLE CAPITAL FUNDS. The Borrower, Berry UK, Norwich and each of the
Subsidiary Guarantors, on a consolidated basis, will attain a Tangible Capital
Funds of not less than the following amounts as of the following dates:
<PAGE>
<TABLE>
<CAPTION>
DATE AMOUNT
<S> <C>
June 30, 1998 $22,000,000
September 30, 1998 $22,500,000
December 31, 1998 $22,000,000
March 31, 1999 $22,500,000
June 30, 1999 $24,000,000
September 30, 1999 $26,000,000
December 31, 1999 $30,000,000
March 31, 2000 $30,500,000
June 30, 2000 $33,000,000
September 30, 2000 $39,000,000
December 31, 2000 $44,000,000
March 31, 2001 $46,000,000
June 30, 2001 $49,000,000
September 30, 2001 $54,000,000
December 31, 2001 $62,000,000
</TABLE>
(II)FUNDED DEBT TO EBITDA. The Borrower, Berry UK, Norwich and each Subsidiary
Guarantor, on a consolidated basis, will not at any time permit the ratio of
(x) Funded Debt to (y) EBITDA, for the prior twelve (12) month period, to be
greater than the following amounts as of the following dates:
<TABLE>
<CAPTION>
DATE RATIO
<S> <C>
June 30, 1998 5.00 to 1.00
September 30, 1998 4.50 to 1.00
December 31, 1998 4.00 to 1.00
March 31, 1999 4.00 to 1.00
June 30, 1999 3.75 to 1.00
September 30, 1999 3.75 to 1.00
December 31, 1999 3.50 to 1.00
March 31, 2000 3.50 to 1.00
June 30, 2000 3.25 to 1.00
September 30, 2000 3.25 to 1.00
December 31, 2000 3.00 to 1.00
March 31, 2001 3.00 to 1.00
June 30, 2001 3.00 to 1.00
September 30, 2001 3.00 to 1.00
December 31, 2001 3.00 to 1.00
</TABLE>
In addition, Berry UK and Norwich, on a consolidated basis, will not permit,
tested as of the last day of each fiscal quarter commencing December 31, 1998
and calculated on a rolling four-quarter basis (until such time as four
quarters have been achieved, calculation will be annualized), the ratio of (x)
its Funded Debt to (y) EBITDA, for the prior twelve (12) month period, to be
greater than 3.0 to 1.0
(III)INTEREST COVERAGE RATIO. The Borrower, Berry UK, Norwich and each
Subsidiary Guarantor will maintain, on a consolidated basis and tested as of
the last day of each fiscal quarter in each fiscal year for the three (3), six
(6), nine (9) or twelve (12) month period of such fiscal year, as appropriate,
ending on that date, an Interest Coverage Ratio of not less than the following
amounts as of the following dates:
<TABLE>
<CAPTION>
DATE RATIO
<S> <C>
June 30, 1998 2.00 to 1.00
September 30, 1998 2.00 to 1.00
December 31, 1998 2.00 to 1.00
March 31, 1999 2.00 to 1.00
June 30, 1999 2.00 to 1.00
September 30, 1999 2.00 to 1.00
December 31, 1999 2.50 to 1.00
March 31, 2000 2.50 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 2.50 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.50 to 1.00
</TABLE>
(IV)FIXED CHARGE COVERAGE RATIO. The Borrower, Berry UK, Norwich and each
of the Subsidiary Guarantor will maintain, on a consolidated basis and
tested as of the last day of each fiscal year, a Fixed Charge Coverage
Ratio of not less than the following amounts as of the following dates:
<TABLE>
<CAPTION>
PERIOD RATIO
<S> <C>
December 31, 1998 1.00 to 1.00
December 31, 1999 1.00 to 1.00
December 31, 2000 1.00 to 1.00
December 31, 2001 1.00 to 1.00
</TABLE>
In addition, Berry UK and Norwich will maintain, on a consolidated basis
and tested as of the last day of each fiscal quarter, commencing December
31, 1998 and calculated on a rolling four-quarter basis (until such time s
four quarters have been achieved, calculation will be annualized), a Fixed
Charge Coverage Ratio of not less than 1.0 to 1.0
(V)DEBT SERVICE COVERAGE RATIO. The Borrower, Berry UK, Norwich and each
Subsidiary Guarantor will maintain, on a consolidated basis and tested as
of the last day of each fiscal quarter in each fiscal year for the three
(3), six (6), nine (9) or twelve (12) month period of such fiscal year, as
appropriate, ending on that date, a Debt Service Coverage Ratio of not less
than 1.50 to 1.0.
(N)COLLECTION OF ACCOUNTS.
Until the occurrence of an Event of Default, the Borrower, Berry UK,
Norwich and its Subsidiaries shall at their own expense have the privilege
for the account of, and in trust for, the Agent and the Lenders of
collecting their Accounts and receiving in respect thereto all Items of
Payment and shall otherwise completely service all of the Accounts
including (a) the billing, posting and maintaining of complete records
applicable thereto, (b) the taking of such action with respect to the
Accounts as each of the Borrower, Berry UK, Norwich and each of the
Subsidiaries may deem advisable; and (c) the granting, in the ordinary
course of business, to any Account Debtor, any rebate, refund or adjustment
to which the Account Debtor may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of which shall
have given rise to an Account and may take such other actions relating to
the settling of any Account Debtor's claim as may be commercially
reasonable. The Agent may, at its option, at any time or from time to time
after and during the continuance of an Event of Default hereunder, revoke
the collection privilege given in this Agreement to the Borrower, Berry UK,
Norwich and the Subsidiaries by either giving notice of its assignment of,
and Lien on the Collateral to the Account Debtors or giving notice of such
revocation to the Borrower, Berry UK and/or Norwich. The Agent shall not
have any duty to, and the Borrower, Berry UK and Norwich each hereby
releases the Agent and the Lenders from all claims of loss or damage caused
by the delay or failure to collect or enforce any of the Accounts or to
preserve any rights against any other party with an interest in the
Collateral, unless due to the gross negligence or willful misconduct of the
Agent and/or any of the Lenders.
(O)GOVERNMENT ACCOUNTS.
The Borrower will immediately notify the Agent if any of the Accounts arise
out of contracts with the United States or with any other Governmental
Authority, which Accounts, individually or in the aggregate, exceed One
Hundred Thousand Dollars ($100,000) and, as appropriate, execute and, cause
each Subsidiary Guarantor to execute, any Financing Documents and take any
steps required by the Agent in order to comply with the Federal Assignment
of Claims Act or any other applicable Laws.
(P)INVENTORY.
With respect to the Inventory, the Borrower, Berry UK, Norwich and the
Subsidiaries will keep correct and accurate records itemizing and
describing the kind, type, and quantity of Inventory, the cost therefor and
the selling price thereof, all of which records shall be available to the
officers, employees or agents of the Agent upon demand for inspection and
copying thereof. The Borrower, Berry UK, Norwich and the Subsidiaries
shall be permitted to sell Inventory in the ordinary course of business
until such time as the Agent notifies the Borrower, Berry UK and/or Norwich
to the contrary following the occurrence of an Event of Default.
(Q)INSURANCE WITH RESPECT TO EQUIPMENT AND INVENTORY.
The Borrower, Berry UK and Norwich will (a) maintain and cause each of
their the Subsidiaries to maintain hazard insurance with fire and extended
coverage and naming the Agent as an additional insured with loss payable to
the Agent as its respective interest may appear on the Equipment and
Inventory in an amount at least equal to the fair market value of the
Equipment and Inventory (but in any event sufficient to avoid any co-
insurance obligations) and with a specific endorsement to each such
insurance policy pursuant to which the insurer agrees to give the Agent at
least thirty (30) days written notice before any alteration or cancellation
of such insurance policy and that no act or default of the Borrower or any
Subsidiary shall affect the right of the Agent to recover under such policy
in the event of loss or damage; and (b) file, and cause each of its
Subsidiaries to file, with the Agent, upon its request, a detailed list of
the insurance then in effect and stating the names of the insurance
companies, the amounts and rates of the insurance, dates of the expiration
thereof and the properties and risks covered thereby. Notwithstanding the
foregoing, Berry UK and Norwich shall be required to maintain insurance in
accordance with the provisions of this Section as and to the extent
appropriate and customary in secured lending transactions between British
lenders and borrowers.
(R)MAINTENANCE OF THE COLLATERAL.
Except as permitted by Section (a) Capital Structure, Merger, Acquisition
or Sale of Assets. (Capital Structure), the Borrower, Berry UK and Norwich
will maintain, and will cause each of the Subsidiary Guarantors to
maintain, the Collateral in good working order, saving and excepting
ordinary wear and tear.
(S)DEFENSE OF TITLE AND FURTHER ASSURANCES.
At its expense, the Borrower, Berry UK and Norwich each will defend the
title to the Collateral (and any part thereof), and will immediately
execute, acknowledge and deliver and, cause each Subsidiary Guarantor to
execute, acknowledge and deliver, any financing statement, renewal,
affidavit, deed, assignment, continuation statement, security agreement,
certificate or other document which the Agent may require in order to
perfect, preserve, maintain, continue, protect and/or extend the Lien or
security interest granted or required to be granted to the Agent, for the
benefit of the Lenders ratably and the Agent, under the terms of this
Agreement and/or under any of the other Financing Documents and the first
priority of that Lien, subject only to the Permitted Liens. The Borrower,
Berry UK and Norwich each will from time to time do, and, the Borrower will
cause each of the Subsidiary Guarantors to do, whatever the Agent may
reasonably require by way of obtaining, executing, delivering, and/or
filing financing statements, landlords' or mortgagees' waivers, notices of
assignment and other notices and amendments and renewals thereof and the
Borrower, Berry UK and Norwich, each will take and, the Borrower will cause
each of the Subsidiary Guarantors to take, any and all steps and observe
such formalities as the Agent may require, in order to create and maintain
a valid Lien upon, pledge of, or paramount security interest in (subject
only to Permitted Liens), the Collateral (including as and to the extent
required to comply with the provisions of SECTION 3.7SUBSIDIARY GUARANTOR
ASSETS. (Subsidiary Guarantor Assets)), subject only to the Permitted
Liens. The Agent understands and will require that the Borrower, Berry UK
and Norwich only use commercially reasonable efforts to obtain landlord's
and mortgagee's waivers requested by the Agent. The Borrower shall pay to
the Agent on demand all taxes, costs and expenses incurred by the Agent in
connection with the preparation, execution, recording and filing of any
such document or instrument. To the extent that the proceeds of any of the
Accounts are expected to become subject to the control of, or in the
possession of, a party other than the Borrower, Berry UK, Norwich or a
Subsidiary Guarantor or the Agent, the Borrower, Berry UK and/or Norwich,
as applicable, shall use commercially reasonable efforts to cause all such
parties to execute and deliver security documents, financing statements or
other documents as requested by the Agent and as may be necessary to
evidence and/or perfect the security interest of the Agent, for the benefit
of the Lenders ratably and the Agent in those proceeds. The Borrower
agrees that a copy of a fully executed security agreement and/or financing
statement shall be sufficient to satisfy for all purposes the requirements
of a financing statement as set forth in Article 9 of the applicable
Uniform Commercial Code. The Borrower, Berry UK and Norwich each hereby
irrevocably appoints the Agent as its attorney-in-fact, with power of
substitution, in the name of the Agent or in the name of the Borrower,
Berry UK and/or Norwich or otherwise, for the use and benefit of the Agent
for itself and the Lenders, but at the cost and expense of the Borrower and
without notice to the Borrower, Berry UK and/or Norwich, to execute and
deliver any and all of the instruments and other documents and take any
action which the Agent may require pursuant to the foregoing provisions of
this Section (S)DEFENSE OF TITLE AND FURTHER ASSURANCES.
(T)BUSINESS NAMES; LOCATIONS.
The Borrower, Berry UK and Norwich will notify and the Borrower will cause
each of the Subsidiary Guarantors to notify the Agent not less than thirty
(30) days prior to (a) any change in the name under which the Borrower,
Berry UK, Norwich or the applicable Subsidiary Guarantor conducts its
business, (b) any change of the location of the chief executive office of
the Borrower, Berry UK, Norwich or the applicable Subsidiary Guarantor, and
(c) the opening of any new place of business, and (d) any change in the
location of the places where the Collateral, or any part thereof, or the
books and records, or any part thereof, are kept to the extent any such
change in location would in and of itself then or with the passage of time
result in any Lien of the Agent and the Lenders not being perfected unless
action is taken by the Agent and/or any other Person to continue, extend or
effect the perfection of such Lien.
(U)SUBSEQUENT OPINION OF COUNSEL AS TO RECORDING REQUIREMENTS.
In the event that the Borrower, Berry UK, Norwich or any Subsidiary
Guarantor shall transfer its principal place of business or the office
where it keeps its records pertaining to the Collateral, upon the Agent's
reasonable request the Borrower will provide to the Agent a subsequent
opinion of counsel as to the filing, recording and other requirements with
which the Borrower, Berry UK, Norwich and the Subsidiary Guarantors have
complied to maintain the Lien and security interest in favor of the Agent,
for the ratable benefit of the Lenders and for the benefit of the Agent
with respect to the Agent's Obligations, in the Collateral.
(V)USE OF PREMISES AND EQUIPMENT.
The Borrower, Berry UK and Norwich each agrees that until the Obligations
are fully paid and all of the Commitments and the Letters of Credit and
Bond Letters of Credit have been terminated or have expired, the Agent (a)
after and during the continuance of a Default or an Event of Default, may
use all owned or leased lifts, hoists, trucks and other facilities or
equipment for handling or removing the Collateral; and (b) shall have, and
is hereby granted, a right of ingress and egress to the places where the
Collateral is located, and may proceed over and through their owned or
leased property.
(W)PROTECTION OF COLLATERAL.
The Borrower, Berry UK and Norwich each agrees that the Agent may at any
time following an Event of Default take such steps as the Agent deems
reasonably necessary to protect the interest of the Agent and the Lenders
in, and to preserve the Collateral, including, the hiring of such security
guards or the placing of other security protection measures as the Agent
deems appropriate, may employ and maintain at their premises a custodian
who shall have full authority to do all acts necessary to protect the
interests of the Agent and the Lenders in the Collateral. The Borrower,
Berry UK and Norwich each agrees to cooperate fully with the Agent's
efforts to preserve the Collateral and will take such actions to preserve
the Collateral as the Agent may reasonably direct. All of the Agent's
reasonable expenses of preserving the Collateral, including any reasonable
expenses relating to the compensation and bonding of a custodian, shall
part of the Enforcement Costs.
(X)APPLICATION OF NET CASUALTY PROCEEDS.
The Borrower, Berry UK and Norwich each agrees that Net Casualty Proceeds
with respect to any Assets of the Borrower, Berry UK, Norwich and/or any
Subsidiary Guarantor must be applied to either (a) the payment of the
Obligations (provided that any Net Casualty Proceeds from any Assets of
Berry UK and/or Norwich shall be applied only to payment of the UK
Obligations) or (b) the repair, replacement and/or restoration of the
Assets affected, and without the prior written consent of the Agent for no
other purpose. The Agent shall determine, in its sole discretion, the
manner in which Net Casualty Proceeds are to be applied if the amount of
the Net Casualty Proceeds exceeds, individually or in the aggregate, One
Million Dollars ($1,000,000) or if there exists a Default or an Event of
Default.
SECTION 6.2NEGATIVE COVENANTS.
So long as any of the Obligations or the Commitments or Letters of Credit
or Bond Letters of Credit shall be outstanding, the Borrower, Berry UK and
Norwich each agrees with the Agent and the Lenders that:
(A)CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS.
Except as otherwise permitted by the provisions of Section (C)PURCHASE OR
REDEMPTION OF SECURITIES, DIVIDEND RESTRICTIONS. (Purchase of Redemption of
Securities), neither the Borrower, Berry UK nor Norwich will alter or
amend, nor will the Borrower permit any Subsidiary Guarantor to alter or
amend, its capital structure, authorize any additional class of equity,
issue any stock or equity of any class, enter into any merger or
consolidation or amalgamation, windup or dissolve themselves (or suffer any
liquidation or dissolution) or acquire all or substantially all the Assets
of any Person, or sell, lease or otherwise dispose of any of its Assets;
except that prior to the occurrence of a Default or an Event of Default,
the following shall be permitted:
(i)Permitted Acquisitions;
(ii)Permitted Asset Dispositions;
(iii)mergers or consolidations (i) among and between the Borrower and/or
any Subsidiary Guarantor, (ii) among and between Berry UK and Norwich, and
(iii) among and between any Subsidiaries of the Borrower other than
Subsidiary Guarantors, Berry UK and/or Norwich; provided, that after
closing and consummation of any such merger or consolidation involving the
Borrower or any Subsidiary Guarantor (A) the Borrower is the surviving
entity if the Borrower is a party to such merger or consolidation, (B) the
Agent and the Lenders retain a first priority Lien on, and assignment of,
one hundred percent (100%) of the capital stock of all surviving Subsidiary
Guarantors, subject only to Permitted Liens, and a first priority Lien on
all of the Assets of the Borrower and of each surviving Subsidiary
Guarantor which had been pledged or required to be pledged under the
provisions of this Agreement prior to such merger or consolidation, subject
only to Permitted Liens, and (C) in any merger or consolidation involving
only Subsidiary Guarantors, the surviving entity qualifies or continues to
qualify as a Subsidiary Guarantor in accordance with the provisions of
Section (B)SUBSIDIARIES. (Subsidiaries);
(iv)investments as and to the extent permitted by the provisions of Section
INVESTMENTS, LOANS AND OTHER TRANSACTIONS. (Investments, Loans and Other
Transactions), including, without limitation, the issuance of equity by any
Subsidiary to the Borrower or another Subsidiary;
(v)the use and disposition of Net Casualty Proceeds, but only as and to the
extent permitted by the provisions of SECTION (X) APPLICATION OF NET
CASUALTY PROCEEDS. (Application of Net Casualty Proceeds);
(vi)South Carolina IRB Lease Transfers.
Any consent of the Agent to an Asset Disposition which does not constitute
a Permitted Asset Disposition may be conditioned on a specified use of the
Net Proceeds generated by such Asset Disposition, provided, however, that
the Agent and the Lenders (i) acknowledge that in the case of a disposition
of assets subject to the South Carolina IRB Lease Agreement, the proceeds
must be first applied to repay the South Carolina IRB, but (ii) reserve all
rights and remedies (including, without limitation, those arising under
Section (S) DEFENSE OF TITLE AND FURTHER ASSURANCES. (Defense of Title) and
comparable provisions of the Security Agreement) in the right of the
Borrower or any one or more of the Guarantors to receive the proceeds of
such repayment as a holder of the South Carolina Bond or otherwise.
(B)SUBSIDIARIES.
Neither the Borrower, Berry UK nor Norwich will create or acquire, or
permit any Subsidiary to create or acquire, any Subsidiaries other than (a)
the Subsidiaries identified on the Collateral Disclosure List, as updated
through the date of this Agreement and (b) the creation or acquisition of
Subsidiary Guarantors. In order to qualify, after the Closing Date, as a
Subsidiary Guarantor under the provisions of this Agreement, a Subsidiary
must (i) be an acquisition permitted by the provisions of this Agreement or
be created solely to consummate an acquisition permitted by the provisions
of this Agreement, (ii) execute and deliver to the Agent a guaranty
agreement substantially in the form of the Guaranty, (iii) grant to the
Agent and the Lenders a first priority Lien on all Assets and property of
such Subsidiary, subject only to Permitted Liens, all in accordance with
the terms of one or more Financing Documents as and to the extent
reasonably required by the Agent, and (iv) be a domestic Subsidiary
(organized and existing under the laws of a state in the United States).
(C)PURCHASE OR REDEMPTION OF SECURITIES, DIVIDEND RESTRICTIONS.
The Borrower will not (a) purchase, redeem or otherwise acquire, or permit
any Subsidiary to purchase, redeem or otherwise acquire, any shares of the
Borrower's capital stock or warrants now or hereafter outstanding, (b)
declare or pay any Distributions (other than stock dividends) or set aside
any funds therefor, or (c) apply any of its property or Assets to the
purchase, redemption or other retirement of, set apart any sum for the
payment of any Distributions on, or for the purchase, redemption, or other
retirement of, make any Distributions by reduction of capital or otherwise
in respect of, any shares of any class of capital stock or warrants of the
Borrower, except for (i) Distributions by the Borrower to the Parent
pursuant to a certain Tax Sharing Agreement dated as of April 21, 1994 by
and between the Borrower and the Parent, as amended through the Closing
Date, and as the same may be further amended from time to time in a manner
that is not materially adverse to the Borrower, (ii) Distributions by the
Borrower to the Parent to enable the Parent to pay its operating and
administrative expenses, including, without limitation, directors fees,
legal and audit expenses, Securities and Exchange Commission compliance
expenses and corporate franchise and other Taxes, not to exceed in any
fiscal year Five Hundred Thousand Dollars ($500,000), (iii) Distributions
by the Borrower to the Parent to pay management fees not to exceed Seven
Hundred Fifty Thousand Dollars ($750,000) in any fiscal year of the
Borrower, (iv) Distributions by the Borrower to the Parent to enable the
Parent to repurchase any capital stock owned by any Person employed by the
Parent and/or the Borrower if such Person is no longer so employed,
provided, that the aggregate amount of Distributions for this purpose shall
not exceed One Million Dollars ($1,000,000) per annum, (v) so long as the
same may be effected with the payment of nominal consideration, the
redemption of the South Carolina IRB in conjunction with the exercise of
the South Carolina IRB Lease Purchase Option and (vi) Distributions to the
Borrower from its Subsidiaries.
(D)INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will create, incur, assume or
suffer to exist, or permit any Subsidiary to create, incur, assume or
suffer to exist, any Indebtedness for Borrowed Money, except:
(i)the Obligations;
(ii)current accounts payable arising in the ordinary course;
(iii)Indebtedness secured by Permitted Liens;
(iv)Subordinated Indebtedness; provided that the principal amount of all
such Subordinated Indebtedness shall not at any time exceed, in the
aggregate, Twenty Million Dollars ($20,000,000);
(v)Indebtedness of the Borrower, Berry UK, Norwich and/or any Subsidiary
existing on the date hereof and reflected on the financial statements
furnished pursuant to (K) FINANCIAL CONDITION. (Financial Condition);
(vi)Unsecured letters of credit, bankers' acceptances and/or (i) secured
Interest Rate/Currency Protection Agreements between the Borrower, Berry
UK, Norwich or a Subsidiary Guarantor and NationsBank and/or (ii) unsecured
Interest Rate Protection/Currency Agreements between the Borrower, Berry
UK, Norwich or a Subsidiary Guarantor and any other financial institution,
providing for the transfer or mitigation of foreign exchange risks or
interest rate risks either generally or under specific contingencies;
(vii)Indebtedness for Borrowed Money incurred by the Borrower, Norwich,
Berry UK or any Subsidiary Guarantor incurred after the Closing Date;
provided, that (i) such Indebtedness for Borrowed Money is incurred on
account of purchase money or finance lease arrangements of Assets (other
than real property) acquired by the Borrower, Norwich, Berry UK or a
Subsidiary Guarantor after the Closing Date, (ii) each such purchase money
or finance lease arrangement does not exceed the cost of the Assets
acquired or leased, (iii) any Lien securing such purchase money or finance
lease arrangement does not extend to any Assets or property other than that
purchased or leased, and (iv) the aggregate amount of Indebtedness for
Borrowed Money under and in connection with all such purchase money and/or
finance lease arrangements shall not exceed, in the aggregate, the sum of
Five Hundred Thousand Dollars ($500,000);
(viii)Capital Leases;
(ix)Indebtedness for Borrowed Money of the Borrower to any Subsidiary
Guarantor or of any Subsidiary Guarantor to the Borrower or any other
Subsidiary Guarantor and Indebtedness for Borrowed Money of the Borrower to
Berry UK and/or Norwich (the "UK Intercompany Indebtedness"), provided that
the aggregate amount of such UK Intercompany Indebtedness (together with
any investment by the Borrower in Berry UK and/or Norwich permitted by the
terms of this Agreement, shall not exceed, in the aggregate, Five Hundred
Thousand Dollars ($500,000);
(x)Indebtedness for Borrowed Money as set forth on Schedule (n)
Indebtedness FOR BORROWED MONEY.;
(xi)Other unsecured Indebtedness for Borrowed Money in aggregate principal
amount not to exceed at any time One Million Dollars ($1,000,000);
(xii)Indebtedness permitted under the provisions of Section INVESTMENTS,
LOANS AND OTHER TRANSACTIONS. (Investments, Loans and Other Transactions),
(xiii)Indebtedness of the Borrower and Berry UK under the Norwich Stock
Purchase Agreement, and.
(xiv)any refinancing, replacement, repurchase, defeasance, redemption or
refunding of any existing Indebtedness for Borrowed Money permitted by the
provisions of this Agreement; provided, that (i) the principal amount of
any Indebtedness for Borrowed Money used to refinance, replace, repurchase,
defease, redeem or refund such existing Indebtedness for Borrowed Money
(each a "Refinancing Indebtedness") does not exceed the then outstanding
principal balance of the Indebtedness for Borrowed Money so refinanced,
replaced, repurchased, defeased, redeemed or refunded, (ii) the Weighted
Average Life to Maturity of any Refinancing Indebtedness is equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness for
Borrowed Money being so refinanced, replaced, repurchased, defeased,
redeemed or refunded by the Refinancing Indebtedness, (iii) the terms of
the Refinancing Indebtedness are not materially more restrictive or
limiting on the Borrower, Berry UK, Norwich or any Subsidiary Guarantor, as
the case may be, than the terms of the Indebtedness for Borrowed Money
being refinanced, replaced, repurchased, defeased, redeemed or refunded, as
determined by the Agent in its reasonable discretion, and (iv) if and to
the extent the Refinancing Indebtedness is intended to refinance, replace,
repurchase, defeasance, redemption or refund Subordinated Indebtedness,
then the Refinancing Indebtedness is subordinated in right of payment to
the Obligations on terms at least as favorable to the Agent and the Lenders
as those then governing the Subordinated Indebtedness to be refinanced,
replaced, repurchased, defeased, redeemed or refunded. As used herein, the
term "Weighted Average Life to Maturity" when applied to any Indebtedness
for Borrowed Money (including any Refinancing Indebtedness) means at any
date, the number of years obtained by dividing (A) the sum of the products
obtained by multiplying (1) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal,
including payment at final maturity, in respect thereof, by (2) the number
of years (calculated to the nearest one-twelfth) that will elapse between
each such date and the making of each such payment, by (B) the then
outstanding principal amount of such Indebtedness for Borrowed Money.
Notwithstanding the foregoing, neither the Borrower, Berry UK, Norwich nor
any Subsidiary Guarantor shall be permitted to create, incur, assume or
suffer to exist any additional Indebtedness for Borrower Money at any time
after the occurrence of a Default or an Event of Default or if and to the
extent any such additional Indebtedness for Borrowed Money would give rise
to a Default or an Event of Default.
(E)INVESTMENTS, LOANS AND OTHER TRANSACTIONS.
Except as otherwise provided in this Agreement, the Borrower, Berry UK, and
Norwich will not, and will not permit any of its or their Subsidiaries to,
(a) make, assume, acquire or continue to hold any investment in any real
property (unless used in connection with their business) or any Person,
whether by stock purchase, capital contribution, acquisition of
Indebtedness of such Person or otherwise (including, without limitation,
investments in any joint venture or partnership), except for (i) Permitted
Acquisitions, (ii) replacements of Assets which are the subject of a
Permitted Asset Disposition made pursuant to clause (f) of the definition
of Permitted Asset Disposition, (iii) those investments existing as of the
Closing Date and reflected on the financial statements furnished pursuant
to Section (K) FINANCIAL CONDITION. (Financial Condition), (iv) any
investments in Cash Equivalents, which, if requested by the Agent, are
pledged to the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent's Obligations, as collateral
and security for the Obligations (v) those investments more particularly
set forth in SCHEDULE INVESTMENTS, LOANS AND OTHER TRANSACTIONS. attached
hereto and made a part hereof (the "Permitted Investments"), (vi) the
Borrower's acquisition, creation or ownership of any Subsidiary Guarantor,
including, the Borrower's existing or additional capital contributions in
any such Subsidiary Guarantor, (vii) the Borrower's acquisition, creation
and ownership of Berry UK and any existing or additional capital
contributions in Berry UK or Norwich; provided that the aggregate amount of
any such existing or additional capital contributions, together with any
intercompany indebtedness between the Borrower and Berry UK permitted by
the terms of this Agreement, may not exceed at any time in the aggregate
Five Hundred Thousand Dollars ($500,000), (viii) the receipt of
Indebtedness for Borrowed Money by the Borrower or any Subsidiary Guarantor
which represents payment to the Borrower or a Subsidiary Guarantor, as the
case may be, of a portion of the purchase price payable to the Borrower in
connection with a Permitted Asset Disposition; provided that, upon the
Agent's demand, the Borrower and/or the Subsidiary Guarantor, as the case
may, shall take all such actions as shall be reasonably requested by the
Agent to grant to the Agent for its benefit and the ratable benefit of the
Lenders a perfected Lien on any such Indebtedness for Borrowed Money and
provided further that the principal amount of all such Indebtedness for
Borrowed Money shall not exceed at any time in the aggregate Five Hundred
Thousand Dollars ($500,000), and (ix) investments permitted by Section (A)
CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. (Capital
Structure), (b) guaranty or otherwise become contingently liable for the
Indebtedness or obligations of any Person, except that the Borrower and any
Subsidiary Guarantor shall be permitted to guaranty (i) any Indebtedness
for Borrowed Money of the Borrower, any Subsidiary Guarantor, Berry UK or
Norwich otherwise permitted by the provisions of Section (D) INDEBTEDNESS.
(Indebtedness), (ii) the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business,
(iii) the obligations of the Borrower under the Subordinated Debt and the
Senior Secured Debt, and (iv) the Obligations, or (c) make any loans or
advances, or otherwise extend credit to any Person, except (i) any advance
to an officer or employee of the Borrower or any Subsidiary for travel or
other business expenses in the ordinary course of business, provided that
the aggregate amount of all such advances by all of the Borrower and its
Subsidiaries (taken as a whole) outstanding at any time shall not exceed
Five Hundred Thousand Dollars ($500,000), (ii) trade credit extended to
customers in the ordinary course of business, (iii) ordinary course
advances to customers in connection with the production of molds and
related materials, (iv) South Carolina IRB Lease Transfers, and (v)
ordinary course working capital advances and loans to and from the Borrower
to any Guarantor and to and from any Guarantor to the Borrower or any other
Guarantor. In addition to the foregoing, Berry UK covenants and agrees
that it shall own no other Assets or investments other than the capital
stock of Norwich.
(F)CAPITAL EXPENDITURES.
Except for Permitted Acquisitions and permitted reinvestments of Permitted
Asset Dispositions, neither the Borrower, Berry UK nor Norwich will or will
permit any Subsidiary to, directly or indirectly, make any Capital
Expenditures in the aggregate for the Borrower, Berry UK, Norwich and their
respective Subsidiaries (taken as a whole) in amount which exceed the
following amounts at any time during the following fiscal years (for each
fiscal year, the "Capital Expenditure Ceiling"):
<TABLE>
<CAPTION>
FISCAL YEAR CAPITAL EXPENDITURE CEILING
<S> <C>
1997 $19,000,000
1998 $23,000,000
1999 $26,000,000
2000 $27,000,000
2001 $29,000,000
</TABLE>
If in any given fiscal year, the total Capital Expenditures of the
Borrower, Berry UK, Norwich and its or their Subsidiaries, taken as a
whole, are less than the applicable Capital Expenditure Ceiling for that
fiscal year, the unused portion of the amount permitted for Capital
Expenditures (the "Carry Forward Amount') may be used to increase the
applicable Capital Expenditure Ceiling for the then next succeeding fiscal
year. The Carry Forward Amount for any given fiscal year cannot be carried
forward for more than one (1) fiscal year.
(G)STOCK OF SUBSIDIARIES.
Neither the Borrower, Berry UK nor Norwich will sell or otherwise dispose
of any shares of capital stock of any Subsidiary (except as necessary or
incident to any transaction permitted by Section (A) CAPITAL STRUCTURE,
MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure) or Section (F)
CAPITAL EXPENDITURES. (Capital Expenditures)) or permit any Subsidiary to
issue any additional shares of its capital stock except pro rata to its
stockholders.
(H)SUBORDINATED INDEBTEDNESS.
Neither the Borrower, Berry UK nor Norwich will, or will permit any
Subsidiary to make:
(i)(i) any payment on account of the Subordinated Debt in violation of the
subordination provisions relating to such Subordinated Debt, or (ii) any
payment on account of any other Subordinated Indebtedness in violation of
the subordination provisions relating to such Subordinated Indebtedness;
(ii)any amendment or modification of to the documents evidencing or
securing the Subordinated Indebtedness; and
(iii)any payment of principal or interest on the Subordinated Indebtedness
other than when due, except that Subordinated Indebtedness may be prepaid,
redeemed, repurchased, refinanced, replaced, refunded or defeased from the
proceeds of any offering of Securities or Indebtedness by the Parent or
the Borrower; provided that at the time of such prepayment there does not
exist a Default or an Event of Default and provided that such offering of
Securities or Indebtedness is otherwise permitted by the provisions of this
Agreement.
(I)LIENS.
