SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 18, 1996
BPC Holding Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 33-75706-01 35-1814673
(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
101 Oakley Street
Evansville, Indiana 47710
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (812) 424-2904
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
BPC Mergerco, Inc. ("Mergerco") 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 BPC Holding Corporation (the
"Registrant"). Pursuant to the terms of a Stock Purchase and
Recapitalization Agreement dated as of June 12, 1996 (the "Common
Stock Purchase Agreement"), 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 (the
"Preferred Stock Purchase Agreement"), CVCA and an additional
institutional investor (the "Preferred Stock Purchasers")
purchased shares of preferred stock of Mergerco 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 the Registrant, with the Registrant being
the surviving corporation. Upon the consummation of the Merger,
each share of Class A Common Stock, $.00005 par value, and Class
B Common Stock, $.00005 par value, of the Registrant 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 shares of other classes of
common stock of the Registrant, a majority of which were held by
certain members of management of the Registrant and its
subsidiaries (the "Rollover Stock"), 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 the Registrant that
were issued in connection with the offering by a subsidiary of
the Registrant of the 12.25% Senior Subordinated Notes due 2004
are 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. As
used herein, the purchase and sale of the common stock, the
preferred stock and the warrants of Mergerco and the merger of
Mergerco with an into the Registrant are collectively referred to
as the "Transaction." Following the consummation of the
Transaction, International and CVCA hold approximately 53% and
24%, respectively, of the voting common stock of the Registrant,
and approximately 23% and 37%, respectively, of all classes of
common stock of the Registrant on a fully-diluted basis. The
entire management of the Registrant and its subsidiaries will
continue in their present positions. The Board of Directors of
the Registrant has been expanded by three members who are
representatives of certain of the equity investors, bringing the
total number of board members to seven. One board member, being
a representative of a former shareholder of the Registrant,
resigned from the Board of Directors of the Registrant and its
wholly-owned subsidiary, Berry Plastics Corporation.
The aggregate consideration paid to the sellers of the
equity interests in the Registrant, including the holders of the
1994 Warrants, was approximately $119.2 million in cash. In
order to finance the Transaction, including the payment of
related fees and expenses: (i) the Registrant issued the 12.50%
Senior Secured Notes due 2006 (the "Senior Notes") for net
proceeds of approximately $100.2 million (or $63.7 million after
deducting the amount of such net proceeds used to purchase
marketable securities available for payment of interest on the
Senior 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
(the "Equity Investments") (which amount includes rollover
investments of approximately $7.1 million by certain members of
management and $3.0 million by an existing institutional
shareholder); and (iii) the Registrant received an aggregate of
approximately $0.9 million in connection with the exercise of
certain management stock options to purchase common stock of the
Registrant.
The Common Stock Purchase Agreement includes customary
business and financial representations and warranties regarding
the Registrant and its subsidiaries. Certain selling
shareholders, and not the Registrant, have certain
indemnification obligations with respect to breaches of the
Registrant's representations and warranties. The Common Stock
Purchase Agreement also contains customary post-closing covenants
obligating the Registrant, among other things, to use the
proceeds of the Transaction for specified purposes and to comply
with all agreements to which it is a party that were entered into
in connection with the Transaction.
In connection with the Transaction, the Registrant also
entered into the Preferred Stock Purchase Agreement with the
Preferred Stock Purchasers. Pursuant to the Preferred Stock
Purchase Agreement, the Preferred Stock Purchasers received
600,000 shares of Preferred Stock and the 1996 Warrants. The
Preferred Stock Purchase Agreement grants the Preferred Stock
Purchasers certain registration rights with respect to each of:
(i) the Preferred Stock; (ii) any securities issued by the
Registrant in exchange for the Preferred Stock; (iii) the 1996
Warrants; and (iv) the related Common Stock issuable upon
exercise of the 1996 Warrants. The Preferred Stock Purchase
Agreement also contains customary representations and warranties
and post-closing covenants obligating the Registrant, among other
things, to use the proceeds of the Transaction as specified
therein and to comply with the terms of all agreements entered
into in connection with the Transaction. The Preferred Stock
Purchase Agreement further obligates the Registrant to pay all
reasonable fees and expenses of the Preferred Stock Purchaser
incurred in connection with the Transaction.
As permitted under Rule 135c promulgated under the
Securities Act of 1933, as amended, the Registrant is filing as
an exhibit to this Current Report on Form 8-K the press release
issued by the Registrant on June 19, 1996.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibits
Exhibit No. Document
2.1 Stock Purchase and Recapitalization
Agreement dated as of June 12,
1996, by and among the Registrant,
BPC Mergerco, Inc. and the other
parties thereto
2.2 Preferred Stock and Warrant
Purchase Agreement dated as of June
12, 1996, by and among the
Registrant, BPC Mergerco, Inc.,
Chase Venture Capital Associates,
L.P. and The Northwestern Mutual
Life Insurance Company
2.3 Agreement and Plan of Merger dated
as of June 18, 1996, by and between
the Registrant and BPC Mergerco,
Inc.
99.1 Press release issued by the
Registrant on
June 19, 1996
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
BPC HOLDING CORPORATION
James M. Kratochvil
Vice President, Chief Financial Officer and Secretary
Dated: July 2, 1996
EXHIBIT 2.1
STOCK PURCHASE AND RECAPITALIZATION AGREEMENT
dated as of June 12, 1996
by and among
BPC HOLDING CORPORATION
and
BPC MERGERCO, INC.
and
CERTAIN PURCHASERS NAMED HEREIN
and
CERTAIN SELLING SHAREHOLDERS NAMED HEREIN
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS
Section 1.1. Defined Terms 3
Section 1.2. Additional Terms 10
Section 1.3. Construction 11
ARTICLE II PURCHASE AND SALE TERMS
Section 2.1. Purchase and Sale 11
Section 2.2. The Merger 12
Section 2.3. The Closing 12
Section 2.4. Payment and Delivery 12
Section 2.5. Transfer Legends and Restrictions 13
Section 2.6. Use of Proceeds 13
ARTICLE III CLOSING CONDITIONS
Section 3.1. Conditions of the Purchasers, the Company,
Mergerco and the Selling Shareholders 13
Section 3.1.1. Execution of This Agreement and All Related
Documents 13
Section 3.1.2. Issuance and Purchase of Common Stock, the Units
and the Senior Secured Notes 14
Section 3.1.3. Merger Effective; Amended and Restated
Certificate of Incorporation 14
Section 3.1.4. Merger Consideration 15
Section 3.1.5. No Litigation, etc. 15
Section 3.1.6. Environmental Report 15
Section 3.1.7. Approvals, etc. 15
Section 3.1.8. Registration Rights Agreement, Institutional
Stockholders Agreement and Management
Stockholders' Agreement 15
Section 3.1.9. Solvency and Fairness Opinions 15
Section 3.1.10. All Proceedings to be Satisfactory 16
Section 3.1.11. Reasonable Satisfaction of Parties and Counsel 16
Section 3.2. Conditions of the Purchasers 16
Section 3.2.1. Representations and Warranties to be True
and Correct; Certificate of Officer of the
Company 16
Section 3.2.2. Supporting Documents 17
Section 3.2.3. Legal Opinion from Counsel for the Company and
Mergerco 18
Section 3.2.4. Delivery of SBA Forms 18
Section 3.2.5. Exchange of Rollover Stock 19
Section 3.3. Conditions of the Company and Mergerco 19
Section 3.3.1. Representations and Warranties to be True and
Correct 19
Section 3.3.2. Legal Opinion from Counsel for the Purchasers 19
Section 3.3.3. Legal Opinion from Counsel for the Selling
Shareholders 19
Section 3.4. Conditions of the Selling Shareholders 19
Section 3.4.1. Representations and Warranties to be True and
Correct; Certificate of the Company 19
Section 3.4.2. Legal Opinion from Counsel for the Company and
Mergerco 20
Section 3.4.3. Legal Opinion from Counsel for the Purchasers 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Company 20
Section 4.1.1. Corporate Existence 20
Section 4.1.2. Power and Authority 21
Section 4.1.3. Enforceability, etc. 21
Section 4.1.4. Capitalization 21
Section 4.1.5. Consents, Approvals and Non-Contravention 22
Section 4.1.6. Pro Forma Balance Sheet 23
Section 4.1.7. SEC Reports and Financial Statements 23
Section 4.1.8. Material Adverse Change 23
Section 4.1.9. Events Subsequent to the Date of the Last
Financial Statement 24
Section 4.1.10. Absence of Undisclosed Liabilities 25
Section 4.1.11. Taxes 25
Section 4.1.12. Litigation 26
Section 4.1.13. Insurance 26
Section 4.1.14. Conflicts of Interest 26
Section 4.1.15. Other Relationships 26
Section 4.1.16. Licenses; Compliance with Laws, Other
Agreements, etc. 27
Section 4.1.17. Intellectual Property Rights and Government
Approvals 27
Section 4.1.18. Investment Company Act 28
Section 4.1.19. Brokers, etc. 28
Section 4.1.20. Private Sale 28
Section 4.1.21. Disclosure 28
Section 4.1.22. Contracts and Commitments 29
Section 4.1.23. Customers and Suppliers 31
Section 4.1.24. Employee Matters and Benefits 31
Section 4.1.25. Environmental Matters 34
Section 4.1.26. Small Business Concern 36
Section 4.1.27. Title to Properties 36
Section 4.1.28. Condition and Sufficiency of Assets 36
Section 4.1.29. Real Property 37
Section 4.2. Representations and Warranties of Mergerco 38
Section 4.2.1. Corporate Existence 38
Section 4.2.2. Power and Authority 38
Section 4.2.3. Enforceability, etc. 38
Section 4.2.4. Consents, Approvals and Non-Contravention 38
Section 4.2.5. No Activities 39
Section 4.2.6. Capitalization 39
Section 4.3. Representations and Warranties of the Selling
Shareholders 40
Section 4.3.1. Existence 40
Section 4.3.2. Power and Authority 40
Section 4.3.3. Enforceability, etc. 41
Section 4.3.4. Title, etc 41
ARTICLE V REPRESENTATIONS AND
WARRANTIES OF THE PURCHASERS
Section 5.1. Representations and Warranties of the Purchasers
41
Section 5.1.1. Power and Authority 41
Section 5.1.2. Enforceability, etc. 41
Section 5.1.3. Purchase for Investment 42
Section 5.1.4. Financial Matters 42
Section 5.1.5. Adequate Access to Personnel and Materials 42
Section 5.1.6. Brokers, etc. 42
ARTICLE VI COVENANTS
Section 6.1. Pre-Closing Date Covenants 43
Section 6.1.1. Access and Investigation 43
Section 6.1.2. Operation of the Businesses of the Company and
its Subsidiaries 43
Section 6.1.3. Negative Covenant 43
Section 6.1.4. Required Approvals 44
Section 6.1.5. Notification 44
Section 6.1.6. No Solicitation 44
Section 6.1.7. Best Efforts 45
Section 6.2. Post-Closing Date Covenants of the Company 45
Section 6.2.1. Use of Proceeds 45
Section 6.2.2. Inspection of Property 45
Section 6.2.3. Compliance with Agreements 45
Section 6.2.4. Affirmative Covenants 45
Section 6.2.5. SBIC Regulatory Provisions 47
Section 6.2.6. Regulatory Compliance Cooperation 48
Section 6.2.7. Further Assurances 49
Section 6.3. Covenants of the Selling Shareholders 49
ARTICLE VII TERMINATION
Section 7.1. Termination 49
Section 7.2. Effect of Termination 51
ARTICLE VIII MISCELLANEOUS
Section 8.1. Payment of Costs and Expenses 51
Section 8.2. General Indemnity 52
Section 8.3. Remedies 54
Section 8.4. Brokerage 54
Section 8.5. Severability 54
Section 8.6. Parties in Interest 55
Section 8.7. Notices 55
Section 8.8. No Waiver 55
Section 8.9. Amendments and Waivers 55
Section 8.10. Understanding Among the Purchasers 56
Section 8.11. CITEI as Purchaser. 56
Section 8.12. Survival of Agreements, etc. 56
Section 8.13. Governing Law 56
Section 8.14. Entire Understanding 56
Section 8.15. Counterparts 56
EXHIBITS
Exhibit A By-laws of the Company
Exhibit B-1 Amended and Restated Certificate of
Incorporation of the Company
Exhibit B-2 Certificate of Amendment of the Company
Exhibit B-3 Restated Certificate of Incorporation of
Mergerco
Exhibit C Offering Memorandum
Exhibit D-1 Form of Merger Agreement
Exhibit D-2 Form of Certificate of Merger
Exhibit E Form of Indemnification Escrow Agreement
Exhibit F Form of Stockholders Agreement
SCHEDULES
Disclosure Schedule
Schedule I List of Purchasers and Common Stock to be
Issued and Purchased
Schedule II List of Selling Shareholders and Merger Stock
Schedule III Capitalization Schedule of the Company
Schedule IV Capitalization Schedule of Mergerco
Schedule V Consents Relating to the Purchasers
Schedule VI Proportionate Percentage of the Selling
Shareholders
STOCK PURCHASE AND RECAPITALIZATION AGREEMENT
This STOCK PURCHASE AND RECAPITALIZATION AGREEMENT, dated as
of June 12, 1996 (as amended or otherwise modified from time to
time, this "Agreement"), is made by and among BPC HOLDING
CORPORATION, a Delaware corporation (the "Company"), BPC
MERGERCO, INC., a Delaware corporation ("Mergerco"), each of the
Persons listed on Schedule I hereto (the "Purchasers"), and each
of the Persons listed on Schedule II hereto (the "Selling
Shareholders").