The Borrower, Berry UK and Norwich each agrees that it (a) will not create,
incur, assume or suffer to exist any Lien upon any of its properties or
Assets, whether now owned or hereafter acquired, or permit any Subsidiary
so to do, except for (i) Liens securing the Obligations and (ii) Permitted
Liens, (b) will not allow or suffer to exist any Permitted Liens to be
superior to Liens securing the Obligations, or permit any Subsidiary so to
do, except for (i) statutory landlord's Liens with respect to which the
Agent has not obtained a landlord's waiver and subordination, (ii) existing
Liens securing Indebtedness for Borrowed Money under and in connection with
the Bonds, and (iii) Liens which have priority as a matter of law and which
do not otherwise constitute or give rise to a Default or an Event of
Default and for which the Agent has established a reserve against the
Borrowing Base (or the UK Borrowing Base, as appropriate) in an amount to
be determined by the Agent in its reasonable discretion, (c) except as
otherwise permitted by the provisions of this Agreement, will not enter
into any contracts for the consignment of goods, will not execute or suffer
the filing of any financing statements or the posting of any signs giving
notice of consignments, and will not, as a material part of its business,
engage in the sale of goods belonging to others, or permit any Subsidiary
so to do, and (d) will not allow or suffer to exist the failure of any Lien
described in the Security Documents to attach to, and/or remain at all
times perfected on, any of the property described in the Security
Documents, except with respect to any Assets disposed of as part of a
Permitted Asset Disposition.
(j)Transactions with Affiliates.
Neither the Borrower, Berry UK, Norwich nor any of its or their
Subsidiaries will enter into any transaction with any Affiliate except in
the ordinary course of business, in each case, upon terms no less favorable
to the Borrower, Berry UK, Norwich or any Subsidiary then would be obtained
in an arms-length, third party transaction. The foregoing provision shall
not restrict (a) any employment agreement entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business and consistent
with the past practices of the Borrower and/or any such Subsidiary, (b)
transactions between or among the Borrower and/or the Subsidiary
Guarantors, (c) transactions between First Atlantic Capital, Ltd. ("First
Atlantic"), pursuant to the Second Amended and Restated Management
Agreement dated as of June 18, 1996, as amended to the date hereof or
otherwise amended with the Agent's prior written consent (solely for
purposes of this Section (j) Transactions with Affiliates., between the
Borrower and First Atlantic, (d) the payment of Distributions permitted by
Section (C)PURCHASE OR REDEMPTION OF SECURITIES, DIVIDEND RESTRICTIONS. (c)
Purchase or Redemption of Securities, Dividend Restrictions. (Purchase or
Redemption of Securities), (e) any transaction fee payable to First
Atlantic not to exceed $1,250,000 per transaction and (f) intercompany
investments and loans between and among the Borrower, Berry UK and Norwich
as and to the extent permitted by the provisions of this Agreement.
(K)ERISA COMPLIANCE.
Neither the Borrower nor any Commonly Controlled Entity shall: (a) engage
in or permit any "prohibited transaction" (as defined in ERISA); (b) cause
any "accumulated funding deficiency" as defined in ERISA and/or the
Internal Revenue Code; (c) terminate any pension plan in a manner which
could result in the imposition of a lien on the property of the Borrower
pursuant to ERISA; (d) terminate or consent to the termination of any
Multi-employer Plan; or (e) incur a complete or partial withdrawal with
respect to any Multi-employer Plan.
<PAGE>
(L) PROHIBITION ON HAZARDOUS MATERIALS.
Neither the Borrower, Berry UK nor Norwich shall place, manufacture or
store or permit to be placed, manufactured or stored any Hazardous
Materials on any property owned, operated or controlled by the Borrower,
Berry UK or Norwich or for which the Borrower, Berry UK or Norwich is
responsible other than Hazardous Materials placed or stored on such
property in accordance with applicable Laws in the ordinary course of the
Borrower's, Berry UK's, Norwich's or any tenant's business expressly
described in this Agreement, or permit any Subsidiary to do so.
(M)AMENDMENTS.
The Borrower will not amend or agree to amend any of the Subordinated Debt
Loan Documents, any of the Senior Secured Debt Loan Documents, any of the
PackerWare Merger Agreement Documents, any of the Venture Stock
Purchase/Merger Documents, and/or any of the Norwich Stock Purchase
Documents, other than in the normal course of business.
(N)METHOD OF ACCOUNTING; FISCAL YEAR.
The Borrower, Berry UK and Norwich each agrees that:
(i)it shall not change, or permit any Subsidiary to change, the method of
accounting employed in the preparation of any financial statements
furnished to the Agent under the provisions of (A)FINANCIAL STATEMENTS.
(Financial Statements), unless required to conform to GAAP and on the
condition that the Borrower's accountants shall furnish such information as
the Agent may request to reconcile the changes with the Borrower's prior
financial statements; and
(ii)it will not change or permit any Subsidiary to change, its fiscal year
from a year ending on or about December 31. The Lenders understand that as
of the Closing Date, the fiscal year end for Norwich is October 31.
Norwich covenants and agrees to change its fiscal year end to December 31
promptly upon closing and consummation of the Norwich Stock Purchase
Transaction.
(O)TRANSFER OF COLLATERAL.
Neither the Borrower, Berry UK, Norwich nor any of its or their
Subsidiaries will transfer, or permit the transfer, to another location of
any of the Collateral or the books and records related to any of the
Collateral, except (a) for transfers among the Borrower and the Subsidiary
Guarantors, if and to the extent the first priority Lien (subject to
Permitted Liens) of the Agent and the Lenders would be unaffected by any
such transfers, (b) for transfers of UK Collateral by Berry UK and/or
Norwich to the Borrower, if and to the extent a first priority perfected
Lien (subject to Permitted Liens) would attach to such UK Collateral so
transferred contemporaneously with such transfer, or (c) transfers of
Inventory in the ordinary course of business to bailees, warehousemen,
consignees or similar third parties if and to the extent that either (i)
such bailees, warehousemen, consignees or similar third parties have
entered into an agreement with the Agent in which such bailees,
warehousemen, consignees or similar third parties consent and agree to the
superior Lien of the Agent and the Lenders on such Inventory and to such
other terms and conditions as may be reasonably required by the Agent or
(ii) the Agent has established reserves against the Borrowing Base (or the
UK Borrowing Base, as appropriate) with respect to any such Inventory so
transferred in accordance with the provisions set forth in the definition
of Eligible Domestic Inventory (or Eligible UK Inventory, as appropriate),
which reserves the Agent shall establish upon the Borrower's request.
(P)SALE AND LEASEBACK.
Neither the Borrower, Berry UK, Norwich nor any of the Subsidiaries will
directly or indirectly enter into any arrangement to sell or transfer all
or any substantial part of its fixed assets and thereupon or within one
year thereafter rent or lease the assets so sold or transferred, except as
contemplated by subsection (h) or subsection (l) of the definition of
Permitted Asset Disposition.
ARTICLE VII
DEFAULT AND RIGHTS AND REMEDIES
SECTION 7.1EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall constitute
an "Event of Default" under the provisions of this Agreement:
(A)FAILURE TO PAY.
The failure of the Borrower, Berry UK and/or Norwich to pay any of the
Obligations to be paid by them under the terms of this Agreement within
three (3) days of the date as and when due and payable in accordance with
the provisions of this Agreement, the Notes and/or any of the other
Financing Documents;
(B)BREACH OF REPRESENTATIONS AND WARRANTIES.
Any representation or warranty made in this Agreement, in any of the other
Financing Documents, or in any report, statement, schedule, certificate,
opinion, financial statement or other document furnished in connection with
this Agreement, any of the other Financing Documents, or the Obligations,
shall prove to have been false or misleading when made (or, if applicable,
when reaffirmed) in any material respect.
(C)FAILURE TO COMPLY WITH CERTAIN COVENANTS.
The failure of the Borrower, Berry UK or Norwich to perform, observe or
comply, or the Borrower to cause any Subsidiary Guarantor to perform,
observe or comply, as appropriate, with any covenant, condition or
agreement contained in (A) FINANCIAL STATEMENTS. (Financial Statements),
(i) The Borrower, Berry UK and Norwich shall, and shall cause each of the
Subsidiaries to, maintain (i) a standard system of accounting in accordance
with GAAP, and (ii) proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation
to its properties, business and activities. (Bookkeeping, Rights of
Inspection, Field Examination, Etc.) with respect to inspection rights
only, Section (H) INSURANCE. (Insurance), FINANCIAL COVENANTS. (Financial
Covenants), (Q) INSURANCE WITH RESPECT TO EQUIPMENT AND INVENTORY.
(Insurance with Respect to Equipment), (S) DEFENSE OF TITLE AND FURTHER
ASSURANCES. (Defense of Title and Further Assurances), (T) BUSINESS NAMES;
LOCATIONS. (Business Names; Locations), or NEGATIVE COVENANTS. (Negative
Covenants).
(D)FAILURE TO COMPLY WITH OTHER COVENANTS.
The failure of the Borrower, Berry UK or Norwich to perform, observe or
comply, or the Borrower to cause any Subsidiary Guarantor to perform,
observe or comply, as appropriate, with any covenant, condition or
agreement contained in this Agreement other than those set forth in Section
(A) FAILURE TO PAY. (Failure to Pay), Section (B) BREACH OF REPRESENTATIONS
AND WARRANTIES. (Breach of Representations and Warranties) or Section (C)
FAILURE TO COMPLY WITH CERTAIN COVENANTS. (Failure to Comply with Certain
Covenants), which failure shall remain unremedied for a period of thirty
(30) days after written notice thereof to the Borrower, Berry UK and/or
Norwich, as appropriate, by the Agent.
(E)DEFAULT UNDER OTHER FINANCING DOCUMENTS OR OBLIGATIONS.
The failure of the Borrower, Berry UK, Norwich and/or any other Person
(other than the Agent or any of the Lenders) which is a party to any of the
Financing Documents, to perform, observe or comply with any covenant,
condition or agreement contained in any such Financing Documents which is
not otherwise covered by any other Section of this DEFAULT AND RIGHTS AND
REMEDIES, which failure shall remain unremedied for a period of thirty (30)
days after written notice thereof to the Borrower, Berry UK and/or Norwich,
as appropriate, by the Agent or the occurrence of an Event of Default under
any of the other Financing Documents as defined therein.
(F)RECEIVER; BANKRUPTCY.
The Borrower, Berry UK, Norwich or any Guarantor shall (a) apply for or
consent to the appointment of a receiver, trustee or liquidator of itself
or any of its property, (b) admit in writing its inability to pay its debts
as they mature, (c) make a general assignment for the benefit of creditors,
(d) be adjudicated a bankrupt or insolvent under any applicable Laws, (e)
file a voluntary petition in bankruptcy or a petition or an answer seeking
or consenting to reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding under
any such law, or take corporate action for the purposes of effecting any of
the foregoing under any applicable Laws, or (f) by any act indicate its
consent to, approval of or acquiescence in any such proceeding or the
appointment of any receiver of or trustee for any of its property, or
suffer any such receivership, trusteeship or proceeding to continue
undischarged for a period of sixty (60) days, or (g) by any act indicate
its consent to, approval of or acquiescence in any order, judgment or
decree by any court of competent jurisdiction or any Governmental Authority
enjoining or otherwise prohibiting the operation of all or substantially
all of the Borrower's or any Guarantor's business or the use or
disposition of all or substantially all of its or their respective assets.
(G)INVOLUNTARY BANKRUPTCY, ETC.
(i) An order for relief shall be entered in any involuntary case brought
against the Borrower, Berry UK, Norwich or any Guarantor under the
Bankruptcy Code or comparable Law, or (b) any such case shall be commenced
against the Borrower, Berry UK, Norwich or any Guarantor and shall not be
dismissed within sixty (60) days after the filing of the petition, or (c)
an order, judgment or decree under any other Law is entered by any court of
competent jurisdiction or by any other Governmental Authority on the
application of a Governmental Authority or of a Person other than the
Borrower, Berry UK, Norwich or any Guarantor (i) adjudicating the Borrower,
Berry UK, Norwich or any Guarantor bankrupt or insolvent, or (ii)
appointing a receiver, trustee or liquidator of the Borrower, Berry UK,
Norwich or of any Guarantor, or of a material portion of its or their
assets, or (iii) enjoining, prohibiting or otherwise limiting the operation
of all or substantially all of its or their business or the use or
disposition of all or substantially all of its or their assets, and such
order, judgment or decree continues unstayed and in effect for a period of
thirty (30) days from the date entered.
(H)JUDGMENT.
Unless adequately insured in the reasonable opinion of the Agent, the entry
of a final judgment for the payment of money involving more than $1,000,000
(individually and in the aggregate) against the Borrower, Berry UK, Norwich
and/or any or all of the Guarantors, and the failure by the Borrower, Berry
UK, Norwich or such Guarantor to discharge the same, or cause it to be
discharged, within sixty (60) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered, or to
secure a stay of execution pending appeal of such judgment.
(I)EXECUTION; ATTACHMENT.
Any execution or attachment shall be levied against the Collateral, or any
part thereof, and such execution or attachment shall not be set aside,
discharged or stayed within sixty (60) days after the same shall have been
levied.
(J)DEFAULT UNDER OTHER BORROWINGS.
An event of default shall be made with respect to any Indebtedness for
Borrowed Money in a principal amount in excess of Two Million Dollars
($2,000,000), either individually or in the aggregate, of the Borrower,
Berry UK, Norwich and/or any or all of the Guarantors, other than the
Loans, if such Indebtedness for Borrowed Money was not paid when due, after
giving effect to any applicable notice and cure period, or if the effect of
such event of default is to accelerate the maturity of such Indebtedness
for Borrowed Money or to permit the holder or obligee thereof or other
party thereto to cause such Indebtedness for Borrowed Money to become due
prior to its stated maturity.
(K)CHALLENGE TO AGREEMENTS.
The Borrower, Berry UK, Norwich or any Guarantor shall challenge the
validity and binding effect of any provision of any of the Financing
Documents or any of the Financing Documents shall for any reason (except to
the extent permitted by its express terms) cease to be effective or to
create a valid and perfected first priority Lien (except for Permitted
Liens, certain of which Permitted Liens, to the extent expressly permitted
by the provisions of this Agreement, may constitute superior and prior
Liens) on, or security interest in, any of the Collateral purported to be
covered thereby, unless due to the gross negligence or willful misconduct
of the Agent.
(L)MATERIAL ADVERSE CHANGE.
The Requisite Lenders, in their sole discretion, determine in good faith
that a material adverse change has occurred in the financial condition of
the Borrower, Berry UK, Norwich and the Subsidiary Guarantors, taken as a
whole.
(M)CHANGE IN OWNERSHIP.
(i)The Borrower shall cease to own and control, beneficially and of record,
directly or indirectly, at least one hundred percent (100%) of the issued
and outstanding capital stock of Berry UK and each Subsidiary Guarantor
(except pursuant to any transaction permitted by (a) CAPITAL STRUCTURE,
MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure) or (B)
SUBSIDIARIES. (Subsidiaries)), (b) Berry UK shall cease to own and control,
beneficially and of record, directly or indirectly, at least one hundred
percent (100%) of the issued and outstanding capital stock of Norwich, (c)
the Parent shall cease to own and control, beneficially and of record,
directly or indirectly, at least one hundred percent (100%) of the issued
and outstanding capital stock of the Borrower, or (c) Atlantic Equity
Partners International II, L. P. ("AEP"), Chase Capital Partners, and their
respective Affiliates shall cease to own and control, beneficially and of
record, at least fifty-one percent (51%) or more of the issued and
outstanding voting capital stock of the Parent.
(N)LIQUIDATION, TERMINATION, DISSOLUTION, CHANGE IN MANAGEMENT,
ETC.
The Borrower, Berry UK, Norwich or any Guarantor shall liquidate, dissolve
or terminate its existence, except as otherwise expressly permitted by the
provisions of NEGATIVE COVENANTS. (Negative Covenants).
(O)PARENT LINE OF BUSINESS.
At any time the Parent engages in any business other than the ownership of
capital stock of the Borrower or any other Wholly-Owned Subsidiary or such
other business as shall be mandatory under the provisions of applicable
Laws.
SECTION 7.2REMEDIES.
Upon the occurrence of any Event of Default, the Agent and/or NationsBank,
as applicable, may, in the exercise of its sole and absolute discretion
from time to time, and shall, at the direction of the Requisite Lenders, at
any time thereafter exercise any one or more of the following rights,
powers or remedies:
(A)ACCELERATION.
The Agent may declare any or all of the Obligations to be immediately due
and payable and NationsBank may declare any or all of the UK Obligations to
be immediately due and payable, notwithstanding anything contained in this
Agreement or in any of the other Financing Documents to the contrary,
without presentment, demand, protest, notice of protest or of dishonor, or
other notice of any kind, all of which the Borrower, Berry UK and Norwich
each hereby waives.
(B)FURTHER ADVANCES.
The Agent and/or NationsBank, as applicable, may from time to time without
notice to the Borrower, Berry UK or Norwich suspend, terminate or limit any
further advances, loans or other extensions of credit under the
Commitments, under this Agreement and/or under any of the other Financing
Documents. Further, upon the occurrence of an Event of Default specified
in (F) RECEIVER; BANKRUPTCY. (Receiver; Bankruptcy) or (G) INVOLUNTARY
BANKRUPTCY, ETC. (Involuntary Bankruptcy, etc.), the Commitments and any
agreement in any of the Financing Documents to provide additional credit
and/or to issue Letters of Credit and/or Bond Letters of Credit shall
immediately and automatically terminate and the unpaid principal amount of
the Notes (with accrued interest thereon) and all other Obligations
(including UK Obligations) then outstanding, shall immediately become due
and payable without further action of any kind and without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, Berry UK and Norwich.
(c) UNIFORM COMMERCIAL CODE.
The Agent and NationsBank each shall have all of the rights and remedies of
a secured party under the applicable Uniform Commercial Code and other
applicable Laws. Upon demand by the Agent or NationsBank, the Borrower
shall assemble the Collateral and make it available to the Agent or
NationsBank, as applicable, at a place designated by the Agent or
NationsBank. The Agent, NationsBank or its or their agents may without
notice from time to time enter upon the Borrower's premises to take
possession of the Collateral, to remove it, to render it unusable, to
process it or otherwise prepare it for sale, or to sell or otherwise
dispose of it.
ANY WRITTEN NOTICE OF THE SALE, DISPOSITION OR OTHER INTENDED ACTION BY THE
AGENT OR NATIONSBANK WITH RESPECT TO THE COLLATERAL WHICH IS SENT BY
REGULAR MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS SET FORTH IN
SECTION 9.1 NOTICES.
All notices, requests and demands to or upon the parties to this Agreement
shall be in writing and shall be deemed to have been given or made when
delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail,
return receipt requested, or when sent by overnight courier, on the
Business Day next following the day on which the notice is delivered to
such overnight courier, addressed as follow (Notices), or such other
address of the Borrower which may from time to time be shown on the Agent's
and/or NationsBank's records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute commercially reasonable
notice to the Borrower. The Agent and NationsBank may alternatively or
additionally give such notice in any other commercially reasonable manner.
If any consent, approval, or authorization of any state, municipal or other
Governmental Authority or of any other Person or of any Person having any
interest therein, should be necessary to effectuate any sale or other
disposition of the Collateral, the Borrower agrees to execute all such
applications and other instruments, and to take all other action, as may be
required in connection with securing any such consent, approval or
authorization.
The Borrower recognizes that the Agent and/or NationsBank may be unable to
effect a public sale of all or a part of the Collateral consisting of
Securities by reason of certain prohibitions contained in the Securities
Act of 1933, as amended, and other applicable Federal and state Laws. The
Agent and NationsBank may, therefore, in its or their discretion, take such
steps as it or they may deem appropriate to comply with such Laws and may,
for example, at any sale of the Collateral consisting of securities
restrict the prospective bidders or purchasers as to their number, nature
of business and investment intention, including, without limitation, a
requirement that the Persons making such purchases represent and agree to
the satisfaction of the Agent and NationsBank that they are purchasing such
securities for their account, for investment, and not with a view to the
distribution or resale of any thereof. The Borrower covenants and agrees
to do or cause to be done promptly all such acts and things as the Agent
and/or NationsBank may request from time to time and as may be necessary to
offer and/or sell the Securities or any part thereof in a manner which is
valid and binding and in conformance with all applicable Laws. Upon any
such sale or disposition, the Agent and NationsBank shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral
consisting of securities so sold.
(D)SPECIFIC RIGHTS WITH REGARD TO COLLATERAL.
In addition to all other rights and remedies provided -hereunder or as
shall exist at law or in equity from time to time, the Agent and/or
NationsBank may (but shall be under no obligation to), without notice to
the Borrower, Berry UK and/or Norwich and upon the occurrence of an Event
of Default the Borrower, Berry UK and Norwich each hereby irrevocably
appoints each of the Agent and NationsBank as its attorney-in-fact, with
power of substitution, in the name of NationsBank, the Agent and/or any or
all of the Lenders and/or in the name of the Borrower, Berry UK and/or
Norwich or otherwise, for the use and benefit of NationsBank, the Agent and
the Lenders, but at the cost and expense of the Borrower, Berry UK and
Norwich, as and to the extent permitted by the provisions of this
Agreement:
(i)request any Account Debtor obligated on any of the Accounts to make
payments thereon directly to the Agent or NationsBank, with the Agent
and/or NationsBank taking control of the cash and non-cash proceeds
thereof;
(ii)compromise, extend or renew any of the Collateral or deal with the same
as it may deem advisable,
(iii)make exchanges, substitutions or surrenders of all or any part of the
Collateral;
(iv)copy, transcribe, or remove from any place of business of the Borrower,
Berry UK, Norwich or any Subsidiary all books, records, ledger sheets,
correspondence, invoices and documents, relating to or evidencing any of
the Collateral or without cost or expense to the Agent or any of the
Lenders, make such use of the Borrower's,. Berry UK's, Norwich's or any
Subsidiary's place(s) of business as may be reasonably necessary to
administer, control and collect the Collateral;
(v)repair, alter or supply goods if necessary to fulfill in whole or in
part the purchase order of any Account Debtor;
(vi)demand, collect, receipt for and give renewals, extensions, discharges
and releases of any of the Collateral;
(vii)institute and prosecute legal and equitable proceedings to enforce
collection of, or realize upon, any of the Collateral;
(viii)settle, renew, extend, compromise, compound, exchange or adjust
claims in respect of any of the Collateral or any legal proceedings brought
in respect thereof;
(ix)endorse or sign the name of the Borrower, Berry UK and/or Norwich upon
any items of payment, certificates of title, instruments, securities, stock
powers, documents, documents of title, financing statements, assignments,
notices or other writing relating to or part of the Collateral and on any
proof of claim in bankruptcy or comparable Laws against an Account Debtor;
(x)notify the Post Office authorities to change the address for the
delivery of mail to the Borrower, Berry UK and/or Norwich to such address
or Post Office Box as the Agent or NationsBank may designate and receive
and open all mail addressed to the Borrower, Berry UK and Norwich; and
(xi)take any other action necessary or beneficial to realize upon or
dispose of the Collateral or to carry out the terms of this Agreement.
(E)APPLICATION OF PROCEEDS.
Unless otherwise required by applicable Laws, any proceeds of sale or other
disposition of the Collateral will be applied by the Agent and NationsBank
to the payment first of any and all Agent's Obligations, then to any and
all Enforcement Costs, and any balance of such proceeds will be remitted to
NationsBank and/or the Lenders, as appropriate, in like currency and funds
received ratably in accordance with their respective Pro Rata Shares of
such balance. Each Lender shall apply any such proceeds received from the
Agent or NationsBank to its Obligations in such order and manner as such
Lender shall determine. If the sale or other disposition of the Collateral
fails to fully satisfy the Obligations, the Borrower shall remain liable to
the Agent and the Lenders for any deficiency. Notwithstanding the
foregoing, any proceeds of sale or other disposition of the UK Collateral
will be applied to the payment of the UK Obligations only in such order and
manner as the Lenders shall determine in their sole and absolute
discretion. If the sale or other disposition (by foreclosure, liquidation
or otherwise) of the UK Collateral fails to fully satisfy the UK
Obligations, the Borrower, Berry UK and Norwich shall remain liable to
NationsBank for any deficiency.
(F)PERFORMANCE BY AGENT.
If the Borrower shall fail to pay the Obligations or Berry UK or Norwich
fails to pay the UK Obligations, or otherwise the Borrower, Berry UK or
Norwich fail to perform, observe or comply with any of the conditions,
covenants, terms, stipulations or agreements contained in this Agreement or
any of the other Financing Documents, the Agent without notice to or demand
upon the Borrower, Berry UK or Norwich and without waiving or releasing any
of the Obligations or any Default or Event of Default, may (but shall be
under no obligation to) at any time thereafter make such payment or perform
such act for the account and at the expense of the Borrower, Berry UK
and/or Norwich, as applicable, and may enter upon the premises of the
Borrower, Berry UK and/or Norwich, for that purpose and take all such
action thereon as the Agent may consider necessary or appropriate for such
purpose and each of the Borrower, Berry UK and Norwich hereby irrevocably
appoints the Agent as its attorney-in-fact upon the occurrence of an Event
of Default to do so, with power of substitution, in the name of the Agent,
in the name of any or all of the Lenders, or in the name of the Borrower,
Berry UK, Norwich or otherwise, for the use and benefit of the Agent, but
at the cost and expense of the Borrower and without notice to the Borrower,
Berry UK and/or Norwich. All sums so paid or advanced by the Agent
together with interest thereon from the date of payment, advance or
incurring until paid in full at the Post-Default Rate and all costs and
expenses, shall be deemed part of the Enforcement Costs, shall be paid by
the Borrower to the Agent on demand, and shall constitute and become a part
of the Agent's Obligations. All powers granted to the Agent under the
provisions of this Section are also deemed granted to NationsBank with
respect to the UK Obligations.
(G)OTHER REMEDIES.
The Agent and NationsBank may from time to time proceed to protect or
enforce the rights of NationsBank, the Agent and/or any of the Lenders by
an action or actions at law or in equity or by any other appropriate
proceeding, whether for the specific performance of any of the covenants
contained in this Agreement or in any of the other Financing Documents, or
for an injunction against the violation of any of the terms of this
Agreement or any of the other Financing Documents, or in aid of the
exercise or execution of any right, remedy or power granted in this
Agreement, the Financing Documents, and/or applicable Laws. The Agent and
each of the Lenders are authorized to offset and apply to all or any part
of the Obligations all moneys, credits and other property of any nature
whatsoever of the Borrower, Berry UK and/or Norwich now or at any time
hereafter in the possession of, in transit to or from, under the control or
custody of, or on deposit with, the Agent, any of the Lenders or any
Affiliate of the Agent or any of the Lenders, subject to the limitations on
liability set forth in (J)LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR
OBLIGATIONS. (Limitations on Joint and Several Liability)
ARTICLE VIII
THE AGENT
SECTION 8.1APPOINTMENT.
Each Lender hereby designates and appoints NationsBank as its agent under
this Agreement and the Financing Documents, and each Lender hereby
irrevocably authorizes the Agent to take such action or to refrain from
taking such action on its behalf under the provisions of this Agreement and
the Financing Documents and to exercise such powers as are set forth herein
or therein, together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such on the express conditions
contained in this THE AGENT. The provisions of this THE AGENT are solely
for the benefit of the Agent and the Lenders and neither the Borrower,
Berry UK, Norwich nor any Person shall have any rights as a third party
beneficiary of any of the provisions hereof, except for those rights
expressly granted to the Borrower pursuant to (A) RESIGNATION.
The Agent may resign from the performance of all its functions and duties
hereunder at any time by giving at least thirty (30) Business Days' prior
written notice to the Borrower and the Lenders. Such resignation shall
take effect upon the acceptance by a successor Agent of appointment
pursuant to Section (B)APPOINTMENT OF SUCCESSOR.
Upon any such notice of resignation pursuant to Section (a) (Resignation),
the Requisite Lenders, with the consent of NationsBank and the Borrower,
shall appoint a successor to the Agent. If a successor to the Agent shall
not have been so appointed within said thirty (30) Business Day period, the
Agent retiring, upon notice to the Borrower, shall then appoint a successor
Agent who shall serve as the Agent until such time, as the Requisite
Lenders appoint a successor the Agent as provided above. (Appointment of
Successor) or as otherwise provided below. (Resignation), SECTION 8.8
COLLATERAL MATTERS. (Collateral Matters), SECTION 8.12 CONSENTS. (Consents)
and CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED.
(Circumstances Where All Lenders Required). In performing its functions
and duties under this Agreement, the Agent shall act solely as an
administrative representative of the Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Lenders, the Borrower or any Person. The
Agent may perform any of its duties hereunder, or under the Financing
Documents, by or through its agents or employees.
SECTION 8.2NATURE OF DUTIES.
(A)IN GENERAL.
The Agent shall have no duties, obligations or responsibilities except
those expressly set forth in this Agreement or in the Financing Documents.
The duties of the Agent shall be mechanical and administrative in nature.
The Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender. Each Lender shall make its own
independent investigation of the financial condition and affairs of the
Borrower, Berry UK and Norwich in connection with the extension of credit
hereunder and shall make its own appraisal of the credit worthiness of the
Borrower, Berry UK and Norwich and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the Closing Date or at any time or times
thereafter. If the Agent seeks the consent or approval of any of the
Lenders to the taking or refraining from taking of any action hereunder,
then the Agent shall send notice thereof to each Lender. The Agent shall
promptly notify each Lender any time that the applicable percentage of the
Lenders have instructed the Agent to act or refrain from acting pursuant
hereto.
(B)EXPRESS AUTHORIZATION.
The Agent is hereby expressly and irrevocably authorized by each of the
Lenders, as agent on behalf of itself and the other Lenders:
(i)To receive on behalf of each of the Lenders any payment or collection on
account of the Obligations and to distribute to each Lender its Pro Rata
Share of all such payments and collections so received as provided in this
Agreement;
(ii)To receive all documents and items to be furnished to the Lenders under
the Financing Documents;
(iii)To act or refrain from acting in this Agreement and in the other
Financing Documents with respect to those matters so designated for the
Agent;
(iv)To act as nominee for and on behalf of the Lenders in and under this
Agreement and the other Financing Documents;
(v)To arrange for the means whereby the funds of the Lenders are to be made
available to the Borrower, Berry UK and/or Norwich;
(vi)To distribute promptly to the Lenders, if required by the terms of this
Agreement, all written information, requests, notices, Loan Notices,
payments, Prepayments, documents and other items received from the
Borrower, Berry UK, Norwich or other Person;
(VII)TO AMEND, MODIFY, OR WAIVE ANY PROVISIONS OF THIS AGREEMENT OR THE
OTHER FINANCING DOCUMENTS ON BEHALF OF THE LENDERS SUBJECT TO THE
REQUIREMENTS THAT ALL OR CERTAIN OF THE LENDERS' CONSENT BE OBTAINED IN
CERTAIN INSTANCES AS PROVIDED IN CIRCUMSTANCES WHERE CONSENT OF ALL OF THE
LENDERS IS REQUIRED. (Circumstances All Lenders Required) and Section 9.2
Amendments; Waivers.
This Agreement and the other Financing Documents may not be amended,
modified, or changed in any respect except by an agreement in writing
signed by the Requisite Lenders, the Borrower, Berry UK and Norwich and to
the extent provided in CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS
REQUIRED. by an agreement in writing signed by all of the Lenders, the
Borrower, Berry UK and Norwich. In addition, any agreement which directly
or indirectly affects any rights, duties, obligations, liabilities or
remedies of the Agent under this Agreement, under any of other Financing
Documents or otherwise must be approved and signed by the Agent. No waiver
of any provision of this Agreement or of any of the other Financing
Documents, nor consent to any departure by the Borrower, Berry UK or
Norwich therefrom, shall in any event be effective unless the same shall be
in writing. No course of dealing between the Borrower, Berry UK, Norwich
and the Agent and/or any of the Lenders and no act or failure to act from
time to time on the part of the Agent and/or any of the Lenders shall
constitute a waiver, amendment or modification of any provision of this
Agreement or any of the other Financing Documents or any right or remedy
under this Agreement, under any of the other Financing Documents or under
applicable Law (Amendments; Waivers);
(viii)To deliver to the Borrower, Berry UK, Norwich and other Persons, all
requests, demands, approvals, notices, and consents received from any of
the Lenders;
(ix)To exercise on behalf of each Lender all rights and remedies of the
Lenders upon the occurrence of any Event of Default and/or Default
specified in this Agreement and/or in any of the other Financing Documents
or applicable Laws;
(x)To execute any of the Security Documents and any other documents on
behalf of the Lenders as the secured party for the benefit of the Agent and
the Lenders; and
(xi)To take such other actions as may be requested by the Requisite
Lenders.
SECTION 8.3RIGHTS, EXCULPATION, ETC.
Neither the Agent nor any of its officers, directors, employees or agents
shall be liable to any Lender for any action taken or omitted by them
hereunder or under any of the Financing Documents, or in connection
herewith or therewith, except that the Agent shall be obligated on the
terms set forth herein for performance of its express obligations
hereunder, and except that the Agent shall be liable with respect to its
own gross negligence or willful misconduct. The Agent shall not be liable
for any apportionment or distribution of payments made by it in good faith
and if any such apportionment or distribution is subsequently determined to
have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other the Lenders any payment in
excess of the amount to which they are determined to be entitled (and such
other Lenders hereby agree to return to such Lender any such erroneous
payments received by them). The Agent shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity, enforceability,
collectible, or sufficiency of this Agreement or any of the Financing
Documents or the transactions contemplated thereby, or for the financial
condition of any Person. The Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the Financing
Documents or the financial condition of any Person, or the existence or
possible existence of any Default or Event of Default. The Agent agrees to
use its reasonable efforts to notify the Lenders as to the occurrence of
any material Event of Default promptly upon obtaining actual knowledge
thereof, provided, however, that the failure in good faith of the Agent to
so notify any Lender shall not give rise to any liability on the part of
the Agent nor shall it waive, discharge or otherwise adversely affect the
Agent's ability to exercise and enforce any rights or remedies resulting
from such Event of Default. The Agent may at any time request instructions
from the Lenders with respect to any actions or approvals which by the
terms of this Agreement or of any of the Financing Documents the Agent is
permitted or required to take or to grant, and the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the
Financing Documents until it shall have received such instructions from the
applicable percentage of the Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting under this Agreement
or any of the other Financing Documents in accordance with the instructions
of the applicable percentage of the Lenders and notwithstanding the
instructions of the Lenders, the Agent shall have no obligation to take any
action if it, in good faith believes that such action exposes the Agent to
any liability.
SECTION 8.4RELIANCE.
The Agent shall be entitled to rely upon any written notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, telecopy or telegram) believed
by it in good faith to be genuine and correct and to have been signed, sent
or made by the proper Person, and with respect to all matters pertaining to
this Agreement or any of the Financing Documents and its duties hereunder
or thereunder, upon advice of counsel selected by it. The Agent may deem
and treat the original Lenders as the owners of the respective Notes for
all purposes until receipt by the Agent of a written notice of assignment,
negotiation or transfer of any interest therein by the Lenders in
accordance with the terms of this Agreement. Any interest, authority or
consent of any holder of any of the Notes shall be conclusive and binding
on any subsequent holder, transferee, or assignee of such Notes. The Agent
shall be entitled to rely upon the advice of legal counsel, independent
accountants, and other experts selected by the Agent in its sole
discretion.
SECTION 8.5INDEMNIFICATION.
Each Lender, severally, agrees to reimburse and indemnify the Agent for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements
including, without limitation, Enforcement Costs, of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any of the
Financing Documents or any action taken or omitted by the Agent under this
Agreement for any of the Financing Documents, in proportion to each
Lender's Pro Rata Share, all of the foregoing as they may arise, be
asserted or be imposed from time to time; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Agent's gross negligence or willful
misconduct. The obligations of the Lenders under this SECTION 8.5
INDEMNIFICATION. shall survive the payment in full of the Obligations and
the termination of this Agreement.
SECTION 8.6NATIONSBANK INDIVIDUALLY.
With respect to its Commitments and the Loans made by it, and the Notes
issued to it, NationsBank shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Lender. The terms "the
Lenders" or "Requisite Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include NationsBank in its individual
capacity as a Lender or one of the Requisite Lenders. NationsBank and its
Affiliates may lend money to, accept deposits from and generally engage in
any kind of banking, trust or other business with the Borrower, any
Affiliate of the Borrower, or any other Person or any of their officers,
directors and employees as if NationsBank were not acting as the Agent
pursuant hereto and the Agent may accept fees and other consideration from
the Borrower, any Affiliate of the Borrower or any of their officers,
directors and employees (in addition to the Agency Fees or other
arrangements or fees heretofore agreed to between the Borrower, Berry UK,
Norwich and the Agent) for services in connection with this Agreement or
otherwise without having to account for or share the same with the Lenders.
SECTION 8.7SUCCESSOR AGENT.
(A)RESIGNATION.
The Agent may resign from the performance of all its functions and duties
hereunder at any time by giving at least thirty (30) Business Days' prior
written notice to the Borrower and the Lenders. Such resignation shall
take effect upon the acceptance by a successor Agent of appointment
pursuant to Section (B) APPOINTMENT OF SUCCESSOR.
Upon any such notice of resignation pursuant to Section (A)RESIGNATION.
(Resignation), the Requisite Lenders, with the consent of NationsBank and
the Borrower, shall appoint a successor to the Agent. If a successor to
the Agent shall not have been so appointed within said thirty (30) Business
Day period, the Agent retiring, upon notice to the Borrower, shall then
appoint a successor Agent who shall serve as the Agent until such time, as
the Requisite Lenders appoint a successor the Agent as provided abov
(Appointment of Successor) or as otherwise provided below.
(B)APPOINTMENT OF SUCCESSOR.
Upon any such notice of resignation pursuant to Section (A) RESIGNATION.
(Resignation), the Requisite Lenders, with the consent of NationsBank and
the Borrower, shall appoint a successor to the Agent. If a successor to
the Agent shall not have been so appointed within said thirty (30) Business
Day period, the Agent retiring, upon notice to the Borrower, shall then
appoint a successor Agent who shall serve as the Agent until such time, as
the Requisite Lenders appoint a successor the Agent as provided above.
(C)SUCCESSOR AGENT.
Upon the acceptance of any appointment as the Agent under the Financing
Documents by a successor Agent, such successor to the Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the Agent retiring, and the Agent retiring shall be discharged
from its duties and obligations under the Financing Documents. After any
Agent's resignation as the Agent under the Financing Documents, the
provisions of this THE AGENT shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under the
Financing Documents.
SECTION 8.8COLLATERAL MATTERS.
(A)RELEASE OF COLLATERAL.
The Lenders hereby irrevocably authorize the Agent and NationsBank, as
applicable, at its or their option and in its or their discretion, to
release any Lien granted to or held by the Agent upon any property covered
by this Agreement or the Financing Documents:
(i)upon termination of the Commitments and payment and satisfaction of all
Obligations and expiration or termination of all Letters of Credit and all
Bond Letters of Credit;
(ii)constituting property being sold or disposed of if the Borrower, Berry
UK, Norwich or a Subsidiary Guarantor certifies to the Agent and/or
NationsBank, as applicable, that the sale or disposition is made in
compliance with the provisions of this Agreement (and the Agent and
NationsBank may rely in good faith conclusively on any such certificate,
without further inquiry);
(iii)constituting property leased to the Borrower, Berry UK, Norwich or any
Subsidiary under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to expire and which
has not been, and is not intended by the Borrower or the Subsidiary to be,
renewed or extended; or
(iv)constituting property covered by Permitted Liens with lien priority
superior to those Liens in favor or for the benefit of NationsBank, the
Agent or the Lenders.
In addition during any fiscal year of the Borrower (x) the Agent and
NationsBank may release Collateral having a book value of not more than 5%
of the book value of all Collateral, (y) the Agent and NationsBank, with
the consent of Requisite Lenders, may release Collateral having a book
value of not more than 25% of the book value of all Collateral and (z) the
Agent and NationsBank, with the consent of the Lenders having 90% of (i)
the Commitments and (ii) Loans, may release all the Collateral.
(B)CONFIRMATION OF AUTHORITY, EXECUTION OF RELEASES.
Without in any manner limiting the Agent's authority to act without any
specific or further authorization or consent by the Lenders as set forth in
Section (A)RELEASE OF COLLATERAL. (Release of Collateral), each Lender
agrees to confirm in writing the authority to release any property covered
by this Agreement or the Financing Documents conferred upon the Agent under
Section (a) Release of Collateral. (Release of Collateral). So long as no
Event of Default is then continuing, upon receipt by the Agent of
confirmation from the requisite percentage of the Lenders, of its authority
to release any particular item or types of property covered by this
Agreement or the Financing Documents, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders herein or pursuant hereto upon such Collateral;
PROVIDED, HOWEVER, that (a) the Agent shall not be required to execute any
such document on terms which, in the Agent's opinion, would expose the
Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (b) such
release shall not in any manner discharge, affect or impair the Obligations
or any Liens upon (or obligations of any Person, in respect of), all
interests retained by any Person, including, without limitation, the
proceeds of any sale, all of which shall continue to constitute part of the
property covered by this Agreement or the Financing Documents.
(C) ABSENCE OF DUTY.
The Agent shall have no obligation whatsoever to any Lender, the Borrower,
Berry UK, Norwich or any other Person to assure that the property covered
by this Agreement or the Financing Documents exists or is owned by the
Borrower, Berry UK, Norwich or any Subsidiary Guarantor or is cared for,
protected or insured or has been encumbered or that the Liens granted to
the Agent on behalf of the Lenders herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all
or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and
powers granted or available to the Agent in this Section (C)
ABSENCE OF DUTY or in any of the Financing Documents, it being understood
and agreed that in respect of the property covered by this Agreement or the
Financing Documents or any act, omission or event related thereto, the
Agent may act in any manner it may deem appropriate, in its discretion,
given the Agent's own interest in property covered by this Agreement or the
Financing Documents as one of the Lenders and that the Agent shall have no
duty or liability whatsoever to any of the other the Lenders.
SECTION 8.9AGENCY FEE.
The Borrower shall pay to the Agent, an annual loan administration and
agency fee (collectively, the "Agency Fees" and individually, an "Agency
Fee"), in the aggregate amount of Eighty Thousand Dollars ($80,000),
payable quarterly in arrears in installments of $20,000 each. The initial
Agency Fee shall be payable on the Second Closing Date, and each Agency Fee
thereafter shall be payable in advance on the first day of each quarterly
period, commencing with the first such day following the date hereof. Each
Agency Fee shall be fully earned and non-refundable upon the date paid.
The Agent shall retain all of the Agency Fees for its own account and shall
have no obligation to remit or pay any portion thereof to any of the
Lenders.
SECTION 8.10AGENCY FOR PERFECTION.
Each Lender hereby appoints the Agent and each other Lender as agent for
the purpose of perfecting the Lenders' Liens in Collateral which, in
accordance with Article 9 of the Uniform Commercial Code in any applicable
jurisdiction or otherwise, can be perfected only by possession. Should any
Lender (other than the Agent) obtain possession of any such Collateral,
such Lender shall notify the Agent thereof, and, promptly upon the Agent's
request therefor, shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
SECTION 8.11EXERCISE OF REMEDIES.
Each Lender agrees that it will not have any right individually to enforce
or seek to enforce this Agreement or any Financing Document or to realize
upon any collateral security for the Loans, it being understood and agreed
that such rights and remedies may be exercised only by the Agent.
SECTION 8.12CONSENTS.
(a)In the event the Agent or NationsBank requests the consent of
a Lender and does not receive a written denial thereof, or a written notice
from a Lender that due cause consideration of the request requires
additional time, in each case, within ten (10) Business Days after such
Lender's receipt of such request, then such Lender will be deemed to have
given such consent.
(b)In the event the Agent, NationsBank the Borrower, Berry UK or
Norwich, as the case may be, requests the consent of a Lender and such
consent is denied, then NationsBank or the Borrower, Berry UK or Norwich,
as the case may be, may, at their option, require such Lender to assign its
interest in the Loans and Commitments to NationsBank or such other lender
as shall be acceptable to the Borrower, Berry UK and/or Norwich, as the
case may be, NationsBank and the Agent, for a price equal to the then
outstanding principal amount thereof, PLUS accrued and unpaid interest,
fees and costs and expenses due such Lender under the Financing Documents,
which principal, interest, fees and costs and expenses will be paid on the
date of such assignment. In the event that NationsBank or the Borrower,
Berry UK or Norwich, as the case may be, elects to require any Lender to
assign its interest to NationsBank or such other lender as shall be
acceptable to the Borrower, Berry UK, or Norwich, as the case may be, and
the Agent and NationsBank will so notify such Lender in writing within
thirty (30) days following such Lender's denial, and such Lender will
assign its interest to NationsBank or such other lender as shall be
acceptable to the Borrower, Berry UK or Norwich, as the case may be,
NationsBank and the Agent, no later than five (5) days following receipt of
such notice.
(c)The Lenders each hereby authorize the Agent and/or
NationsBank, as appropriate on their behalf to execute any and all
amendments to this Agreement and any of the other Financing Documents as
may be necessary to remedy and correct any clerical errors, omissions or
inconsistencies. The Agent and NationsBank, as appropriate, agrees to give
copies of any and all such executed amendments to each of the Lenders.
(d)Notwithstanding anything to the contrary contained herein,
NationsBank acknowledges and agrees that to the extent any Lender has made
all required payments to NationsBank on account of its participation
interests in the UK Obligations in accordance with the terms of this
Agreement, such Lender shall be deemed a "Lender" for purposes of consents
and similar actions required to be contained by NationsBank with respect to
such UK Obligations. Accordingly, all consents and similar actions
required to be obtained by the Agent with respect to the Obligations from
the Requisite Lenders and/or all of the Lenders as required by the terms of
this Agreement shall likewise be applicable to actions of NationsBank with
respect to the UK Obligations in the same respect.
SECTION 8.13CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED.
Notwithstanding anything to the contrary contained herein, no amendment,
modification, change or waiver shall be effective without the consent of
all of the Lenders (but only the consent of all Lenders party to this
Agreement as of the Closing Date shall be required with respect to item (i)
below) to:
(a)increase the principal amount of any of the Commitments;
(b)extend the maturity or due date of payment of principal,
interest or Fees on account of the Obligations, including the UK
Obligations;
(c)reduce the principal amount of any Obligations, the rate of
interest on any of the Obligations or any Fees payable, except as expressly
permitted therein;
(d)change the method of calculation utilized in connection with
the computation of interest and Fees;
(e)change the manner of pro rata application by the Agent or
NationsBank of payments made by the Borrower, Berry UK or Norwich or any
other payments required hereunder or under the other Financing Documents;
(f)modify this Section or the definition of "Requisite Lenders";
(g)release any material portion of any Collateral (including any
UK Collateral), any Guarantor or any Financing Document (except to the
extent provided herein or therein);
(h)increase the advance rates for any component of the Borrowing
Base or the UK Borrowing Base; and
(i)modify, waiver or otherwise change the requirements of Section
2.1.13.
SECTION 8.14DISSEMINATION OF INFORMATION.
The Agent will provide the Lenders with any information received by the
Agent from the Borrower, Berry UK or Norwich which is required to be
provided to the Agent or to the Lenders hereunder; PROVIDED, HOWEVER, that
the Agent shall not be liable to any one or more the Lenders for any
failure to do so, except to the extent that such failure is attributable to
the Agent's gross negligence or willful misconduct.
SECTION 8.15DISCRETIONARY ADVANCES.
The Agent may, in its sole discretion, make, for the account of the Lenders
on a pro rata basis, advances under the Revolving Loan of up to 10% in
excess of the Borrowing Base but not in excess of the limitation set forth
in aggregate Revolving Credit Commitments for a period of not more than
thirty (30) consecutive days or, following an Event of Default, for such
longer period as the Requisite Lenders may elect.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1NOTICES.
All notices, requests and demands to or upon the parties to this Agreement
shall be in writing and shall be deemed to have been given or made when
delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail,
return receipt requested, or when sent by overnight courier, on the
Business Day next following the day on which the notice is delivered to
such overnight courier, addressed as follows:
<TABLE>
<CAPTION>
Borrower BERRY PLASTICS CORPORATION
Berry UK or 101 Oakley Street
Norwich P.O. Box 959
Evansville, Indiana 47710-0959
Attention: President
<S> <C>
with a copy to Ilan S. Nissan, Esquire
O'Sullivan, Graev & Karabell, LLP
30 Rockefeller Center
41{st} Floor
New York, New York 10112
with a copy to: Joseph S. Levy
Vice President
First Atlantic Capital, Ltd.
135 East 57th Street, 29th Floor
New York, New York 10022
Agent: NATIONSBANK, N.A.
NationsBank Business Credit
100 S. Charles Street
Baltimore, Maryland 21201
Attention: Alison Arbuthnot
with a copy to: Shaun F. Carrick, Esquire
Miles & Stockbridge P.C.
10 Light Street
Baltimore, Maryland 21202
AGENT'S LONDON OFFICE NationsBank - Europe
New Broad Street House
35 New Broad Street
London, England EC2MINH
Attention: Mr. Aidan Fisher
NATIONSBANK: NationsBank, N.A.
NationsBank Business Credit
100 S. Charles Street
Baltimore, Maryland 21201
Attn: Ms. Vickie Tillman
GE Capital General Electric Capital Corporation
335 Madison Avenue
New York, New York 10017
Attn: Account Manager - Berry Plastics
Fleet: Fleet Capital Corporation
200 Glastonbury Boulevard
Glastonbury, Connecticut 06033
Attn: Mr. John Stanescki
Heller: Mr. Tom Bukowski
Senior
Vice President
Heller
Financial, Inc.
150
East 42{nd} Street
7{th}
Floor
New
York, New York 10017
</TABLE>
By written notice, each party to this Agreement may change the address to
which notice is given to that party, provided that such changed notice
shall include a street address to which notices may be delivered by
overnight courier in the ordinary course on any Business Day.
SECTION 9.2AMENDMENTS; WAIVERS.
This Agreement and the other Financing Documents may not be amended,
modified, or changed in any respect except by an agreement in writing
signed by the Requisite Lenders, the Borrower, Berry UK and Norwich and to
the extent provided in CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS
REQUIRED. by an agreement in writing signed by all of the Lenders, the
Borrower, Berry UK and Norwich. In addition, any agreement which directly
or indirectly affects any rights, duties, obligations, liabilities or
remedies of the Agent under this Agreement, under any of other Financing
Documents or otherwise must be approved and signed by the Agent. No waiver
of any provision of this Agreement or of any of the other Financing
Documents, nor consent to any departure by the Borrower, Berry UK or
Norwich therefrom, shall in any event be effective unless the same shall be
in writing. No course of dealing between the Borrower, Berry UK, Norwich
and the Agent and/or any of the Lenders and no act or failure to act from
time to time on the part of the Agent and/or any of the Lenders shall
constitute a waiver, amendment or modification of any provision of this
Agreement or any of the other Financing Documents or any right or remedy
under this Agreement, under any of the other Financing Documents or under
applicable Laws.
Without implying any limitation on the foregoing, and subject to the
provisions OF CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS
REQUIRED.:
(a)Any waiver or consent shall be effective only in the specific
instance, for the terms and purpose for which given, subject to such
conditions as the Agent may specify in any such instrument.
(b)No waiver of any Default or Event of Default shall extend to
any subsequent or other Default or Event of Default, or impair any right
consequent thereto.
(c)No notice to or demand on the Borrower, Berry UK or Norwich in
any case shall entitle the Borrower, Berry UK or Norwich to any other or
further notice or demand in the same, similar or other circumstance.
(d)No failure or delay by the Lender to insist upon the strict
performance of any term, condition, covenant or agreement of this Agreement
or of any of the other Financing Documents, or to exercise any right, power
or remedy consequent upon a breach thereof, shall constitute a waiver,
amendment or modification of any such term, condition, covenant or
agreement or of any such breach or preclude the Agent from exercising any
such right, power or remedy at any time or times.
(e)By accepting payment after the due date of any amount payable
under this Agreement or under any of the other Financing Documents, the
Agent shall not be deemed to waive the right either to require prompt
payment when due of all other amounts payable under this Agreement or under
any of the other Financing Documents, or to declare a Default or an Event
of Default for failure to effect such prompt payment of any such other
amount.
SECTION 9.3CUMULATIVE REMEDIES.
The rights, powers and remedies provided in this Agreement and in the other
Financing Documents are cumulative, may be exercised concurrently or
separately, may be exercised from time to time and in such order as the
Agent shall determine, subject to the provisions of this Agreement, and are
in addition to, and not exclusive of, rights, powers and remedies provided
by existing or future applicable Laws. In order to entitle the Agent to
exercise any remedy reserved to it in this Agreement, it shall not be
necessary to give any notice, other than such notice as may be expressly
required in this Agreement. Without limiting the generality of the
foregoing and subject to the terms of this Agreement, the Agent may:
(a)proceed against the Borrower, Berry UK or Norwich with or
without proceeding against any other Person (including, without limitation,
any one or more of the Guarantors) who may be liable (by endorsement,
guaranty, indemnity or otherwise) for all or any part of the Obligations
(subject to the limitations set forth in Section (J)LIMITATIONS ON JOINT
AND SEVERAL LIABILITY FOR OBLIGATIONS. (Limitations on Joint and Several
Liability);
(b)proceed against the Borrower, Berry UK or Norwich with or
without proceeding under any of the other Financing Documents or against
any Collateral or other collateral and security for all or any part of the
Obligations;
(c)without reducing or impairing the obligation of the Borrower,
Berry UK or Norwich and without notice, release or compromise with any
guarantor or other Person liable for all or any part of the Obligations
under the Financing Documents or otherwise;
(d)without reducing or impairing the obligations of the Borrower,
Berry UK or Norwich and without notice thereof: (i)fail to perfect the Lien
in any or all Collateral or to release any or all the Collateral or to
accept substitute Collateral, (ii) approve the making of advances under the
Revolving Loan and/or the UK Revolving Loan under this Agreement, (iii)
waive any provision of this Agreement or the other Financing Documents,
(iv) exercise or fail to exercise rights of set-off or other rights, or (v)
accept partial payments or extend from time to time the maturity of all or
any part of the Obligations.
SECTION 9.4SEVERABILITY.
In case one or more provisions, or part thereof, contained in this
Agreement or in the other Financing Documents shall be invalid, illegal or
unenforceable in any respect under any Law, then without need for any
further agreement, notice or action:
(a)the validity, legality and enforceability of the remaining
provisions shall remain effective and binding on the parties thereto and
shall not be affected or impaired thereby;
(b)the obligation to be fulfilled shall be reduced to the limit
of such validity;
(c)such provision or part thereof only shall be void, and the
remainder of this Agreement shall remain operative and in full force and
effect.
SECTION 9.5ASSIGNMENTS BY LENDERS.
Any Lender may, with the prior written consent of the Agent and the
Borrower, but without notice to or consent of any other Lender, which
consent shall not be unreasonably withheld, delayed or conditioned, assign
to any Person (each an "Assignee" and collectively, the "Assignees") all or
a portion of such Lender's Commitments; provided that (a) the amount
assigned by such Lender must be at least equal to Five Million Dollars
($5,000,000), (b) after giving effect to such assignment, such Lender must
continue to hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000), unless such Lender has assigned one hundred
percent (100%) of such Lender's Commitments, and (c) any amount assigned
shall be divided pro rata among such Lenders' Pro Rata Share of the
Commitments and Obligations. NationsBank agrees that if at any time
NationsBank sells one hundred percent (100%) of all of its Commitments,
NationsBank shall resign as Agent and the remaining Lenders shall select a
replacement Agent in accordance with the provisions of this Agreement. In
addition, NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to hold
a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of
the Lender (other than NationsBank) having the highest Pro Rata Share of
the Commitments. Any Lender which elects to make such an assignment shall
pay to the Agent, for the exclusive benefit of the Agent, an administrative
fee for processing each such assignment in the amount of Three Thousand
Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify
the Agent and the Borrower in writing of the date on which the assignment
is to be effective (the "Adjustment Date"). On or before the Adjustment
Date, the assigning Lender, the Agent, the Borrower and the respective
Assignee shall execute and deliver a written assignment agreement in a form
acceptable to the Agent, which shall constitute an amendment to this
Agreement to the extent necessary to reflect such assignment. Upon the
request of any assigning Lender following an assignment made in accordance
with this ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich shall
issue new Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning
Lender.
In addition to the foregoing assignments permitted by this ASSIGNMENTS BY
LENDERS., without the prior written consent of the Borrower, Berry UK or
Norwich, but with the consent of the Agent, which consent shall not be
unreasonably withheld, delayed or conditioned, any Lender may assign all or
any portion of such Lender's Commitments (a) to NationsBank, Fleet, GE
Capital or Heller at any time regardless of the occurrence or non-
occurrence of an Event of Default and (b) to any other Person at any time
after the occurrence of an Event of Default; provided that with respect to
any such proposed assignment under either (a) or (b) (i) the amount to be
assigned by such assigning Lender must be at least equal to Five Million
Dollars ($5,000,000), (ii) after giving effect to such assignment, such
assigning Lender must continue to hold a Pro Rata Share of the Commitments
at least equal to Ten Million Dollars ($10,000,000), unless such Lender has
assigned one hundred percent (100%) of such Lender's Commitments, (iii) any
amount to be assigned shall be divided pro rata among such Lender's Pro
Rata Share of the Commitments and the Obligations, and (iv) prior to
closing and consummating the proposed assignment (the "Proposed Assignee"),
the Lender shall have first given the Borrower notice of the proposed
assignment (the "Right of First Refusal Notice") to permit the Borrower an
opportunity to locate another Person acceptable to the Agent (the
"Substitute Purchaser") to close and consummate the proposed assignment on
the same terms and conditions available to the Proposed Assignee and the
Substitute Purchaser shall in fact close and consummate the proposed
assignment within thirty (30) days after the Right of First Refusal Notice.
If the Borrower fails to locate a Substitute Purchaser or if the Substitute
Purchaser fails to close and consummate the proposed assignment within such
thirty (30) day period, the assigning Lender shall be entitled to close and
consummate the proposed assignment to the Proposed Assignee without further
notice or obligation to the Borrower, Berry UK or Norwich.
In addition, notwithstanding the foregoing, any Lender may at any time
pledge all or any portion of such Lender's rights under this Agreement, any
of the Commitments or any of the Obligations to a Federal Reserve Bank.
SECTION 9.6PARTICIPATIONS BY LENDERS.
Any Lender may at any time sell to one or more financial institutions
participating interests in any of such Lender's Obligations or Commitments;
provided, however, that (a) no such participation shall relieve such Lender
from its obligations under this Agreement or under any of the other
Financing Documents to which it is a party, (b) such Lender shall remain
solely responsible for the performance of its obligations under this
Agreement and under all of the other Financing Documents to which it is a
party, (c) the Borrower, Berry UK, Norwich, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and the
other Financing Documents, and (d) no such participant shall be granted
voting rights with respect to any matters reserved for the Lenders under
the provisions of this Agreement.
SECTION 9.7DISCLOSURE OF INFORMATION BY LENDERS.
(a)In connection with any sale, transfer, assignment or
participation by any Lender in accordance with ASSIGNMENTS BY LENDERS.
(Assignments by Lenders) or SECTION 9.6 PARTICIPATIONS BY LENDERS.
(Participations by Lenders), each Lender shall have the right to disclose
to any actual or potential purchaser, assignee, transferee or participant
all financial records, information, reports, financial statements and
documents obtained in connection with this Agreement and/or any of the
other Financing Documents or otherwise, provided that such actual or
potential purchaser shall agree to keep confidential any non-public
information delivered or made available to such Lender.
(b)Each of the Lenders and the Agent hereby agree to exercise
reasonable efforts to keep any non-public information delivered or made
available to it pursuant to this Agreement or any of the Financing
Documents, confidential from any other Person except (i) Persons employed
or retained by such Lender or Agent who are or are expected to become
engaged in evaluating, approving, structuring or administering the
Obligations, (ii) with the prior written consent of Borrower, (iii) as
required in connection with the exercise of any remedy under this Agreement
or any of the Financing Documents or (iv) as may be required by Law,
provided that in the event that any Lender, the Agent or any of its or
their representatives are requested or compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any of the non-public
information delivered or made available to any Lender or the Agent pursuant
to this Agreement or any of the Financing Documents, the Lenders, the Agent
and its or their representatives, as appropriate, agree to provide Borrower
with prompt notice of such request(s).
SECTION 9.8SUCCESSORS AND ASSIGNS.
This Agreement and all other Financing Documents shall be binding upon and
inure to the benefit of the Borrower, Berry UK, Norwich, the Agent and the
Lenders and their respective heirs, personal representatives, successors
and assigns, except that neither the Borrower, Berry UK nor Norwich shall
have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Agent and the Requisite Lenders.
SECTION 9.9CONTINUING AGREEMENTS.
All covenants, agreements, representations and warranties made by the
Borrower, Berry UK and/or Norwich in this Agreement, in any of the other
Financing Documents, and in any certificate delivered pursuant hereto or
thereto shall survive the making by the Lenders of the Loans, the issuance
of Letters of Credit by the Agent and the execution and delivery of the
Notes, shall be binding upon the Borrower, Berry UK and Norwich regardless
of how long before or after the date hereof any of the Obligations were or
are incurred, and shall continue in full force and effect so long as any of
the Obligations are outstanding and unpaid. From time to time upon the
Agent's request, and as a condition of the release of any one or more of
the Security Documents, the Borrower, Berry UK, Norwich and other Persons
obligated with respect to the Obligations shall provide the Agent with such
acknowledgments and agreements as the Agent may require to the effect that
there exists no defenses, rights of setoff or recoupment, claims,
counterclaims, actions or causes of action of any kind or nature whatsoever
against the Agent, any or all of the Lenders, and/or any of its or their
agents and others, or to the extent there are, the same are waived and
released.
SECTION 9.10ENFORCEMENT COSTS.
The Borrower agrees to pay to the Agent on demand all Enforcement Costs
(including expenses and fees incurred by any Lender to the extent included
in the definition of Enforcement Costs), together with interest thereon
from the date following demand until paid in full at a per annum rate of
interest equal at all times to the Post-Default Rate. The Borrower, Berry
UK and Norwich jointly and severally agree to pay to the Agent on demand
all Enforcement Costs which relate solely to the UK Obligations, together
with interest thereon from the date following demand until paid in full at
a per annum rate of interest equal at all times to the Post-Default Rate.
Enforcement Costs shall be immediately due and payable at the time advanced
or incurred, whichever is earlier. Without implying any limitation on the
foregoing, the Borrower and to the extent appropriate, Berry UK and
Norwich, jointly and severally agree, as part of the Enforcement Costs, to
pay upon demand any and all stamp and other Taxes and fees payable or
determined to be payable in connection with the execution and delivery of
this Agreement and the other Financing Documents and to save the Agent and
the Lenders harmless from and against any and all liabilities with respect
to or resulting from any delay in paying or omission to pay any Taxes or
fees referred to in this Section. The provisions of this Section shall
survive the execution and delivery of this Agreement, the repayment of the
other Obligations and shall survive the termination of this Agreement.
SECTION 9.11APPLICABLE LAW; JURISDICTION.
(A)GOVERNING LAW.
As a material inducement to the Agent and the Lenders to enter into this
Agreement, the Borrower, Berry UK and Norwich each acknowledges and agrees
that the Financing Documents, including, this Agreement, shall be governed
by the Laws of the State, as if each of the Financing Documents and this
Agreement had each been executed, delivered, administered and performed
solely within the State even though for the convenience and at the request
of the Borrower, Berry UK and/or Norwich one or more of the Financing
Documents may be executed elsewhere. The Agent and the Lenders
acknowledge, however, that remedies under certain of the Financing
Documents that relate to property outside the State may be subject to the
laws of the state in which the property is located.
(B)SUBMISSION TO JURISDICTION.
The Borrower, Berry UK and Norwich each irrevocably submits to the
jurisdiction of any state or federal court sitting in the State over any
suit, action or proceeding arising out of or relating to this Agreement or
any of the other Financing Documents. The Borrower, Berry UK and Norwich
each irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Final judgment in any such suit, action
or proceeding brought in any such court shall be conclusive and binding
upon the Borrower, Berry UK and Norwich and may be enforced in any court in
which the Borrower, Berry UK and/or Norwich is subject to jurisdiction, by
a suit upon such judgment, provided that service of process is effected
upon the Borrower, Berry UK and Norwich in one of the manners specified in
this Section or as otherwise permitted by applicable Laws.
(C)APPOINTMENT OF AGENT FOR SERVICE OF PROCESS.
The Borrower, Berry UK and Norwich each hereby irrevocably designates and
appoints CT Corporation System 300 East Lombard Street, Baltimore,
Maryland, 21202, as their respective agent to receive on their behalf
service of any and all process that may be served in any suit, action or
proceeding of the nature referred to in this Section in any state or
federal court sitting in the State. If such agent shall cease so to act,
the Borrower, Berry UK and Norwich shall irrevocably designate and appoint
without delay another such agent in the State satisfactory to the Agent and
shall promptly deliver to the Agent evidence in writing of such other
agent's acceptance of such appointment and its agreement that such
appointment shall be irrevocable.
(D)SERVICE OF PROCESS.
The Borrower, Berry UK and Norwich each hereby consents to process being
served in any suit, action or proceeding of the nature referred to in this
Section by (a) the mailing of a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to the Borrower, Berry UK
and Norwich at their respective address designated in or pursuant to
SECTION 9.1NOTICES. (Notices), and (b) serving a copy thereof upon the
agent, if any, designated and appointed by the Borrower, Berry UK and
Norwich as their respective agent for service of process by or pursuant to
this Section. The Borrower, Berry UK and Norwich each irrevocably agrees
that such service (i) shall be deemed in every respect effective service of
process upon each of them in any such suit, action or proceeding, and (ii)
shall, to the fullest extent permitted by law, be taken and held to be
valid personal service upon the Borrower, Berry UK and Norwich. Nothing in
this Section shall affect the right of the Agent to serve process in any
manner otherwise permitted by law or limit the right of the Agent otherwise
to bring proceedings against the Borrower, Berry UK and/or Norwich in the
courts of any jurisdiction or jurisdictions.
SECTION 9.12DUPLICATE ORIGINALS AND COUNTERPARTS.
This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be
deemed to be an original and all taken together shall constitute but one
and the same instrument.
SECTION 9.13HEADINGS.
The headings in this Agreement are included herein for convenience only,
shall not constitute a part of this Agreement for any other purpose, and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
SECTION 9.14NO AGENCY.
Nothing herein contained shall be construed to constitute the Borrower,
Berry UK or Norwich as the agent of the Agent or any of the Lenders for any
purpose whatsoever or to permit the Borrower, Berry UK or Norwich to pledge
any of the credit of the Agent or any of the Lenders. Neither the Agent
nor any of the Lenders shall be responsible or liable for any shortage,
discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof.
Neither the Agent nor any of the Lenders shall, by anything herein or in
any of the Financing Documents or otherwise, assume any of the Borrower's,
Berry UK's, or Norwich's obligations under any contract or agreement
assigned to the Agent and/or the Lenders, and neither the Agent nor any of
the Lenders shall be responsible in any way for the performance by the
Borrower, Berry UK or Norwich of any of the terms and conditions thereof.
SECTION 9.15WAIVER OF TRIAL BY JURY.
THE BORROWER, BERRY UK, NORWICH, THE AGENT AND THE LENDERS HEREBY JOINTLY
AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWER, BERRY UK, NORWICH, THE AGENT AND/OR ANY OR ALL OF THE LENDERS MAY
BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT,
(B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO
SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by the Borrower,
Berry UK, Norwich, the Agent and the Lenders, and the Borrower, Berry UK,
Norwich, the Agent and the Lenders hereby represent that no representations
of fact or opinion have been made by any individual to induce this waiver
of trial by jury or to in any way modify or nullify its effect. The
Borrower, Berry UK, Norwich, the Agent and the Lenders further represent
that they have been represented in the signing of this Agreement and in the
making of this waiver by independent legal counsel, selected of their own
free will, and that they have had the opportunity to discuss this waiver
with counsel.