W I T N E S S E T H:
WHEREAS, in order to facilitate a recapitalization
transaction (the "Recapitalization"), Mergerco has been formed;
WHEREAS, Mergerco wishes to issue and sell to the Purchasers
Common Stock of Mergerco in the amounts and of the series and
classes set forth opposite the names of such Purchasers on
Schedule I hereto;
WHEREAS, pursuant to a Preferred Stock and Warrant Purchase
Agreement, dated as of the date hereof (as amended or otherwise
modified from time to time pursuant to the terms thereof, the
"Preferred Stock Purchase Agreement"), by and among the Company,
Mergerco, The Northwestern Mutual Life Insurance Company,
("Northwestern"), Chase Venture Capital Associates, L.P., a
California limited partnership ("CVCA" and in such capacity,
together with Northwestern, the "Preferred Stock Purchasers" and
each a "Preferred Stock Purchaser"), the Preferred Stock
Purchasers wish to purchase an aggregate of (i) 600,000 shares of
Mergerco's Preferred Stock, par value $.01 per share, and
(ii) Warrants of Mergerco entitling the holder or holders thereof
to purchase an aggregate amount of 9,372 shares of Class B Voting
Common Stock and 29,728 shares of Class B Non-Voting Stock, at a
purchase price of $.01 per share, subject to the adjustment as
provided therein, all on the terms and subject to the conditions
set forth therein;
WHEREAS, pursuant to an Exchange Agreement, to be entered
into on or prior to the Closing Date (as thereafter amended or
otherwise modified from time to time pursuant to the terms
thereof, the "Exchange Agreement"), by and among the Company, The
CIT Group/Equity Investments, Inc., a New Jersey corporation
("CITEI") and certain members of management (the "Management
Shareholders" and, together with CITEI, the "Rollover
Shareholders") of the Company, (i) the Management Shareholders,
who own shares of the Company's Class A Common Stock set forth
opposite their names on Schedule I to the Exchange Agreement
(such shares hereinafter referred to as the "Management Rollover
Stock"), wish to exchange the Management Rollover Stock pursuant
to a recapitalization of the type described in
Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as
amended (the "Code"), for shares of Class C Common Stock, Class D
Common Stock and Class E Common Stock of the Company pursuant to,
and in the amounts, types and series set forth for such
Management Shareholders on Schedule I to, the Exchange Agreement
and (ii) CITEI, which owns the shares of the Company's Class A
Common Stock and Class B Common Stock set forth opposite its name
on Schedule I to the Exchange Agreement (such shares hereinafter
referred to as the "CITEI A Rollover Stock" and "CITEI B Rollover
Stock", respectively, and collectively referred to as the "CITEI
Rollover Stock" and, together with the Management Rollover Stock,
the "Rollover Stock"), wishes to exchange the CITEI Rollover
Stock for shares of Class F Common Stock and Class G Common Stock
of the Company pursuant to, and in the amounts, types and series
set forth for CITEI on Schedule I to, the Exchange Agreement, all
on the terms and subject to the conditions set forth herein and
therein;
WHEREAS, following Mergerco's issuance of Common Stock to
the Purchasers, Mergerco's issuance of Preferred Stock and
Warrants to the Preferred Stock Purchasers, the Company's
issuance of Class C Common Stock, Class D Common Stock and Class
E Common Stock to the Management Shareholders in exchange for the
Management Rollover Stock and the Company's issuance of Class F
Common Stock and Class G Common Stock to CITEI in exchange for
the CITEI Rollover Stock, subject to the terms and conditions
hereof, the Preferred Stock Purchase Agreement and the Exchange
Agreement, the Company and Mergerco wish to merge pursuant to the
provisions of Section 251 of the Delaware General Corporation Law
(the "Merger"), pursuant to which
(i) the classes and series of capital stock of
Mergerco shall be converted into identical classes and
series of capital stock of the Company, in each case having
the rights, preferences and privileges set forth in the
Amended and Restated Certificate of Incorporation;
(ii) each share of the Class C Common Stock of
the Company shall be converted into .5855 shares of Class B
Voting Common Stock of the Company;
(iii) each share of the Class D Common Stock of
the Company shall be converted into .5855 shares of Class B
Non-Voting Common Stock of the Company;
(iv) each share of the Class E Common Stock of
the Company shall be converted into 5,824.417 shares of
Class C Common Stock of the Company;
(v) each share of the Class F Common Stock of
the Company shall be converted into .5855 shares of Class A
Voting Common Stock of the Company;
(vi) each share of the Class G Common Stock of
the Company shall be converted into .5855 shares of Class A
Non-Voting Common Stock of the Company;
(vii) the holders of the stock subscription
warrants (the "Old Public Warrants") issued by the Company
pursuant to the Warrant Agreement, dated as of April 21,
1994, shall be entitled to receive from the Company cash in
an aggregate amount of $4,501,510;
(viii) the holders of the Old Private Warrants
issued by the Company shall be entitled to receive from the
Company cash in an approximate aggregate amount of
$22,198,457; and
(ix) the then outstanding shares of Class A
Common Stock and Class B Common Stock of the Company (such
capital stock being herein referred to as "Merger Stock")
owned by the Selling Shareholders in the amounts set forth
opposite the names of such Selling Shareholders on
Schedule II hereto and certain other shareholders will be
converted into the right to receive from the Company cash in
the amounts set forth opposite the names of such selling
shareholders on Schedule II hereto (the "Merger
Consideration");
WHEREAS, the Purchasers are willing on the terms and
conditions set forth in this Agreement to purchase, for an
aggregate consideration of not less than $44,575,000, shares of
Common Stock of Mergerco in the amounts and of the series and
classes set forth opposite the names of such Purchasers on
Schedule I hereto; and
WHEREAS, the Selling Shareholders wish to approve the Merger
and to make the agreements herein for the purpose of causing such
Merger to be effected;
NOW, THEREFORE, based upon the foregoing and the mutual
covenants and agreements herein contained, and for other good and
sufficient consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINED TERMS
I.1. Defined Terms. When used in this Agreement, the following
terms shall have the following meanings:
"Aetna" means BPC Equity, LLC, a Delaware limited liability
company.
"Affiliate" means, with respect to any specified Person, any
other Person which, directly or indirectly, controls, is under
common control with, or is owned or controlled by, such specified
Person. For purposes of this definition, (i) "control" means,
with respect to any specified Person, either (x) the beneficial
ownership of more than 30 percent of any class of equity
securities or (y) the power to direct the management or policies
of the specified Person through the ownership of voting
securities, by contract, voting agreement or otherwise, and
(ii) the terms "controlling", "control with" and "controlled by",
etc., shall have meanings correlative to the foregoing.
"Amended and Restated Certificate of Incorporation" means
the restated certificate of incorporation of the Company
following the Merger in the form attached hereto as Exhibit B-1,
as amended from time to time in accordance with the requirements
hereof and of the Stockholders Agreement.
"By-laws" means the by-laws of the Company in the form
attached hereto as Exhibit A, as amended from time to time in
accordance with the requirements hereof, thereof and of the
Stockholders Agreement.
"Certificate of Amendment" means the Certificate of
Amendment of the Company in the form attached hereto as Exhibit B-
2.
"Certificate of Merger" means the Certificate of Merger,
dated as of the Closing Date, by and between Mergerco and the
Company, in substantially the form of Exhibit D-2 hereto.
"Class A Common Stock" means, as the context may require,
(i) Mergerco's or the Company's Class A Voting Common Stock or
Class A Non-Voting Common Stock or (ii) both the Class A Voting
Common Stock and the Class A Non-Voting Common Stock of Mergerco
or the Company.
"Class A Non-Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class A Non-Voting Common
Stock, which prior to the Merger has a par value of $.00005 per
share and $.01 per share for the Company and Mergerco,
respectively, and following the Merger shall have a par value of
$.01 per share with respect to such stock of the Company.
"Class A Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class A Voting Common Stock,
which prior to the Merger has a par value of $.00005 per share
and $.01 per share for the Company and Mergerco, respectively,
and following the Merger shall have a par value of $.01 per share
with respect to such stock of the Company.
"Class B Common Stock" means, as the context may require,
(i) Mergerco's or the Company's Class B Voting Common Stock or
Class B Non-Voting Common Stock or (ii) both the Class B Voting
Common Stock and the Class B Non-Voting Common Stock of Mergerco
or the Company.
"Class B Non-Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class B Non-Voting Common
Stock, which prior to the Merger has a par value of $.00005 per
share and $.01 per share for the Company and Mergerco,
respectively, and following the Merger shall have a par value of
$.01 per share with respect to such stock of the Company.
"Class B Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class B Voting Common Stock,
which prior to the Merger has a par value of $.00005 per share
and $.01 per share for the Company and Mergerco, respectively,
and following the Merger shall have a par value of $.01 per share
with respect to such stock of the Company.
"Class C Common Stock" means, as the context may require,
Mergerco's or the Company's Class C Common Stock, which prior to
the Merger has a par value of $.00005 per share and $.01 per
share for the Company and Mergerco, respectively, and following
the Merger shall have a par value of $.01 per share with respect
to such non-voting stock of the Company.
"Class D Common Stock" means the Company's non-voting
$.00005 par value per share Class D Common Stock.
"Class E Common Stock" means the Company's voting $.00005
par value per share Class E Common Stock.
"Class F Common Stock" means the Company's voting $.00005
par value per share Class F Common Stock.
"Class G Common Stock" means the Company's non-voting
$.00005 par value per share Class G Common Stock.
"CMIHI" means Chase Manhattan Investment Holdings, Inc., a
Delaware corporation.
"Common Stock" means the Class A Common Stock, the Class B
Common Stock, the Class C Common Stock, the Class D Common Stock,
the Class E Common Stock, the Class F Common Stock and the Class
G Common Stock of Mergerco or the Company, as the case may be and
as the context may require, and any other classes of common stock
of the Company hereafter authorized in accordance with the
requirements hereof and of the Stockholders Agreement.
"Environmental Law" means any law which relates to or
otherwise imposes liability or standards of conduct concerning
discharges, emissions, releases or threatened releases of noises,
odors or any pollutants, contaminants or hazardous or toxic
wastes, substances or materials, whether as matter or energy,
into ambient air, water, or land, or otherwise relating to the
manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of
pollutants, contaminants, or hazardous or toxic wastes,
substances or materials, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
and the Superfund Amendments and Reauthorization Act of 1986
(together, as amended, "CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act
Amendments of 1972, the Clean Water Act of 1977, as amended, any
so-called "Superlien" law, and any other similar Federal, state
or local Law.
"Environmental Permit" means any permit, license, approval,
consent or other authorization required by or pursuant to any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor law thereto.
"Event of Noncompliance" has the meaning provided in the
Stockholders Agreement.
"Governmental Authority" means the government of the United
States or any foreign country or any state or political
subdivision thereof and any entity, body or authority exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Material" means
(a) any "hazardous substance", as defined by
CERCLA;
(b) any "hazardous waste", as defined by the
Resource Conservation and Recovery Act, as amended;
(c) any petroleum product or fractions thereof;
or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within
the meaning of any other applicable Federal, state or local
Law, regulation, ordinance or requirement (including consent
decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, all as now
or at any time hereafter in effect.
"Holder" means any Purchaser (or any of his or its permitted
successors or assigns, other than the Company or any of its
Subsidiaries) holding any Common Stock.
"HSR Act" means the Hart-Scott-Rodino Anti-Trust
Improvements Act of 1976 or any successor law, and regulations
and rules issued pursuant to such Act or any successor law
thereto.
"Indemnification Escrow Agent" means United States Trust
Company of New York, a bank organized under the laws of the State
of New York.
"Indemnification Escrow Agreement" means the Escrow
Agreement, dated as of the Closing Date, among the Purchasers
named therein, the Selling Shareholders named therein, and the
Indemnification Escrow Agent, in substantially the form of
Exhibit E hereto.
"Institutional Stockholders Agreement" means the
Stockholders Agreement, dated as of February 14, 1991, as amended
by the First Amendment thereto, dated as of March 29, 1994, among
the Company, The Fund, CMIHI, WFC and CITEI.
"Interests" means any evidence of equity ownership of any
Person, whether represented by common stock, preferred stock,
securities convertible into or exercisable for the purchase or
other acquisition of common stock (including convertible
debentures, warrants and options), trust certificates or general
or limited partnership interests.
"International" means Atlantic Equity Partners International
II, L.P., a Delaware limited partnership domiciled in the Cayman
Islands.
"Investments" means, as to any Person, (i) any direct or
indirect purchase or other acquisition by such Person of any
notes, obligations, instruments, stock, securities or Interests
of any other Person (other than a Subsidiary of such Person) and
(ii) any contribution by such Person to any other Person (other
than a Subsidiary of such Person).
"Lien" means any mortgage, lien (except for any lien for
taxes not yet due and payable), charge, restriction, pledge,
security interest, option, lease or sublease, claim, right of any
third party, easement, encroachment or encumbrance.
"Management Stockholders' Agreement" means the Stockholders'
Agreement, dated as of January 22, 1991, among the Company and
those stockholders of the Company parties thereto.
"Material Adverse Effect" means, with respect to any Person,
any fact, event, change, circumstance or effect that has or is
reasonably likely to have a materially adverse effect on the
business, financial condition, results of operations or, to the
actual knowledge of such Person, prospects of such Person and its
Subsidiaries, taken as a whole.
"Merger Agreement" means the Agreement and Plan of Merger,
dated as of the Closing Date, by and between Mergerco and the
Company, in substantially the form of Exhibit D-1 hereto.