SECTION 9.16LIABILITY OF THE AGENT AND THE LENDERS.
The Borrower, Berry UK and Norwich each hereby agrees that neither the
Agent nor any of the Lenders shall be chargeable for any negligence,
mistake, act or omission of any accountant, examiner, agency or attorney
employed by the Agent and/or any of the Lenders in making examinations,
investigations or collections, or otherwise in perfecting, maintaining,
protecting or realizing upon any lien or security interest or any other
interest in the Collateral or other security for the Obligations, except
for acts of gross negligence and willful misconduct.
By inspecting the Collateral or any other properties of the Borrower, Berry
UK or Norwich or by accepting or approving anything required to be
observed, performed or fulfilled by the Borrower, Berry UK or Norwich or to
be given to the Agent and/or any of the Lenders pursuant to this Agreement
or any of the other Financing Documents, neither the Agent nor any of the
Lenders shall be deemed to have warranted or represented the condition,
sufficiency, legality, effectiveness or legal effect of the same, and such
acceptance or approval shall not constitute any warranty or representation
with respect thereto by the Agent and/or the Lenders.
SECTION 9.17ENTIRE AGREEMENT.
THIS AGREEMENT IS INTENDED BY THE AGENT, THE LENDERS, BERRY UK, NORWICH AND
THE BORROWER TO BE A COMPLETE, EXCLUSIVE AND FINAL EXPRESSION OF THE
AGREEMENTS CONTAINED HEREIN. NEITHER THE AGENT, THE LENDERS NOR BERRY UK,
NORWICH, OR THE BORROWER SHALL HEREAFTER HAVE ANY RIGHTS UNDER ANY PRIOR
AGREEMENTS PERTAINING TO THE MATTERS ADDRESSED BY THIS AGREEMENT BUT SHALL
LOOK SOLELY TO THIS AGREEMENT FOR DEFINITION AND DETERMINATION OF ALL OF
THEIR RESPECTIVE RIGHTS, LIABILITIES AND RESPONSIBILITIES UNDER THIS
AGREEMENT.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto have executed and delivered
this Agreement under their respective seals as of the day and year first
written above.
WITNESS OR ATTEST:BERRY PLASTICS CORPORATION
_________________________By:_______________________(Seal)
James M. Kratochvil
Vice President
WITNESS OR ATTEST:NIM HOLDINGS LIMITED
____________________________By:_______________________(Seal)
James M. Kratochvil
Vice President
WITNESS OR ATTEST:NORWICH INJECTION MOULDERS LIMITED
_________________________By:_______________________(Seal)
James M. Kratochvil
Vice President
WITNESS:NATIONSBANK, N.A.,
in its capacity as Agent
_________________________By:______________________(Seal)
Alison Arbuthnot
Vice President
<PAGE>
WITNESS:NATIONSBANK, N.A.
in its capacity as a Lender
_________________________By:_______________________(Seal)
Alison Arbuthnot
Vice President
WITNESS:GENERAL ELECTRIC CAPITAL CORPORATION
in its capacity as a Lender
_________________________By:_______________________(Seal)
WITNESS:FLEET CAPITAL CORPORATION
in its capacity as a Lender
_________________________By:_______________________(Seal)
WITNESS:HELLER FINANCIAL, INC.
in its capacity as a Lender
_________________________By:_______________________(Seal)
<PAGE>
LIST OF EXHIBITS
A-1.Form of Borrowing Base Report
A-2Form of UK Borrowing Base Report
B.Wire Transfer Procedures
C-1.Pro-Forma Financial Statements
C-2Pro-Forma Balance Sheets
D.Form of Compliance Certificate
<PAGE>
LIST OF SCHEDULES
ScheduleSection 1.1 CERTAIN DEFINED TERMS. List of Account Debtors
(concentrations)
SCHEDULE(j) Litigation. Litigation
SCHEDULE(n) Indebtedness FOR BORROWED MONEY. Scheduled Indebtedness for
Borrowed Money
SCHEDULE(T) EMPLOYEE RELATIONS. Employee Relations Disclosures
SCHEDULE(u) Presence OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS
CONTAMINATION. Hazardous Materials Disclosures
SCHEDULE(v) Perfection AND PRIORITY OF COLLATERAL. Scheduled Permitted
Liens
SCHEDULE(x) Business NAMES AND ADDRESSES. Information on Names, Addresses
and Locations
SCHEDULEInvestments, Loans AND OTHER TRANSACTIONS. Permitted Investments
<PAGE>
EXHIBIT B
<PAGE>
EXHIBIT C
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
2
Section 1.1Certain Defined Terms
2
Section 1.2Accounting Terms and Other Definitional Provisions.
76
ARTICLE II THE CREDIT FACILITIES............................................77
Section 2.1The Revolving Credit Facility....................................77
Section 2.2The Term Loan A Facility.........................................88
Section 2.3Term Loan B Facility.............................................94
Section 2.4The Letter of Credit Facility....................................98
Section 2.5The Bond Letter of Credit Facility..............................101
Section 2.6The Special Source Bond Facility................................106
Section 2.7The UK Revolving Credit Facility................................107
Section 2.8UK Term Loan Facility...........................................112
Section 2.9General Letter of Credit Provisions and Participation Provisions for
UK Credit Facilities.115
Section 2.10Interest.......................................................120
Section 2.11General Financing Provisions...................................126
Section 2.12Settlement Among Lenders.......................................134
ARTICLE III THE COLLATERAL.................................................139
Section 3.1Debt and Obligations Secured....................................139
Section 3.2Grant of Liens..................................................140
Section 3.3Collateral Disclosure List......................................141
Section 3.4Personal Property...............................................143
Section 3.5Record Searches.................................................145
Section 3.6Real Property...................................................145
Section 3.7Subsidiary Guarantor Assets.....................................148
Section 3.8Costs...........................................................148
Section 3.9Release.........................................................148
Section 3.10Inconsistent Provisions........................................148
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................148
Section 4.1Representations and Warranties..................................148
Section 4.2Survival; Updates of Representations and Warranties.............159
ARTICLE V CONDITIONS PRECEDENT.............................................160
Section 5.1Conditions to the Initial Advance and Initial Letter of Credit..160
Section 5.2Conditions to all Extensions of Credit..........................166
ARTICLE VI COVENANTS OF THE BORROWER.......................................167
Section 6.1Affirmative Covenants...........................................167
Section 6.2Negative Covenants..............................................181
ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES................................192
Section 7.1Events of Default...............................................192
Section 7.2Remedies........................................................195
ARTICLE VIII THE AGENT.....................................................199
Section 8.1Appointment.....................................................199
Section 8.2Nature of Duties................................................199
Section 8.3Rights, Exculpation, Etc........................................201
Section 8.4Reliance........................................................202
Section 8.5Indemnification.................................................204
Section 8.6NationsBank Individually........................................204
Section 8.7Successor Agent.................................................204
Section 8.8Collateral Matters..............................................204
Section 8.9Agency Fee......................................................207
Section 8.10Agency for Perfection..........................................207
Section 8.11Exercise of Remedies...........................................207
Section 8.12Consents.......................................................207
Section 8.13Circumstances Where Consent of all of the Lenders is Required..208
Section 8.14Dissemination of Information...................................209
Section 8.15Discretionary Advances.........................................209
ARTICLE IX MISCELLANEOUS...................................................209
Section 9.1Notices.........................................................209
Section 9.2Amendments; Waivers.............................................211
Section 9.3Cumulative Remedies.............................................212
Section 9.4Severability....................................................213
Section 9.5Assignments by Lenders..........................................213
Section 9.6Participations by Lenders.......................................214
Section 9.7Disclosure of Information by Lenders............................215
Section 9.8Successors and Assigns..........................................215
Section 9.9Continuing Agreements...........................................215
Section 9.10Enforcement Costs..............................................216
Section 9.11Applicable Law; Jurisdiction...................................216
Section 9.12Duplicate Originals and Counterparts...........................217
Section 9.13Headings.......................................................218
Section 9.14No Agency......................................................218
Section 9.15Waiver of Trial by Jury........................................218
Section 9.16Liability of the Agent and the Lenders.........................218
Section 9.17Entire Agreement...............................................219
<PAGE>
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED
FINANCING AND SECURITY AGREEMENT
-----------------------------------------------
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING
AND SECURITY AGREEMENT (this "Amendment") is made as of the ___ day of
August, 1998, by and among BERRY PLASTICS CORPORATION, a corporation
organized and existing under the laws of the State of Delaware (the
"Borrower"); NIM HOLDINGS LIMITED, a company organized and existing under
the laws of England and Wales ("Berry UK"), and NORWICH INJECTION
MOULDERS LIMITED, a company organized and existing under the laws of
England and Wales ("Norwich"); NATIONSBANK, N.A., a national banking
association, in its capacity as a lender ("NationsBank"), FLEET CAPITAL
CORPORATION, a corporation organized and existing under the laws of the
State of Rhode Island ("Fleet"), GENERAL ELECTRIC CAPITAL CORPORATION, a
corporation organized and existing under the laws of the State of New
York ("GE Capital") and HELLER FINANCIAL, INC., a corporation organized
and existing under the laws of the State of Delaware ("Heller")
(NationsBank, Fleet, GE Capital and Heller are herein collectively
referred to as the "Lenders" and individually, as a "Lender"); and
NATIONSBANK, N.A., a national banking association, in its capacity as
administrative and collateral agent for the Lenders (the "Agent");
Witnesseth:
RECITALS
--------
(a) The Lenders, the Borrower, Berry UK, Norwich and the
Agent are parties to that certain Second Amended and Restated
Financing and Security Agreement dated as of July 2, 1998, as
amended by that certain First Amendment to Second Amended and
Restated Financing and Security Agreement dated as of July 31, 1998
(as amended, restated, supplemented or otherwise modified, the
"Credit Agreement"). Under and subject to the provisions of the
Credit Agreement, the Lenders agreed to establish in favor of the
Borrower, Berry UK and Norwich certain revolving credit, letter of
credit and term loan facilities. All capitalized terms used herein
but not specifically defined herein shall have the meanings given
such terms in the Credit Agreement.
(b) On or before August 31, 1998, the Borrower intends to
offer and issue additional Subordinated Debt having an aggregate
maximum principal amount of Thirty Million Dollars ($30,000,000)
(the "Additional Subordinated Debt"). The Additional Subordinated
Debt shall be issued substantially on the same terms and conditions
as are currently applicable to the Subordinated Debt (except for
certain provisions relating to asset sales which provide that the
existing Subordinated Debt shall have priority as between the
existing Subordinated Debt and the Additional Subordinated Debt as
to any available excess proceeds from certain asset sales) and shall
be guaranteed by the Subsidiary Guarantors, the Parent, Norwich and
Berry UK.
(c) The Borrower has requested that the Agent and the Lenders
consent and agree to the issuance of the Additional Subordinated
Debt and otherwise amend certain terms and conditions of the Credit
Agreement. The Agent and the Lenders have so agreed; provided that,
among other things, the Borrower executes and delivers this
Amendment.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, Berry UK, Norwich, the Lenders and the
Agent hereby agree as follows:
1. The Borrower, Berry UK, and Norwich hereby acknowledge and agree
that the recitals set forth above are true and accurate in each and every
respect and are incorporated herein by reference. The representations
and warranties of the Borrower, Berry UK and Norwich contained among the
provisions of the Credit Agreement are true as of the date of this
Amendment with the same effect as though such representations and
warranties had been made as of such date, except that (i) the
representations and warranties which relate to a specific date need only
be true and correct as of such date and (ii) the representations and
warranties which relate to financial statements which are referred to in
Section 4.1.11 of the Credit Agreement, shall also be deemed to cover
financial statements furnished from time to time to the Agent pursuant to
Section 6.1.1 (Financial Statements) of the Credit Agreement.
2. The Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended to
add the following additional definitions:
"ADDITIONAL SUBORDINATED DEBT" MEANS THAT CERTAIN INDEBTEDNESS
FOR BORROWED MONEY OF THE BORROWER (AND ALL GUARANTEES THEREOF BY
THE BORROWER AND ITS SUBSIDIARIES) ISSUED OR INTENDED TO BE ISSUED
IN FAVOR OF UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE FOR
THE HOLDERS OF THE 12-1/4% SERIES B SENIOR SUBORDINATED NOTES (AND
ANY OTHER PROMISSORY NOTES HEREAFTER ISSUED IN EXCHANGE THEREFOR AS
CONTEMPLATED BY THE INDENTURE)DUE 2004 IN A STATED PRINCIPAL AMOUNT
UP TO THIRTY MILLION DOLLARS ($30,000,000).
(b) The definition of Indenture on page 25 of the Credit
Agreement is hereby deleted in its entirety and the following is
substituted in its place:
"INDENTURE" MEANS (i) THAT CERTAIN INDENTURE DATED AS OF APRIL
21, 1994 BY AND BETWEEN THE BORROWER AND THE UNITED STATES TRUST
COMPANY OF NEW YORK, AS TRUSTEE, ENTERED INTO IN CONNECTION WITH THE
SUBORDINATED DEBT AND (ii) THAT CERTAIN INDENTURE ENTERED INTO OR
INTENDED TO BE ENTERED INTO BY AND BETWEEN THE BORROWER AND THE
UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE, WITH RESPECT TO
THE ADDITIONAL SUBORDINATED DEBT, EACH AS THE SAME MAY BE AMENDED,
RESTATED SUPPLEMENTED OR OTHERWISE MODIFIED.
(c) The definition of "Permitted Acquisition" on pages 33
through 36 inclusive is hereby deleted in its entirety and the
following is substituted in its place:
"PERMITTED ACQUISITION" MEANS (a) THE ACQUISITION OR PURCHASE
OF, OR INVESTMENT IN, ANY PERSON, ANY OPERATING DIVISION OR UNIT OF
ANY PERSON, OR THE STOCK OR ASSETS OF ANY PERSON OR THE COMBINATION
WITH ANY PERSON BY THE BORROWER OR ANY SUBSIDIARY GUARANTOR (EACH
INDIVIDUALLY, A "SUBJECT TRANSACTION") REGARDLESS OF THE STRUCTURE
OF THE SUBJECT TRANSACTION, ENGAGED PRINCIPALLY IN THE LINES OF
BUSINESS SET FORTH IN SECTION 6.1.7 (LINE OF BUSINESS) OR IN A
BUSINESS REASONABLY RELATED THERETO; PROVIDED, HOWEVER THAT:
(i) THE AGGREGATE PURCHASE PRICE OF, INVESTMENT IN,
ACQUISITION EXPENDITURES RELATING TO (EXCLUDING CUSTOMARY AND
REASONABLE TRANSACTION COSTS) AND ASSUMED LIABILITIES IN
CONNECTION WITH ANY SUCH SUBJECT TRANSACTION (A) SHALL NOT
EXCEED AT ANY TIME DURING THE PERIOD COMMENCING ON AUGUST 1,
1998 AND ENDING ON NOVEMBER 15, 1998, TWENTY MILLION DOLLARS
($20,000,000) IF THE PRO FORMA EBITDA FOR (x) THE PERSON WHICH
IS THE TARGET OF SUCH SUBJECT TRANSACTION OR (y) THE SELLER OR
DIVISION OF THE SELLER OF THE ASSETS WHICH IS THE TARGET OF
SUCH SUBJECT TRANSACTION, AS APPLICABLE, IS AT LEAST EQUAL TO
1.5 MULTIPLIED BY THE INCREMENTAL INTEREST EXPENSE ATTRIBUTABLE
TO INDEBTEDNESS INCURRED IN CONNECTION WITH SUCH SUBJECT
TRANSACTION, AND (B) SHALL NOT EXCEED AT ANY OTHER TIME OR IN
ANY OTHER CIRCUMSTANCE THE LESSER OF:
(1) THE PRODUCT OF (A) THE ACTUAL EBITDA FOR (x) THE PERSON
WHICH IS THE TARGET OF SUCH SUBJECT TRANSACTION OR (y)THE SELLER
OR THE DIVISION OF THE SELLER OF THE ASSETS WHICH IS THE TARGET
OF SUCH SUBJECT TRANSACTION, AS APPLICABLE, FOR THE THEN
PRECEDING TWELVE (12) MONTH PERIOD AFTER GIVING EFFECT TO SUCH
SUBJECT TRANSACTION (SUBJECT TO SUCH PRO-FORMA ADJUSTMENTS AS
SHALL BE ACCEPTABLE TO THE AGENT IN ITS SOLE AND ABSOLUTE
DISCRETION), AND (B) 5, OR
(2) SEVEN MILLION DOLLARS ($7,000,000),
(ii) THE AGGREGATE PURCHASE PRICES OF, INVESTMENTS IN,
ACQUISITION EXPENDITURES RELATING TO (EXCLUDING CUSTOMARY AND
REASONABLE TRANSACTION COSTS) AND ASSUMED LIABILITIES IN
CONNECTION WITH ALL SUBJECT TRANSACTIONS MADE ON OR AFTER THE
FIRST CLOSING DATE (EXCLUDING ANY PERMITTED ACQUISITION
PERMITTED UNDER CLAUSE (B) OF THIS DEFINITION) SHALL NOT EXCEED
(A) FIFTY MILLION DOLLARS ($50,000,000) IN THE EVENT A SUBJECT
TRANSACTION WHICH QUALIFIES AS A PERMITTED ACQUISITION IS
CLOSED AND CONSUMMATED DURING THE PERIOD COMMENCING ON AUGUST
1, 1998 AND ENDING ON NOVEMBER 15, 1998 AND (B) THIRTY MILLION
DOLLARS ($30,000,000) IF NO SUBJECT TRANSACTION WHICH QUALIFIES
AS A PERMITTED ACQUISITION IS CLOSED AND CONSUMMATED DURING THE
AFORESAID PERIOD,
(iii) SUCH SUBJECT TRANSACTION SHALL NOT OTHERWISE
CONSTITUTE OR GIVE RISE TO A DEFAULT OR AN EVENT OF DEFAULT,
(iv) THE BORROWER SHALL HAVE FURNISHED FINANCIAL
PROJECTIONS IN FORM AND CONTENT REASONABLY ACCEPTABLE TO THE
AGENT WHICH GIVE EFFECT TO SUCH SUBJECT TRANSACTION AND WHICH
PROJECT THAT SUCH SUBJECT TRANSACTION WOULD NOT CAUSE A DEFAULT
OR EVENT OF DEFAULT (PROVIDED THAT THE AGENT AND THE LENDERS
AGREE THAT SUCH PROJECTIONS SHALL NOT CONSTITUTE A GUARANTY OF
ACTUAL PERFORMANCE),
(v) IF REQUESTED BY THE AGENT OR THE REQUISITE LENDERS, A
PHASE I ENVIRONMENTAL ASSESSMENT OF ANY REAL PROPERTY TO BE
ACQUIRED OR PURCHASED OR OWNED BY ANY PERSON TO BE ACQUIRED OR
PURCHASED OR OWNED BY ANY PERSON IN WHICH THE BORROWER OR ANY
SUBSIDIARY INTENDS TO MAKE AN INVESTMENT, HAS BEEN PERFORMED BY
A REPUTABLE AND RECOGNIZED ENVIRONMENTAL CONSULTING FIRM
ENGAGED BY THE BORROWER AND REASONABLY ACCEPTABLE TO THE AGENT
AND HAS REVEALED NO MATERIAL HAZARDOUS MATERIALS
CONTAMINATION OR MATERIAL VIOLATIONS OF ANY ENVIRONMENTAL LAWS,
THE NON-REMEDIATION OF OR NON-COMPLIANCE WITH WHICH WOULD
RESULT IN A MATERIAL LIABILITY NOT REFLECTED IN THE PURCHASE
PRICE,
(vi) IF AND TO THE EXTENT THE SUBJECT TRANSACTION
CONSISTS OF THE PURCHASE OR ACQUISITION OF A PERSON WHICH IS TO
BE A SUBSIDIARY OF THE BORROWER OR MERGED INTO A SUBSIDIARY OF
THE BORROWER CREATED FOR THE EXPRESS PURPOSE OF CONSUMMATING
THE PROPOSED ACQUISITION:
(1) THE BORROWER SHALL EXECUTE ALL DOCUMENTS AND TAKE SUCH
OTHER ACTIONS AS THE AGENT MAY REASONABLY REQUIRE TO GRANT TO
THE AGENT AND THE LENDERS A FIRST PRIORITY LIEN ON ONE HUNDRED
PERCENT (100%) OF THE STOCK OF SUCH SUBSIDIARY (EXCEPT THAT WITH
RESPECT TO THE FORMATION OF BERRY UK AND ITS ACQUISITION OF
NORWICH, THE BORROWER SHALL BE REQUIRED ONLY TO PLEDGE SIXTY-
FIVE PERCENT (65%) OF THE STOCK OF BERRY UK, AS SECURITY FOR ALL
OF THE OBLIGATIONS, EXCLUDING THE UK OBLIGATIONS, AND TO PLEDGE
ONE HUNDRED PERCENT (100%) OF THE STOCK OF BERRY UK, AS SECURITY
FOR ALL OF THE UK OBLIGATIONS, WHICH ONE HUNDRED PERCENT (100%)
PLEDGE SHALL REDUCE TO SIXTY-FIVE PERCENT (65%) AT SUCH TIME AS
ALL OBLIGATIONS UNDER THE SUBORDINATED DEBT HAVE BEEN PAID IN
FULL,
(2) SUCH SUBSIDIARY SHALL BE DESIGNATED AND QUALIFY
IMMEDIATELY AFTER THE CLOSING OF THE SUBJECT TRANSACTION AS A
SUBSIDIARY GUARANTOR IN ACCORDANCE WITH THE TERMS OF SECTION
6.2.2(SUBSIDIARIES), EXCEPT THAT NEITHER BERRY UK NOR NORWICH
SHALL BE DESIGNATED OR REQUIRED TO QUALIFY AS A SUBSIDIARY
GUARANTOR,
(vii) AFTER GIVING EFFECT TO ANY BORROWINGS UNDER THE
REVOLVING LOAN, IF ANY, NEEDED TO FINANCE THE SUBJECT
TRANSACTION, THE BORROWER AND THE SUBSIDIARY GUARANTORS SHALL
HAVE AVAILABILITY UNDER THE REVOLVING LOAN IN AN AMOUNT AT
LEAST EQUAL TO TWENTY MILLION DOLLARS ($20,000,000) AND ARE
REASONABLY EXPECTED TO HAVE SUCH MINIMUM AVAILABILITY FOR A
PERIOD OF TEN (10) BUSINESS DAYS AFTER CLOSING AND CONSUMMATION
OF THE SUBJECT TRANSACTION, EXCEPT THAT IN CONNECTION WITH THE
NORWICH STOCK PURCHASE TRANSACTION, AVAILABILITY UNDER THE
REVOLVING LOAN NEED ONLY BE IN AN AMOUNT AT LEAST EQUAL TO
FIFTEEN MILLION DOLLARS ($15,000,000),
(viii) ALL LEGAL MATTERS INCIDENT TO THE SUBJECT
TRANSACTION SHALL BE ACCEPTABLE TO THE AGENT IN ITS REASONABLE
DISCRETION,
(ix) THE AGENT SHALL HAVE BEEN GIVEN NO LESS THAN THIRTY
(30) DAYS PRIOR WRITTEN NOTICE OF ANY PROPOSED SUBJECT
TRANSACTION AND SHALL HAVE BEEN PROVIDED WITH ALL INFORMATION
WHICH IT MAY HAVE REASONABLY REQUESTED IN CONNECTION WITH SUCH
PROPOSED SUBJECT TRANSACTION, EXCEPT THAT NOTWITHSTANDING THE
FOREGOING, THE AGENT AGREES THAT WITH RESPECT TO ANY PROPOSED
SUBJECT TRANSACTION INTENDED TO BE CLOSED AND CONSUMMATED
DURING THE PERIOD COMMENCING ON AUGUST 1, 1998 AND ENDING ON
NOVEMBER 15, 1998, THE BORROWER SHALL ONLY BE REQUIRED TO GIVE
THE AGENT NO LESS THAN TWENTY-ONE (21) DAYS WRITTEN NOTICE OF
SUCH PROPOSED SUBJECT TRANSACTION,
(x) IF REQUESTED BY THE AGENT, THE AGENT SHALL HAVE
RECEIVED, PRIOR TO OR SIMULTANEOUSLY WITH THE CLOSING OF A
SUBJECT TRANSACTION, AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE AGENT IN ALL RESPECTS COVERING THE BORROWER'S
OR THE RELEVANT SUBSIDIARY'S, AS THE CASE MAY BE, DUE
INCORPORATION, VALID EXISTENCE, GOOD STANDING AND POWER AND
AUTHORITY TO ENTER INTO THE DOCUMENTS CONTEMPLATED BY THIS
AGREEMENT AND THE SUBJECT TRANSACTION AND SUCH OTHER MATTERS AS
MAY BE REASONABLY REQUESTED BY THE AGENT,
(xi) UNLESS OTHERWISE AGREED BY THE REQUISITE LENDERS, NO
SUBJECT TRANSACTION SHALL BE PERMITTED BY THE TERMS OF THIS
AGREEMENT IF THE BORROWER, BERRY UK, NORWICH AND THE SUBSIDIARY
GUARANTORS, ON A CONSOLIDATED BASIS AND TAKEN AS A WHOLE, HAVE
HAD, IMMEDIATELY PRIOR TO THE DATE OF THE CLOSING OF SUCH
SUBJECT TRANSACTION, THREE (3) CONSECUTIVE MONTHS OF NET
OPERATING LOSSES, AND
(xii) THE AGGREGATE PURCHASE PRICE OF, INVESTMENT IN,
ACQUISITION EXPENDITURES RELATING TO (EXCLUDING CUSTOMARY AND
REASONABLE TRANSACTION COSTS) AND ASSUMED LIABILITIES IN
CONNECTION WITH ALL SUBJECT TRANSACTIONS IN THE FISCAL YEAR
ENDING DECEMBER 31, 1998 SHALL NOT EXCEED THIRTY-FIVE MILLION
DOLLARS ($35,000,000) AND IN ANY OTHER FISCAL YEAR SHALL NOT
EXCEED SEVEN MILLION DOLLARS ($7,000,000); AND
(b) THE VENTURE STOCK PURCHASE/MERGER TRANSACTION AND THE
PACKERWARE MERGER TRANSACTION.
THE BORROWER UNDERSTANDS AND AGREES THAT THE AGENT SHALL HAVE
NO OBLIGATION OR COMMITMENT TO INCLUDE ANY OF THE ASSETS OR
PROPERTIES OF ANY PERSON ACQUIRED IN THE BORROWING BASE
PURSUANT TO A SUBJECT TRANSACTION. THE AGENT AND THE LENDERS
AGREE, HOWEVER, THAT IF AFTER COMPLETION AND REVIEW OF A
SATISFACTORY FIELD EXAMINATION OF THE ASSETS AND PROPERTIES
WHICH CONSTITUTE OR ARE PART OF A PERMITTED ACQUISITION, SUCH
ASSETS AND PROPERTIES SHALL BE INCLUDED IN THE BORROWING BASE
IF THE RESULTS OF SUCH FIELD EXAMINATION AND AUDIT ARE
REASONABLY ACCEPTABLE IN ALL RESPECTS TO THE AGENT IN ITS
DISCRETION AND SUCH ASSETS AND PROPERTIES OTHERWISE SATISFY THE
ELIGIBILITY CRITERIA FOR INCLUSION IN THE BORROWING BASE.
NOTWITHSTANDING THE FOREGOING, THE AGENT AND THE LENDERS AGREE
THAT THE ASSETS AND PROPERTIES OF BERRY UK AND NORWICH SHALL BE
INCLUDED IN THE UK BORROWING BASE SUBJECT TO THE ELIGIBILITY
CRITERIA SET FORTH IN THE DEFINITIONS OF ELIGIBLE UK INVENTORY
AND ELIGIBLE UK RECEIVABLES.
(d) The definition of "Subordinated Debt" on page 47 of the
Credit Agreement is hereby deleted in its entirety and the following
is substituted in its place:
"SUBORDINATED DEBT" MEANS COLLECTIVELY (i) THAT CERTAIN
INDEBTEDNESS FOR BORROWED MONEY OF THE BORROWER (AND ALL GUARANTEES
THEREOF BY THE BORROWER AND ITS SUBSIDIARIES) IN FAVOR OF UNITED
STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE FOR THE HOLDERS OF THE
12-1/4% SENIOR SUBORDINATED NOTES DUE 2004 IN A STATED PRINCIPAL
AMOUNT OF ONE HUNDRED MILLION DOLLARS ($100,000,000) AND (ii) THE
ADDITIONAL SUBORDINATED DEBT.
(e) Section 2.2.3(b) on page 67 of the Credit Agreement is
hereby amended to provide that the Borrower shall not be obligated
to make a Term Loan A Mandatory Prepayment solely as the result of
the issuance of the Additional Subordinated Debt.
(f) Subsection (d) of Section 6.2.4 on page 144 of the Credit
Agreement is hereby deleted in its entirety and the following is
substituted in its place:
(d) SUBORDINATED INDEBTEDNESS, INCLUDING, WITHOUT LIMITATION,
THE ADDITIONAL SUBORDINATED DEBT; PROVIDED THAT THE PRINCIPAL AMOUNT
OF ALL SUCH SUBORDINATED INDEBTEDNESS SHALL NOT AT ANY TIME EXCEED,
IN THE AGGREGATE, THIRTY MILLION DOLLARS ($30,000,000)
3. The Agent and the Lenders hereby consent and agree to the
issuance of the Additional Subordinated Debt in accordance with the terms
and conditions of this Amendment; provided that (i) the Borrower executes
and delivers this Amendment, (ii) the proceeds of the Additional
Subordinated Debt (net of any and all customary and reasonable fees and
expenses incurred by the Borrower in connection with the closing and
consummation of the Additional Subordinated Debt) are paid to the Agent
immediately upon closing and consummation of the Additional Subordinated
Debt as a Revolving Loan Optional Prepayment and (iii) any portion of the
net proceeds of the Additional Subordinated Debt in excess of the then
unpaid principal balance of the Revolving Loan shall be used by the
Borrower in a manner mutually acceptable to the Agent, the Requisite
Lenders and the Borrower as determined within thirty (30) days of closing
the Additional Subordinated Debt.
4. The terms "this Agreement" as used in the Credit Agreement and
the terms "Credit Agreement" as used in any of the Financing Documents
shall mean the Credit Agreement as modified herein unless the context
clearly indicates or dictates a contrary meaning. Any and all such
Financing Documents are deemed hereby amended to reflect the terms and
conditions of this Amendment, including, without limitation, the Deeds of
Trust.
5. The Borrower, the Agent and the Lenders will execute such
confirmatory instruments with respect to the Credit Agreement and/or any
of the Financing Documents as the Agent may reasonably require.
6. This Amendment may not be amended, changed, modified, altered or
terminated without in each instance the prior written consent of the
Agent, the Lenders and the Borrower. This Amendment shall be construed
in accordance with, and governed by, the laws of the State of Maryland.
7. The Borrower agree that neither the execution and delivery of
this Amendment nor any of the terms, provisions, covenants, or agreements
contained in this Amendment shall in any manner release, impair, lessen,
waive, or otherwise adversely affect the joint and several liability and
obligations of the Borrower under the terms of the Credit Agreement.
8. This Agreement may be executed in any number of duplicate
originals or counterparts, each of such duplicate originals or
counterparts shall be deemed to be an original and all taken together
shall constitute but one and the same instrument. The parties agree that
their respective signatures may be delivered by facsimile. Any party who
chooses to deliver its signature by facsimile agrees to provide a
counterpart of this Agreement with its inked signature promptly to each
other party.
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders
have caused this Amendment to be executed under seal as of the date first
above written.
WITNESS: BERRY PLASTICS CORPORATION
_________________________ By:____________________________(Seal)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: NIM HOLDINGS LIMITED
_________________________ By:_______________________(Seal)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: NORWICH INJECTION MOULDERS LIMITED
_________________________ By:_______________________(Seal)
James M. Kratochvil
Vice President
1
<PAGE>
WITNESS: NATIONSBANK, N.A.,
in its capacity as Agent
_________________________ By:____________________________(Seal)
Name: Vickie Tillman
Title: Senior Vice President
WITNESS: NATIONSBANK, N.A.,
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Name: Vickie Tillman
Title: Senior Vice President
WITNESS: FLEET CAPITAL CORPORATION,
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Name:
Title:
WITNESS:
GENERAL ELECTRIC CAPITAL
CORPORATION,
in its capacity as a Lender
_________________________ By:__________________________(Seal)
Name:
Title:
WITNESS: HELLER FINANCIAL, INC.
in its capacity as a Lender
_________________________ By:__________________________(Seal)
Name:
Title:
2
<PAGE>
ACKNOWLEDGMENT AND CONSENT
BPC HOLDING CORPORATION, a corporation organized and existing
under the laws of the State of Delaware, BERRY IOWA CORPORATION, a
corporation organized and existing under the laws of the State of
Delaware, BERRY TRI-PLAS CORPORATION, a corporation organized under the
laws of the State of Delaware, BERRY STERLING CORPORATION, a corporation
organized under the laws of the State of Delaware, AEROCON, INC., a
corporation organized under the laws of the State of Delaware PACKERWARE
CORPORATION, a corporation organized under the laws of the State of
Kansas, BERRY PLASTICS DESIGN CORPORATION, a corporation organized and
existing under the laws of the State of Delaware, VENTURE PACKAGING,
INC., a corporation organized and existing under the laws of the State of
Delaware, VENTURE PACKAGING SOUTHEAST, INC., a corporation organized and
existing under the laws of the State of South Carolina and VENTURE
PACKAGING MIDWEST, INC., a corporation organized and existing under the
laws of State of Ohio (collectively, the "Guarantors") hereby consent and
agree to the foregoing Amendment and hereby acknowledge and agree that
(i) the joint and several obligations and liabilities of the Guarantors
under and in connection with those certain Guaranty of Payment Agreements
and all other Financing Documents executed and delivered in connection
with the Obligations (as amended, restated, supplemented or otherwise
modified, the "Guaranty Documents") shall include and to the extent
necessary are hereby amended to include any and all Obligations, as
amended by this Amendment and (ii) neither the execution and delivery of
the foregoing Amendment nor any of the terms, provisions and agreements
contained in the foregoing Amendment shall in any manner impair, lessen,
waive, discharge or otherwise adversely affect the indebtedness,
liabilities, and obligations of the Guarantors under and in connection
with any and all Financing Documents previously, now or hereafter
executed and delivered by either of them, including, without limitation,
the Guaranty Documents.