"Offering Memorandum" means the Preliminary Offering
Memorandum, dated May 31, 1996, relating to the offering of the
Senior Secured Notes of the Company, a true, correct and complete
copy of which is attached hereto as Exhibit C. Reference to the
Offering Memorandum shall include any amendments or supplements
thereto effected prior to the Closing Date that are reasonably
satisfactory to CVCA and International.
"Old Private Warrants" means, collectively, (i) the Stock
Warrant Certificate, dated as of February 14, 1991, to CMIHI,
(ii) the Stock Warrant Certificate, dated as of December 26,
1991, to The Fund, (iii) the Stock Warrant Certificate, dated as
of November 17, 1995, to The Fund, (iv) the Stock Warrant
Certificate, dated as of November 17, 1995, to Martin R. Imbler,
(v) the Stock Warrant Certificate, dated as of November 17, 1995,
to Ira G. Boots, (vi) the Stock Warrant Certificate, dated as of
November 17, 1995, to James M. Kratochvil, (vii) the Stock
Warrant Certificate, dated as of November 17, 1995, to R. Brent
Beeler and (viii) the Stock Warrant Certificate, dated as of
November 17, 1995, to Douglas E. Bell, in each case issued by the
Company for shares of its Common Stock and in such amounts as set
forth opposite the name of each such holder on Schedule II.
"Other Financing Documents" means the Senior Secured Note
Indenture, the Preferred Stock Purchase Agreement, the Exchange
Agreement, the Senior Secured Note Purchase Agreement, the
Registration Rights Agreement (as defined in the Senior Secured
Note Indenture), the Holding Pledge Agreement (as defined in the
Senior Secured Note Indenture), and the Escrow and Disbursement
Agreement (as defined in the Senior Secured Note Indenture).
"Permitted Transferee" has the meaning provided in the
Stockholders Agreement.
"Person" means any individual, corporation, general or
limited partnership, joint venture, association, limited
liability company, joint stock company, trust, business trust,
bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization, cooperative, association
or governmental branch, authority, agency or political
subdivision thereof.
"Plan" means any plan regulated under ERISA.
"Preferred Stock" means the $.01 par value per share Senior
Cumulative Exchangeable Preferred Stock, Series A of Mergerco or
the Company, as the context may require.
"Proportionate Percentage" means, with respect to a Selling
Shareholder, the percentage set forth opposite the name of such
Selling Shareholder on Schedule VI hereto.
"Qualified Holder" has the meaning provided in the
Stockholders Agreement.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of December 24, 1990, as amended by
the First Amendment thereto, dated as of March 29, 1994, among
the Company, The Fund, CMIHI, WFC and CITEI.
"Related Documents" means the Merger Agreement, the
Certificate of Merger, the Stockholders Agreement and the
Indemnification Escrow Agreement.
"Restated Certificate of Incorporation" means (a) with
respect to the Company, its amended and restated certificate of
incorporation filed with the Secretary of State of the State of
Delaware on December 20, 1990 (amending and restating the
certificate of incorporation of the Company filed on December 11,
1990), as amended and restated by the amended and restated
certificate of incorporation filed on April 19, 1994, as amended
by the certificate of amendment filed on May 5, 1995 and (b) with
respect to Mergerco, its restated certificate of incorporation in
the form attached hereto as Exhibit B-3.
"Restricted Securities" means the Common Stock; provided,
however, that Common Stock shall cease to constitute Restricted
Securities when it has (a) been effectively registered under the
Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for
sale pursuant to Rule 144(k) (or any similar provision then in
force) under the '33 Act or (c) been otherwise transferred and
new certificates for them not bearing the '33 Act legend set
forth in the Stockholders Agreement have been issued. Whenever
any particular securities cease to be Restricted Securities, the
holder thereof shall be entitled to receive from the Company,
without expense, new securities of like tenor not bearing a '33
Act legend of the character set forth in the Stockholders
Agreement.
"Senior Secured Note Indenture" means the Indenture, dated
June 18, 1996, between the Company and First Trust of New York,
National Association, as trustee, regarding the Senior Secured
Notes, as such Indenture may be amended or otherwise modified
from time to time.
"Senior Secured Note Purchase Agreement" means the Purchase
Agreement, dated June 12, 1996, by and among the Company, Berry
Plastics Corporation, a Delaware corporation ("Berry"), and
Donaldson, Lufkin & Jenrette Securities Corporation.
"Senior Secured Notes" means the 12-1/2% senior secured
notes in the aggregate principal amount of $105,000,000 issued by
the Company pursuant to the Senior Secured Note Purchase
Agreement.
"Stockholders Agreement" means the Stockholders Agreement,
dated as of the Closing Date, among the Company, the Purchasers,
CITEI, the Preferred Stock Purchasers and certain members of
management of the Company, as amended or otherwise modified from
time to time pursuant to the terms thereof, in substantially the
form of Exhibit F.
"Subsidiary" or "Subsidiaries" of any Person means any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such
Person.
"The Fund" means Atlantic Equity Partners, L.P., a Delaware
limited partnership domiciled in the Cayman Islands.
"'33 Act" means the Securities Act of 1933, as amended, and
the rules and regulations issued in respect thereto.
"'34 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations issued in respect thereto.
"Units" means the Preferred Stock and Warrants.
"Warrants" means the warrants to purchase Class B Common
Stock of the Company issued in connection with the purchase of
Preferred Stock pursuant to the Preferred Stock Purchase
Agreement.
"WFC" means Whirlpool Financial Corporation, a Delaware
corporation.
I.2. Additional Terms. The following terms shall have the
meanings indicated or referred to in the following Sections of
this Agreement:
Term Section
Agreement Preamble
Approval 4.1.5(a)
Balance Sheet 4.1.9
Blue Sky Laws 4.1.4(c)
Capitalization Schedule 3.1.3
CERCLA definition of Environmental Law
CITEI 4th Recital
CITEI A Rollover Stock 4th Recital
CITEI B Rollover Stock 4th Recital
CITEI Rollover Stock 4th Recital
Closing 2.3
Closing Date 2.3
Code 4th Recital
Company Preamble
Competing Offer 6.1.6
CVCA 3rd Recital
Defense Counsel 8.2(b)
Defense Notice 8.2(b)
Employee Benefit Plans 4.1.24(b)
Environmental Report 3.1.6
Exchange Agreement 4th Recital
FACL 8.14
Financial Statements 4.1.7(b)
Financing 6.2.5(e)
GAAP 4.1.7(b)
GMI 3.1.6
Indemnified Liabilities 8.2(a)
Indemnitees 8.2(a)
Indemnity Cap 8.2(a)(ii)
Intellectual Property 4.1.17
Licenses 4.1.16
Management Rollover Stock 4th Recital
Management Shareholders 4th Recital
Merger 5th Recital
Merger Consideration 5th Recital
Merger Stock 5th Recital
Mergerco Preamble
Northwestern 3rd Recital
Old Public Warrants 5th Recital
Preferred Stock Purchaser
and Preferred Stock
Purchasers 3rd Recital
Preferred Stock Purchase
Agreement 3rd Recital
Purchasers Preamble
Purchasers' Advisors 6.1.1
Recapitalization 1st Recital
Regulatory Problem 6.2.6(b)
Regulatory Violation 6.2.5(e)
Rollover Shareholders 4th Recital
Rollover Stock 4th Recital
SBA 6.2.5(b)
SBA Compliance Documents 3.2.4
SBIC Holder 6.2.5(a)
SBIC Investor 3.2.4
SBIC Regulations 6.2.5(e)
SEC 4.1.7(a)
SEC Reports 4.1.7(a)
Selling Shareholders Preamble
Third Party Claim 8.2(b)
I.3. Construction. When used herein, the masculine form of
words includes the feminine and the neuter and vice versa, and,
unless the context otherwise requires, the singular form of words
includes the plural and vice versa. The words "herein",
"hereof", "hereunder" and other words of similar import when used
in this Agreement refer to this Agreement as a whole, and not to
any particular section or subsection.
ARTICLE II
PURCHASE AND SALE TERMS
II.1. Purchase and Sale. Subject to the terms of this
Agreement, Mergerco shall authorize, issue and sell to each
Purchaser, and each Purchaser shall purchase from Mergerco at the
Closing, the number, type and series of shares of Common Stock,
as applicable, at the aggregate purchase price set forth opposite
such Purchaser's name on Schedule I hereto. The obligation of
each Purchaser to purchase such Common Stock hereunder is several
and not joint.
II.2. The Merger. Subject to the terms of this Agreement,
the Company and Mergerco shall effect the Merger at the Closing
in accordance with the terms of the Merger Agreement.
II.3. The Closing. The closing of the purchase and sale of
the Common Stock, the purchase and sale of the Units, the
exchange and cancellation of the Rollover Stock and the
consummation of the Merger, shall take place at the offices of
O'Sullivan, Graev & Karabell, LLP, located at 30 Rockefeller
Plaza, New York, New York 10112 or at such other location as the
Company and a majority-in-interest of the Purchasers may
designate (the "Closing"). The Closing shall occur on or before
July 31, 1996, or such later date as the Company and a majority-
in-interest of the Purchasers may designate (the "Closing Date").
It is the intention of the parties hereto that the Closing Date
shall occur simultaneously with the issuance of the Common Stock
hereunder and under the Exchange Agreement, the issuance of the
Units under the Preferred Stock Purchase Agreement and the
issuance of the Senior Secured Notes under the Senior Secured
Note Purchase Agreement.
II.4. Payment and Delivery. On the Closing Date, the
following payments and deliveries shall occur:
(a) With respect to the Common Stock being purchased by the
Purchasers, each Purchaser shall pay the purchase price of the
Common Stock purchased by it in full, in cash, by wire transfer
of immediately available funds to an account designated by
Mergerco in writing not less than one business day prior to the
Closing Date. The amount of the purchase price for such
Purchaser to be paid on the Closing Date shall be as set forth
opposite such Purchaser's name on Schedule I hereto. Upon
delivery of such funds, Mergerco shall deliver to such Purchaser
stock certificates evidencing the Common Stock purchased by it,
registered in the name of such Purchaser or its nominee.
(b) Upon the effectiveness of the Merger, the Company shall
deposit $5,000,000 of the Merger Consideration with the
Indemnification Escrow Agent to be placed into an escrow account
for a period of fifteen months following the Closing Date, such
money to be to held, safeguarded and released subject to and in
accordance with the terms of the Indemnification Escrow
Agreement. The Merger Consideration shall be further reduced by
the aggregate exercise price of any Old Public Warrants or Old
Private Warrants held by a Selling Shareholder or other selling
shareholder, as the case may be. The balance of the Merger
Consideration shall be paid in cash, by wire transfer of
immediately available funds to the accounts designated by the
Selling Shareholders and the other selling shareholders set forth
on Schedule II hereto in writing not less than one business day
prior to the Closing Date. The amount of the Merger
Consideration payable to each Selling Shareholder and each such
other selling shareholder on the Closing Date shall be in the
amount set forth opposite the name of each such Selling
Shareholder and each such other selling shareholder on
Schedule II hereto.
II.5. Transfer Legends and Restrictions. The transfer of
the shares of Common Stock will be restricted in accordance with
the terms hereof and of the Stockholders Agreement, as
applicable. Each certificate or other instrument evidencing the
Common Stock, including any certificate or other instrument
issued to any transferee thereof, shall be imprinted with one or
more legends in substantially the form set forth herein or in the
Stockholders Agreement, and such legends shall not be removed
from such certificates or other instruments except in accordance
with the terms and provisions hereof or of the Stockholders
Agreement.
II.6. Use of Proceeds. The Company shall use the net cash
proceeds received from the sale of the Common Stock of Mergerco,
together with the net cash proceeds received from the sale of the
Senior Secured Notes and the Units, solely for purposes of
effecting the Merger, paying certain extraordinary bonuses
awarded to several management employees not to exceed $2,600,000
in the aggregate, funding the Merger Consideration to be paid to
the Selling Shareholders and the other selling shareholders,
funding the escrow account established under the Indemnification
Escrow Agreement, funding the Escrow Account under the Escrow and
Disbursement Agreement (as defined in the Senior Secured Note
Indenture), making net payments to holders of the Old Private
Warrants and the Old Public Warrants and paying the costs,
expenses and fees incurred in connection therewith.
ARTICLE III
CLOSING CONDITIONS
III.1. Conditions of the Purchasers, the Company, Mergerco
and the Selling Shareholders. The obligation of each Purchaser
to purchase, and the obligation of Mergerco to issue and sell,
the Common Stock, the obligation of the Company to effect the
exchange of the Rollover Stock and to effect the Merger and the
obligation of the Selling Shareholders to vote in favor of, and
otherwise cause the Company to effect, the Merger on the Closing
Date, shall be subject to satisfaction of the following
conditions on or prior to such date (unless otherwise specified
below):
III.1.1. Execution of This Agreement and All Related
Documents. The Company, Mergerco, the Purchasers, the Selling
Shareholders and all other requisite parties shall have duly
authorized and executed copies of this Agreement, each Related
Document, each Other Financing Document and each other agreement,
document or instrument related hereto or thereto, to which any
such Person is a party, required in connection with the
consummation of the transactions contemplated hereby and thereby.
This Agreement, each such Related Document, each such Other
Financing Document and each other related agreement, document or
instrument shall remain in full force and effect.