WITNESS OR ATTEST: BERRY IOWA CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: BERRY TRI-PLAS CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
3
<PAGE>
WITNESS OR ATTEST: BERRY STERLING CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: AERO CON, INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: PACKERWARE CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: BERRY PLASTICS DESIGN CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: BPC HOLDING CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: VENTURE PACKAGING, INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
4
<PAGE>
WITNESS OR ATTEST: VENTURE PACKAGING SOUTHEAST,
INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: VENTURE PACKAGING MIDWEST,
INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
5
<PAGE>
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
FINANCING AND SECURITY AGREEMENT
----------------------------------------------
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND
SECURITY AGREEMENT (this "Amendment") is made as of the 31{st} day of July,
1998, by and among BERRY PLASTICS CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Borrower"); NIM
HOLDINGS LIMITED, a company organized and existing under the laws of
England and Wales ("Berry UK"), and NORWICH INJECTION MOULDERS LIMITED, a
company organized and existing under the laws of England and Wales
("Norwich"); NATIONSBANK, N.A., a national banking association, in its
capacity as a lender ("NationsBank"), FLEET CAPITAL CORPORATION, a
corporation organized and existing under the laws of the State of Rhode
Island ("Fleet"), GENERAL ELECTRIC CAPITAL CORPORATION, a corporation
organized and existing under the laws of the State of New York ("GE
Capital") and HELLER FINANCIAL, INC., a corporation organized and existing
under the laws of the State of Delaware ("Heller") (NationsBank, Fleet, GE
Capital and Heller are herein collectively referred to as the "Lenders" and
individually, as a "Lender"); and NATIONSBANK, N.A., a national banking
association, in its capacity as administrative and collateral agent for the
Lenders (the "Agent"); Witnesseth:
RECITALS
--------
A. The Lenders, the Borrower, Berry UK, Norwich and the Agent are
parties to that certain Second Amended and Restated Financing and Security
Agreement dated as of July 2, 1998 (as amended, restated, supplemented or
otherwise modified, the "Credit Agreement"). Under and subject to the
provisions of the Credit Agreement, the Lenders agreed to establish in
favor of the Borrower, Berry UK and Norwich certain revolving credit,
letter of credit and term loan facilities. All capitalized terms used
herein but not specifically defined herein shall have the meanings given
such terms in the Credit Agreement.
B. On or before the date of this Amendment, the Iowa Bond Trustee has
made or intends to make a Conversion Drawing on the Iowa Bond Letter of
Credit - NB to redeem Iowa Bonds. As permitted by Section 2.5.5(b) of the
Credit Agreement, the Borrower is permitted to pay the Conversion Drawing
over a period of ten (10) years; provided that payment of all amounts
outstanding with respect to such Conversion Drawing are repaid in full on
or before the Revolving Credit Termination Date.
C. The Borrower has requested, however, that the Lenders agree to
readvance a portion of Term Loans A previously advanced and repaid to pay
the Conversion Drawing in full. The Agent and the Lenders have so agreed;
provided that, among other things, the Borrower execute and delivered
amended and restated Term Loan A Notes and this Amendment.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, Berry UK, Norwich, the Lenders and the Agent
hereby agree as follows:
1. The Borrower, Berry UK, and Norwich hereby acknowledge and agree
that the recitals set forth above are true and accurate in each and every
respect and are incorporated herein by reference. The representations and
warranties of the Borrower, Berry UK and Norwich contained among the
provisions of the Credit Agreement are true as of the date of this
Amendment with the same effect as though such representations and
warranties had been made as of such date, except that (i) the
representations and warranties which relate to a specific date need only be
true and correct as of such date and (ii) the representations and
warranties which relate to financial statements which are referred to in
Section 4.1.11 of the Credit Agreement, shall also be deemed to cover
financial statements furnished from time to time to the Agent pursuant to
Section 6.1.1 (Financial Statements) of the Credit Agreement.
2. The Credit Agreement is hereby amended as follows:
(a) The first paragraph of Section 2.2.1 on page 65 of the Credit
Agreement is hereby deleted in its entirety and the following is
substituted in its place:
2.2.1 TERM LOAN A COMMITMENTS. Subject to and upon the
terms of this Agreement, each Lender severally agrees to make a
loan (each a "Term Loan A"; and collectively, the "Term Loans A")
to the Borrower in the principal amount set forth below opposite
such Lender's name (herein called such Lender's "Term Loan A
Committed Amount"). The total of each Lender's Term Loan A
Committed Amount is herein called the "Total Term Loan A
Committed Amount". The proportionate share set forth below
opposite each Lender's name is herein called such Lender's "Term
Loan A Pro Rata Share":
Term Loan A Term Loan A
LENDER COMMITTED AMOUNT PRO RATA SHARE
------ ---------------- --------------
Fleet $7,901,159.47 23.8525%
GE Capital $9,677,491.83 29.215%
NationsBank $9,677,491.83 29.215%
Heller $5,868,935.87 17.7175%
TOTAL TERM LOAN A
COMMITTED AMOUNT: $33,125,079 100%
The Borrower understands and agrees that the Term Loans A have been
fully funded and that none of the Lenders shall have any further
obligation or commitment to advance any additional portion of their
respective Term Loan A Committed Amount.
(b) The amortization schedule for the Term Loans A on page 66 of
the Credit Agreement is hereby deleted in its entirety and the following is
substituted in its place:
DUE DATE AMOUNT
-------- ------
August 1, 1998 $297,000
November 1, 1998 $432,477
February 1, 1999 $888,477
May 1, 1999 $888,477
August 1, 1999 $888,477
November 1, 1999 $888,477
February 1, 2000 $1,335,477
May 1, 2000 $1,335,477
August 1, 2000 $1,335,477
November 1, 2000 $1,335,477
February 1, 2001 $1,835,477
May 1, 2001 $1,835,477
August 1, 2001 $1,835,477
November 1, 2001 $1,835,477
January 21, 2002 $16,157,878
3. The terms "this Agreement" as used in the Credit Agreement and the
terms "Credit Agreement" as used in any of the Financing Documents shall
mean the Credit Agreement as modified herein unless the context clearly
indicates or dictates a contrary meaning. Any and all such Financing
Documents are deemed hereby amended to reflect the terms and conditions of
this Amendment, including, without limitation, the Deeds of Trust.
4. The Borrower, the Agent and the Lenders will execute such
confirmatory instruments with respect to the Credit Agreement and/or any of
the Financing Documents as the Agent may reasonably require.
5. This Amendment may not be amended, changed, modified, altered or
terminated without in each instance the prior written consent of the Agent,
the Lenders and the Borrower. This Amendment shall be construed in
accordance with, and governed by, the laws of the State of Maryland.
6. The Borrower agree that neither the execution and delivery of this
Amendment nor any of the terms, provisions, covenants, or agreements
contained in this Amendment shall in any manner release, impair, lessen,
waive, or otherwise adversely affect the joint and several liability and
obligations of the Borrower under the terms of the Credit Agreement.
7. This Agreement may be executed in any number of duplicate
originals or counterparts, each of such duplicate originals or counterparts
shall be deemed to be an original and all taken together shall constitute
but one and the same instrument. The parties agree that their respective
signatures may be delivered by facsimile. Any party who chooses to deliver
its signature by facsimile agrees to provide a counterpart of this
Agreement with its inked signature promptly to each other party.
-1-
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have caused
this Amendment to be executed under seal as of the date first above
written.
WITNESS: BERRY PLASTICS CORPORATION
_________________________ By:____________________________(Seal)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: NIM HOLDINGS LIMITED
_________________________ By:_______________________(Seal)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: NORWICH INJECTION MOULDERS LIMITED
_________________________ By:_______________________(Seal)
James M. Kratochvil
Vice President
WITNESS: NATIONSBANK, N.A.,
in its capacity as Agent
_________________________ By:____________________________(Seal)
Name: Alison Arbuthnot
Title: Vice President
WITNESS: NATIONSBANK, N.A.,
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Name: Alison Arbuthnot
Title: Vice President
-2-
<PAGE>
WITNESS: FLEET CAPITAL CORPORATION,
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Name:
Title:
WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION,
in its capacity as a Lender
_________________________ By:__________________________(Seal)
Name: Title:
WITNESS: HELLER FINANCIAL, INC.
in its capacity as a Lender
_________________________ By:__________________________(Seal)
Name: Title:
-3-
<PAGE>
ACKNOWLEDGMENT AND CONSENT
BPC HOLDING CORPORATION, a corporation organized and existing under
the laws of the State of Delaware, BERRY IOWA CORPORATION, a corporation
organized and existing under the laws of the State of Delaware, BERRY TRI-
PLAS CORPORATION, a corporation organized under the laws of the State of
Delaware, BERRY STERLING CORPORATION, a corporation organized under the
laws of the State of Delaware, AEROCON, INC., a corporation organized under
the laws of the State of Delaware PACKERWARE CORPORATION, a corporation
organized under the laws of the State of Kansas, BERRY PLASTICS DESIGN
CORPORATION, a corporation organized and existing under the laws of the
State of Delaware, VENTURE PACKAGING, INC., a corporation organized and
existing under the laws of the State of Delaware, VENTURE PACKAGING
SOUTHEAST, INC., a corporation organized and existing under the laws of the
State of South Carolina and VENTURE PACKAGING MIDWEST, INC., a corporation
organized and existing under the laws of State of Ohio (collectively, the
"Guarantors") hereby consent and agree to the foregoing Amendment and
hereby acknowledge and agree that (i) the joint and several obligations and
liabilities of the Guarantors under and in connection with those certain
Guaranty of Payment Agreements and all other Financing Documents executed
and delivered in connection with the Obligations (as amended, restated,
supplemented or otherwise modified, the "Guaranty Documents") shall include
and to the extent necessary are hereby amended to include any and all
Obligations, as amended by this Amendment and (ii) neither the execution
and delivery of the foregoing Amendment nor any of the terms, provisions
and agreements contained in the foregoing Amendment shall in any manner
impair, lessen, waive, discharge or otherwise adversely affect the
indebtedness, liabilities, and obligations of the Guarantors under and in
connection with any and all Financing Documents previously, now or
hereafter executed and delivered by either of them, including, without
limitation, the Guaranty Documents.
WITNESS OR ATTEST: BERRY IOWA CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: BERRY TRI-PLAS CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
-4-
<PAGE>
WITNESS OR ATTEST: BERRY STERLING CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: AERO CON, INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: PACKERWARE CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: BERRY PLASTICS DESIGN CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: BPC HOLDING CORPORATION
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: VENTURE PACKAGING, INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
-5-
<PAGE>
WITNESS OR ATTEST: VENTURE PACKAGING SOUTHEAST, INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
WITNESS OR ATTEST: VENTURE PACKAGING MIDWEST, INC.
_________________________ By:__________________________(SEAL)
James M. Kratochvil
Vice President
-6-
IRREVOCABLE LETTER OF CREDIT
NO. 930300
April 16, 1997
Manufacturers and Traders
Trust Company, as Trustee
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust Department
Ladies and Gentlemen:
At the request and for the account of our customer, Berry
Plastics Corporation, a Delaware corporation (the "COMPANY"), we (the
"BANK") hereby issue in your favor our Irrevocable Letter of Credit No.
930300 in the amount of $5,226,028 (the "STATED AMOUNT"), effective
immediately and expiring at 5 p.m. (Dallas, Texas time) at our office on
January 20, 2002 (the "EXPIRATION DATE"). This Letter of Credit is
issued to you as trustee (the "TRUSTEE") under the Trust Indenture, dated
as of April 1, 1991 (the "INDENTURE"), between the City of Henderson,
Nevada Public Improvement Trust (the "ISSUER") and you, pursuant to which
$5,000,000 in aggregate principal amount of the Issuer's Variable Rate
Demand Refunding Bonds (Berry Plastics Corporation Project), Series 1991
(the "BONDS") are outstanding.
We hereby irrevocably authorize you to draw on us, in an
aggregate amount not to exceed the Stated Amount of the Letter of Credit
set forth above, and in accordance with the terms and conditions and
subject to the reductions in an amount as hereinafter set forth, the
following amounts by presentation to us of one or more of your sight
drafts referring thereon to the number of this Letter of Credit, together
with one or more of the following certificates duly completed by you and
purportedly signed by you (any such sight draft accompanied by any such
certificate being a "DRAFT"):
1. ANNEX A - Certificate for Drawing in Connection with the
Payment of up to 110 Days' Interest on the Variable Rate Demand
Refunding Bonds (Berry Plastics Corporation Project), Series 1991
("INTEREST DRAFT DRAWING") - in a single drawing (subject to the
reinstatement provisions contained in the next following paragraph)
(such draft accompanied by such certificate being your ("INTEREST
DRAFT") in an amount not exceeding $226,028;
2. ANNEX B - Certificate for Drawing in Connection with the
Payment of Purchase Price of (Including the Principal of and up to
110 Days' Interest on) the Variable Rate Demand Refunding Bonds
(Berry Plastics Corporation Project), Series 1991 in Support of a
Tender Pursuant to Section 114 of the Indenture ("TENDER DRAFT
DRAWING") - in one or more drawings (any such draft accompanied by
such certificate being your "TENDER DRAFT"), in an aggregate amount
not exceeding $5,226,028 (subject to reinstatement as provided in
this Letter of Credit);
3. ANNEX C - Certificate for Drawing in Connection with the
Payment of Principal of and up to 110 Days' Interest on the Variable
Rate Demand Refunding Bonds (Berry Plastics Corporation Project),
Series 1991 upon a Partial Redemption ("PARTIAL REDEMPTION DRAFT
DRAWING") - in one or more drawings (any such draft accompanied by
such certificate being your "PARTIAL REDEMPTION DRAFT"), in an
aggregate amount not exceeding $5,226,028; and
4. ANNEX D - Certificate for Drawing in Connection with the
Payment of Principal of and up to 110 Days' Interest on the Variable
Rate Demand Refunding Bonds (Berry Plastic Corporation Project),
Series 191, upon Stated and Accelerated Maturity, Purchase of All of
the Bonds or Optional or Mandatory Redemption as a Whole ("FINAL
DRAFT DRAWING") - in a single drawing (such draft accompanied by
such certificate being your "FINAL DRAFT"), in an amount not
exceeding $5,226,028.
If you shall draw on us by your Interest Draft under CLAUSE (1)
of the preceding paragraph and we shall not have sent to you within ten
calendar days from the date of such drawing a written notice from us to
the effect that an Event of Default has occurred under the Financing and
Security Agreement dated as of January 21, 1997 (as from time to time in
effect, the "Reimbursement Agreement"), between the Company and the Bank,
and that such amount, and your right to draw on us by an Interest Draft,
will not be reinstated, your right to draw on us in a single drawing by
your Interest Draft under CLAUSE (1) shall be automatically reinstated
and, effective the 11th calendar day from the date of such drawing, you
shall again be authorized to draw on us by your Interest Draft in
accordance with said CLAUSE (1) and the other terms and conditions
referred to or set forth in the immediately preceding paragraph; and this
automatic reinstatement of your right to draw on us by your Interest
Draft shall be applicable to each successive drawing by your Interest
Draft under CLAUSE (1) of the immediately preceding paragraph so long as
this Letter of Credit shall not have terminated as set forth below.
To the extent that Bonds are redeemed and paid with funds not
drawn under this Letter of Credit, the amount of this Letter of Credit
shall be decreased upon our receipt of your written and completed
certificate signed by you in substantially the form of ANNEX E attached
hereto (relating to a mandatory or optional redemption of less than all
of the Bonds outstanding), by an amount equal to the amount stated in
such certificate, and the amounts available to be drawn by you by any
subsequent Interest Draft, Tender Draft, Partial Redemption Draft or
Final Draft shall be decreased upon our receipt of such certificate, to
the amounts stated in such certificate.
Upon our honoring any Tender Draft presented by you hereunder,
the amount of this Letter of Credit and the amounts available to be drawn
hereunder by you by any subsequent Tender Draft, Partial Redemption Draft
and Final Draft shall be automatically decreased by an amount
corresponding to the amount of such Tender Draft. The amount of this
Letter of Credit and the amounts from time to time available to be drawn
by you hereunder by any Tender Draft, Partial Redemption Draft or Final
Draft shall be increased when and to the extent, but only when and to the
extent, that we have given you written notice that we have either (a)
been reimbursed by the Company or by you on behalf of the Company for any
amount drawn hereunder by any Tender Draft, or (b) received Pledged Bonds
(as defined in the Pledge Agreement dated as of April __, 1997, among the
Company, the Bank, you and the Remarketing Agent identified therein) in
aggregate principal amount equal to the principal amount of Bonds
purchased with the proceeds of such Tender Draft. Any amount received by
us from or on behalf of the Company in reimbursement of amounts drawn
hereunder shall, if accompanied by your completed and signed certificate
in substantially the form of ANNEX F attached hereto, be applied to the
extent of the amount indicated therein to reimburse us for amounts drawn
hereunder by your Tender Drafts.
Upon your honoring any Partial Redemption Draft presented by
you hereunder, the amount of this Letter of Credit and the amounts
available to be drawn by you hereunder by any subsequent Partial
Redemption Draft, Tender Draft or Final Draft shall be automatically and
permanently decreased by an amount corresponding to the principal amount
of Bonds to be redeemed and paid with the proceeds of such Partial
Redemption Draft (the "Principal Component Reduction"), plus an amount
that is equal to 110 days' interest on such Principal Component
Reduction, calculated at an assumed rate of 15% per annum and on the
basis of a 365-day year (the "Interest Component Reduction"). In
addition, the amount available to be drawn by you hereunder by any
subsequent Interest Draft will be automatically and permanently decreased
by the Interest Component Reduction.
Each Draft presented under this Letter of Credit shall refer
thereon to the number of this Letter of Credit and shall be dated the
date of its presentation, and shall be drawn and presented at our office
located at NationsBank of Texas, N.A., 901 Main Street, Dallas, Texas
75202, Attention: Mona Davis (or at any other office that may be
designated by us in writing at least three Banking Days prior to the date
on which a drawing is made hereunder), with a copy to NationsBank
Business Credit, 100 South Charles Street, 4th Floor, Baltimore, Maryland
21201, Attention: Vickie L. Tillman (or telecopied to (410) 576-2958),
it being understood that providing such a copy shall not constitute a
condition of drawing. Each Draft may be presented only on a Banking Day.
If we receive any of your Drafts at such office, all in strict conformity
with the terms and conditions of this Letter of Credit, not later than
11:00 a.m. (Dallas, Texas time) on a Banking Day prior to the
termination hereof, we will honor the same no later than 2:00 p.m.
(Dallas, Texas time) on the same day in immediately available funds in
accordance with your payment instructions. If we receive any of your
Drafts at such office, all in strict conformity with the terms and
conditions of this Letter of Credit, after 11:00 a.m. (Dallas, Texas
time) on a Banking Day prior to the termination hereof, we will honor the
same in immediately available funds no later than 2:00 p.m. (Dallas,
Texas time) on the next succeeding Banking Day in accordance with your
payment instruments. The term "Banking Day" means any day of the year
other than a Saturday, Sunday, legal holiday or a day on which banking
institutions in Dallas, Texas or in Buffalo, New York, are authorized or
required to close.
The Drafts you are required to submit to us may be submitted to
us in the form of a facsimile copy by telecopier to the Bank, Attention:
Mona Davis, telecopier no.: (214) 508-3928, with prior telephone notice
to such office at telephone no.: (214) 508-3153 (or at such other office
and telecopier and telephone numbers as we may designate to you in
writing), with a copy to NationsBank Business Credit, 100 South Charles
Street, 4th Floor, Baltimore, Maryland 21201, Attention: Vickie L.
Tillman (or telecopied to (410) 576-2958), it being understood that
providing such a copy shall not constitute a condition of drawing. By
acceptance of this Letter of Credit, you agree to send the same day the
originals of all telecopied Drafts to us, prominently marked to indicate
that they are originals of telecopied Drafts, by overnight courier for
next day delivery to our designated address for presentation of Drafts.
By paying you an amount demanded in accordance with this Letter
of Credit, we make no representation as to the correctness of the amount
demanded or your calculations and representations on the certificates
required of you by this Letter of Credit.
This Letter of Credit shall automatically expire on the
earliest to occur of (i) our honoring your Final Draft presented
hereunder, (ii) 15 days after the date on which we receive written notice
from you that the Bonds have been converted to a "Fixed Interest Rate"
within the meaning of the Indenture, (iii) the date on which we receive
written notice from you that an alternate letter of credit or other
credit facility has been substituted for this Letter of Credit in
accordance with the Indenture, (iv) the date on which we receive written
notice from you that there are no longer any Bonds "Outstanding" within
the meaning of the Indenture, (v) upon receipt by us of written notice
from the Company and the holders of all of the Bonds that are
"Outstanding" within the meaning of the Indenture that they are
exercising their option to terminate the Letter of Credit pursuant to
Section 111(c) of the Indenture, on the earlier of the date specified in
such notice and 15 days after we receive such written notice, together
with your certification that such holders constitute the holders of all
Outstanding Bonds, and (iv) the Expiration Date.
This Letter of Credit sets forth in full our undertaking, and
such undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement referred to
herein (including, without limitation, the Bonds, the Indenture, the
Reimbursement Agreement), except only the Annexes and Drafts referred to
herein; and any such reference shall not be deemed to incorporate herein
by reference any document, instrument or agreement except for such
Annexes and Drafts.
This Letter of Credit is transferable any number of times in
full but not in part. Transfer may be made to any entity whom you or any
transferee hereunder designate as a successor trustee under the Indenture
who is acceptable to us, provided that our acceptance of a successor
trustee shall not be unreasonably withheld and provided further that we
will promptly advise you of our acceptance or disapproval. Transfer of
the available drawing under this Letter of Credit to such transferee
shall be effected by the presentation to us of this Letter of Credit
accompanied by your instruction to transfer in the form of Annex G
attached to this Letter of Credit, and the payment of (x) $2,000 as a
transfer fee and (y) the Bank's costs and expenses incurred in connection
with such transfer. Upon presentation and payment, we shall forthwith
effect a transfer of this Letter of Credit to your designated transferee.
This Letter of Credit shall be governed by the laws of the
State of Maryland, including the Uniform Commercial Code as in effect in
the State of Maryland, except that Articles 16 and 20(b) of the Uniform
Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, shall govern
solely with respect to the presentation of Drafts by telecopy
transmission. Communications to us with respect to this Letter of Credit
other than presentations of Drafts and certificates hereunder shall be in
writing and shall be addressed to us at NationsBank Business Credit, 100
South Charles Street, 4th Floor, Baltimore, Maryland 21201, Attention:
Vickie L. Tillman (or telecopied to (410) 576-2958), with a copy to us
at NationsBank of Texas, N.A., 901 Main Street, Dallas, Texas 75202,
Attention: Mona Davis (or telecopied to (214) 508-3928), specifically
referring to the number of this Letter of Credit. Communications to you
with respect to this Letter of Credit shall be in writing and shall be
addressed to you at your address set forth above, specifically referring
to the number of this Letter of Credit and the Bonds.
Very truly yours,
NATIONSBANK, N.A.
By:
Name:
Title:
<PAGE>
ANNEX A
INTEREST DRAFT DRAWING
The undersigned, a duly authorized officer of the undersigned
Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the
"Bank"), with reference to Irrevocable Letter of Credit No. _____________
(the "Letter of Credit", the terms defined therein and not otherwise
defined herein being used herein as therein defined) issued by the Bank
in favor of the Trustee, as follows:
1. The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
2. The Trustee is making a drawing under the Letter of Credit
with respect to a payment of interest on the Bonds, which payment is
due on [PAYMENT DUE DATE]. None of the Bonds in respect of which
this drawing will be used to pay interest is held of record by the
Company or by the undersigned for the account of the Company.
3. [THE INTEREST DRAFT ACCOMPANYING THIS CERTIFICATE IS THE
FIRST INTEREST DRAFT PRESENTED BY THE TRUSTEE UNDER THE LETTER OF
CREDIT.] [OR] [THE INTEREST DRAFT LAST PRESENTED BY THE TRUSTEE
UNDER THE LETTER OF CREDIT WAS HONORED AND PAID BY THE BANK ON
________________, 19___, AND THE TRUSTEE HAS NOT RECEIVED A NOTICE
FROM THE BANK THAT AN EVENT OF DEFAULT HAS OCCURRED UNDER THE
REIMBURSEMENT AGREEMENT.]
4. The amount of the Interest Draft accompanying this
Certificate is $__________________. It was computed in compliance
with the terms and conditions of the Bonds and the Indenture, and
does not include any amount of interest which is included in any
Tender Draft, Partial Redemption Draft or Final Draft presented on
or prior to the date of this Certificate.
<PAGE>
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of __________________, 19___.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
<PAGE>
ANNEX B
TENDER DRAFT DRAWING
The undersigned, a duly authorized officer of the undersigned
Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the
"Bank"), with reference to Irrevocable Letter of Credit No.
________________ (the "Letter of Credit", the terms defined therein and
not otherwise defined herein being used herein as therein defined) issued
by the Bank in favor of the Trustee, as follows:
1. The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
2. The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon an optional tender of all or less
than all of the Bonds which are Outstanding (as defined in the
Indenture), of the purchase price of (including the unpaid
principal amount of, and up to 110 days' accrued and unpaid
interest on) the Bonds to be purchased as a result of such tender
pursuant to the terms of Section 114 of the Indenture (other than
Bonds, or $ ______________ portions thereof, presently held of
record by the Company or by the Trustee for the account of the
Company), which payment is due on [payment due date].
3. The amount of the Tender Draft accompanying this
Certificate is equal to the sum of (i) $_______________ being drawn
in respect of the payment of the portion of the purchase price equal
to the unpaid principal of the Bonds being purchased and (ii)
$______________ being drawn in respect of the payment of the portion
of the purchase price equal to the accrued and unpaid interest on
such Bonds, and does not include any amount of interest which is
included in any Interest Draft, Partial Redemption Draft or Final
Draft presented on or prior to the date of this Certificate.
4. The amount of the Tender Draft accompanying this
Certificate was computed in compliance with the terms and conditions
of the Bonds and the Indenture and does not exceed the amount
available to be drawn by the Trustee under the Letter of Credit.
The Trustee acknowledges that, pursuant to the terms of the
Letter of Credit, upon the Bank's honoring of the Tender Draft
accompanying this Certificate, the amount of the Letter of Credit and the
amounts available to be drawn by the Trustee thereunder by any subsequent
Tender Draft, Partial Redemption Draft or Final Draft are automatically
decreased by an amount equal to the amount of such Tender Draft, subject
to reinstatement as provided in the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of __________________, 19___.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
<PAGE>
ANNEX C
PARTIAL REDEMPTION DRAFT DRAWING
The undersigned, a duly authorized officer of the undersigned
Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the
"Bank"), with reference to Irrevocable Letter of Credit No.
________________ (the "Letter of Credit", the terms defined therein and
not otherwise defined herein being used herein as therein defined) issued
by the Bank in favor of the Trustee, as follows:
1. The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
2. The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon a mandatory or optional redemption
of less than all of the Bonds which are Outstanding (as defined in
the Indenture) pursuant to the BOND FORM APPENDIX to the Indenture,
of the unpaid principal amount of, and up to 110 days' accrued and
unpaid interest on, Bonds to be redeemed.
3. The amount of the Partial Redemption Draft accompanying
this Certificate is equal to the sum of (i) $________________ being
drawn in respect of the payment of unpaid principal of Bonds to be
redeemed and (ii) $_______________ being drawn in respect of the
payment of up to 110 days' accrued and unpaid interest on such
Bonds, and does not include any amount of interest on the Bonds
which is included in any Interest Draft, Tender Draft or Final Draft
presented on or prior to the date of this Certificate.
4. The amount of the Partial Redemption Draft accompanying
this Certificate was computed in accordance with the terms and
conditions of the Bonds and the Indenture and does not exceed the
amount available to be drawn under the Letter of Credit.
5. This Certificate and the Partial Redemption Draft it
accompanies are dated, and are being presented to the Bank on, the
date on which the unpaid principal amount of, and accrued and unpaid
interest on, Bonds to be redeemed are due and payable under the
Indenture upon redemption of less than all of the Bonds which are
Outstanding (as defined in the Indenture).
<PAGE>
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of __________________, 19___.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
<PAGE>
ANNEX D
FINAL DRAFT DRAWING
The undersigned, a duly authorized officer of the undersigned
Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the
"Bank"), with reference to Irrevocable Letter of Credit No.
_________________ (the "Letter of Credit", the terms defined therein and
not otherwise defined herein being used herein as therein defined) issued
by the Bank in favor of the Trustee, as follows:
1. The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
2. The Trustee is making a drawing under the Letter of Credit
with respect to the payment, either as stated maturity, upon
acceleration, upon purchase of all of the Bonds pursuant to a
conversion to a fixed interest rate under Section 101 of the
Indenture or a mandatory purchase of all of the Bonds under Section
115 of the Indenture, or as a result of an optional or mandatory
redemption of all of the Bonds pursuant to the BOND FORM APPENDIX of
the Indenture, of the unpaid principal amount of, and up to 110
days' accrued and unpaid interest on, all of the Bonds which are
"Outstanding" within the meaning of the Indenture, which payment is
due on [payment due date].
3. The amount of the Final Draft accompanying this Certificate
is equal to the sum of (i) $__________ being drawn in respect of the
payment of unpaid principal of Bonds, and (ii) $__________ being
drawn in respect of the payment of up to 110 days' accrued and
unpaid interest on such Bonds, and does not include any amount of
interest on the Bonds which is included in any Interest Draft,
Tender Draft or Partial Redemption Draft presented on or prior to
the date of this Certificate.
4. The amount of the Final Draft accompanying this Certificate
was computed in accordance with the terms and conditions of the
Bonds and the Indenture and does not exceed the amount available to
be drawn by the Trustee under the Letter of Credit.
<PAGE>
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of __________________, 19___.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
<PAGE>
ANNEX E
CERTIFICATE FOR REDUCTION
The undersigned, a duly authorized officer of the undersigned
Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the
"Bank"), with reference to Irrevocable Letter of Credit No.
_____________________ (the "Letter of Credit", the terms defined therein
and not otherwise defined herein being used herein as therein defined)
issued by the Bank in favor of the Trustee, as follows:
1. The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
2. The Trustee hereby notifies you that on or prior to the
date hereof $_____________________ principal amount of the Bonds
have been redeemed and paid pursuant to the Indenture. Such
redemption and payment was not effected with the proceeds of amounts
drawn under the Letter of Credit.
3. Following the redemption and payment referred to in
paragraph (2) above, the aggregate principal amount of all of the
Bonds which are "Outstanding" within the meaning of the Indenture is
$_____________________.
4. The maximum amount of interest, computed in accordance with
the terms and conditions of the Bonds and the Indenture, which could
accrue on the Bonds referred to in paragraph (3) above in any period
of 110 days is $_____________________.
5. The amount available to be drawn by the Trustee under the
Letter of Credit by any Interest Draft is reduced to
$_____________________ (such amount being equal to the amount
specified in paragraph (4) above) upon receipt by the Bank of this
Certificate.
6. The amount available to be drawn by the Trustee under the
Letter of Credit by any Tender Draft is reduced to
$_____________________ (such amount being equal to the sum of the
amounts specified in paragraphs (3) and (4) above) upon receipt by
the Bank of this Certificate.
7. The amount available to be drawn by the Trustee under the
Letter of Credit by any Partial Redemption Draft is reduced to
$_______________ (such amount being equal to the sum of the amounts
specified in paragraphs (3) and (4) above) upon receipt by the Bank
of this Certificate.
8. The amount available to be drawn by the Trustee under the
Letter of Credit by its Final Draft is reduced to $_______________
(such amount being equal to the sum of the amounts specified in
paragraphs (3) and (4) above) upon receipt by the Bank of this
Certificate.
9. The amount of the Letter of Credit is reduced to
$_______________ (such amount being equal to the sum of the amounts
specified in paragraphs (3) and (4) above) upon receipt by the Bank
of this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of __________________, 19___.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
<PAGE>
ANNEX F
CERTIFICATE FOR REINSTATEMENT
The undersigned, a duly authorized officer of the undersigned
Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the
"Bank"), with reference to Irrevocable Letter of Credit No.
_______________ (the "Letter of Credit", the terms defined therein and
not otherwise defined herein being used herein as therein defined) issued
by the Bank in favor of the Trustee, as follows:
1. The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
2. The amount of $___________ paid to you today by the Company
or by the Trustee on behalf of the Company is a payment made to
reimburse you or, pursuant to Sections 2.04 and 2.05 of the
Reimbursement Agreement for amounts drawn under the Letter of Credit
by Tender Drafts.
3. Of the amount referred to in paragraph (2), $___________
represents the aggregate principal amount of Bonds resold on behalf
of the Company.
4. Of the amount referred to in paragraph (2), $___________
represents accrued and unpaid interest on Bonds.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of __________________, 19___.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
<PAGE>
ANNEX G
INSTRUCTION TO TRANSFER
____________________, 19__
NationsBank of Texas, N.A.
901 Main Street
Dallas, Texas 75202
Attention: Mona Davis
Re: IRREVOCABLE LETTER OF CREDIT NO.
Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
[Name of Transferee]
[Address]
all rights of the undersigned beneficiary to draw under the above-
captioned Letter of Credit (the "Letter of Credit"). The transferee has
succeeded the undersigned as Trustee under the Indenture (as defined in
the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in
the Letter of Credit are transferred to the transferee and the transferee
shall hereafter have the sole rights as beneficiary thereof; PROVIDED,
HOWEVER, that no rights shall be deemed to have been transferred to the
transferee until such transfer complies with the requirements of the
Letter of Credit pertaining to transfers.
In accordance with UCP 500 sub Article 48(d), the undersigned
beneficiary hereby waives the right to refuse to allow you to advise
amendments to the Letter of Credit directly to the transferee.
Therefore, the transferee shall have the sole rights as beneficiary to
the Letter of Credit, including the sole right relating to any amendments
thereto whether now existing or hereafter made. All amendments are to be
advised directly to the transferee.
The Letter of Credit is returned herewith and in accordance
therewith we ask that this transfer be effective and that you transfer
the Letter of Credit to our transferee or that, if so requested by the
transferee, you issue a new irrevocable letter of credit in favor of the
transferee with provisions consistent with the Letter of Credit.
Very truly yours,
MANUFACTURERS AND TRADERS TRUST COMPANY,
as predecessor Trustee
By:
[Name and Title]
cc: NationsBank Business Credit
100 South Charles Street
4th Floor
Baltimore, Maryland 21201
Attention: Vickie L. Tillman
(Telecopier No. (410) 576-2958)
BERRY PLASTICS CORPORATION
BPC HOLDING CORPORATION
BERRY IOWA CORPORATION
BERRY STERLING CORPORATION
BERRY TRI-PLAS CORPORATION
AEROCON, INC.
PACKERWARE CORPORATION
BERRY PLASTICS DESIGN CORPORATION
VENTURE PACKAGING, INC.
VENTURE PACKAGING MIDWEST, INC.
VENTURE PACKAGING SOUTHEAST, INC.
NIM HOLDINGS LIMITED
NORWICH INJECTION MOULDERS LIMITED
$25,000,000
12 1/4 % Series B Senior Subordinated Notes due 2004
PURCHASE AGREEMENT
August 19, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
<PAGE>
$25,000,000
12 1/4 % Series B Senior Subordinated Notes due 2004
of Berry Plastics Corporation
PURCHASE AGREEMENT
August 19, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Each of Berry Plastics Corporation, a Delaware corporation (the
"COMPANY"), BPC Holding Corporation, a Delaware corporation ("HOLDING"),
Berry Iowa Corporation, a Delaware corporation, Berry Sterling
Corporation, a Delaware corporation, Berry Tri-Plas Corporation, a
Delaware corporation, AeroCon, Inc., a Delaware corporation, PackerWare
Corporation, a Kansas corporation, Berry Plastics Design Corporation, a
Delaware corporation, Venture Packaging, Inc., a Delaware corporation,
Venture Packaging Midwest, Inc., an Ohio corporation, Venture Packaging
Southeast, Inc., a South Carolina corporation, NIM Holdings Limited, a
company organized under the laws of England and Wales, and Norwich
Injection Moulders Limited, a company organized under the laws of England
and Wales (collectively with Holding, the "Guarantors"), agree with you
as follows:
1. ISSUANCE OF SECURITIES.
The Company proposes to issue and sell to Donaldson, Lufkin &
Jenrette Securities Corporation (the "INITIAL PURCHASER") $25,000,000 in
aggregate principal amount of 12 1/4 % Series B Senior Subordinated Notes
due 2004 (the "SERIES B NOTES"). The Series B Notes and the Series C
Notes (as defined below) issuable in exchange therefor are collectively
referred to herein as the "NOTES." The Notes will be guaranteed (the
"Note Guarantees") by each of the Guarantors. The Notes are to be issued
pursuant to the provisions of an indenture (the "INDENTURE") to be dated
August 24, 1998, among the Company, the Guarantors and United States
Trust Company of New York, as trustee (the "TRUSTEE"). Capitalized terms
used but not defined herein shall have the meanings given to such terms
in the Indenture.
The Series B Notes will be offered and sold to you pursuant to
an exemption from the registration requirements under the Securities Act
of 1933, as amended (the "ACT"). The Company has prepared a preliminary
offering memorandum (the "Preliminary Offering Memorandum"), and a final
offering memorandum, dated August 19, 1998 (the "OFFERING MEMORANDUM"),
relating to Holding, the Company and its subsidiaries, the Notes and the
Note Guarantees.
Upon original issuance thereof, and until such time as the same
is no longer required under the applicable requirements of the Act, the
Series B Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OR (c) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY AND THE GUARANTORS SO REQUEST), (2)
TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
You have advised the Company that you will make offers (the
"EXEMPT RESALES") of the Series B Notes purchased by you hereunder on the
terms set forth in the Offering Memorandum, as amended or supplemented,
solely to persons (each, a "144A PURCHASER") whom you reasonably believe
to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS") (such persons being referred to herein as the "ELIGIBLE
PURCHASERS").
Holders (including subsequent transferees) of the Series B
Notes will have the registration rights set forth in the registration
rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the
Closing Date (as defined herein), in substantially the form of Exhibit A
hereto, for so long as such Series B Notes constitute "TRANSFER
RESTRICTED SECURITIES" (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Securities and Exchange Commission
(the "COMMISSION") within 90 days of the Closing Date and under the
circumstances set forth therein, (i) a registration statement under the
Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the
Company's 12 1/4 % Series C Senior Subordinated Notes due 2004 (the
"SERIES C NOTES") to be offered in exchange for the Series B Notes (such
offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER")
and (ii) under the circumstances set forth in the Registration Rights
Agreement, a shelf registration statement pursuant to Rule 415 under the
Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange
Offer Registration Statement, the "REGISTRATION STATEMENTS") relating to
the resale by certain holders of the Series B Notes, and to use their
best efforts to cause such Registration Statements to be declared
effective within the time periods set forth in the Registration Rights
Agreement. This Agreement, the Indenture, the Notes, the Notes
Guarantees and the Registration Rights Agreement are hereinafter referred
to collectively as the "OPERATIVE DOCUMENTS." As used in this Purchase
Agreement (this "AGREEMENT"), the term "SUBSIDIARY" shall mean any
subsidiary of the Company.
2. AGREEMENTS TO SELL AND PURCHASE.
On the basis of the representations and warranties contained in
this Agreement, and subject to the terms and conditions contained herein,
the Company agrees to issue and sell to you, and you agree to purchase
from the Company, $25,000,000 in aggregate principal amount of Series B
Notes at a purchase price equal to 102.335% of the principal amount
thereof (the "PURCHASE PRICE").
3. DELIVERY AND PAYMENT.
Delivery to you of and payment for the Series B Notes shall be
made at 9:00 A.M., New York City time, on August 24, 1998 (the "CLOSING
DATE") at the offices of Latham & Watkins, 885 Third Avenue, New York,
New York 10022, or such other time or place as you shall reasonably
designate.
One or more Series B Notes in definitive global form,
registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), having an aggregate amount corresponding to the
aggregate amount of the Series B Notes sold pursuant to Exempt Resales to
QIBs (collectively, the "GLOBAL NOTE"), shall be delivered by the Company
to the Initial Purchaser (or as the Initial Purchaser directs), against
payment by the Initial Purchaser of the Purchase Price, by wire transfer
of immediately available funds to such account or accounts as the Company
shall specify, provided that the Company shall give at least two business
days' prior written notice to the Initial Purchaser of the information
required to effect such wire transfers. The Global Note shall be made
available to the Initial Purchaser for inspection not later than 9:30
A.M. on the business day immediately preceding the Closing Date.
4. AGREEMENTS OF THE COMPANY AND THE GUARANTORS.
Each of the Company and the Guarantors hereby agrees with you
as follows:
(a) To advise you promptly and, if requested by you, confirm
such advice in writing, (i) of the issuance by any state securities
commission of any stop order suspending the qualification or
exemption from qualification of any Series B Notes for offering or
sale in any jurisdiction, or the initiation of any proceeding for
such purpose by the Commission or any state securities commission or
other regulatory authority and (ii) of the happening of any event
which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to
or changes in the Offering Memorandum in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The Company and the Guarantors
shall use their reasonable best efforts to prevent the issuance of
any stop order or order suspending the qualification or exemption of
the Series B Notes under any state securities or Blue Sky laws, and,
if at any time any state securities commission issues an order
suspending the qualification or exemption of the Series B Notes, the
Company and the Guarantors shall use every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish to you without charge as many copies of the
Offering Memorandum, and any amendments or supplements thereto, as
you may reasonably request. The Company and the Guarantors consent
to the use of the Offering Memorandum, and any amendments and
supplements thereto, required pursuant to this Agreement by you in
connection with the Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum prior
to the Closing Date unless you shall previously have been advised
of, and shall not have reasonably objected to, such amendment or
supplement within a reasonable time, but in any event not longer
than five business days after being furnished a copy of such
amendment or supplement. The Company and the Guarantors shall
promptly prepare, upon any reasonable request by you, any amendment
or supplement to the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(d) If, in connection with any Exempt Resales or market
making transactions after the date of this Agreement and prior to
the consummation of the Registered Exchange Offer, any event shall
occur that, in the judgment of the Company and the Guarantors or in
the judgment of counsel to you, makes any statement of a material
fact in the Offering Memorandum untrue or that requires the making
of any additions to or changes in the Offering Memorandum in order
to make the statements in the Offering Memorandum, in the light of
the circumstances at the time that the Offering Memorandum is
delivered to prospective Eligible Purchasers, not misleading, or if
it is necessary to amend or supplement the Offering Memorandum to
comply with all applicable laws, the Company and the Guarantors
shall promptly notify you of such event and prepare an appropriate
amendment or supplement to the Offering Memorandum so that (i) the
statements in the Offering Memorandum as amended or supplemented
will, in the light of the circumstances at the time that the
Offering Memorandum is delivered to prospective Eligible Purchasers,
not be misleading and (ii) the Offering Memorandum will comply with
applicable law.
(e) To cooperate with you and your counsel in connection with
the qualification of the Series B Notes for offer and sale by you
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request (provided, however, that neither
the Company nor any Guarantor shall be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general
consent to service of process in any jurisdiction in which it is not
now so subject). The Company and the Guarantors will continue such
qualification in effect so long as required by law for distribution
of the Series B Notes and will file such consents to service of
process or other documents as may be necessary in order to effect
such qualification.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay
all costs, expenses, fees and taxes incident to and in connection
with: (i) the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements and exhibits)
and all amendments and supplements thereto, (ii) the preparation,
printing (including, without limitation, word processing and
duplication costs) and delivery of this Agreement, the Indenture,
the Registration Rights Agreement, all preliminary and final Blue
Sky Memoranda and all other agreements, memoranda, correspondence
and other documents printed and delivered in connection herewith and
with the Exempt Resales, (iii) the issuance and delivery by the
Company and the Guarantors of the Notes and the Note Guarantees,
(iv) the qualification of the Notes and the Note Guarantees for
offer and sale under the securities or Blue Sky laws of the several
states (including, without limitation, the reasonable fees and
disbursements of your counsel relating to such registration or
qualification), (v) furnishing such copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and all amendments
and supplements thereto, as may be reasonably requested for use in
connection with the Exempt Resales, (vi) the preparation of
certificates for the Notes and the Note Guarantees (including,
without limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's and the Guarantors'
counsel and accountants, (viii) all expenses and listing fees in
connection with the application for quotation of the Series B Notes
in the National Association of Securities Dealers, Inc. ("NASD")
Automated Quotation System - PORTAL ("PORTAL"), (ix) the rating of
the Notes by rating agencies, if any, (x) all fees and expenses
(including fees and expenses of counsel) of the Company and the
Guarantors in connection with approval of the Notes by DTC for
"book-entry" transfer and (xii) the performance by the Company and
the Guarantors of their other obligations under this Agreement and
the other Operative Documents to which they are a party.
(g) To use the proceeds from the sale of the Series B Notes
in the manner described in the Offering Memorandum under the caption
"USE OF PROCEEDS."
(h) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders
of the Notes.
(i) Prior to the Closing Date, to furnish to you, as soon as
they have been prepared, a copy of any unaudited interim
consolidated financial statements of Holding or the Company for any
period subsequent to the period covered by the financial statements
appearing in the Offering Memorandum.
(j) To use its best efforts to do and perform all things
required to be done and performed under this agreement by it prior
to or after the Closing Date and to satisfy all conditions precedent
on its part to the delivery of the Series B Notes and the Note
Guarantees.
(k) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Act) that would be integrated with the sale of the Series B Notes in
a manner that would require the registration under the Act of the
sale to you or the Eligible Purchasers of Series B Notes.
(l) For so long as any of the Notes remain outstanding and
during any period in which the Company is not subject to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), to make available to any Eligible Purchaser or
beneficial owner of Notes in connection with any sale thereof and
any prospective purchaser of such Notes from such Eligible Purchaser
or beneficial owner, the information required by Rule 144A(d)(4)
under the Act.
(m) To comply with its agreements in the Registration Rights
Agreement, and all agreements set forth in the representation
letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(n) To cause the Registered Exchange Offer to be made in the
appropriate form, as contemplated by the Registration Rights
Agreement, to permit registration of the Series C Notes and note
guarantees thereof to be offered in exchange for the Series B Notes
and Note Guarantees and to comply with all applicable federal and
state securities laws in connection with the Registered Exchange
Offer.
(o) To use its best efforts to effect the inclusion of the
Series B Notes in PORTAL.
(p) For so long as any of the Notes are outstanding, to
deliver without charge to the Initial Purchaser, promptly upon their
becoming available, copies of (i) all reports or other publicly
available information that the Company or any of the Guarantors
shall mail or otherwise make available to its securityholders and
(ii) all reports, financial statements and proxy or information
statements filed by the Company or any of the Guarantors with the
Commission or any national securities exchange and such other
publicly available information concerning Holding, the Company or
its Subsidiaries, including without limitation, press releases.
(q) Neither Holding, the Company nor any of its Subsidiaries
will take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of
the Guarantors to facilitate the sale or resale of the Notes.
Except as permitted by the Act, the Company and the Guarantors will
not distribute any preliminary offering memorandum, offering
memorandum or other offering material in connection with the
offering and sale of the Notes.
(r) To comply with the agreements in the Indenture, the
Registration Rights Agreement and each other Operative Document.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.
Each of the Company and the Guarantors represents and warrants
to you that:
(a) The Offering Memorandum (and each supplement and
amendment thereto) has been prepared in connection with the Exempt
Resales. The Offering Memorandum does not, and any supplement or
amendment thereto will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall
not apply to statements in or omissions from the Offering Memorandum
(or any supplement or amendment to it) made in reliance upon and in
conformity with information relating to you furnished to the Company
and the Guarantors in writing by you expressly for use therein. The
Company and the Guarantors acknowledge for all purposes under this
Agreement that the statements set forth in the last paragraph on the
cover page, the stabilization legend, and the third, fifth and
seventh paragraphs under the caption "Plan of Distribution" in the
Offering Memorandum (or any amendment or supplement) constitute the
only written information furnished to the Company and the Guarantors
by you expressly for use in the Offering Memorandum (or any
amendment or supplement thereto).
(b) Each of Holding, the Company and the Subsidiaries is a
duly organized and validly existing corporation in good standing
under the laws of its jurisdiction of incorporation, has the
requisite corporate power and authority to own, lease and operate
its properties and to conduct its business as it is currently being
conducted and described in the Offering Memorandum, and is duly
qualified as a foreign corporation and is in good standing in each
jurisdiction where the ownership, leasing or operation of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, singly or in the
aggregate, have a material adverse effect on the properties,
business, results of operations, condition (financial or otherwise),
affairs or prospects of Holding, the Company and the Subsidiaries
taken as a whole (a "MATERIAL ADVERSE EFFECT").
(c) Each of the Company and the Guarantors has all necessary
corporate power and authority to execute and deliver this Agreement,
the Notes (in the case only of the Company), the Note Guarantees (in
the case only of the Guarantors), the Indenture and the Registration
Rights Agreement, to perform its obligations under this Agreement,
the Indenture and the Registration Rights Agreement and to
authorize, issue, sell and deliver the Notes and the Note
Guarantees, as the case may be, as contemplated by this Agreement.
(d) This Agreement has been duly authorized and validly
executed and delivered by the Company and each of the Guarantors and
constitutes a legal, valid and binding agreement of the Company and
each of the Guarantors, enforceable against each of them in
accordance with its terms (assuming the due execution and delivery
hereof by you), subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
in effect from time to time with respect to creditors' rights
generally and to principles of equity, whether at law or in equity
and except as rights to indemnity and contribution thereunder may be
limited by federal and state securities laws and public policy
considerations underlying such laws.
(e) The issuance and sale of the Series B Notes has been duly
authorized by the Company, and all legally required corporate
proceedings by the Company in connection with the issuance and sale
of the Series B Notes have been taken; each of the Series B Notes,
when issued and delivered to and paid for by the Initial Purchaser
in accordance with this Agreement (assuming the due authentication
thereof by the Trustee), will be a legal, valid and binding
obligation of the Company entitled to the benefits provided by the
Indenture, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws in effect from time to
time with respect to creditors' rights generally and to principles
of equity, whether at law or in equity and except as rights to
indemnity and contribution thereunder may be limited by federal and
state securities laws and public policy considerations underlying
such laws.
(f) The Company has all requisite power to authorize and
issue the Series C Notes; the issuance of the Series C Notes has
been duly authorized by the Company and all legally required
corporate proceedings by the Company in connection with the issuance
of the Series C Notes have been taken; each of the Series C Notes,
when and if issued and delivered in accordance with the terms of the
Registration Rights Agreement and the Indenture, will be validly
executed, issued and delivered and (assuming the due authentication
thereof by the Trustee) will be a legal, valid and binding
obligation of the Company entitled to the benefits provided by the
Indenture, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws in effect from time to
time with respect to creditors' rights generally and to principles
of equity, whether at law or in equity and except as rights to
indemnity and contribution thereunder may be limited by federal and
state securities laws and public policy considerations underlying
such laws.
(g) The Note Guarantee to be endorsed on the Series B Notes
by each Guarantor has been duly authorized by such Guarantor and, on
the Closing Date, will have been duly executed and delivered by each
such Guarantor and will conform to the description thereof in the
Offering Memorandum. When the Series B Notes have been issued,
executed and authenticated in accordance with the Indenture and
delivered to and paid for by the Initial Purchaser in accordance
with the terms of this Agreement, the Note Guarantee of each
Guarantor endorsed thereon will constitute valid and legally binding
obligations of such Guarantor, enforceable against such Guarantor in
accordance with its terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganizations, moratorium and similar laws in effect
from time to time with respect to creditors' rights generally and to
principles of equity whether at law or in equity.
(h) The note guarantee to be endorsed on the Series C Notes
by each Guarantor has been duly authorized by such Guarantor and all
legally required corporate proceedings by such Guarantor in
connection with the issuance of such note guarantees have been
taken; the note guarantees, when issued, will have been duly
executed and delivered by each such Guarantor and will conform to
the description thereof in the Offering Memorandum. When the Series
C Notes have been issued, executed and authenticated in accordance
with the terms of the Registered Exchange Officer and the Indenture,
the note guarantee of each Guarantor endorsed thereon will
constitute valid and legally binding obligations of such Guarantor,
enforceable against such Guarantor in accordance with its terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganizations,
moratorium and similar laws in effect from time to time with respect
to creditors' rights generally and to principles of equity whether
at law or in equity.
(i) The Indenture has been duly authorized by the Company and
each Guarantor and, on the Closing Date, will have been duly
executed by the Company and each Guarantor and will conform to the
description thereof in the Offering Memorandum. When the Indenture
has been duly executed and delivered, the Indenture will be a valid
and legally binding agreement of the Company and each Guarantor,
enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws in effect from time to
time with respect to creditors' rights generally and to principles
of equity, whether at law or in equity and except as rights to
indemnity and contribution thereunder may be limited by federal and
state securities laws and public policy considerations underlying
such laws.
(j) The Registration Rights Agreement has been duly
authorized by the Company and each Guarantor and, on the Closing
Date, will have been duly executed by the Company and each Guarantor
and will conform to the description thereof in the Offering
Memorandum. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights Agreement will be a
valid and legally binding agreement of the Company and each
Guarantor, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws in effect
from time to time with respect to creditors' rights generally and to
principles of equity, whether at law or in equity and except as
rights to indemnity and contribution thereunder may be limited by
federal and state securities laws and public policy considerations
underlying such laws.
(k) The entities listed on Schedule A hereto are, and on the
Closing Date will be, the only Subsidiaries, direct or indirect, of
the Company. All of the issued and outstanding shares of capital
stock of, or other ownership interests in, each Subsidiary have been
duly and validly authorized and issued. All of the shares of
capital stock of, or other ownership interests in, each Subsidiary
are owned, directly or through Subsidiaries, by the Company. All
such shares of capital stock are fully paid and nonassessable, and
are owned free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "LIEN") other than those Liens
created pursuant to the Credit Facility (as defined in the Offering
Memorandum). There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of
sale or Liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of, or other
ownership interest in, any Subsidiary.
(l) Except as set forth on Schedule B hereto, neither
Holding, the Company nor any of the Subsidiaries is in violation of
its respective charter or bylaws or in default in the performance of
any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or any
indenture, mortgage, deed of trust or other contract, lease or other
instrument to which Holding, the Company or any of the Subsidiaries
is a party or by which any of them is bound, or to which any of the
property or assets of Holding, the Company or any of the
Subsidiaries is subject. To the knowledge of the Company and the
Guarantors, there exists no condition which, with notice, the
passage of time or otherwise, would constitute a default under any
such document or instrument.
(m) The execution and delivery of this Agreement, the
Indenture, the Registration Rights Agreement, the Notes and the Note
Guarantees, the issuance and sale of the Notes and the Note
Guarantees, the performance of this Agreement, the Indenture and the
Registration Rights Agreement, compliance by the Company and the
Guarantors with the provisions hereof and thereof and of the Notes
and the Note Guarantees (in each case, to the extent the Company or
such Guarantor is a party thereto), the consummation of each of the
transactions contemplated hereby and thereby, in each case, as
applicable, will not result in a breach or violation of any of the
respective charters or bylaws of Holding, the Company or any of the
Subsidiaries or any of the terms or provisions of, or constitute a
default or cause an acceleration of any obligation under, or result
in the imposition or creation of (or the obligation to create or
impose) a Lien with respect to, any bond, note, debenture or other
evidence of indebtedness or any indenture, mortgage, deed of trust
or other agreement or instrument to which Holding, the Company or
any of the Subsidiaries is a party or by which it or any of them is
bound, or to which any properties of Holding, the Company or any of
the Subsidiaries is or may be subject, or contravene any order of
any court or governmental agency or body having jurisdiction over
Holding, the Company or any of the Subsidiaries or any of their
properties, or violate or conflict with any statute, rule or
regulation or administrative or court decree applicable to Holding,
the Company or any of the Subsidiaries, or any of their respective
properties.
(n) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, pending
against or affecting Holding, the Company or any of the
Subsidiaries, or any of their respective properties, which is
required to be disclosed and is not so disclosed, in the Offering
Memorandum, or which would result, singly or in the aggregate, in a
Material Adverse Effect or which would materially and adversely
affect the consummation of this Agreement or the transactions
contemplated hereby, and to the best knowledge of the Company and
the Guarantors, no such proceedings are contemplated or threatened.
(o) To the knowledge of the Company and the Guarantors, no
action has been taken and no statute, rule or regulation or order
has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Notes or the Note
Guarantees, prevents or suspends the use of any Offering Memorandum
or suspends the sale of the Notes or the Note Guarantees, in any
jurisdiction referred to in Section 4(e) hereof; no injunction,
restraining order or order of any nature by a federal or state court
of competent jurisdiction has been issued with respect to Holding,
the Company or any of the Subsidiaries which would prevent or
suspend the issuance or sale of the Notes or the Note Guarantees, or
the use of any Offering Memorandum in any jurisdiction referred to
in Section 4(e) hereof; no action, suit or proceeding is pending
against or, to the best knowledge of the Company and the Guarantors
threatened against or affecting Holding, the Company or any of the
Subsidiaries before any court or arbitrator or any governmental
body, agency or official, domestic or foreign, which, if adversely
determined, would materially interfere with or adversely affect the
issuance of the Notes or the Note Guarantees, or in any manner draw
into question the validity of this Agreement, the Indenture, the
Registration Rights Agreement, the Notes or the Note Guarantees; and
every request of the Commission or any securities authority or
agency of any jurisdiction for additional information (to be
included in the Offering Memorandum or otherwise) has been complied
with.
(p) Except as set forth in the Offering Memorandum, Holding,
the Company and the Subsidiaries are in compliance with all
applicable existing federal, state and local laws and regulations
relating to protection of human health or the environment or
imposing liability or standards of conduct concerning any Hazardous
Material ("ENVIRONMENTAL LAWS"), except where the failure to comply
would not have a Material Adverse Effect. The term "Hazardous
Material" means (a) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, (b) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (c) any
petroleum or petroleum product, (d) any polychlorinated biphenyl and
(e) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance.
(q) Neither Holding, the Company nor any of the Subsidiaries
has violated any federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees or any
applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder, nor has Holding, the Company or
any of the Subsidiaries engaged in any unfair labor practice, which
in each case would result, singly or in the aggregate, in a Material
Adverse Effect. There is (i) no significant unfair labor practice
complaint pending against Holding, the Company or any of the
Subsidiaries or, to the best knowledge of the Company and the
Guarantors, threatened against any of them before the National Labor
Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending
against Holding, the Company or any of the Subsidiaries or, to the
best knowledge of the Company and the Guarantors, threatened against
any of them, (ii) no significant strike, labor dispute, slowdown or
stoppage is pending against Holding, the Company or any of the
Subsidiaries or, to the best knowledge of the Company and the
Guarantors, threatened against Holding, the Company or any of the
Subsidiaries and (iii) to the best knowledge of the Company and the
Guarantors, no union representation question exists with respect to
the employees of Holding, the Company or any of the Subsidiaries and
no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above,
singly or in the aggregate) such as could not have a Material
Adverse Effect.
(r) Except (i) as would not result, singly or in the
aggregate, in a Material Adverse Effect, and (ii) for the liens
created pursuant to (A) the Credit Facility (as defined in the
Offering Memorandum), (B) the Nevada Bonds and the South Carolina
Bonds (as defined in the Offering Memorandum), (C) the Pledge,
Escrow and Disbursement Agreement dated June 18, 1996, among
Holding, First Trust of New York, National Association ("FIRST
TRUST"), as trustee, and First Trust, as escrow agent, and (D) the
Holding Pledge and Security Agreement dated June 18, 1996 between
Holding and First Trust, as collateral agent, Holding, the Company
and each of the Subsidiaries has good and marketable title, free and
clear of all Liens (except Liens for taxes not yet due and payable),
to all property and assets reflected in the Company's consolidated
financial statements at and for the year ended December 27, 1997.
(s) The firms of accountants that have certified or shall
certify the applicable financial statements and supporting schedules
of Holding, the Company and the Subsidiaries as part of the Offering
Memorandum are independent public accountants, as required by the
Act and the Exchange Act. The consolidated historical and pro forma
financial statements, together with related schedules and notes, set
forth in the Offering Memorandum comply as to form in all material
respects with the requirements of the Act. Such historical
financial statements fairly present in all material respects the
financial position of Holding, the Company and the Subsidiaries at
the respective dates indicated and the results of operations and
cash flows for the respective periods indicated, in accordance with
generally accepted accounting principles in the United States
("GAAP") consistently applied throughout such periods (other than as
set forth on Schedule C hereto). Such pro forma financial
statements have been prepared on a basis consistent with such
historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a
reasonable basis. The other financial and statistical information
and data included in the Offering Memorandum, historical and pro
forma, are, in all material respects, prepared on a basis consistent
with such financial statements and the books and records of Holding,
the Company and the Subsidiaries, as the case may be.
(t) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the
Closing Date (except as disclosed in the Offering Memorandum),
neither Holding, the Company nor any of the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, which
are material, individually or in the aggregate, to Holding, the
Company or any Subsidiary, nor entered into any transaction not in
the ordinary course of business and there has not been, singly or in
the aggregate, any material adverse change, or any development which
may reasonably be expected to involve a material adverse change, in
the properties, business, results of operations, condition
(financial or otherwise), affairs or prospects of Holding, the
Company or any Subsidiary (each, a "MATERIAL ADVERSE CHANGE").
(u) All tax returns required to be filed by Holding, the
Company or any of the Subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and
all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be
due from such entities have been paid, other than those being
contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest.
(v) No authorization, approval or consent or order of, or
filing with, any court or governmental body or agency is necessary
in connection with the Transaction or the transactions contemplated
by this Agreement, except such as may be required by the NASD, the
Trust Indenture Act of 1939, as amended (the "TIA"), or the Act, or
have been obtained and made under state securities or Blue Sky laws
or regulations. No consents or waivers from any person under any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument are required to consummate the transactions
contemplated by this Agreement, the Notes, the Note Guarantees, the
Indenture and the Registration Rights Agreement or the Offering
Memorandum, except for such consents or waivers which have been, or
will be, obtained prior to the Closing Date.
(w) (i) Each of Holding, the Company and the Subsidiaries has
all certificates, consents, exemptions, orders, permits, licenses,
authorizations or other approvals (each, an "AUTHORIZATION") of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or
required to own, lease, license and use its properties and assets
and to engage in the business currently conducted by it, except as
such are described in the Offering Memorandum or to the extent that
the failure to obtain or file would not, singly or in the aggregate,
have a Material Adverse Effect, (ii) all such Authorizations are
valid and in full force and effect and (iii) Holding, the Company
and the Subsidiaries are in compliance in all material respects with
the terms and conditions of all such Authorizations that have been
obtained thereby and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with
respect thereto. Neither Holding, the Company nor any Subsidiary
believes that any governmental body or agency is considering
limiting, suspending or revoking any such material license,
certificate, permit, authorization, approval, franchise or right.
(x) Neither Holding, the Company nor any of the Subsidiaries
is (i) an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act
of 1940, as amended, or (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
(y) No holder of any security of Holding, the Company or any
of the Subsidiaries has or will have any right to require the
registration of such security by virtue of any transaction
contemplated by this Agreement.
(z) There are no contracts, agreements or understandings
between Holding, the Company or any of the Subsidiaries and any
person (other than the Initial Purchaser) that would give rise to a
valid claim against Holding, the Company, the Subsidiaries or the
Initial Purchaser for a brokerage commission, finder's fee or like
payment in connection with the issuance, purchase and sale of the
Notes.
(aa) Holding, the Company and the Subsidiaries possess all
material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names
(collectively, "INTELLECTUAL PROPERTY") presently employed by them
in connection with the businesses now operated by them, and, except
as set forth in the Offering Memorandum, neither Holding, the
Company nor any Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to the
foregoing.
(bb) Holding, the Company and the Subsidiaries each maintain
a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(cc) The present fair saleable value of the assets of each of
the Company and the Guarantors exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of each such person
as they become absolute and matured. The assets of each of the
Company and the Guarantors do not constitute unreasonably small
capital to carry out their businesses as conducted or as proposed to
be conducted. Neither the Company nor any of the Guarantors
intends to, nor does it believe that it will, incur debts beyond its
ability to pay such debts as they mature. Upon the issuance of the
Series B Notes, the present fair saleable value of the assets of
each of the Company and the Guarantors will exceed the amount that
will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of such
person as they become absolute and matured. The assets of each of
the Company and the Guarantors, upon the issuance of the Series B
Notes, will not constitute unreasonably small capital to carry out
their businesses as now conducted, including the capital needs of
each of the Company and the Guarantors, taking into account the
projected capital requirements and capital availability of each of
the Company and the Guarantors.
(dd) None of Holding, the Company, the Subsidiaries or any
agent thereof acting on the behalf of any of them has taken, and
none of them will take, any action that might cause this Agreement,
any of the other Operative Documents or the issuance or sale of the
Series B Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221)
or Regulation X (12 C.F.R. Part 224) of the Board of Governors of
the Federal Reserve System.
(ee) Holding, the Company and each Subsidiary maintains
insurance covering their properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as
are adequate in accordance with customary industry practice to
protect Holding, the Company and the Subsidiaries and their
businesses. Neither Holding, the Company nor any Subsidiary has
received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to
be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be
outstanding and duly in force on the Closing Date.
(ff) When the Series B Notes and Note Guarantees are issued
and delivered pursuant to this Agreement, neither the Series B Notes
nor the Note Guarantees will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company or
the Guarantors that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are quoted in
a United States automated inter-dealer quotation system.
(gg) Assuming (i) that your representations and warranties in
Section 6 are true, (ii) compliance by you with your covenants set
forth in Section 8 and (iii) that each of the Eligible Purchasers is
a QIB, the purchase and resale of the Series B Notes pursuant hereto
(including pursuant to the Exempt Resales) is exempt from the
registration requirements of the Act. No form of general
solicitation or general advertising was used by the Company, the
Guarantors or any of their representatives (other than you, as to
whom the Company and the Guarantors make no representation) in
connection with the offer and sale of the Series B Notes, including,
but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast
over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general
advertising. No securities of the same class as the Series B Notes
have been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(hh) Set forth on Schedule D hereto is a list of each
employee pension or benefit plan with respect to which the Company
or any corporation considered an affiliate of the Company within the
meaning of Section 407(d)(7) of ERISA (an "AFFILIATE") is a party in
interest or disqualified person. The execution and delivery of this
Agreement, the other Operative Documents and the sale of the Series
B Notes to be purchased by the Eligible Purchasers will not involve
any prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code. The representation made by the
Company and the Guarantors in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with,
the representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum under
the Section entitled "Notice to Investors."
(ii) The Offering Memorandum as of its date, and each
amendment or supplement thereto, as of its date, contains the
information specified in, and meets the requirements of Rule
144A(d)(4) of the Act.