III.1.2. Issuance and Purchase of Common Stock, the Units and
the Senior Secured Notes. Mergerco shall have duly issued and
delivered certificates to each of the Purchasers representing the
number of shares of Common Stock purchased by such Purchaser as
provided in Article II hereof; Mergerco shall have duly issued
and delivered certificates to each Preferred Stock Purchaser
representing the number of shares of Preferred Stock and Warrants
purchased by it pursuant to the Preferred Stock Purchase
Agreement; each Purchaser shall have purchased and paid for such
Common Stock of Mergerco to be purchased by it pursuant to such
Article II; and each Preferred Stock Purchaser shall have
purchased and paid for the Units to be purchased by it pursuant
to the Preferred Stock Purchase Agreement. The Company shall
have duly issued and delivered certificates to each of the
Rollover Shareholders evidencing the number of shares of Common
Stock being issued to such Rollover Shareholder as provided in
the Exchange Agreement, and each Rollover Shareholder shall have
surrendered to the Company for cancellation certificates
representing the Rollover Stock being exchanged by such Rollover
Shareholder pursuant to the terms thereto. The Company shall
also have duly issued and delivered to the purchasers thereof (or
a trustee or fiduciary for such purchasers) the Senior Secured
Notes, and the Company shall have received not less than
$105,000,000 in gross cash proceeds (of which approximately
$34,500,000 will be deposited into the Escrow Account under the
Escrow and Disbursement Agreement (as defined in the Senior
Secured Note Indenture)) from the issuance and sale of the Senior
Secured Notes.
III.1.3. Merger Effective; Amended and Restated Certificate of
Incorporation. On the Closing Date, the Merger shall be
effective under Delaware law. Prior to the Merger and the
effectiveness of the issuance and purchase of the Common Stock of
Mergerco pursuant to Section 3.1.2 and the exchange of the
Rollover Stock pursuant to the Exchange Agreement, the Restated
Certificate of Incorporation of Mergerco, the Certificate of
Amendment of the Company, the Certificate of Merger and the
Amended and Restated Certificate of Incorporation of the Company
shall have been filed with the Secretary of State of Delaware in
accordance with Delaware law and be in effect, except for the
Certificate of Merger and the Amended and Restated Certificate of
Incorporation of the Company which shall be in effect as of the
effectiveness of the Merger. Immediately after giving effect to
the Closing and the consummation of the transactions contemplated
hereby, the Company's capitalization shall be as set forth on
Schedule III hereto (the "Capitalization Schedule").
III.1.4. Merger Consideration. Upon the effectiveness of the
Merger, the Company shall have paid the Selling Shareholders the
Merger Consideration.
III.1.5. No Litigation, etc. No litigation, arbitration,
governmental investigation or proceeding shall, as of the Closing
Date, be pending or, to the knowledge of the Company, threatened,
which seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement, the other Related
Documents, the Other Financing Documents or any other material
agreement related hereto or thereto.
III.1.6. Environmental Report. Each of the Company, the
Purchasers and the Selling Shareholders shall have received a
satisfactory environmental report from Geraghty & Miller Inc.
("GMI"), dated May, 1996, as supplemented by the letter to Chase
Capital Partners by GMI, dated June 11, 1996 (the "Environmental
Report"), regarding the operations and real property assets of
the Company and its Subsidiaries.
III.1.7. Approvals, etc. All Approvals set forth on Item
4.1.5 ("Consents and Approvals") of the Disclosure Schedule
hereto shall have been obtained or otherwise satisfied, and all
applicable waiting or appeal periods with respect thereto shall
have passed, in each case to the satisfaction of (i) a majority-
in-interest of the Purchasers and (ii) a majority-in-interest of
the Selling Shareholders.
III.1.8. Registration Rights Agreement, Institutional
Stockholders Agreement and Management Stockholders' Agreement.
On the Closing Date,
(a) the Registration Rights Agreement shall have been
terminated by the parties thereto in accordance therewith;
(b) the Institutional Stockholders Agreement shall have been
terminated by the parties thereto in accordance therewith; and
(c) the Management Stockholders' Agreement shall have been
amended and restated, in form and substance satisfactory to the
Company and a majority-in-interest of the Purchasers, by the
parties thereto.
III.1.9. Solvency and Fairness Opinions. At the Company's
expense, each of the Company, the Purchasers and the Selling
Shareholders shall have received a copy of: (i) a solvency
opinion addressed to the Company from Houlihan, Lokey, Howard &
Zukin, Inc., dated the Closing Date, opining that, both before
and after giving effect to the transactions contemplated hereby,
by the Related Documents and by the Other Financing Documents,
the Company was not and will not be insolvent; and (ii) a
fairness opinion addressed to the Company from Patricof & Co.
Capital Corp., dated the Closing Date, opining, among other
things, that the Merger Consideration paid to the Selling
Shareholders for the Merger Stock is fair from a financial point
of view. Each of the solvency opinion and the fairness opinion
shall be in form, scope and substance satisfactory to (x) the
Company and (y) a majority-in-interest of the Purchasers.
III.1.10. All Proceedings to be Satisfactory. All corporate
and other proceedings to be taken by the Company in connection
with the transactions contemplated hereby, the other Related
Documents and the Other Financing Documents, and all documents
incident thereto, shall be satisfactory in form and substance to
the Purchasers, the Selling Shareholders and their respective
counsel, and the Purchasers, the Selling Shareholders and said
counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may
reasonably request.
III.1.11. Reasonable Satisfaction of Parties and Counsel. All
instruments applicable to the issuance and sale of the Common
Stock, the Preferred Stock, the Warrants and the Senior Secured
Notes and the other transactions contemplated hereby shall be
reasonably satisfactory to the parties hereto and their
respective counsel.
III.2. Conditions of the Purchasers. The obligations of
each Purchaser to purchase Common Stock shall be further subject
to the satisfaction of the following conditions on or prior to
such date (unless otherwise specified below):
III.2.1. Representations and Warranties to be True
and Correct; Certificate of Officer of the Company. The
representations and warranties contained in Article IV, as well
as the representations and warranties set forth in Section 5 of
the Senior Secured Note Purchase Agreement and in Article IV of
the Preferred Stock Purchase Agreement, shall be true and correct
in all material respects (except with respect to any such
representation or warranty that contains an express materiality
limitation, in which case such representation or warranty shall
be true and correct in all respects) on and as of the Closing
Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except to
the extent that any such representations and warranties
specifically apply to a prior date). The Company shall have
delivered to the Purchasers a certificate of its chief executive
or chief financial officer certifying that (i) the
representations and warranties set forth herein and therein are
in fact true and correct as stated above, (ii) the Company and
Mergerco have performed or complied with all agreements and
conditions contained herein which are required to be performed or
complied with by them on or before the Closing Date, (iii) the
Company, Berry or Mergerco, as the case may be, has performed or
complied with all agreements and conditions contained in the
Senior Secured Note Purchase Agreement, the Senior Secured Note
Indenture and the Preferred Stock Purchase Agreement and
(iv) each of the conditions set forth in Sections 3.1 and 3.2 has
been satisfied.
III.2.2. Supporting Documents. On or prior to the Closing
Date the Purchasers and their respective counsel shall have
received copies of the following supporting documents:
(a) (i) copies of the Company's Restated Certificate of
Incorporation, as amended by the Certificate of Amendment,
certified as of a recent date by the Secretary of State of the
State of Delaware, (ii) a certificate of said Secretary of State,
dated as of a recent date, as to the due incorporation and good
standing of the Company and its Subsidiaries and listing all
documents of the Company on file with said Secretary of State,
and (iii) a facsimile, telegram or telex from said Secretary as
of the close of business on the business day preceding the
Closing Date as to the continued good standing of the Company;
(b) (i) copies of the Restated Certificate of Incorporation of
Mergerco, certified as of a recent date by the Secretary of State
of the State of Delaware, (ii) a certificate of said Secretary of
State, dated as of a recent date, as to the due incorporation and
good standing of Mergerco and listing all documents of Mergerco
on file with said Secretary of State, and (iii) facsimile, a
telegram or telex from said Secretary as of the close of business
on the business day preceding the Closing Date as to the
continued good standing of Mergerco;
(c) a certificate of the Secretary of the Company, dated the
Closing Date and certifying: (i) that attached thereto is a true
and complete copy of the By-laws of the Company as in effect on
the date of such certification; (ii) that attached thereto is a
true and complete copy of resolutions adopted by the Board of
Directors of the Company authorizing the execution, delivery and
performance of this Agreement, each of the Related Documents and
each of the Other Financing Documents, the issuance, sale and
delivery of the Common Stock by the Company to the Rollover
Shareholders in exchange for the Rollover Stock, the issuance,
sale and delivery of the Senior Secured Notes and the approval of
the Merger, and that all such resolutions are still in full force
and effect and are all the resolutions adopted in connection with
the transactions contemplated hereunder and thereunder;
(iii) that the Company's Restated Certificate of Incorporation,
as amended by the Certificate of Amendment, has not been amended
(other than by the amendment and restatement of the Company's
Restated Certificate of Incorporation by the Amended and Restated
Certificate of Incorporation) since the date of the certificates
delivered pursuant to clause (a)(ii) above; and (iv) the
incumbency and specimen signature of each officer of the Company
executing this Agreement, each of the Related Documents, each of
the Other Financing Documents, the stock certificate or
certificates representing the Common Stock and any certificate or
instrument furnished pursuant hereto or thereto, and a
certification by another officer of the Company as to the
incumbency and signature of the officer signing the certificate
referred to in this clause (c); and
(d) a certificate of the Secretary of Mergerco, dated the
Closing Date and certifying: (i) that attached thereto is a true
and complete copy of the By-laws of Mergerco as in effect on the
date of such certification; (ii) that attached thereto is a true
and complete copy of resolutions adopted by the Board of
Directors of Mergerco authorizing the execution, delivery and
performance of this Agreement, each of the Related Documents and
each of the Other Financing Documents to which Mergerco is a
party, the issuance, sale and delivery of the Common Stock, the
Preferred Stock, the Warrants, and the approval of the Merger,
and that all such resolutions are still in full force and effect
and are all the resolutions adopted in connection with the
transactions contemplated hereunder and thereunder; (iii) that
the Restated Certificate of Incorporation of Mergerco has not
been amended since the date of the certificate delivered pursuant
to clause (b)(ii) above; and (iv) the incumbency and specimen
signature of each officer of Mergerco executing this Agreement,
each of the Related Documents, each of the Other Financing
Documents, the stock certificate or certificates representing the
Common Stock, the Preferred Stock, the Warrants and any
certificate or instrument furnished pursuant hereto or thereto,
and a certification by another officer of Mergerco as to the
incumbency and signature of the officer signing the certificate
referred to in this clause (d); and
(e) such additional supporting documents, instruments,
certificates, opinions and other information with respect to the
operations and affairs of the Company and Mergerco as the
Purchasers or their counsel may reasonably request.
All such documents shall be satisfactory in form and
substance to the Purchasers and their respective counsel.
III.2.3. Legal Opinion from Counsel for the Company and
Mergerco. On the Closing Date, the Purchasers shall have received
the written opinion of O'Sullivan Graev & Karabell, LLP, counsel
for the Company and Mergerco, in form and substance satisfactory
to a majority-in-interest of the Purchasers and their counsel.
III.2.4. Delivery of SBA Forms. Each Purchaser that is a
licensed Small Business Investment Company under the Small
Business Investment Act of 1958, as amended (each an "SBIC
Investor"), shall have prepared the Size Status Declaration on
Form 480, the Assurance of Compliance for Nondiscrimination on
Form 652 and the Portfolio Financing Report on Form 1031
(collectively, the "SBA Compliance Documents"), the Company shall
have executed and delivered the Forms 480 and 652 to each SBIC
Investor, as applicable, and all of the information set forth in
the SBA Compliance Documents shall be true and correct in all
respects.
III.2.5. Exchange of Rollover Stock.
(a) Management Shareholders shall have, pursuant to the
Exchange Agreement, exchanged or agreed in writing to exchange,
not less than 111,016 shares of Management Rollover Stock (which
represent a majority-in-interest of all Management Rollover
Stock).
(b) CITEI shall have, pursuant to the Exchange Agreement,
exchanged or agreed in writing to exchange, not less than 51,238
shares of CITEI Rollover Stock.
III.3. Conditions of the Company and Mergerco. The
obligations of (a) the Company to exchange the Rollover Stock for
Common Stock and to effect the Merger and (b) Mergerco to sell
the Common Stock and Units shall be further subject to
satisfaction of the following conditions on or prior to such
date:
III.3.1. Representations and Warranties to be True and
Correct. The representations and warranties contained in Article
V shall be true and correct on and as of the Closing Date with
the same effect as though such representations and warranties had
been made on and as of such date (except to the extent that any
such representations and warranties specifically apply to a prior
date).
III.3.2. Legal Opinion from Counsel for the Purchasers. On
the Closing Date, the Company shall have received the written
opinion of Mayer, Brown & Platt, counsel for the Purchasers, in
form and substance satisfactory to the Company and its counsel.
III.3.3. Legal Opinion from Counsel for the Selling
Shareholders. On the Closing Date, the Company shall have
received the written opinion of O'Sullivan Graev & Karabell, LLP,
counsel for the Selling Shareholders, in form and substance
satisfactory to the Company and its counsel.
III.4. Conditions of the Selling Shareholders. The
obligations of each Selling Shareholder to vote in favor of the
Merger and otherwise cooperate with the Company to effect the
Merger shall be further subject to the satisfaction of the
following conditions on or prior to such date (unless otherwise
specified below):
III.4.1. Representations and Warranties to be True and
Correct; Certificate of the Company. The representations and
warranties of the Company, Mergerco and the Purchasers set forth
in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and
as of the Closing Date (except to the extent that any such
representations and warranties specifically apply to a prior
date). The Company shall have delivered to the Selling
Shareholders a certificate stating that (i) the representations
and warranties of the Company and of Mergerco set forth herein
are in fact true and correct as stated above, (ii) the Company
and Mergerco have each performed or complied with all agreements
and conditions contained herein that are required to be performed
or complied with by it on or before the Closing Date and (iii)
the Company, Berry or Mergerco, as the case may be, has performed
or complied with all agreements and conditions contained in the
Senior Secured Note Purchase Agreement, the Senior Secured Note
Indenture and the Preferred Stock Purchase Agreement.