(jj) Except as disclosed in the Offering Memorandum, there
are no business relationships or related party transactions required
to be disclosed therein pursuant to Item 404 of Regulation S-K of
the Commission (assuming for purposes of this paragraph 5(jj) that
Regulation S-K is applicable to the Offering Memorandum).
(kk) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the
TIA.
6. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES.
The Initial Purchaser represents and warrants to the Company
and the Guarantors that:
(a) The Initial Purchaser is either a QIB or an accredited
investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Act), in either case with such knowledge and experience in financial
and business matters as are necessary in order to evaluate the
merits and risks of an investment in the Series B Notes.
(b) The Initial Purchaser (i) is not acquiring the Series B
Notes with a view to any distribution thereof or with any present
intention of offering or selling any of the Series B Notes in a
transaction that would violate the Act or the securities laws of any
State of the United States or any other applicable jurisdiction and
(ii) will be reoffering and reselling the Series B Notes only to
QIBs in reliance on the exemption from the registration requirements
of the Act provided by Rule 144A.
(c) The Initial Purchaser also understands that the Company
and the Guarantors and, for purposes of the opinions to be delivered
to you pursuant to Sections 8(f) and 8(g) hereof, each of O'Sullivan
Graev & Karabell, LLP and Latham & Watkins, will rely upon the
accuracy and truth of the foregoing representations and you hereby
consent to such reliance.
(d) The Initial Purchaser further agrees that, in connection
with the Exempt Resales, the Initial Purchaser will solicit offers
to buy the Series B Notes only from, and will offer to sell the
Series B Notes only to, the Eligible Purchasers. You further agree
that you will offer to sell the Series B Notes only to, and will
solicit offers to buy the Series B Notes only from, persons who in
purchasing such Series B Notes will be deemed to have represented
and agreed (1) if such Eligible Purchaser is a QIB, that they are
purchasing the Series B Notes for their own account or an account
with respect to which they exercise sole investment discretion and
that they or such accounts are QIBs, (2) that such Series B Notes
will not have been registered under the Act and may be resold,
pledged or otherwise transferred, only (A) (I) to a person who the
seller reasonably believes is a "qualified institutional buyer"
within the meaning of Rule 144A under the Act in a transaction
meeting the requirements of Rule 144A, or in accordance with Rule
144 under the Act, or pursuant to another exemption from the
registration requirements of the Act (and based upon an opinion of
counsel if the Company and the Guarantors so request) or (II) to the
Company and (B) in each case, in accordance with any applicable
securities laws of any State of the United States or any other
applicable jurisdiction, (3) that the holder will, and each
subsequent holder is required to, notify any purchaser from it of
the security evidenced thereby of the resale restrictions set forth
in (2) above.
7. INDEMNIFICATION.
(a) The Company and each Guarantor (the "INDEMNIFYING
PARTIES") agree to indemnify and hold harmless (i) the Initial
Purchaser, (ii) each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Initial Purchaser (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "CONTROLLING PERSON") and
(iii) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchaser or any
controlling person (any person referred to in clause (i), (ii) or
(iii) may hereinafter be referred to as an "INDEMNIFIED PERSON") to
the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all
reasonable costs of investigating, preparing or defending any claim
or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Person) directly or
indirectly caused by, related to, based upon, arising out of or in
connection with any untrue statement or alleged untrue statement of
a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto) or any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are
caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in
conformity with information relating to the Initial Purchaser
furnished in writing to the Company and the Guarantors by the
Initial Purchaser expressly for use in the Offering Memorandum (or
any amendment or supplement thereto); provided, however, that the
foregoing indemnity shall not inure to the benefit of the Initial
Purchaser from whom the person asserting any such losses, claims,
damages, liabilities, judgments, actions or expenses purchased
Notes, or any controlling person of the Initial Purchaser, if a copy
of the Offering Memorandum (including any amendment or supplement
thereto delivered to the Initial Purchaser prior to the date such
Offering Memorandum was sent or given to such purchaser) was not
sent or given by or on behalf of the Initial Purchaser to such
person at or prior to the written confirmation of the sale of Notes
to such person, and if the Offering Memorandum (including any
amendment or supplement thereto delivered to the Initial Purchaser
prior to the date such Offering Memorandum was sent or given to such
purchaser) cured the defect giving rise to such losses, claims,
damages, liabilities, judgments, actions or expenses. The
Indemnifying Parties shall notify you promptly of the institution,
threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the
matters addressed by this Agreement which involves the Indemnifying
Parties or an Indemnified Person.
(b) In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against any
of the Indemnified Persons with respect to which indemnity may be
sought against the Indemnifying Parties, such Indemnified Person (or
the entity controlled by such controlling person) shall promptly
notify the Company in writing (provided that the failure to give
such notice shall not relieve the Indemnifying Parties of their
obligations pursuant to this Agreement unless such failure to notify
has materially prejudiced the ability of the Indemnifying Parties to
defend any such claim) and the Indemnifying Parties shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Parties and payment of all
reasonable fees and expenses. Such Indemnified Person shall have
the right to employ its own counsel in any such action and
participate in the defense thereof, but the fees and expenses of
such counsel shall be at the Indemnified Party's expense unless (i)
the employment of such counsel has been specifically authorized in
writing by the Company, (ii) the Indemnifying Parties have not
assumed the defense and employed counsel reasonably satisfactory to
such Indemnified Party within a reasonable time after notice of
commencement of such action or proceeding or (iii) the named parties
to any such action or proceeding (including any impleaded parties)
include both an Indemnified Party and any Indemnifying Party and any
such Indemnified Party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to the Indemnifying
Parties (in which case the Indemnifying Parties shall not have the
right to assume the defense of such action on behalf of the
Indemnified Parties, it being understood, however, that the
Indemnifying Parties shall not, in connection with any one such
action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local
counsel) at any time for such Indemnified Persons, which firm shall
be designated by the Initial Purchaser). The Indemnifying Parties
shall be liable for any settlement of any such action or proceeding
effected with the Indemnifying Parties' prior written consent, which
consent will not be unreasonably withheld, and the Indemnifying
Parties agree to indemnify and hold harmless any Indemnified Person
from and against any loss, claim, damage, liability or expense by
reason of any settlement of any action effected with the written
consent of the Indemnifying Parties. If at any time the Indemnified
Person shall have requested the Indemnifying Parties to reimburse
the Indemnified Person for fees and expenses of counsel as
contemplated by the second sentence of this paragraph in connection
with any such action or proceeding, the Indemnifying Parties agree
that they shall be liable for any settlement of any proceeding
effected without their written consent so long as they receive
written notice of such settlement if (i) such settlement is entered
into more than ninety business days after receipt by such
Indemnifying Parties of the aforesaid request and (ii) such
Indemnifying Parties shall not have reimbursed the Indemnified Party
in accordance with such request prior to the date of such
settlement. The Indemnifying Parties shall not, without the prior
written consent of each Indemnified Person, which will not be
unreasonably withheld, settle or compromise or consent to the entry
of a judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of
which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Person is a party thereto), unless
such settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Person from all liability
arising out of such action, claim, litigation or proceeding.
(c) The Initial Purchaser agrees to indemnify and hold
harmless the Company and the Guarantors, their respective directors
and officers, any person controlling (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company or the
Guarantors, and the officers, directors, partners, employees,
representatives and agents of each such person to the same extent as
the foregoing indemnity from the Indemnifying Parties to each of the
Indemnified Persons, but only with respect to claims and actions
based on information relating to the Initial Purchaser furnished in
writing by the Initial Purchaser expressly for use in the Offering
Memorandum.
(d) If the indemnification provided for in this Section 7 is
unavailable to a party entitled to indemnification pursuant to
Section 7(b) or (c) in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities, expenses
and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party (or
parties, as applicable) on the one hand and the indemnified party
(or parties, as applicable) on the other hand from the offering of
the Series B Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying
party (or parties, as applicable) and the indemnified party (or
parties, as applicable), as well as any other relevant equitable
considerations. The relative benefits received by the Company and
the Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, shall be deemed to be in the same proportion as the
total proceeds from the offering (net of discounts and commissions
but before deducting expenses) received by the Company and the
Guarantors bear to the total discounts and commissions received by
the Initial Purchaser, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of the
Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact related to information supplied by the Company or the
Guarantors, on the one hand, or the Initial Purchaser, on the other
hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The indemnity and contribution obligations of the Company
and the Guarantors set forth herein shall be in addition to any
liability or obligation the Company and the Guarantors may otherwise
have to any Indemnified Person.
The Company and the Guarantors and the Initial Purchaser agree
that it would not be just and equitable if contribution pursuant to
this Section 7(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the
equitable considerations referred to in this Section 7(d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities, expenses or judgments referred
to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), the Initial
Purchaser (and its related Indemnified Persons) shall not be
required to contribute, in the aggregate, any amount in excess of
the amount by which the total discount received by the Initial
Purchaser applicable to the Series B Notes purchased by the Initial
Purchaser exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
8. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS.
The obligations of the Initial Purchaser to purchase the Series
B Notes under this Agreement are subject to the satisfaction of each of
the following conditions:
(a) All the representations and warranties of the Company and
the Guarantors contained in this Agreement shall be true and correct
in all material respects (other than those representations and
warranties that are qualified by a reference to materiality, which
shall be true and correct in all respects) on the Closing Date with
the same force and effect as if made on and as of the date hereof
and the Closing Date, respectively. The Company and the Guarantors
shall have performed or complied with in all material respects all
of their obligations and agreements herein contained (other than
those obligations and agreements that are qualified by a reference
to materiality, which shall be performed or complied with in all
respects) and required to be performed or complied with by them at
or prior to the Closing Date.
(b) No stop order suspending the sale of the Series B Notes
in any jurisdiction referred to in Section 4(e) shall have been
issued and no proceeding for that purpose shall have been commenced
or shall be pending or threatened.
(c) (i) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by
any governmental agency which would, as of the Closing Date, prevent
the issuance of the Series B Notes; (ii) no injunction, restraining
order or order of any nature by a federal or state court of
competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Series B Notes; and (iii) on
the Closing Date no action, suit or proceeding shall be pending
against or affecting or, to the knowledge of the Company and the
Guarantors, threatened against, Holding, the Company or any
Subsidiary before any court or arbitrator or any governmental body,
agency or official which, if adversely determined, would prohibit
the issuance of the Series B Notes except as disclosed in the
Offering Memorandum.
(d) (i) Since the date hereof or since the dates as of which
information is given in the Offering Memorandum, there shall not
have been any Material Adverse Change, (ii) since the date of the
latest balance sheet included in the Offering Memorandum, there
shall not have been any material change in the capital stock or
long-term debt, or material increase in short-term debt, of Holding,
the Company or any of the Subsidiaries (other than as disclosed in
the Offering Memorandum) and (iii) Holding, the Company and the
Subsidiaries shall have no liability or obligation, direct or
contingent, that is material to Holding, the Company and the
Subsidiaries taken as a whole and is required to be disclosed on a
balance sheet in accordance with GAAP and is not disclosed on the
latest balance sheet included in the Offering Memorandum.
(e) You shall have received certificates, dated the Closing
Date, signed by (i) the President or any Vice President or any other
executive officer and (ii) a principal financial or accounting
officer of the Company and each of the Guarantors confirming, as of
the Closing Date, the matters set forth in paragraphs (a), (b), (c)
and (d) of this Section 8.
(f) On the Closing Date, you shall have received an opinion
(satisfactory to you and your counsel), dated the Closing Date, of
O'Sullivan Graev & Karabell, LLP, counsel for the Company and the
Guarantors, to the effect that:
(i) Holding, the Company and each of the Subsidiaries is
a duly organized and validly existing corporation in good
standing under the laws of its jurisdiction of incorporation,
has the requisite corporate power and authority to own, lease
and operate its properties and to conduct its business as it is
currently being conducted and described in the Offering
Memorandum, and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction listed on a schedule
attached to the opinion;
(ii) Each of the Company and the Guarantors has all
necessary corporate power and authority to execute and deliver
this Agreement, the Series B Notes, the Note Guarantees, the
Indenture and the Registration Rights Agreement, as applicable,
and to perform its obligations under this Agreement, the
Indenture and the Registration Rights Agreement and to
authorize, issue, sell and deliver the Series B Notes and the
Note Guarantees, as applicable, as contemplated by this
Agreement;
(iii) Each of this Agreement, the Series B Notes, the
Note Guarantees, the Registration Rights Agreement and the
Indenture has been duly authorized, executed and delivered by
the Company and the Guarantors, as applicable;
(iv) When authenticated in accordance with the terms of
the Indenture and delivered to and paid for by you in
accordance with the terms of this Agreement, the Series B Notes
will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement
is sought at law or in equity);
(v) When the Series B Notes are executed and
authenticated in accordance with the terms of the Indenture,
each of the Notes Guarantees endorsed thereon will constitute
valid and legally binding obligations of the respective
Guarantor, enforceable against each such Guarantor in
accordance with its terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement
is sought at law or in equity).
(vi) The Series C Notes and the note guarantees to be
endorsed thereon have been duly authorized by the Company and
each of the Guarantors, as the case may be;
(vii) The Indenture, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a
valid and legally binding agreement of the Company and each of
the Guarantors, enforceable against each of them in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement
is sought at law or in equity);
(viii) The Notes, the Note Guarantees, the Indenture and
the Registration Rights Agreement conform to the descriptions
thereof contained in the Offering Memorandum in all material
respects;
(ix) All of the issued and outstanding shares of capital
stock of, or other ownership interests in, each Subsidiary have
been duly and validly authorized and issued and are fully paid
and nonassessable. All of the shares of capital stock of, or
other ownership interests in, each Subsidiary are owned,
directly or through Subsidiaries, by the Company;
(x) To the best knowledge of such counsel, there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or Liens related to
or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in,
any Subsidiary (other than those Liens created pursuant to the
Credit Facility (as defined in the Offering Memorandum));
(xi) Neither Holding, the Company nor any of the
Subsidiaries is (a) an "investment company" or a company
"controlled" by an investment company within the meaning of the
Investment Company Act of 1940, as amended, or (b) a "holding
company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility
Holding Company Act of 1935, as amended;
(xii) The descriptions in the Offering Memorandum of
statutes, legal and governmental proceedings, and contracts and
other documents are accurate in all material respects; it being
understood that such counsel need express no opinion as to the
financial statements, notes or schedules or other financial
data included therein;
(xiii) To the knowledge of such counsel: (a) no action
has been taken and no statute, rule or regulation or order has
been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Series B Notes or the
Notes Guarantees, and such counsel has received no notice which
suspends the sale of the Series B Notes or the Notes
Guarantees; (b) no injunction, restraining order or order of
any nature by a federal or state court of competent
jurisdiction has been issued with respect to Holding, the
Company or any of the Subsidiaries which would prevent or
suspend the issuance or sale of the Series B Notes or the Notes
Guarantees, and such counsel has not received notice which
prevents or suspends the use of the Offering Memorandum in any
jurisdiction referred to in Section 4(e) hereof; and (c) no
action, suit or proceeding is pending against or threatened
against or affecting Holding, the Company or any of the
Subsidiaries before any court or arbitrator or any governmental
body, agency or official, domestic or foreign, which, if
adversely determined, would prevent the issuance of the Series
B Notes or the Notes Guarantees;
(xiv) Except as may be required under state securities or
"Blue Sky" laws or regulations or by the NASD, as to which such
counsel expresses no opinion, no authorization, approval,
consent or order of, or filing with, any court or governmental
body or agency is required for the consummation of the
transactions contemplated by this Agreement, except such as
have been obtained and made under the Act; no consents or
waivers from any person under any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or
instrument that is listed on a schedule to the opinion are
required to consummate the transactions contemplated by this
Agreement or the other Operative Documents, except for any
consent or waiver which has been obtained on or prior to the
Closing Date;
(xv) On the Closing Date, the Offering Memorandum (except
for financial statements, the notes thereto and related
schedules and other financial data included therein, or omitted
therefrom, as to which no opinion need be expressed) complied
as to form in all material respects with Rule 144A(d)(4) of the
Act;
(xvi) To the best knowledge of such counsel, other than
as set forth on Schedule B to this Agreement, neither Holding,
the Company nor any of the Subsidiaries is in violation of its
respective charter or bylaws or in default in the performance
of any obligation, agreement or condition contained in any
agreement or instrument listed on a schedule to the opinion; to
the best knowledge of such counsel, there exists no condition
which, with notice, the passage of time or otherwise, would
constitute a default under any such document or instrument;
(xvii) The execution and delivery of this Agreement and
the other Operative Documents, the issuance and sale of the
Series B Notes and the Note Guarantees, the performance of this
Agreement and the other Operative Documents, compliance by the
Company and the Guarantors with the provisions hereof and
thereof and of the Series B Notes and the Note Guarantees, the
consummation of the transactions contemplated hereby and
thereby and the payments described in the Offering Memorandum
under the caption "Use of Proceeds," in each case, as
applicable, will not result in a breach or violation of any of
the respective charters or bylaws of Holding, the Company or
any of the Subsidiaries or any of the terms or provisions of,
or constitute a default or cause an acceleration of any
obligation under, or result in the imposition or creation of
(or the obligation to create or impose) a Lien with respect to,
any agreement or instrument listed on a schedule to the
opinion, or, to the knowledge of such counsel, contravene any
order of any court or governmental agency or body having
jurisdiction over Holding, the Company or any of the
Subsidiaries or any of their properties, or violate any
statute, rule or regulation or administrative or court decree
applicable to Holding, the Company or any of the Subsidiaries,
or any of their respective properties;
(xviii) The Registration Rights Agreement constitutes a
valid and legally binding agreement of the Company and each
Guarantor, enforceable against each of them in accordance with
its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, and to general
equitable principles (regardless of whether considered in a
proceeding in equity or at law) and, to the extent the
Registration Rights Agreement provides for rights of
indemnification and contribution, subject to the limitations of
applicable law;
(xix) When the Series B Notes are issued and delivered
pursuant to the Purchase Agreement, such Series B Notes will
not be of the same class (within the meaning of Rule 144A under
the Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated
inter-dealer quotation system;
(xx) No registration under the Act of the Series B Notes
is required for the sale of the Series B Notes to you as
contemplated hereby or for the Exempt Resales (assuming,
without independent investigation, (A) that each of the
Eligible Purchasers who buy the Series B Notes in the Exempt
Resales are QIBs; (B) your representations and agreements
relating to the absence of general solicitation are accurate
and will be complied with; (C) the Company's and the
Guarantors' representations and agreements relating to (1)
whether the Notes are of the same class as other securities of
the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a
U.S. automated inter-dealer quotation system, (2) whether any
form of general solicitation was used by the Company or the
Guarantors, (3) other offerings of securities of the same class
as the Notes and (4) whether the Offering Memorandum contains
all the information specified in, and meeting the requirements
of, Rule 144A(d)(4) under the Act are accurate; (D) each of the
Eligible Purchasers to whom the Initial Purchaser initially
resells the Series B Notes receives a copy of the Offering
Memorandum at or prior to delivery of a confirmation of such
sale, if delivery of the Offering Memorandum is required by
applicable law; and (E) that the certificates representing the
Series B Notes will bear the legend specified herein);
(xxi) Prior to the Exchange Offer or the effectiveness of
the Shelf Registration Statement, the Indenture is not required
to be qualified under the TIA; and
(xxii) The Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date, contained the
information specified in, and meets the requirements of Rule
144A(d)(4) of the Act.
The opinions set forth in paragraphs (ix) and (x) will be based
solely on a review of stock records and other specified corporate record
books of Holding, the Company and its Subsidiaries and applicable law.
The opinion of O'Sullivan Graev & Karabell, LLP shall be
rendered to you at the request of the Company and the Guarantors and
shall so state therein.
In giving their opinion required by this subsection 8(f),
O'Sullivan Graev & Karabell, LLP shall additionally state that such
counsel has participated in conferences with officers and other
representatives of the Company and the Guarantors, representatives of the
independent public accountants for the Company and the Guarantors, your
representatives and your counsel in connection with the preparation of
the Offering Memorandum, although such counsel has not independently
verified the accuracy, completeness or fairness of such statements
(except as indicated above); and such counsel advises you that, on the
basis of the foregoing, no facts came to such counsel's attention that
caused such counsel to believe that the Offering Memorandum (as amended
or supplemented), as of its date and the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion nor express any
statement or belief with respect to the financial statements and
schedules and other financial and data included in, or omitted from, the
Offering Memorandum or any supplement or amendment thereto).
(g) You shall have received an opinion, dated the Closing
Date, of Latham & Watkins, counsel for the Initial Purchaser, in
form and substance reasonably satisfactory to you.
(h) You shall have received letters on and as of the date
hereof as well as on and as of the Closing Date (in the latter case
constituting an affirmation of the statements set forth in the
former), in form and substance satisfactory to you, from Ernst &
Young, LLP, independent auditors, with respect to the financial
statements and certain financial information contained in the
Offering Memorandum relating to Holding, the Company and the
Subsidiaries.
(i) Latham & Watkins shall have been furnished with such
documents and opinions, in addition to those set forth above, as
they may reasonably require for the purpose of enabling them to
review or pass upon the matters referred to in this Section 8 and in
order to evidence the accuracy, completeness or satisfaction in all
material respects of any of the representations, warranties or
conditions herein contained.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(k) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and you shall have received counterparts,
conformed as executed, thereof.
(l) The Company, the Guarantors and you shall have entered
into the Registration Rights Agreement, and you shall have received
counterparts, conformed as executed thereof.
(m) The Offering Memorandum shall have been distributed to
you not later than 5:00 P.M., New York City time, on August 20,
1998, or at such later date and time as you may approve in writing.
All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Company and the
Guarantors will be in compliance with the provisions hereof only if they
are reasonably satisfactory in form and substance to you. The Company
and the Guarantors will furnish the Initial Purchaser with such conformed
copies of such opinions, certificates, letters and other documents as it
shall reasonably request.
9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective upon the execution
and delivery of this Agreement by the parties hereto.
(b) This Agreement may be terminated at any time on or prior
to the Closing Date by you by notice to the Company if any of the
following has occurred: (i) subsequent to the date of the Offering
Memorandum or of this Agreement, any Material Adverse Change which,
in the judgment of the Initial Purchaser, materially impairs the
investment quality of the Series B Notes; (ii) any outbreak or
escalation of hostilities or other national or international
calamity or crisis or material adverse change in the financial
markets of the United States or elsewhere, or any other substantial
national or international calamity or emergency if the effect of
such outbreak, escalation, calamity, crisis or emergency would, in
the judgment of the Initial Purchaser, make it impracticable or
inadvisable to market the Series B Notes or to enforce contracts for
the sale of the Series B Notes; (iii) any suspension or limitation
of trading generally in securities on the New York Stock Exchange,
the American Stock Exchange or in the over-the-counter markets or
any setting of minimum prices for trading on such exchange or
markets; (iv) any declaration of a general banking moratorium by
either federal or New York authorities; (v) the taking of any action
by any federal, state or local government or agency in respect of
its monetary or fiscal affairs that, in the judgment of the Initial
Purchaser, has a material adverse effect on the financial markets in
the United States and would, in the judgment of the Initial
Purchaser, make it impracticable or inadvisable to market the Series
B Notes or to enforce contracts for the sale of the Series B Notes;
or (vi) the enactment, publication, decree, or other promulgation of
any federal or state statute, regulation, rule or order of any court
or other governmental authority which, in your judgment, materially
and adversely affect, or will materially and adversely affect, the
business or operations of the Company and the Guarantors.
(c) The indemnities and contribution provisions and other
agreements, representations and warranties of the Company and the
Guarantors, their respective officers and directors and of the
Initial Purchaser set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will
survive delivery of and payment for the Series B Notes, regardless
of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchaser or by or on behalf of
the Company and the Guarantors, the officers or directors of the
Company and the Guarantors or any controlling person of the Company
and the Guarantors, (ii) acceptance of the Series B Notes and
payment for them hereunder and (iii) termination of this Agreement.
(d) If this Agreement shall be terminated by the Initial
Purchaser pursuant to clause (i) of paragraph (b) of this Section 9
or because of the failure or refusal on the part of the Company or
any Guarantors to comply with the terms or to fulfill any of the
conditions of this Agreement, the Company and each of the Guarantors
agree to reimburse you for all out-of-pocket expenses (including the
fees and disbursements of counsel) incurred by you. Notwithstanding
any termination of this Agreement, the Company and each of the
Guarantors shall be liable for all expenses which it has agreed to
pay pursuant to Section 4(f) hereof.
(e) Except as otherwise provided, this Agreement has been and
is made solely for the benefit of and shall be binding upon the
Company, the Guarantors, the Initial Purchaser, any Indemnified
Person referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no
other person shall acquire or have any right under or by virtue of
this Agreement. The terms "successors and assigns" shall not
include a purchaser of any of the Notes from the Initial Purchaser
merely because of such purchase.
10. NOTICES.
Notices given pursuant to any provision of this Agreement shall
be addressed as follows: (a) if to the Company or any Guarantor, to
Berry Plastics Corporation, 101 Oakley Street, P.O. Box 959, Evansville,
Indiana 47710-0959, Attention: James M. Kratochvil, with a copy to
O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New
York 10112, Attention: Michael Joseph O'Brien, and (b) if to the Initial
Purchaser, to 277 Park Avenue, New York, New York 10172, Attention:
Glenn Tongue, with a copy to Latham & Watkins, 885 Third Avenue, New
York, New York 10022, Attention: Philip E. Coviello, or in any case to
such other address as the person to be notified may have requested in
writing.
11. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers and
directors and other persons referred to in Section 5, and no other person
will have any right or obligation hereunder.
[signature page follows]
<PAGE>
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument. Please confirm
that the foregoing correctly sets forth the agreement among the Company,
the Guarantors and you.
[CAPTION]
Very truly yours,
BERRY PLASTICS CORPORATION
By:
Name:
Title:
BPC HOLDING CORPORATION
By:_________________________________
Name:
Title:
BERRY IOWA CORPORATION
By:_________________________________
Name:
Title:
BERRY STERLING CORPORATION
By:_________________________________
Name:
Title:
BERRY TRI-PLAS CORPORATION
By:_________________________________
Name:
Title:
AEROCON, INC.
By:_________________________________
Name:
Title:
PACKERWARE CORPORATION
By:_________________________________
Name:
Title:
BERRY PLASTICS DESIGN CORPORATION
By:_________________________________
Name:
Title:
VENTURE PACKAGING, INC.
By:_________________________________
Name:
Title:
VENTURE PACKAGING MIDWEST, INC.
By:_________________________________
Name:
Title:
VENTURE PACKAGING SOUTHEAST, INC.
By:_________________________________
Name:
Title:
NIM HOLDINGS LIMITED
By:_________________________________
Name:
Title:
NORWICH INJECTION MOULDERS LIMITED
By:_________________________________
Name:
Title:
<PAGE>
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
Name:
Title:
<PAGE>
SCHEDULE A
Subsidiaries
Berry Iowa Corporation
Berry Tri-Plas Corporation
Berry Sterling Corporation
AeroCon, Inc.
PackerWare Corporation
Berry Plastics Design Corporation
Venture Packaging, Inc.
Venture Packaging Midwest, Inc.
Venture Packaging Southeast, Inc.
NIM Holdings Limited
Norwich Injection Moulders Limited
<PAGE>
SCHEDULE B
Pursuant to the terms of the Underwriting Agreement dated April 14, 1994
among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas
Corporation (formerly known as Berry-CPI Plastics Corp.) and Donaldson,
Lufkin & Jenrette Securities Corporation, the Company was obligated to
use the proceeds of the offering of the Units (as defined in the
Underwriting Agreement) to, among other things, purchase the assets of
CPI-Plastics, Inc. and its affiliates (the "CPI TRANSACTION") or, in the
alternative, to pay down certain industrial revenue bonds. The Company
utilized a portion of such proceeds to consummate other acquisitions,
rather than the CPI transaction or the repayment of such debt, and for
other capital expenditures related to such consummated acquisitions.
<PAGE>
SCHEDULE C
With respect to the valuation of the outstanding employee stock options,
the Financial Statements contained in the 10-QA filed by Holding as of
May 13, 1996, were not prepared on a consistent basis with Financial
Statements in previously filed SEC Reports.
<PAGE>
SCHEDULE D
1. Berry Plastics Corporation Employees 401(k) Retirement Plan.
2. Berry Plastics Health and Welfare Plan, which includes the following
benefits: (a) long term disability income (salaried employees); (b)
long term disability income (hourly employees); (c) short term
disability; (d) group life insurance; (e) vision; and (f) dental.
3. Berry Plastics Corporation Section 125 Plan.
<PAGE>
1..Issuance of Securities.
2. Agreements to Sell and Purchase.
3. DELIVERY AND PAYMENT.
4. Agreements of the Company and the Guarantors.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
GUARANTORS.
6. Initial Purchaser's Representations and Warranties.
7. INDEMNIFICATION.
8. Conditions of the Initial Purchaser's Obligations.
9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION.
10. Notices.
11. GOVERNING LAW.
12. Successors.
EXHIBIT 21
LIST OF SUBSIDIARIES
1. Berry Iowa Corporation, a Delaware corporation
2. Berry Tri-Plas Corporation, a Delaware corporation
3. Berry Sterling Corporation, a Delaware corporation
4. AeroCon, Inc., a Delaware corporation
5. PackerWare Corporation, a Kansas corporation
6. Berry Plastics Design Corporation, a Delaware corporation
7. Venture Packaging, Inc., a Delaware corporation
8. Venture Packaging Midwest, Inc., an Ohio corporation
9. Venture Packaging Southeast, Inc., a South Carolina corporation
10. NIM Holdings Limited, a company organized under the laws of England
and Wales
11. Norwich Injection Moulders Limited, a company organized under the
laws of England and Wales
12. Knight Plastics, Inc., a Delaware corporation
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
__________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
__________________________
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
__________________________
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-3818954
(Jurisdiction of incorporation (I. R. S. Employer
if not a U. S. national bank) Identification No.)
114 West 47th Street 10036-1532
New York, New York (Zip Code)
(Address of principal
executive offices)
__________________________
Berry Plastics Corporation
(Exact name of OBLIGOR as specified in its charter)
Delaware 35-1813706
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
BPC Holding Corporation
(Exact name of OBLIGOR as specified in its charter)
Delaware 35-1814673
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
1
<PAGE>
__________________________
Berry Iowa Corporation
(Exact name of OBLIGOR as specified in its charter)
Delaware 42-1382173
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Berry Tri-Plas Corporation
(Exact name of OBLIGOR as specified in its charter)
Delaware 56-1949250
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Berry Sterling Corporation
(Exact name of OBLIGOR as specified in its charter)
Delaware 54-1749681
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
AeroCon, Inc.
(Exact name of OBLIGOR as specified in its charter)
Delaware 35-1948748
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Packerware Corporation
(Exact name of OBLIGOR as specified in its charter)
Kansas 48-0759852
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
2
<PAGE>
__________________________
Berry Plastics Design Corporation.
(Exact name of OBLIGOR as specified in its charter)
Delaware 62-1689708
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Venture Packaging, Inc.
(Exact name of OBLIGOR as specified in its charter)
Delaware 51-0368479
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Venture Packaging Midwest, Inc.
(Exact name of OBLIGOR as specified in its charter)
Ohio 34-1809003
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Venture Packaging Southeast, Inc.
(Exact name of OBLIGOR as specified in its charter)
South Carolina 57-1029638
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
NIM Holdings Limited
(Exact name of OBLIGOR as specified in its charter)
England and Wales Pending
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
3
<PAGE>
__________________________
Norwich Injection Moulders Limited
(Exact name of OBLIGOR as specified in its charter)
England and Wales Pending
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
__________________________
Knight Plastics, Inc.
(Exact name of OBLIGOR as specified in its charter)
Delaware 35-2056610
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
101 Oakley Street 47710
Evansville, Indiana (Zip code)
(Address of principal executive offices)
__________________________
12 1/4% Senior Subordinated Notes due 2004
(Title of the indenture securities)
4
<PAGE>
GENERAL
1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is
subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:
Berry Plastics Corporation, BPC Holding Corporation, Berry Iowa Corporation,
Berry Tri-Plas Corporation, Berry Sterling Corporation, Aerocon, Inc.,
Packerware Corporation, Berry Plastics Design Corporation, Venture
Packaging, Inc., Venture Packaging Midwest, Inc., Venture Packaging
Southeast, Inc., NIM Holdings Limited, Norwich Injection Moulders Limited
and Knight Plastics, Inc. currently are not in default. Accordingly,
responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-
1 are not required under General Instruction B.
16. LIST OF EXHIBITS
T-1.1 -- Organization Certificate, as amended, issued by the State of
New York Banking Department to transact business as a Trust
Company, is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 15, 1995 with the Commission pursuant to
the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
5
<PAGE>
16. LIST OF EXHIBITS
(CONT'D)
T-1.4 -- The By-Laws of United States Trust Company of New York, as
amended, is incorporated by reference to Exhibit T-1.4 to Form
T-1 filed on September 15, 1995 with the Commission pursuant to
the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No.
33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTE
As of October 19, 1998, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
__________________
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 19th day
of October 1998.
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By:
Cynthia Chaney
Assistant Vice President
CC/kk (rv:pg)
6
<PAGE>
EXHIBIT T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
/S/GERARD F. GANEY
By: Gerard F. Ganey
Senior Vice President
7
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
JUNE 30, 1998
($ IN THOUSANDS)
ASSETS
Cash and Due from Banks $ 99,322
Short-Term Investments 171,315
Securities, Available for Sale 626,426
Loans 1,857,795
Less: Allowance for Credit Losses 16,708
Net Loans 1,841,087
Premises and Equipment 59,304
Other Assets 122,476
Total Assets $2,919,930
LIABILITIES
Deposits:
Non-Interest Bearing $ 648,072
Interest Bearing 1,646,049
Total Deposits 2,294,121
Short-Term Credit Facilities 306,807
Accounts Payable and Accrued Liabilities 144,419
TOTAL LIABILITIES $2,745,347
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 49,541
Retained Earnings 107,703
Unrealized Gains on Securities
Available for Sale (Net of Taxes) 2,344
TOTAL STOCKHOLDER'S EQUITY 174,583
Total Liabilities and
Stockholder's Equity $2,919,930
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory
authority and is true to the best of my knowledge and belief.