III.4.2. Legal Opinion from Counsel for the Company and
Mergerco. On the Closing Date, the Selling Shareholders shall
have received the written opinion of O'Sullivan Graev & Karabell,
LLP, counsel for the Company and Mergerco, in form and substance
satisfactory to a majority-in-interest of the Selling
Shareholders and their counsel.
III.4.3. Legal Opinion from Counsel for the Purchasers. On
the Closing Date, the Selling Shareholders shall have received
the written opinion of Mayer, Brown & Platt, counsel for the
Purchasers, in form and substance satisfactory to a majority-in-
interest of the Selling Shareholders and their counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
IV.1. Representations and Warranties of the Company. The
Company represents and warrants to the Purchasers, as of the date
hereof and the Closing Date (except to the extent any of the
following representations or warranties specifically apply or
relate to a prior date, in which event the Company represents and
warrants such representations and warranties to be true and
correct as of such prior date), as follows:
IV.1.1. Corporate Existence. Each of the Company and each of
its Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
set forth for such corporation on Item 4.1.1 ("Company and
Existing Subsidiaries (Name, Jurisdiction of Incorporation") of
the Disclosure Schedule hereto, and is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or use of its assets or
properties, or the conduct or nature of its business, makes such
qualification necessary, except where the failure to so qualify
would not constitute a Material Adverse Effect. The Company has
all requisite corporate power and authority to conduct its
business and own its properties as now conducted and owned.
Attached as Exhibit A hereto is a true and complete copy of the
Company's By-laws, as in effect as of the Closing Date; and
attached as Exhibit B-1 hereto is a true and complete copy of the
Amended and Restated Certificate of Incorporation, as in effect
and as on file with the Secretary of State of the State of
Delaware as of the Closing Date after giving effect to the
Merger.
IV.1.2. Power and Authority. The Company has all requisite
corporate power and authority, and has taken all required
corporate and other action necessary, to execute, deliver and
perform this Agreement, all Related Documents, all Other
Financing Documents to which the Company is a party and to issue
and exchange the Common Stock for the Rollover Stock, to issue
the Senior Secured Notes and to effect the Merger, as herein and
therein provided. None of the foregoing actions will (i) violate
any provision of the Company's By-laws, Restated Certificate of
Incorporation, as amended by the Certificate of Amendment, prior
to the Merger or Amended and Restated Certificate of
Incorporation following the Merger, (ii) result in the breach of
or constitute a default under any contract, agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which it or any of them is bound, (iii) result in the
creation or imposition of any lien, claim or encumbrance on any
asset of the Company or any of its Subsidiaries, (iv) give any
Person rights to terminate any contracts or agreements with the
Company or any of its Subsidiaries or otherwise to exercise
rights against the Company or any of its Subsidiaries or
(v) violate any Approval or any order, writ, judgment,
injunction, decree, statute, rule or regulation of any court,
tribunal or governmental entity applicable to or bearing upon the
Company or any of its Subsidiaries or any of their respective
assets or business, except, in the case of each of clauses (ii),
(iii), (iv) and (v) above, for occurrences that would not in the
aggregate constitute a Material Adverse Effect.
IV.1.3. Enforceability, etc. Each of this Agreement, each of
the Related Documents and each of the Other Financing Documents
to which the Company is a party has been duly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable against it in
accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance
or other similar laws affecting the enforcement of creditors'
rights generally and general equitable principles.
IV.1.4. Capitalization. Assuming that all transactions
contemplated hereunder have been consummated (including the
issuance and sale of the Common Stock, the Preferred Stock, the
Warrants and the Senior Secured Notes, the exchange of the
Rollover Stock and consummation of the Merger) as of the Closing
Date:
(a) the Capitalization Schedule sets forth a true and complete
statement of the capitalization of the Company and each of its
Subsidiaries as of the Closing Date, including a list of all
holders of Interests of or in the Company and its Subsidiaries
(and the amount and type of such Interests);
(b) except as set forth on the Capitalization Schedule, the
Company has not issued any Interests, nor are any Interests (or
any rights to acquire or purchase any Interests) outstanding; and
(c) the Common Stock delivered to the Rollover Shareholders
will have been duly authorized, validly issued, fully paid and
will be non-assessable and will have been delivered to the
Rollover Shareholders free and clear of any liens, encumbrances,
preemptive rights, escrows, options, rights of first refusal or
other agreements, arrangements, commitments, understandings or
obligations, whether written or oral, or any other restrictions
affecting rights and other incidents of record and beneficial
ownership, other than (i) as set forth herein or in the Related
Documents and (ii) restrictions on transferability imposed
generally under the '33 Act and under the securities laws of the
several states and the rules and regulations issued in respect
thereof (such state laws, rules and regulations, being,
collectively, "Blue Sky Laws").
Except as set forth on Item 4.1.1 ("Company and Existing
Subsidiaries (Name, Jurisdiction of Incorporation")) of the
Disclosure Schedule hereto, the Company has no Subsidiaries. The
Company owns 100% of all issued and outstanding shares of capital
stock of its Subsidiaries, and owns no capital stock, other
securities or Interests, or rights or obligations to acquire the
same, of any other Person.
IV.1.5. Consents, Approvals and Non-Contravention. Except as
set forth on Item 4.1.5 ("Consents and Approvals") of the
Disclosure Schedule hereto, neither the execution, delivery and
performance of this Agreement, any Related Documents or any of
the Other Financing Documents to which it is a party by the
Company, nor the consummation of any transaction related hereto
or thereto, nor the issuance, sale or delivery of the Common
Stock pursuant to the Exchange Agreement will
(a) require any consent, approval, license, permit, waiver or
other authorization of, filing or taking of any other action
with, or notice to, any Person, including any local, state or
federal governmental agency, authority, branch or instrumentality
(collectively, an "Approval"), except where the failure to obtain
an Approval would not in the aggregate constitute a Material
Adverse Effect; or
(b) violate any of the Company's or any of its Subsidiaries'
Licenses, except where such violation would not in the aggregate
constitute a Material Adverse Effect.
IV.1.6. Pro Forma Balance Sheet. The pro forma balance sheet
set forth on Item 4.1.6 ("Pro Forma Balance Sheet") of the
Disclosure Schedule hereto fairly presents in all material
respects the financial condition of the Company and its
Subsidiaries on a consolidated basis as of the date of the
Balance Sheet, giving effect to the consummation of the
transactions contemplated hereby and by the Related Documents and
the Other Financing Documents as if such transactions had been
consummated as of such date.
IV.1.7. SEC Reports and Financial Statements. (a) The
Company has filed all forms, reports and documents required to be
filed with the Securities and Exchange Commission ("SEC") since
December 31, 1994, and has made available to the Purchasers (i)
its Annual Reports on Form 10-K for the two fiscal years ended
December 31, 1994, and December 31, 1995, (ii) all other reports,
information and registration statements filed by the Company with
the SEC since December 31, 1994 and (iii) all amendments and
supplements to all such reports, information and registration
statements filed by the Company with the SEC (collectively, the
"SEC Reports"). The SEC Reports (1) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act,
as the case may be, and the rules and regulations promulgated
thereunder and (2) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. True and complete copies of each
SEC Report, including all exhibits thereto, have been made
available to the Purchasers.
(b) Except as set forth on Item 4.1.7 ("Financial
Statements") of the Disclosure Schedule hereto, each of the
consolidated financial statements (including, in each case, any
related notes thereto) (the "Financial Statements") contained in
the SEC Reports was prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (except as may be expressly
described in the notes thereto) and each fairly presents the
consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial
statements included in the Company's Form 10-QA reports were or
are subject to normal and recurring year-end adjustments.
IV.1.8. Material Adverse Change. Except as set forth on Item
4.1.8 ("Material Adverse Change") of the Disclosure Schedule
hereto, since the date of the last audited Financial Statement,
(i) there has been no material adverse change in the assets,
liabilities or financial condition of the Company and its
Subsidiaries from that reflected in such audited Financial
Statement, except for changes in the ordinary course of business
individually or in the aggregate and (ii) there has been no event
that would result in a Material Adverse Effect.
IV.1.9. Events Subsequent to the Date of the Last Financial
Statement. Since the date of the last audited Financial
Statements, except as contemplated by this Agreement or as set
forth in the balance sheet included in the Company's Form 10-QA
for the period ending March 31, 1996 (the "Balance Sheet") or
Item 4.1.9 ("Subsequent Events") of the Disclosure Schedule
hereto, neither the Company nor any of its Subsidiaries has
(i) issued any stock, bond or other corporate security other than
in connection with the exercise of options issued pursuant to the
Company's 1991 Stock Option Plan, (ii) borrowed any amount or
incurred or become subject to any material liability (absolute,
accrued or contingent), except liabilities under the Senior Bank
Agreement and in respect of the Senior Secured Notes and the
Senior Subordinated Notes (as defined in the Stockholders
Agreement), current liabilities incurred and liabilities under,
contracts entered into in the ordinary course of business,
(iii) discharged or satisfied any lien or encumbrance or incurred
or paid any obligation or liability (absolute, accrued or
contingent) other than current liabilities shown on the Balance
Sheet and current liabilities incurred since the date of the
Balance Sheet in the ordinary course of business, (iv) except as
contemplated hereunder or under the Exchange Agreement, declared
or made any payment or distribution to stockholders or purchased
or redeemed any of its capital stock, (v) except in connection
with the transactions contemplated by the Senior Secured Note
Indenture, mortgaged, pledged or subjected to any lien or
encumbrance any of its assets, tangible or intangible, other than
liens for current real property taxes not yet due and payable,
(vi) sold, assigned or transferred any of its tangible assets
except in the ordinary course of business, or cancelled any debt
or claim owed to the Company or any such Subsidiary except in the
ordinary course of business, (vii) sold, assigned, transferred or
granted any exclusive license with respect to any patent,
trademark, trade name, service mark, copyright, trade secret or
other intangible asset, (viii) suffered any substantial loss of
property or waived any right of substantial value other than in
the ordinary course of business, (ix) made any change in officer
compensation except in the ordinary course of business and
consistent with past practice, (x) made any material change in
the manner of business or operations of the Company and its
Subsidiaries taken as a whole, (xi) entered into any transaction
except in the ordinary course of business or as otherwise
contemplated hereby or (xii) entered into any commitment,
obligation, understanding or other arrangement, contingent or
otherwise, to effect, directly or indirectly, any of the
foregoing.
IV.1.10. Absence of Undisclosed Liabilities. Since the date
of the last audited Financial Statement, neither the Company nor
any of its Subsidiaries had any material loss contingency (as
defined in Statement of Financial Accounting Standards No. 5),
whether matured or unmatured, fixed or contingent, which is not
fully reflected or provided for on the Balance Sheet or disclosed
in a footnote thereto, except (i) obligations to perform under
commitments or other obligations incurred in the ordinary course
of business, (ii) tax and related liabilities which have been
disclosed pursuant to Item 4.1.11 ("Taxes") of the Disclosure
Schedule hereto and (iii) other liabilities as set forth on
Item 4.1.10 ("Liabilities") of the Disclosure Schedule hereto or
in the SEC Reports filed prior to the date hereof or in the
Offering Memorandum.
IV.1.11. Taxes. Except as set forth on Item 4.1.11 ("Taxes")
of the Disclosure Schedule hereto, the Company has accurately
completed and filed or will file within the time prescribed by
law (including extensions of time approved by the appropriate
taxing authority) all tax returns and reports required to be
filed on behalf of the Company and each of its Subsidiaries with
the Internal Revenue Service, the State of Delaware, any other
states or governmental subdivisions and all foreign countries and
has paid all taxes, interest, penalties, assessments or
deficiencies shown to be due (or, to the knowledge of the
Company, claimed by such authority or jurisdiction to be due) on
or in respect of such tax returns and reports. The Company knows
of (i) no other federal, state, county, municipal or foreign
taxes (or other liabilities in respect thereof) which are due and
payable by the Company or any of its Subsidiaries which have not
been so paid, (ii) no other material federal, state, county,
municipal or foreign tax returns or reports which are required to
be filed which have not been so filed, (iii) no other unpaid
assessment for additional taxes or penalties for any fiscal
period or any basis thereof and (iv) no material tax lien,
whether imposed by any Federal, state, county, municipal or
foreign taxing authority, outstanding against the assets or
business of the Company or any of its Subsidiaries. The federal
income tax returns of the Company and its Subsidiaries have been
audited for the Company's 1991, 1992 and 1993 fiscal years and
the state income tax returns of the Company and its Subsidiaries
are currently being audited. Proper and accurate amounts have
been withheld by the Company and its Subsidiaries from their
respective employees for all periods in compliance with the tax,
social security and any employment withholding provisions of
applicable federal and state law, and proper and accurate federal
and state returns have been filed by the Company for all periods
for which returns were due with respect to employee income tax
withholding, social security and unemployment taxes for the
Company and its Subsidiaries, and the amounts shown thereon to be
due and payable have been paid in full or provision therefor
included on the books of the Company in accordance with and to
the extent required by GAAP. The Company has not made any
election under Section 341(f) of the Code.
IV.1.12. Litigation. Except as set forth on Item 4.1.12
("Litigation") of the Disclosure Schedule hereto, there are no
actions, suits, proceedings, orders, investigations or claims
pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries, any of their
respective assets or businesses or any of their respective
directors or employees, at law or in equity, before any court,
arbitration panel, tribunal or governmental department,
commission, board, bureau, agency or instrumentality which could
have a Material Adverse Effect or which could materially
adversely affect the transactions contemplated by this Agreement,
the Related Documents and the Other Financing Documents.
IV.1.13. Insurance. Except as set forth on Item 4.1.13
("Insurance") of the Disclosure Schedule hereto, the Company
holds valid policies in full force and effect covering all of the
insurance required to be maintained by it pursuant to
Section 6.2.4(g) hereof.
IV.1.14. Conflicts of Interest. Except as set forth on Item
4.1.14 ("Conflict of Interest") of the Disclosure Schedule
hereto, neither the Company, nor any Subsidiary, nor, to the
knowledge of the Company, any of their respective officers,
employees, agents or any other Person acting on behalf of the
Company or any such Subsidiary has, directly or indirectly, given
or agreed to give any money, gift or similar benefit (other than
legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a
customer or supplier, or official or employee of any governmental
agency or instrumentality of any government (domestic or foreign)
or other Person who was, is, or may be in a position to help or
hinder the business of the Company or any of its Subsidiaries (or
assist in connection with any actual or proposed transaction)
which (i) could reasonably be expected to subject the Company or
any of its Subsidiaries to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not
given in the past, could reasonably be expected to constitute a
Material Adverse Effect, or (iii) if not continued in the future,
could reasonably be expected to constitute a Material Adverse
Effect.
IV.1.15. Other Relationships. Except as set forth on Item
4.1.15 ("Other Relationships") of the Disclosure Schedule hereto,
to the knowledge of the Company
(a) the officers of the Company and its Subsidiaries have no
interest (other than as non-controlling holders of securities of
a publicly-traded company), either directly or indirectly, in any
Person (whether as an employee, officer, director, shareholder,
agent, independent contractor, security holder, creditor,
consultant or otherwise) that presently (i) provides any services
or designs, produces or sells any products or product lines, or
engages in any activity which is the same, similar to or
competitive with any activity or business in which the Company or
any of its Subsidiaries is now engaged, (ii) is a supplier of,
customer of, creditor of, or has an existing contractual
relationship with, the Company or any of its Subsidiaries, or
(iii) has any direct or indirect interest in any asset or
property used by the Company or any of its Subsidiaries or any
property, real or personal, tangible or intangible, that is
necessary or desirable for the conduct of the business of the
Company or any of its Subsidiaries; and
(b) no current or former stockholder, director, officer or
employee of the Company or any of its Subsidiaries, nor any
Affiliate of any such Person, is at present, or has, since
January 1, 1995, been, directly or indirectly through his
affiliation with any other Person, a party to any transaction
(other than as an employee) with the Company or any of its
Subsidiaries providing for the furnishing of services by, or
rental of real or personal property from, or otherwise requiring
cash payments to any such person.
IV.1.16. Licenses; Compliance with Laws, Other Agreements,
etc. Except as set forth on Item 4.1.16 ("Licenses") of the
Disclosure Schedule hereto, the Company and its Subsidiaries have
all franchises, permits, licenses and other rights, including,
without limitation, all Approvals (governmental and otherwise),
which are necessary or required for the conduct of the business
of the Company and its Subsidiaries as currently conducted and as
contemplated to be conducted (pursuant to the Offering
Memorandum) (collectively, the "Licenses"), except where the
failure to obtain such Licenses would not in the aggregate
constitute a Material Adverse Effect. The Company knows of no
basis upon which the renewal of any Licenses would be denied in
the future. Each such License has been validly issued and is in
full force and effect, and neither the Company nor any of its
Subsidiaries is in violation of any such License, except where
such violations would not in the aggregate constitute a Material
Adverse Effect.
IV.1.17. Intellectual Property Rights and Government
Approvals. Except as set forth on Item 4.1.17(a) ("Intellectual
Property Rights") of the Disclosure Schedule hereto, the Company
and its Subsidiaries have all patents, trademarks, service marks,
trade names, copyrights, rights or licenses to use the same, and
any and all applications therefor (collectively, the
"Intellectual Property"), necessary to permit the Company and its
Subsidiaries to conduct their business as currently conducted and
as contemplated to be conducted, except where the failure to own
or hold any Intellectual Property would not in the aggregate
constitute a Material Adverse Effect. Except as set forth on
Item 4.1.17(a) of the Disclosure Schedule hereto, neither the
Company nor any of its Subsidiaries has received any formal or
informal notice of infringement or other complaint that any of
their operations infringe any rights under any Intellectual
Property or any other proprietary rights of any other Person, nor
does the Company or any of its Subsidiaries have any reason to
believe that there has been any such infringement that would
constitute a Material Adverse Effect. Except as set forth on
Item 4.1.17(b) ("Royalties and Other Fees") of the Disclosure
Schedule hereto, no royalties, honorariums or fees are or will be
payable by the Company or any of its Subsidiaries to any other
Person by reason of the ownership or use by any of them of any
Intellectual Property.
IV.1.18. Investment Company Act. The Company is not, and
immediately after any Closing will not be, an "investment
company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act.
IV.1.19. Brokers, etc. Except as set forth on Item 4.1.19
("Brokers") of the Disclosure Schedule hereto, the Company has
not dealt with, nor is the Company obligated to pay any fee or
commission in connection with, any broker, finder or other
similar Person in connection with the offer or sale of the Common
Stock, Preferred Stock, the Warrants or Senior Secured Notes or
any of the transactions contemplated by this Agreement, any
Related Document or any Other Financing Document.
IV.1.20. Private Sale. Except for the issuance of the Senior
Secured Notes (with respect to which the Company intends to file
the Exchange Offer Registration Statement (as defined in the
Offering Memorandum)), in connection with the Recapitalization,
the Company has not, either directly or through any agent,
offered any Common Stock, Preferred Stock, Senior Secured Notes
or any other securities to, or solicited any offers to acquire
any Common Stock, Preferred Stock, Senior Secured Notes or any
other Interests or securities from, or otherwise approached,
negotiated or communicated in respect of any Common Stock,
Preferred Stock, Senior Secured Notes or any other Interests or
securities with, any Person in such a manner as to require that
the offer or sale of any such securities be registered pursuant
to the '33 Act or any Blue Sky Laws.
IV.1.21. Disclosure. Neither this Agreement, nor any Related
Document, any Other Financing Document, the Offering Memorandum
for the Senior Secured Notes, nor any of the exhibits, schedules
or attachments hereto or thereto contain any untrue statement of
a material fact or omits a material fact necessary to make each
statement contained herein or therein not misleading; provided,
however, that with respect to any of the financial projections
included therein the Company represents and warrants only that
such projections were based upon assumptions reasonably believed
by the Company to be reasonable and fair as of the date the
projections were prepared in the context of the Company's history
and current and reasonably foreseeable business conditions.
IV.1.22. Contracts and Commitments.
(a) Except as expressly contemplated by this Agreement or as
set forth in the SEC Reports filed prior to the date hereof or on
Item 4.1.22 ("Contracts and Commitments") of the Disclosure
Schedule hereto, neither the Company nor any of its Subsidiaries
is a party to any written or oral:
(i) pension, profit sharing, stock option, employee stock
purchase or other plan or arrangement providing for deferred or
other compensation to employees or any other employee benefit
plan or arrangement, or any contract with any labor union, or any
severance agreements;
(ii) contract for the employment of any officer, individual
employee or other Person on a full-time, part-time, consulting or
other basis providing annual compensation in excess of $100,000
per annum or contract relating to loans to officers, directors or
Affiliates;
(iii) contract under which the Company or any of its
Subsidiaries has advanced or loaned any other Person amounts in
the aggregate exceeding $50,000;
(iv) agreement or indenture relating to the borrowing of money
or the mortgaging, pledging or otherwise placing a lien on any
material asset or material group of assets of the Company or any
of its Subsidiaries;
(v) guarantee of any obligation of any Person (other than the
Company or a Subsidiary) involving more than $100,000;
(vi) lease or agreement under which the Company or any of its
Subsidiaries is lessee of or holds or operates any property, real
or personal, owned by any other Person, except for any lease of
real or personal property under which the aggregate annual rental
payments do not exceed $100,000;
(vii) lease or agreement under which the Company or any of
its Subsidiaries is lessor of or permits any third party to hold
or operate any property, real or personal, owned or controlled by
the Company or any of its Subsidiaries, except for any lease
under which the aggregate annual rental payments do not exceed
$100,000;
(viii) contract or group of related contracts with the same
party or group of Affiliated parties the performance of which
involves a consideration in excess of $100,000;
(ix) assignment or license agreement with respect to any
intangible property (including, without limitation, any
Intellectual Property);
(x) warranty agreement with respect to its services rendered
or its products sold or leased;
(xi) agreement under which it has granted any Person any
registration rights or similar rights (including piggyback
rights) or co-sale or similar rights in respect of any securities
of the Company or any of its Subsidiaries;
(xii) sales, distribution or franchise agreement involving
more than $100,000 per annum;
(xiii) agreement with a term of more than six months
involving more than $100,000 per annum which is not terminable by
the Company or any Subsidiary upon less than 30 days' notice
without penalty;
(xiv) contract or agreement prohibiting it from freely
engaging in any business or competing anywhere in the world;
(xv) contract, agreement or other arrangement (including,
without limitation, any stockholders or voting agreement, voting
trust or similar arrangement with respect to any securities of
the Company or any of its Subsidiaries) with any officer,
director, employee, holder of securities or Affiliate, or any
Affiliate of any officer, director, employee or holder of such
securities; or
(xvi) any other agreement which is material to its
operations and business prospects or involves a consideration in
excess of $100,000 annually.
(b) Except as set forth on Item 4.1.22 ("Contracts and
Commitments") of the Disclosure Schedule hereto, all of the
contracts, agreements and instruments set forth on such
Disclosure Schedule are valid, binding and enforceable against
the Company or one or more of its Subsidiaries, as the case may
be, in accordance with their respective terms, all obligations
required to be performed by the Company or any such Subsidiary,
as the case may be, under such contracts, agreements and
instruments have been so performed, and neither the Company nor
any such Subsidiary is in default under or in breach of, nor in
receipt of any claim of default or breach under, any such
contract, agreement or instrument to which it is subject, except
where the failure to perform such obligations or such defaults or
breaches would not in the aggregate constitute a Material Adverse
Effect. No event has occurred which with the passage of time or
the giving of notice or both would result in a default, breach or
event of noncompliance under any such contract, agreement or
instrument, except where such defaults, breaches or events of
noncompliance would not in the aggregate constitute a Material
Adverse Effect; the Company has no present expectation or
intention that either it or any of its Subsidiaries, as the case
may be, will not fully perform all such obligations; the Company
has no knowledge of any breach or anticipated breach by the other
parties to any such contract or commitment; and neither the
Company nor any of its Subsidiaries is a party to any contract
requiring it to purchase or sell goods or services or lease
property above or below (as the case may be) prevailing market
prices and rates.
IV.1.23. Customers and Suppliers. Set forth on Item 4.1.23
("Customers and Suppliers") of the Disclosure Schedule hereto is
a list of the ten largest customers of the Company and its
Subsidiaries for each of the two most recent fiscal years, and
set forth opposite the name of each such customer is the
percentage of consolidated net sales attributable to such
customer. Such Disclosure Schedule also lists any additional
current customers which the Company anticipates may be among the
ten largest customers for the current fiscal year. Since the
date of the Balance Sheet, no material supplier of the Company or
any of its Subsidiaries has indicated that it shall stop, or
materially decrease the rate of, supplying materials, products or
services to the Company or any such Subsidiary, and, except as
set forth in Item 4.1.23 of the Disclosure Schedule, no customer
listed on the aforementioned Disclosure Schedule has indicated
that it shall stop, or materially decrease the rate of, buying
materials, products or services from the Company or any such
Subsidiary.
IV.1.24. Employee Matters and Benefits.
(a) General. Except as set forth in the SEC Reports filed
prior to the date hereof or on Item 4.1.24 ("Employee Benefit
Plans") of the Disclosure Schedule hereto, neither the Company
nor any of its Subsidiaries is a party to, participates in or has
any liability (contingent or otherwise) with respect to:
(i) any "employee welfare benefit plan" or "employee
pension benefit plan" (as those terms are respectively
defined in sections 3(1) and 3(2) of ERISA), other than
a "multiemployer plan" (as defined in section 3(37) of
ERISA);
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, insurance or hospitalization program or
any other fringe benefit arrangements for any current or
former employee, director, consultant or agent, whether
pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an employee benefit
plan (as defined in section 3(3) of ERISA); or
(iii) any contract for the employment of any officer,
individual employee or other Person on a full-time, part-
time, consulting or other basis providing annual
compensation in excess of $100,000 per annum.
(b) Plan Documents and Reports. A true and correct copy of
each of the plans, arrangements, and agreements listed on
Item 4.1.24 ("Employee Benefit Plans") of the Disclosure Schedule
hereto (referred to hereinafter as "Employee Benefit Plans"), and
all contracts relating thereto, or to the funding thereof,
including, without limitation, all trust agreements, insurance
contracts, administration contracts, investment management
agreements, subscription and participation agreements, and
recordkeeping agreements, each as in effect on the date hereof,
has been made available to the Purchasers. In the case of any
Employee Benefit Plan which is not in written form, an accurate
description of such Employee Benefit Plan as in effect on the
date hereof has been made available to the Purchasers. A true
and correct copy of the most recent annual report, actuarial
report, accountant's opinion of the plan's financial statements,
summary plan description and Internal Revenue Service
determination letter with respect to each Employee Benefit Plan,
to the extent applicable, and a current schedule of assets (and
the fair market value thereof assuming liquidation of any asset
which is not readily tradable) held with respect to any funded
Employee Benefit Plan has been made available to the Purchasers,
and there have been no material changes in the financial
condition in the respective plans from that stated in the annual
reports and actuarial reports so made available.