Richard E. Brinkmann, SVP & Controller
July 31, 1998
8
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> DEC-27-1997 JAN-02-1999
<PERIOD-END> DEC-27-1997 SEP-26-1998
<CASH> 2688 7122
<SECURITIES> 0 0
<RECEIVABLES> 29423 36052
<ALLOWANCES> 1038 844
<INVENTORY> 29458 26423
<CURRENT-ASSETS> 63532 71535
<PP&E> 174291 183544
<DEPRECIATION> 66073 78980
<TOTAL-ASSETS> 239444 248521
<CURRENT-LIABILITIES> 42669 66515
<BONDS> 306335 308391
0 0
16509 16728
<COMMON> 6 6
<OTHER-SE> (125490) (131812)
<TOTAL-LIABILITY-AND-EQUITY> 239444 248521
<SALES> 226953 205116
<TOTAL-REVENUES> 0 0
<CGS> 180249 151083
<TOTAL-COSTS> 210754 182219
<OTHER-EXPENSES> 226 0
<LOSS-PROVISION> 325 561
<INTEREST-EXPENSE> 32237 26524
<INCOME-PRETAX> (14273) (3286)
<INCOME-TAX> 138 331
<INCOME-CONTINUING> (14411) (3617)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (14411) (3617)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004
OF
BERRY PLASTICS CORPORATION
PURSUANT TO THE PROSPECTUS DATED JANUARY __, 1999
<TABLE>
<CAPTION>
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FEBRUARY __, 1999, UNLESS EXTENDED.
To: United States Trust Company of New York, as Exchange Agent
<S> <C> <C>
BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE: BY HAND BEFORE 4:30 P.M.:
United States Trust Company of New York (212)780-0592 United States Trust Company of New York
P.O. Box 843 Attention: Customer 111 Broadway
Cooper Station Service New York, New York 10006
New York, New York 10276 Attention: Lower Level Corporate Trust Window
Attention: Corporate Trust Services
CONFIRM BY TELEPHONE TO: BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.
(800) 548-6565 P.M. ON THE EXPIRATION DATE:
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
The undersigned acknowledges that he or she has received the
Prospectus, dated January __, 1999 (the "Prospectus), of Berry Plastics
Corporation (the "Company") and this Letter of Transmittal (the "Letter of
Transmittal"), which together constitute the Company's offer (the "Exchange
Offer") to exchange its 12{1}/{4}% Series C Senior Subordinated Notes due 2004
(the "New Notes") for an equal principal amount of its 12{1}/{4}% Series B
Senior Subordinated Notes due 2004 (the "Old Notes" and, together with the New
Notes, the "Notes"). The terms of the New Notes are identical in all material
respects to the Old Notes, except that the New Notes have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, therefore,
will not bear legends restricting their transfer and will not contain certain
provisions providing for an increase in the interest rate on the Old Notes
under certain circumstances relating to the Registration Rights Agreement (as
defined in the Prospectus). The term "Expiration Date" shall mean 5:00 p.m.,
New York City time, on February __, 1999, unless the Exchange Offer is extended
as provided in the Prospectus, in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended.
Capitalized terms used but not defined herein have the meanings given to them
in the Prospectus.
Holders who wish to tender their Old Notes and (i) whose Old Notes
are not immediately available or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal or an Agent's Message (as defined in the Prospectus) and
any other documents required by this Letter of Transmittal to the Exchange
Agent prior to the Expiration Date must tender their Old Notes according to the
guaranteed delivery procedures set forth under the caption "The Exchange Offer
- - Guaranteed Delivery Procedures" in the Prospectus. See Instruction 5.
The term "Holder" with respect to the Exchange Offer means any person
in whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder. The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must
complete this Letter of Transmittal in its entirety.
If the undersigned is a broker-dealer that receives New Notes for its
own account in exchange for Old Notes, where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities (other than Old Notes acquired directly from the Company), the
undersigned may be deemed to be an "underwriter" under the Securities Act and
the undersigned acknowledges, therefore, that it will deliver a prospectus in
connection with any resale of such New Notes. By so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
- -1-
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE COMPLETING THIS LETTER OF TRANSMITTAL
<TABLE>
DESCRIPTION OF 12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004
<S> <C> <C> <C>
Aggregate Principal Amount
Name(s) and Principal Tendered (must
Address(es) of Amount be in integral
Registered Holder(s) Certificate Represented by multiples
(please fill in, if blank) Number(s) Certificate(s) of $1,000)*
TOTAL
{*}Unless indicated in the column labeled "Principal Amount Tendered," any tendering Holder of Old Notes will be
deemed to have tendered the entire aggregate principal amount represented by the column labeled "Aggregate
Principal Amount Represented by Certificate(s)."
If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed
schedule and affix such schedule to this Letter of Transmittal.
The minimum permitted tender is $1,000 in principal amount. All other tenders must be in integral multiples of $1,000.
</TABLE>
<TABLE>
<CAPTION>
CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE EXCHANGE
AGENT'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY ("DTC") AND COMPLETE THE FOLLOWING
(ONLY PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER) (SEE INSTRUCTION
4):
<S> <C>
Name of Tendering Institution_______________________________________________________
Account No. _____________________________________________________________________
Transaction Code Number__________________________________________________________
CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE
INSTRUCTION 5):
Name(s) of Registered Holder(s)_____________________________________________________
Window Ticket Number (if any)_____________________________________________________
Date of Execution of Notice of Guaranteed Delivery_____________________________________
Name of Institution which Guaranteed Delivery_________________________________________
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO AND COMPLETE THE
FOLLOWING:
Name:__________________________________________________________________________
Address:________________________________________________________________________
_______________________________________________________________________________
</TABLE>
k:\s4exhibits\127578.doc -2-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 7, 8 AND 9) (See Instructions 7,8 and 9)
To be completed ONLY if certificates for Old Notes To be completed ONLY if certificates for Old Notes
in a principal amount not tendered, or New Notes in a principle amount not tendered, or New Notes
issued in exchange for Old Notes accepted for issued in exchange for Old Notes accepted for
exchange, are to be issued in the name of someone exchange, are to be sent to someone other than the
other than the undersigned. the undersigned, or to the undersigned at an address
other than that shown above.
Issue certificates(s) to: Deliver certificate(s) to:
Name:______________________________________ Name:______________________________________
(Please Print) (Please Print)
Address:___________________________________ Address:___________________________________
___________________________________________ ___________________________________________
(Include Zip Code) (Include Zip Code)
___________________________________________ ___________________________________________
(Tax Identification or Social Security No.) (Tax Identification or Social Security No.)
</TABLE>
k:\s4exhibits\127578.doc -3-
<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of Old Notes
indicated above. Subject to and effective upon the acceptance for exchange of
the principal amount of Old Notes tendered in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the order
of, the Company all right, title and interest in and to the Old Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent its agent and attorney-in-fact (with full knowledge that the
Exchange Agent also acts as the agent of the Company) with respect to the
tendered Old Notes with full power of substitution (i) to deliver certificates
for such Old Notes to the Company and deliver all accompanying evidences of
transfer and authenticity to, or upon the order of, the Company and (ii) to
present such Old Notes for transfer on the books of the Company, all in
accordance with the terms of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that he or she has
full power and authority to tender, sell, assign and transfer the Old Notes
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim when the same are acquired by the Company.
The undersigned and any beneficial owner of Old Notes tendered hereby further
represent and warrant that (i) the New Notes acquired by the undersigned and
any such beneficial owner of Old Notes pursuant to the Exchange Offer are being
obtained in the ordinary course of business of the person receiving such New
Notes, (ii) neither the undersigned nor any such beneficial owner has an
arrangement with any person to participate in the distribution of such New
Notes, (iii) neither the undersigned nor any such beneficial owner nor any such
other person is engaging in or intends to engage in a distribution of such New
Notes and (iv) neither the undersigned nor any such other person is an
"affiliate," as defined under Rule 405 promulgated under the Securities Act, of
the Company. The undersigned and each beneficial owner acknowledge and agree
that any person who is an affiliate of the Company or who tenders in the
Exchange Offer for the purpose of participating in a distribution of the New
Notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a resale transaction of the New Notes
acquired by such person and may not rely on the position of the staff of the
Securities and Exchange Commission set forth in the no-action letters discussed
in the Prospectus under the caption "The Exchange Offer - Purpose and Effect of
the Exchange Offer." The undersigned and each beneficial owner will, upon
request, execute and deliver any additional documents deemed by the Exchange
Agent or the Company to be necessary or desirable to complete the sale,
assignment and transfer of the Old Notes tendered hereby.
For purposes of the Exchange Offer, the Company shall be deemed to
have accepted validly tendered Old Notes when, as and if the Company has given
oral notice (confirmed in writing) or written notice thereof to the Exchange
Agent.
If any tendered Old Notes are not accepted for exchange pursuant to
the Exchange Offer because of an invalid tender, the occurrence of certain
other events set forth in the Prospectus or otherwise, any such unaccepted Old
Notes will be returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein under "Special
Delivery Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption " The Exchange Offer - Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer, subject only to withdrawal of
such tenders on the terms set forth in the Prospectus under the caption "The
Exchange Offer - Withdrawal of Tenders."
Unless otherwise indicated under "Special Registration Instructions,"
please issue the certificates representing the New Notes issued in exchange for
the Old Notes accepted for exchange and any certificates for Old Notes not
tendered or not exchanged in the name(s) of the undersigned. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please send the
certificates representing the New Notes issued in exchange for the Old Notes
accepted for exchange and any certificates for Old Notes not tendered or not
exchanged (and accompanying documents, as appropriate) to the undersigned at
the address shown below the undersigned's signature(s). In the event that both
"Special Registration Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the New Notes issued in
exchange for the Old Notes accepted for exchange in the name(s) of, and return
any certificates for Old Notes not tendered or not exchanged to, the person(s)
so indicated. The undersigned understands that the Company has no obligation
pursuant to the "Special Registration Instructions" and "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
Holder(s) thereof if the Company does not accept for exchange any of the Old
Notes so tendered.
Holders who wish to tender their Old Notes and (i) whose Old Notes
are not immediately available or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal or an Agent's Message and any other documents required by
this Letter of Transmittal to the Exchange Agent prior to the Expiration Date
may tender their Old Notes according to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer - Guaranteed
Delivery Procedures" See Instruction 5.
<TABLE>
<CAPTION>
-4-
<PAGE>
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
<S> <C>
X________________________________________________________ Date:___________
X________________________________________________________ Date:___________
Signature(s) of Registered Holder(s) or Authorized Signatory
Area Code and Telephone Number:_______________________________________________
The above lines must be signed by the registered holder(s) as his or her name(s) appear(s) on the Old Notes or by
person(s) authorized to become registered holder(s) by a properly completed bond power from the registered
holder(s), a copy of which must be transmitted with this Letter of Transmittal. If the Old Notes to which this
Letter of Transmittal relate are held of record by two or more joint holders, then all such holders must sign this
Letter of Transmittal. If this Letter of Transmittal or any Old Notes or bond powers are signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person must (i) so indicate and set forth his or her full title below and (ii)
unless waived by the Company, submit evidence satisfactory to the Company of such person's authority to so act.
See Instruction 7.
Name(s):_____________________________________________________________________________________
_____________________________________________________________________________________________
(Please Print)
Capacity:____________________________________________________________________________________
Address:_____________________________________________________________________________________
_____________________________________________________________________________________________
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution:
(If required by Instruction 7)
_____________________________________________________________________________________________
(Authorized Signature)
_____________________________________________________________________________________________
(Title)
_____________________________________________________________________________________________
(Name of Firm)
Date:_______________, 1999
</TABLE>
k:\s4exhibits\127578.doc -5-
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. PROCEDURES FOR TENDERING. This Letter of Transmittal or a facsimile
hereof, properly completed and duly executed, or an Agent's Message, and any
other documents required by this Letter of Transmittal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. In addition, either (i) certificates for
tendered Old Notes must be received by the Exchange Agent along with the Letter
of Transmittal or (ii) a timely confirmation of a book-entry transfer (a "Book
Entry Confirmation") of such Old Notes, if such procedure is available, into
the Exchange Agent's account at DTC pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date or (iii) the Holder must comply with the guaranteed delivery
procedures described below.
THE METHOD OF DELIVERY OF OLD NOTES AND THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL
BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. INSTEAD OF
DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IF SENT BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
RETURN RECEIPT REQUESTED, BE USED AND PROPER INSURANCE BE OBTAINED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE
AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD
BE SENT TO THE COMPANY.
All questions as to the validity, form, eligibility (including time
of receipt), acceptance and withdrawal of tendered Old Notes will be determined
by the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old
Notes not properly tendered or any Old Notes the Company's acceptance of which
would, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the right to waive any defects, irregularities or conditions of
tender as to particular Old Notes. The Company's interpretation of the terms
and conditions of the Exchange Offer (including the instructions in this Letter
of Transmittal) shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Although the Company intends
to notify Holders of defects or irregularities with respect to tenders of Old
Notes, neither the Company, the Exchange Agent nor any other person shall be
under any duty to give any such notification, nor shall any of them incur any
liability for failure to give such notification. Tenders of Old Notes will not
be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that the Company
determines are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holders, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date.
2. TENDER BY HOLDER. Only a Holder of Old Notes may tender such Old Notes
in the Exchange Offer. Any beneficial owner whose Old Notes are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact the registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf.
If such beneficial owner wishes to tender on such beneficial owner's own
behalf, such beneficial owner must, prior to completing and executing this
Letter of Transmittal and delivering such beneficial owner's Old Notes, either
make appropriate arrangements to register ownership of the Old Notes in such
beneficial owner's name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
3. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in
integral multiples of $1,000. If less than the entire principal amount of any
Old Notes is tendered, the tendering Holder should fill in the principal amount
tendered in the fourth column of the box entitled "Description of 12{1}/{4}%
Series B Senior Subordinated Notes due 2004" above. The entire principal
amount of any Old Notes delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated. If the entire principal amount of
all Old Notes is not tendered, then Old Notes for the principal amount of Old
Notes not tendered and a certificate or certificates representing New Notes
issued in exchange for any Old Notes accepted will be sent to the Holder at his
or her registered address, unless a different address is provided in the
appropriate box on this Letter of Transmittal, promptly after the Old Notes are
accepted for exchange.
4. BOOK-ENTRY TRANSFER. Any financial institution that is a participant
in DTC's system may make book-entry delivery of Old Notes by causing DTC to
transfer such Old Notes into the Exchange Agent's account at DTC in accordance
with DTC's procedures for transfer. However, although delivery of Old Notes
may be effected through book-entry transfer at DTC, this Letter of Transmittal
or a facsimile hereof, or an Agent's Message, with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by the Exchange Agent on or prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with.
5. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old
Notes and (i) whose Old Notes are not immediately available or (ii) who cannot
deliver their Old Notes, this Letter of Transmittal or an Agent's Message or
any other documents required hereby to the Exchange Agent prior to the
Expiration Date must tender their Old Notes according to the guaranteed
delivery procedures set forth in the Prospectus. Pursuant to such procedure:
(a) such tender must be made through an Eligible Institution (as defined
below); (b) prior to the Expiration Date, the Exchange Agent must have received
from the Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting
forth the name and address of the Holder, the certificate number(s) of such Old
Notes and the principal amount of Old Notes tendered, stating that the tender
is being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the Expiration Date, this Letter of Transmittal (or
facsimile hereof) or an Agent's Message together with the certificate(s)
representing the Old Notes, or a Book-Entry Confirmation, and any other
required documents will be deposited by the Eligible Institution with the
Exchange Agent; and (c) such properly completed and executed Letter of
Transmittal (or facsimile hereof) or an Agent's Message, as well as the
certificate(s) representing all tendered Old Notes in proper form for transfer,
or a Book-Entry Confirmation, as the case may be, and all other documents
required by this Letter of Transmittal must be received by the Exchange Agent
within three New York Stock Exchange trading days after the Expiration Date,
all as provided in the Prospectus under the caption "The Exchange Offer -
Guaranteed Delivery Procedures." Any Holder who wishes to tender his or her
Old Notes pursuant to the guaranteed delivery procedures described above must
ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior
to 5:00 p.m., New York City time, on the Expiration Date. Upon request to the
Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who
wish to tender their Old Notes according to the guaranteed delivery procedures
set forth above.
6. WITHDRAWAL OF TENDERS. To withdraw a tender of Old Notes in the
Exchange Offer, a written or facsimile transmission notice of withdrawal must
be received by the Exchange Agent prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name
of the person having deposited the Old Notes to be withdrawn (the "Depositor"),
(ii) identify the Old Notes to be withdrawn (including the certificate number
or numbers and principal amount of such Old Notes), (iii) be signed by the
Holder in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Old Notes register the transfer of such
Old Notes into the name of the persons withdrawing the tender and (iv) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. If certificates for Old Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates, the withdrawing Holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such Holder is an
Eligible Institution. If Old Notes have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawn Old Notes and otherwise comply with the procedures of such facility.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Company in its sole
discretion, which determination shall be final and binding on all parties. Any
Old Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no New Notes will be issued with respect
thereto unless the Old Notes so withdrawn are validly retendered. Properly
withdrawn Old Notes may be retendered by following one of the procedures
described above in Instruction 1, under Procedures for Tendering, at any time
prior to the Expiration Date.
7. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof)
is signed by the registered holder(s) of the Old Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the Old
Notes without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder or holders of Old Notes tendered and the certificate or
certificates for New Notes issued in exchange therefor is to be issued (or any
untendered principal amount of Old Notes is to be reissued) to the registered
holder or holders and neither the "Special Delivery Instructions" nor the
"Special Registration Instructions" has been completed, then such holder or
holders need not and should not endorse any tendered Old Notes, nor provide a
separate bond power. In any other case, such holder or holders must either
properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes
or bond powers are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when
signing, and, unless waived by the Company, submit evidence satisfactory to the
Company of such person's authority to so act with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by
this Instruction 7 must be guaranteed by an Eligible Institution which is a
member of (a) the Securities Transfer Agents Medallion Program, (b) the New
York Stock Exchange Medallion Signature Program or (c) the Stock Exchange
Medallion Program.
Except as otherwise provided below, all signatures on this Letter of
Transmittal must be guaranteed by a firm that is a member of a registered
national securities exchange or the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent in
the United States or an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an
"Eligible Institution"). Signatures on this Letter of Transmittal need not be
guaranteed if (a) this Letter of Transmittal is signed by the registered
holder(s) of the Old Notes tendered herewith and such holder(s) has not
completed the box set forth herein entitled "Special Registration Instructions"
or the box set forth herein entitled "Special Delivery Instructions" or (b)
such Old Notes are tendered for the account of an Eligible Institution.
8. SPECIAL REGISTRATION AND DELIVERY INFORMATION. Tendering holders
should indicate, in the applicable box or boxes, the name and address to which
New Notes or substitute Old Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person singing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated.
9. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, certificates representing New Notes or Old Notes for principal amounts
not tendered or accepted for exchange are to be delivered to, or are to be
registered in the name of, any person other than the registered holder of the
Old Notes tendered hereby, or if tendered Old Notes are registered in the name
of any person other than the person signing this Letter of Transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or on any other persons) will be
payable by the tendering Holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with this Letter of Transmittal,
the amount of such transfer taxes will be billed directly to such tendering
Holder.
10. Except as provided in this Instruction 9, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
11. WAIVER OF CONDITIONS. The Company reserves the right, in its sole
discretion, to amend, waive or modify specified conditions in the Exchange
Offer in the case of any Old Notes tendered.
12. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering Holder
whose Old Notes have been mutilated, lost, stolen or destroyed should contact
the Exchange Agent at the address indicated herein for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
specified herein. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
k:\s4exhibits\127578.doc -6-
<PAGE>
IMPORTANT TAX INFORMATION
The Holder is required to give the Exchange Agent the social security
number or employer identification number of the Holder of the Notes. If the
Notes are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to
report.
PAYER'S NAME: BERRY PLASTICS CORPORATION
<TABLE>
<CAPTION>
Name of Holder (if joint, list first and circle the name of
the person or entity whose number you enter in Part I below).
<S> <C> <C>
Address (if Holder does not complete, signature below will
constitute a certification that the above address is correct.)
SUBSTITUTE Part I-Please provide your TIN
in the box at right and certify by Social Security Number
FORM W-9 signing and dating below. If you do or
not have a number, see How to Obtain Employer Identification Number
a "TIN" in the enclosed Guidelines. ______________________________
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE Part II- For Payees exempt from backup withholding, see the enclosed Guidelines
Payer's Request for Taxpayer for Certification of Taxpayer Identification Number on Substitute Form W-9.
Identification Number (TIN)
CERTIFICATION. Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be
issued to me), and
(2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest
or dividends, or the IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS. You must cross out item (2) above if you have been notified by the IRS that you are
subject to backup withholding because of underreported interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you received another notification from the IRS
that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.)
Signature______________________________________________________
Date___________________________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU UNDER THE NOTES. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<CAPTION>
CERTIFICATE SURRENDERED OLD NOTES TENDERED OLD NOTES ACCEPTED
<S> <C> <C>
Delivery Prepared By_______________ Checked By_______________ Date__________
</TABLE>
k:\s4exhibits\127578.doc
- -7-
BERRY PLASTICS CORPORATION
NOTICE OF GUARANTEED DELIVERY
OF
12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004
As set forth in the Prospectus dated January __, 1999 (the
"Prospectus"), of Berry Plastics Corporation (the "Company") under the
caption "The Exchange Offer - Guaranteed Delivery Procedures," this form
must be used to accept the Company's offer to exchange its 12{1}/{4}%
Series C Senior Subordinated Notes due 2004 (the "New Notes") for an equal
principal amount of its 12{1}/{4}% Series B Senior Subordinated Notes due
2004 (the "Old Notes"), by Holders who wish to tender their Old Notes and
(i) whose Old Notes are not immediately available or (ii) who cannot
deliver their Old Notes, the Letter of Transmittal or an Agent's Message
(as defined in the Prospectus) and any other documents required by the
Letter of Transmittal to the Exchange Agent prior to the Expiration Date.
This form must be delivered by an Eligible Institution by mail or hand
delivery or transmitted, via facsimile, to the Exchange Agent at its
address set forth below not later than the Expiration Date. All
capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Prospectus.
THE EXCHANGE AGENT IS:
UNITED STATES TRUST COMPANY OF NEW YORK
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BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE: BY HAND BEFORE 4:30 P.M.:
United States Trust Company of New York (212)780-0592 United States Trust Company of New York
P.O. Box 843 Attention: Customer 111 Broadway
Cooper Station Service New York, New York 10006
New York, New York 10276 Attention: Lower Level Corporate Trust Window
Attention: Corporate Trust Services
CONFIRM BY TELEPHONE TO: BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.
(800) 548-6565 P.M. ON THE EXPIRATION DATE:
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
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DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders for exchange to the Company, upon the
terms and subject to the conditions set forth in the Prospectus and the Letter
of Transmittal, receipt of which is hereby acknowledged, the principal amount
of Old Notes set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "The Exchange Offer - Guaranteed
Delivery Procedures."
The undersigned understands and acknowledges that the Exchange Offer
will expire at 5:00 p.m., New York City time, on February __, 1999, unless
extended by the Company. The term "Expiration Date" shall mean 5:00 p.m., New
York City time, on February __, 1999, unless the Exchange Offer is extended as
provided in the Prospectus, in which case the term "Expiration Date" shall mean
the latest date and time to which the Exchange Offer is extended.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
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SIGNATURE Principal Amount of Old Notes
X Date: Tendered (must be in integral
multiples of $1,000): $
X Date:
Signature(s) of Registered Holder(s)
or Authorized Signatory Certificate Number(s) of Old Notes (if
available):
Area Code and Telephone Number:
Name(s):
(Please Print) Aggregate Principal Amount
Represented by Certificate(s): $
Capacity (full title), if signing in a
fiduciary or representative capacity): IF TENDERED OLD NOTES WILL BE DELIVERED
BY BOOK-ENTRY TRANSFER, PROVIDE THE DEPOSITORY TRUST
Address: COMPANY ("DTC") ACCOUNT NO. AND TRANSACTION CODE NUMBER
(Including Zip Code) (IF AVAILABLE):
Taxpayer Identification or
Social Security No.:
Account No.
Transaction Number
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GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended,
guarantees deposit with the Exchange Agent of a properly completed and executed
Letter of Transmittal (or facsimile thereof), or an Agent's Message, as well as
the certificate(s) representing all tendered Old Notes in proper form for
transfer, or confirmation of the book-entry transfer of such Old Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility described in the
Prospectus under the caption "The Exchange Offer - Book-Entry Transfer" and any
other documents required by the Letter of Transmittal, all by 5:00 p.m., New
York City time, on the third New York Stock Exchange trading day following the
Expiration Date.
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Name of Eligible Institution: Authorized Signature
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Address: Name:
Title:
Area Code and Telephone No: Date:
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NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE. ACTUAL SURRENDER OF
OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, THE LETTER OF
TRANSMITTAL.
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BERRY PLASTICS CORPORATION
Offer to Exchange up to $25,000,000 of its
12{1}/{4}% Series C Senior Subordinated Notes due 2004
for any and all of its outstanding
12{1}/{4}% Series B Senior Subordinated Notes due 2004
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THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON FEBRUARY __, 1999, UNLESS
EXTENDED.
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To Brokers, Dealers, Commercial Banks, January __, 1999
Trust Companies and Other Nominees:
Berry Plastics Corporation, a Delaware corporation (the
"Company"), is offering, upon the terms and subject to the conditions set
forth in the Prospectus dated January __, 1999 (the "Prospectus") and the
accompanying Letter of Transmittal enclosed herewith (which together
constitute the "Exchange Offer"), to exchange its 12{1}/{4}% Series C
Senior Subordinated Notes due 2004 (the "New Notes") for an equal principal
amount of its 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the
"Old Notes" and together with the New Notes, the "Notes"). As set forth in
the Prospectus, the terms of the New Notes are identical in all material
respects to the Old Notes, except that the New Notes have been registered
under the Securities Act of 1933, as amended, and therefore will not bear
legends restricting their transfer and will not contain certain provisions
providing for an increase in the interest rate on the Old Notes under
certain circumstances relating to the Registration Rights Agreement (as
defined in the Prospectus). Old Notes may be tendered only in integral
multiples of $1,000.
THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CUSTOMARY CONDITIONS.
SEE "THE EXCHANGE OFFER - CONDITIONS" IN THE PROSPECTUS.
Enclosed herewith for your information and forwarding to your
clients are copies of the following documents:
1. the Prospectus, dated January __, 1999;
2. the Letter of Transmittal for your use and for the information of
your clients (facsimile copies of the Letter of Transmittal may be used to
tender Old Notes);
3. a form of letter which may be sent to your clients for whose
accounts you hold Old Notes registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer;
4. a Notice of Guaranteed Delivery;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. a return envelope addressed to United States Trust Company of New
York, the Exchange Agent.
YOUR PROMPT ACTION IS REQUESTED. PLEASE NOTE THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS
EXTENDED. PLEASE FURNISH COPIES OF THE ENCLOSED MATERIALS TO THOSE OF YOUR
CLIENTS FOR WHOM YOU HOLD OLD NOTES REGISTERED IN YOUR NAME OR IN THE NAME
OF YOUR NOMINEE AS QUICKLY AS POSSIBLE.
In all cases, exchanges of Old Notes accepted for exchange
pursuant to the Exchange Offer will be made only after timely receipt by
the Exchange Agent of (a) certificates representing such Old Notes, or a
Book-Entry Confirmation (as defined in the Prospectus), as the case may be,
(b) the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, or an Agent's Message (as defined in the Prospectus) and
(c) any other required documents.
Holders who wish to tender their Old Notes and (i) whose Old
Notes are not immediately available or (ii) who cannot deliver their Old
Notes, the Letter of Transmittal or an Agent's Message and any other
documents required by the Letter of Transmittal to the Exchange Agent prior
to the Expiration Date must tender their Old Notes according to the
guaranteed delivery procedures set forth under the caption "The Exchange
Offer - Guaranteed Delivery Procedures" in the Prospectus.
The Exchange Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Old Notes residing in any
jurisdiction in which the making of the Exchange Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction.
The Company will not pay any fees or commissions to brokers,
dealers or other persons for soliciting exchanges of Notes pursuant to the
Exchange Offer. The Company will, however, upon request, reimburse you for
customary clerical and mailing expenses incurred by you in forwarding any
of the enclosed materials to your clients. The Company will pay or cause
to be paid any transfer taxes payable on the transfer of Notes to it,
except as otherwise provided in Instruction 9 of the Letter of Transmittal.
Questions and requests for assistance with respect to the
Exchange Offer or for copies of the Prospectus and Letter of Transmittal
may be directed to the Exchange Agent at its address set forth in the
Prospectus or at (212) 852-1000.
Very truly yours,
BERRY PLASTICS CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, OR ANY
AFFILIATE THEREOF, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENTS OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
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BERRY PLASTICS CORPORATION
Offer to Exchange up to $25,000,000 of its
12{1}/{4}% Series C Senior Subordinated Notes due 2004
for any and all of its outstanding
12{1}/{4}% Series B Senior Subordinated Notes due 2004
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THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS
EXTENDED.
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To Our Clients:
Enclosed for your consideration is a Prospectus dated January __,
1999 (he "Prospectus") and a Letter of Transmittal (which together
constitute the "Exchange Offer") relating to the offer by Berry Plastics
Corporation (the "Company") to exchange its 12{1}/{4}% Series C Senior
Subordinated Notes due 2004 (the "New Notes") for an equal principal amount
of its 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old
Notes" and together with the New Notes, the "Notes"). As set forth in the
Prospectus, the terms of the New Notes are identical in all material
respects to the Old Notes, except that the New Notes have been registered
under the Securities Act of 1933, as amended, and therefore will not bear
legends restricting their transfer and will not contain certain provisions
providing for an increase in the interest rate on the Old Notes under
certain circumstances relating to the Registration Rights Agreement (as
defined in the Prospectus). Old Notes may be tendered only in integral
multiples of $1,000.
The enclosed material is being forwarded to you as the beneficial
owner of Old Notes carried by us for your account or benefit but not
registered in your name. An exchange of any Old Notes may only be made by
us as the registered Holder and pursuant to your instructions. Therefore,
the Company urges beneficial owners of Old Notes registered in the name of
a broker, dealer, commercial bank, trust company or other nominee to
contact such Holder promptly if they wish to exchange Old Notes in the
Exchange Offer.
Accordingly, we request instructions as to whether you wish us to
exchange any or all such Old Notes held by us for your account or benefit,
pursuant to the terms and conditions set forth in the Prospectus and Letter
of Transmittal. We urge you to read carefully the Prospectus and Letter of
Transmittal before instructing us to exchange your Old Notes.
Your instructions to us should be forwarded as promptly as
possible in order to permit us to exchange Old Notes on your behalf in
accordance with the provisions of the Exchange Offer. THE EXCHANGE OFFER
EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS
EXTENDED. The term "Expiration Date" shall mean 5:00 p.m., New York City
time, on February __, 1999, unless the Exchange Offer is extended as
provided in the Prospectus, in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended. A
tender of Old Notes may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for the exchange of $1,000 principal amount
of the New Notes for each $1,000 principal amount of the Old Notes, of
which $25,000,000 aggregate principal amount was outstanding as of January
__, 1999. The terms of the New Notes are identical in all material
respects to the Old Notes, except that the New Notes have been registered
under the Securities Act of 1933, as amended, and therefore will not bear
legends restricting their transfer and will not contain certain provisions
providing for an increase in the interest rate on the Old Notes under
certain circumstances relating to the Registration Rights Agreement.
2. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CUSTOMARY CONDITIONS. SEE
"THE EXCHANGE OFFER - CONDITIONS" IN THE PROSPECTUS.
3. The Exchange Offer and withdrawal rights will expire at 5:00 p.m.,
New York City time, on February __, 1999, unless extended.
4. The Company has agreed to pay the expenses of the Exchange Offer.
5. Any transfer taxes incident to the transfer of Old Notes from the
tendering Holder to the Company will be paid by the Company, except as
provided in the Prospectus and the Letter of Transmittal.
The Exchange Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Old Notes residing in any
jurisdiction in which the making of the Exchange Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction.
If you wish us to tender any or all of your Old Notes held by us
for your account or benefit, please so instruct us by completing, executing
and returning to us the attached instruction form. THE ACCOMPANYING LETTER
OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATIONAL PURPOSES ONLY AND MAY
NOT BE USED BY YOU TO EXCHANGE OLD NOTES HELD BY US AND REGISTERED IN OUR
NAME FOR YOUR ACCOUNT OR BENEFIT.
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INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the
enclosed material referred to therein relating to the Exchange Offer of
Berry Plastics Corporation.
This will instruct you to tender for exchange the aggregate
principal amount of Old Notes indicated below (or, if no aggregate
principal amount is indicated below, all Old Notes) held by you for the
account or benefit of the undersigned, pursuant to the terms of and
conditions set forth in the Prospectus and the Letter of Transmittal.
Aggregate Principal Amount of Old Notes to be tendered for
exchange
$________________________________
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*I (WE) UNDERSTAND THAT IF I (WE) SIGN
THIS INSTRUCTION FORM WITHOUT INDICATING
AN AGGREGATE PRINCIPAL AMOUNT OF OLD NOTES
IN THE SPACE ABOVE, ALL OLD NOTES HELD BY SIGNATURE(S)
YOU FOR MY (OUR) ACCOUNT WILL BE TENDERED
FOR EXCHANGE.
Capacity (full title), if signing in a fiduciary
or representative capacity
Name(s) and address, including zip code
DATE:
Area Code and Telephone Number
Taxpayer Identification or Social Security No.
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