(c) Compliance with Laws; Liabilities. Except as set forth in
Item 4.1.24 ("Employee Benefit Plans") of the Disclosure Schedule
hereto and except for cases that would not in the aggregate
constitute a Material Adverse Effect (it being understood that
for the purposes of this Section 4.1.24 only, Material Adverse
Effect shall not exclude any unfunded liabilities under any
Employee Benefit Plans), as to all Employee Benefit Plans:
(i) All Employee Benefit Plans comply and have been
administered in form and in operation in all material
respects with all applicable requirements of law, and no
event has occurred which will or could reasonably be
expected to cause any such Employee Benefit Plan to fail to
comply with such requirements and no notice has been issued
by any governmental authority questioning or challenging
such compliance.
(ii) All Employee Benefit Plans which are employee
pension benefit plans comply in form and in operation with
all applicable requirements of sections 401(a) and 501(a) of
the Code; there have been no amendments to such plans which
are not the subject of a favorable determination letter
issued with respect thereto by the Internal Revenue Service;
and, to the knowledge of the Company, no event has occurred
which will or could reasonably be expected to give rise to
disqualification of any such plan under such sections or to
a tax under section 511 of the Code.
(iii) None of the assets of any Employee Benefit Plan
that is qualified under sections 401(a) and 501(a) of the
Code is invested in employer securities or employer real
property.
(iv) There have been no "prohibited transactions" (as
described in section 406 of ERISA or section 4975 of the
Code) with respect to any Employee Benefit Plan and neither
the Company nor any Subsidiary has engaged in any prohibited
transaction.
(v) There have been no acts or omissions which have
given rise to or could reasonably be expected to give rise
to fines, penalties, taxes or related charges under section
502 of ERISA or Chapters 43, 47 or 68 of the Code for which
the Company or any Subsidiary may be liable.
(vi) None of the payments contemplated by the Employee
Benefit Plans would, in the aggregate, constitute excess
parachute payments (as defined in section 280G of the Code
(without regard to subsection (b)(4) thereof)).
(vii) There are no actions, suits or claims (other
than routine claims for benefits) pending or, to the
Company's knowledge, threatened involving any Employee
Benefit Plan or the assets thereof and, to the knowledge of
the Company, no facts exist which could reasonably be
expected to give rise to any such actions, suits or claims
(other than routine claims for benefits).
(viii) No Employee Benefit Plan is subject to Title IV
of ERISA.
(ix) Each Employee Benefit Plan which constitutes a
"group health plan" (as defined in section 607(1) of ERISA
or section 4980B(g)(2) of the Code), including any plans of
current and former affiliates which must be taken into
account under sections 4980B and 414(t) of the Code or
section 601 of ERISA, has been operated in compliance with
applicable law, including coverage requirements of section
4980B of the Code and section 601 of ERISA to the extent
such requirements are applicable.
(x) Neither the Company nor any Subsidiary has any
liability or contingent liability for providing, under any
Employee Benefit Plan or otherwise, any post-retirement
medical or life insurance benefits, other than statutory
liability for providing group health plan continuation
coverage under Part 6 of Title I of ERISA and section 4980B
of the Code.
(xi) Actuarially adequate accruals for all obligations
under the Employee Benefit Plans are reflected in the
financial statements of the Company and such obligations
include a pro rata amount of the contributions and the
Pension Benefit Guaranty Corporation premiums which would
otherwise have been made in accordance with past practices
and applicable law for the plan years which include the
Closing Date.
(xii) There has been no act or omission that would
impair the ability of the Company and its Subsidiaries (or
any successor thereto) to unilaterally amend or terminate
any Employee Benefit Plan.
(d) Multiemployer Plans. Neither the Company nor any
Subsidiary contributes to, has contributed to, or has any
liability or contingent liability with respect to a
multiemployer plan.
IV.1.25. Environmental Matters. Except as disclosed on
Item 4.1.25 ("Environmental Matters") of the Disclosure Schedule
hereto and the Environmental Report and except for cases that
would not in the aggregate constitute a Material Adverse Effect:
(a) the business, operations and facilities (whether owned or
leased) of the Company and its Subsidiaries, and all existing
uses of and activities on or at any of the properties or
facilities (whether owned or leased) of the Company and its
Subsidiaries, are, to the Company's knowledge, in material
compliance with all Environmental Laws in effect as of the date
hereof, and no condition exists or event has occurred which, with
or without notice or the passage of time or both, would
constitute a violation of or give rise to any Lien under any
Environmental Law; provided, however, that, with respect to any
property or facility which is leased by the Company or any of its
Subsidiaries, if the lessor of such leased property or facility
has leased a portion thereof to a Person other than the Company
or any of its Subsidiaries, the Company makes no representation
or warranty under this clause (a) as to such other Person or
other leased portion;
(b) the Company and its Subsidiaries are in possession of all
Environmental Permits necessary or desirable for the conduct or
operation of its business (or any part thereof), and are in
material compliance with all of the requirements, conditions and
limitations included in such Environmental Permits;
(c) to the Company's knowledge, there is no, and the Company
and its Subsidiaries have not used or stored any, Hazardous
Material in, on, or at any of the properties or facilities now
owned or leased by the Company or its Subsidiaries except for
inventories of substances which are used or are to be used in the
ordinary course of business (which inventories have been stored,
used and disposed of in accordance with all applicable
Environmental Laws and Environmental Permits, including all
so-called "Right To Know Laws");
(d) the Company and its Subsidiaries have not received any
notice, whether formal or informal, from any Governmental
Authority or any other Person that any past or present aspect of
the business, operations or facilities (whether owned or leased)
of the Company or its Subsidiaries is in violation of any
Environmental Law or Environmental Permit, or that the Company or
its Subsidiaries is responsible or liable (or potentially
responsible or liable) for the investigation, cleanup or
remediation of any Hazardous Materials at any location;
(e) the Company and its Subsidiaries have not at any time
deposited or incorporated any Hazardous Material into, on,
beneath, or adjacent to any property except in compliance in all
material respects with all applicable Environmental Laws and in a
manner which does not create any liability under Environmental
Law;
(f) the Company and its Subsidiaries are not the subject of
any litigation or proceedings in any forum, judicial or
administrative, involving a demand for damages, injunctive
relief, penalties, or other potential liability with respect to
violations of or liability under any Environmental Law;
(g) the Company and its Subsidiaries timely filed all reports
and notifications required to be filed with respect to all of
their operations, properties and facilities (whether owned or
leased) and have generated and maintained all required records
and data under all applicable Environmental Laws;
(h) neither the Company, its Subsidiaries nor, to the
knowledge of the Company, any predecessor thereof has transported
or arranged for the transportation of any Hazardous Material to
any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA or on any similar
state list; and
(i) no condition exists or, to the knowledge of the Company,
existed in the past or event has occurred, with respect to any
property that is currently or was at any time owned or leased by
the Company or its Subsidiaries, or, to the knowledge of the
Company, any predecessor to the Company or its Subsidiaries that
is likely, with or without notice, passage of time or both, to
give rise to any present or future liability of the Company or
its Subsidiaries pursuant to any Environmental Law.
IV.1.26. Small Business Concern. To the best of its
knowledge, the Company is a "Small Concern" as defined in
Section 121.301 of Title 13 of the Code of Federal Regulations.
When executed and delivered by the Company at the Closing, the
Size Status Declaration on SBA Form 480 and Assurance of
Compliance on SBA Form 652, and the information relating to the
Company set forth in Part A of the Portfolio Financing Report on
SBA Form 1031, shall be true and correct to the best of the
Company's knowledge.
IV.1.27. Title to Properties. Except as disclosed in the SEC
Reports filed prior to the date hereof or on Item 4.1.27 ("Title
to Properties") of the Disclosure Schedule hereto, the Company
and its Subsidiaries have, and on the Closing Date will have,
good (and, with respect to real property, marketable) title to,
and are, and on the Closing Date will be, the lawful owner of,
(a) all of the tangible and intangible assets, properties and
rights used in connection with the business of the Company and
its Subsidiaries (except for those assets, properties and rights
that the Company leases or otherwise has the right to use or as
to which the failure to own or possess title would not reasonably
be expected to have a Material Adverse Effect) and (b) all of the
tangible and intangible assets, properties and rights reflected
as owned by the Company and its Subsidiaries in the Financial
Statements or the SEC Reports filed prior to the date hereof or
Item 4.1.28 ("Assets") of the Disclosure Schedule hereto or Item
4.1.29 ("Real Property") of the Disclosure Schedule hereto (other
than assets leased under the leases set forth in Item 4.1.28
("Assets") of the Disclosure Schedule hereto or Item 4.1.29
("Real Property") of the Disclosure Schedule hereto and assets
disposed of in the ordinary course of business since the date of
such Financial Statements or the most recently filed SEC Report).
IV.1.28. Condition and Sufficiency of Assets. Except as
disclosed on Item 4.1.28 ("Assets") of the Disclosure Schedule
hereto, all of the tangible assets and properties of the Company
and its Subsidiaries, whether real or personal, owned or leased,
are in generally good operating condition and repair (with the
exception of normal wear and tear), and are free from defects
(other than such minor defects as do not either interfere with
the intended use thereof in the conduct of normal operations),
except where the failure to conform to such condition would not
in the aggregate constitute a Material Adverse Effect.
Immediately after the Closing Date, the Company and its
Subsidiaries shall own or have the right to use all the assets,
properties, rights, know-how, key personnel, processes and
ability which are required for or currently used in connection
with the operation of their business as presently conducted,
except where the failure to have a right to use or own any
thereof would not have a Material Adverse Effect.
IV.1.29. Real Property. Item 4.1.29 ("Real Property") of the
Disclosure Schedule hereto contains an accurate and complete
list, as of the date of this Agreement, of all fee interests in
real property and buildings and structures of the Company and its
Subsidiaries. The Company and its Subsidiaries have good and
indefeasible title in fee simple to all of the real property and
buildings specified as owned by them in such Item 4.1.29 ("Real
Property") of the Disclosure Schedule hereto, and have such title
in all such listed real property and buildings as is required for
the conduct of the business of the Company and its Subsidiaries,
as presently conducted, in each case free and clear of all
encumbrances, except:
(A) Liens for taxes, easements or governmental charges or
levies if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith by appropriate proceedings and are not material to the
Company or its Subsidiaries; and
(B) such imperfections of title, if any, as do not
individually or in the aggregate materially detract from the
value or marketability of such real property as presently used or
materially interfere with such real property's present, or to the
knowledge of the Company, proposed use, or that in the aggregate
would have a Material Adverse Effect.
Except as set forth in Item 4.1.29 ("Real Property") of the
Disclosure Schedule hereto, all of the buildings and structures
to the extent owned by the Company or its Subsidiaries are in
good operating condition and repair, suitable for the purposes
for which they are being used and each has adequate rights of
ingress and egress for the operation of the business of the
Company and its Subsidiaries in the ordinary course of business.
To the Company's knowledge, no building or structure to the
extent owned by the Company or its Subsidiaries, or any
appurtenance thereto or equipment therein, or the operation or
maintenance thereof, violates any restrictive covenants or any
provisions of any federal, state, local or foreign law, ordinance
or zoning regulation, or encroaches on any property owned by
others, except to the extent any such violation or encroachment
would not (i) materially interfere with the use or adversely
affect the value of such building, structure or appurtenance or
(ii) have a Materially Adverse Effect. No condemnation
proceeding is pending or, to the knowledge of the Company,
threatened with respect to any of the real property listed in
Item 4.1.29 ("Real Property") of the Disclosure Schedule hereto
nor, to the knowledge of the Company, is any change in any of the
foregoing laws, ordinances or regulations pending or threatened,
which proceeding or change could reasonably be expected to
materially interfere with the use or materially adversely affect
the value of any of the real property listed in Item 4.1.29
("Real Property") of the Disclosure Schedule hereto.
IV.2. Representations and Warranties of Mergerco. Mergerco
represents and warrants to the Purchasers, as of the Closing
Date, as follows:
IV.2.1. Corporate Existence. Mergerco is a corporation duly
incorporated, validly existing and in good standing under the
laws of the jurisdiction set forth for such corporation, and is
duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or use
of its assets or properties, or the conduct or nature of its
business, makes such qualification necessary, except where the
failure to so qualify would not constitute a Material Adverse
Effect. Mergerco has all requisite corporate power and authority
to conduct its business and own its properties as now conducted
and owned. The copies of the Restated Certificate of
Incorporation and By-Laws of Mergerco previously made available
to the Purchasers are true and correct.
IV.2.2. Power and Authority. Mergerco has all requisite
corporate power and authority, and has taken all required
corporate and other action necessary, to execute, deliver and
perform this Agreement, all Related Documents and all Other
Financing Documents to which it is a party, and to issue and sell
the Common Stock, the Preferred Stock and the Warrants as
provided herein and therein. None of the foregoing actions will
(i) violate any provision of Mergerco's By-laws or Restated
Certificate of Incorporation, (ii) result in the breach of or
constitute a default under any contract, agreement or instrument
to which Mergerco is a party or by which it is bound,
(iii) result in the creation or imposition of any lien, claim or
encumbrance on any asset of Mergerco, (iv) give any Person rights
to terminate any contracts or agreements with Mergerco or
otherwise to exercise rights against Mergerco or (v) violate any
Approval or any order, writ, judgment, injunction, decree,
statute, rule or regulation of any court, tribunal or
governmental entity applicable to or bearing upon Mergerco or its
assets or business; except, in the case of each of clauses (ii),
(iii), (iv) and (v) above, for occurrences that would not in the
aggregate constitute a Material Adverse Effect.
IV.2.3. Enforceability, etc. Each of this Agreement, each of
the Related Documents and each of the Other Financing Documents
to which it is a party has been duly executed and delivered by
Mergerco and constitutes the legal, valid and binding obligation
of Mergerco enforceable against it in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or other
similar laws affecting the enforcement of creditors' rights
generally and general equitable principles.
IV.2.4. Consents, Approvals and Non-Contravention. Neither
the execution, delivery and performance by Mergerco of this
Agreement, any Related Documents or any of the Other Financing
Documents to which it is a party, nor the consummation by
Mergerco of any transaction related hereto or thereto, nor the
issuance, sale or delivery of the Common Stock, the Preferred
Stock or Warrants will:
(a) require any Approval, except where the failure to obtain
an Approval would not in the aggregate constitute a Material
Adverse Effect;
(b) violate any contract, agreement, instrument or other
arrangement to which Mergerco is a party or by which it is bound,
except where such violation would not in the aggregate constitute
a Material Adverse Effect;
(c) violate any order, writ, judgment, injunction, decree,
statute, law, rule or regulation of any court, tribunal or
governmental entity or authority applicable to or bearing upon
Mergerco, or any of its assets or business, except where such
violation would not in the aggregate constitute a Material
Adverse Effect; or
(d) violate any of Mergerco's Licenses, except where such
violation would not in the aggregate constitute a Material
Adverse Effect.
IV.2.5. No Activities. Mergerco has not carried on any trade
or business activities and has not acquired any assets or rights
or incurred any indebtedness, commitments or other liabilities
(contingent or otherwise) except those pursuant to this
Agreement, any Related Documents or Other Financing Documents to
which it is a party.
IV.2.6. Capitalization. Schedule IV hereto sets forth a true
and complete statement of the capitalization of Mergerco
immediately prior to the Merger and after giving effect to the
issuance and sale by Mergerco of the Common Stock, Preferred
Stock and Warrants. Except as set forth on said Schedule IV,
Mergerco has not issued any Interests, nor are any Interests (or
any rights to acquire or purchase any Interests) outstanding.
The Common Stock, Preferred Stock and Warrants to be delivered to
the Purchasers and Preferred Stock Purchasers, as applicable, by
Mergerco will be delivered in accordance with the terms hereof
and the Preferred Stock Purchase Agreement, and upon such
delivery, will be duly authorized, validly issued, fully paid and
non-assessable and will be delivered to the Purchasers and
Preferred Stock Purchasers, as applicable, free and clear of any
liens, encumbrances, preemptive rights, escrows, options, rights
of first refusal or other agreements, arrangements, commitments,
understandings or obligations, whether written or oral, or any
other restrictions affecting rights and other incidents of record
and beneficial ownership, other than (a) as set forth herein, in
the Related Documents or the Other Financing Documents and
(b) restrictions on transferability imposed generally under the
'33 Act and under the Blue Sky Laws. The issuance and delivery
of the Common Stock, Preferred Stock and Warrants to the
Purchasers and Preferred Stock Purchasers, as applicable, are
exempt from the registration requirements of the '33 Act and the
Blue Sky Laws or have been qualified as may be necessary.
IV.3. Representations and Warranties of the Selling
Shareholders. Each Selling Shareholder severally (and not
jointly) represents and warrants to the Purchasers, as of the
date hereof and the Closing Date (except to the extent any of the
following representations or warranties specifically apply or
relate to a prior date, in which event such Selling Shareholder
represents and warrants such representations and warranties to be
true and correct as of such prior date), as follows:
IV.3.1. Existence. Such Selling Shareholder, if not a
natural Person, is an entity duly organized, validly existing and
in good standing under the laws of its state of organization and
is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the ownership or
use of its assets or properties, or the conduct or nature of its
business, makes such qualification necessary, except where the
failure to so qualify would not constitute a Material Adverse
Effect. Such Selling Shareholder, if not a natural Person, has
all requisite power and authority to conduct its business and own
its properties as now conducted and owned.
IV.3.2. Power and Authority. Such Selling Shareholder, if
not a natural Person, has all requisite organizational power and
authority, and has taken all required organizational and other
action necessary, to execute, deliver and perform this Agreement,
all Related Documents, all Other Financing Documents to which
such Selling Shareholder is a party and to exchange any Rollover
Stock being exchanged by such Selling Shareholder, as herein
provided. Such Selling Shareholder, if a natural Person, is of
legal capacity and age to duly execute, deliver and perform this
Agreement, all Related Documents, all Other Financing Documents
to which such Selling Shareholder is a party and to exchange any
Rollover Stock being exchanged by such Selling Shareholder, as
contemplated herein. None of the foregoing actions will (i)
violate any provision of such Selling Shareholder's (if not a
natural Person) organizational or charter documents, (ii) result
in the breach of or constitute a default under any contract,
agreement or instrument to which such Selling Shareholder is a
party or by which it is bound, (iii) result in the creation or
imposition of any lien, claim or encumbrance on any asset of such
Selling Shareholder, (iv) give any Person rights to terminate any
contracts or agreements with such Selling Shareholder or
otherwise to exercise rights against such Selling Shareholder or
(v) violate any Approval or any order, writ, judgment,
injunction, decree, statute, rule or regulation of any court,
tribunal or governmental entity applicable to or bearing upon
such Selling Shareholder or any such Selling Shareholder's assets
or business, except for occurrences that would not have a
Material Adverse Effect.
IV.3.3. Enforceability, etc. This Agreement, each of the
Related Documents and each of the Other Financing Documents to
which such Selling Shareholder is a party has been duly executed
and delivered by such Selling Shareholder and constitutes the
legal, valid and binding obligation of such Selling Shareholder
enforceable against such Selling Shareholder in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or other
similar laws affecting the enforcement of creditors' rights
generally and general equitable principles.
IV.3.4. Title, etc. Such Selling Shareholder has good and
marketable title to all the shares of Merger Stock and Old
Private Warrants (as reflected on Schedule II hereto) owned by
such Selling Shareholder, free and clear of all liens,
encumbrances, equities, security interests, preemptive rights,
escrows, options, rights of first refusal or other agreements,
arrangements, commitments, understandings or obligations, whether
written or oral, or any other restrictions affecting rights and
other incidents of record and beneficial ownership, and claims
whatsoever, with full right and authority to exercise any voting
rights applicable to such stock.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS
V.1. Representations and Warranties of the Purchasers. Each of
the Purchasers severally (and not jointly) represents and
warrants to the Company, as of the date hereof and the Closing
Date, as follows:
V.1.1. Power and Authority. Such Purchaser has full power
and authority and, if not an individual Purchaser, has taken all
required corporate (or trust or partnership, as the case may be)
and other action necessary to permit it to execute and deliver
this Agreement, the Related Documents, the Other Financing
Documents and each other document or instrument related hereto or
thereto that such Purchaser is a party to, and to carry out the
terms hereof and thereof. None of the foregoing actions will
(i) violate any provision of such Purchaser's by-laws, charter or
other similar organic documents, if applicable, (ii) result in
the breach of or constitute a default under any contract,
agreement or instrument to which such Purchaser is a party or by
which it is bound or (iii) violate any order, writ, judgment,
injunction, decree, statute, rule or regulation of any court,
tribunal or governmental entity or authority applicable to or
bearing upon such Purchaser or any of its assets or business,
except for any such occurrences that would not constitute a
Material Adverse Effect.
V.1.2. Enforceability, etc. This Agreement and each of the
Related Documents to which such Purchaser is a party has been
duly executed and delivered by such Purchaser and constitutes the
legal, valid and binding obligation of such Purchaser enforceable
against it in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally and general equitable
principles.
V.1.3. Purchase for Investment. Such Purchaser is
purchasing the Common Stock for its own account and with no
present view to distribution thereof, except for transfers
permitted hereunder. Such Purchaser understands that the Common
Stock must be held indefinitely unless it is registered under the
'33 Act or an exemption from such registration becomes available,
and that the Common Stock may only be transferred as provided in
this Agreement and the Related Documents and will bear a legend
to such effect.
V.1.4. Financial Matters. Such Purchaser represents and
warrants to the Company that it understands that the purchase of
the Common Stock involves substantial risk and that such
Purchaser's financial condition and investments are such that it
is in a financial position to hold the Common Stock for an
indefinite period of time and to bear the economic risk of, and
withstand a complete loss of, its investment in the Common Stock.
Such Purchaser represents that it is an "accredited investor" as
that term is defined in Regulation D promulgated under the '33
Act, and that such Purchaser is a sophisticated investor, capable
of evaluating the merits and risks of investing in the Company.
V.1.5. Adequate Access to Personnel and Materials. During
the negotiation of the transactions contemplated herein, such
Purchaser and its representatives have been afforded full and
free access to the Company's corporate books, financial
statements and records, have been afforded an opportunity to ask
such questions of the Company's officers and employees concerning
the Company's business, operations, financial condition, assets,
liabilities and other relevant matters, and have been given all
such information as has been requested, in order to evaluate the
merits and risks of the prospective investment contemplated
herein.
V.1.6. Brokers, etc. Such Purchaser has not dealt with any
broker, finder or other similar Person in connection with the
offer or sale of the Common Stock or any of the transactions
contemplated by this Agreement as a result of which the Company
or any Selling Shareholder would be obligated to pay any fee or
commission.
ARTICLE VI
COVENANTS
VI.1. Pre-Closing Date Covenants of the Company. The
Company covenants and agrees that, at all times prior to the
Closing Date, it shall perform, observe and comply with the
covenants set forth in this Section 6.1.
VI.1.1. Access and Investigation. Upon reasonable notice,
and provided the Purchasers and their advisors (collectively,
"Purchasers' Advisors") shall maintain the confidentiality of all
information to which they have access, the Company will, and will
cause each of its Subsidiaries to, (a) afford the Purchasers and
the Purchasers' Advisors full and free access, during normal
business hours without disruption to the normal day-to-day
operation of the business, to the personnel, properties
(including subsurface testing), contracts, books and records and
other documents and data of the Company and its Subsidiaries, (b)
furnish the Purchasers and the Purchasers' Advisors with copies
of all such contracts, books and records and other existing
documents and data as the Purchasers may reasonably request, and
(c) furnish the Purchasers and the Purchasers' Advisors with such
additional financial, operating and other data and information as
the Purchasers may reasonably request.
VI.1.2. Operation of the Businesses of the Company and its
Subsidiaries. The Company will, and will cause each of its
Subsidiaries to, (a) conduct their respective businesses only in
the ordinary course of business, (b) use all commercially
reasonable efforts to preserve intact the current business
organization of the Company and its Subsidiaries, keep available
the services of the current officers, employees and agents of the
Company and each of its Subsidiaries, and maintain the relations
and good will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships with
the Company and its Subsidiaries, (c) confer with CVCA (on behalf
of the Purchasers) concerning operational matters of a material
nature, (d) otherwise operate and conduct the businesses of the
Company and its Subsidiaries in a manner so as not to cause any
of the Company's representations or warranties set forth in
Section 4.1 to be false or incorrect in any material respect on
the Closing Date, and (e) upon reasonable request, otherwise
report periodically to the Purchasers concerning the status of
the business, operations and finances of the Company and its
Subsidiary.
VI.1.3. Negative Covenant. Except as otherwise expressly
permitted by this Agreement, the Company will not, and will cause
each of its Subsidiaries not to, without the prior consent of a
majority-in-interest of the Purchasers take any affirmative
action, or fail to take any reasonable action within their or its
control, as a result of which any of the changes or events listed
in Section 4.1.9 could reasonably be expected to occur.
VI.1.4. Required Approvals. As promptly as practicable after
the date of this Agreement, the Company will make all filings
required to be made by it in order to consummate the transactions
contemplated hereby and by the Related Documents and Other
Financing Documents (including all filings under the HSR Act).
The Company will (a) cooperate with the Purchasers with respect
to all filings that the Purchasers elect to make or are required
to make in connection with the transactions contemplated hereby
and by the Related Documents and Other Financing Documents, and
(b) cooperate with the Purchasers in obtaining all consents
identified on Schedule V hereof (including taking all actions
reasonably requested by any Purchaser that has made a filing
pursuant to the HSR Act in connection with the transactions
contemplated hereby to cause early termination of any applicable
waiting period under the HSR Act).
VI.1.5. Notification. The Company will promptly notify the
Purchasers and the Selling Shareholders in writing if the Company
becomes aware of any fact or condition that causes or constitutes
a breach of any of the Company's representations and warranties
as of the date of this Agreement, or if the Company becomes aware
of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty
been made as of the time of occurrence or discovery of such fact
or condition. The Company will promptly notify the Purchasers
and the Selling Shareholders of the occurrence of any breach of
any covenant of the Company in this Article VI or of the
occurrence of any event that may make the satisfaction of the
conditions in Article III impossible or unlikely.
VI.1.6. No Solicitation. Until such time, if any, as this
Agreement is terminated pursuant to Section 7.1, neither any
Selling Shareholder nor the Company shall, nor shall the Company
permit any of its Subsidiaries to, directly or indirectly,
solicit, initiate, or encourage any inquiries or proposals from,
any Person (other than the Purchasers) relating to any
transaction involving, directly or indirectly, the sale of the
business or assets (other than in the ordinary course of
business) of the Company or any of its Subsidiaries, or any of
the capital stock of any the Company or any of its Subsidiaries,
or any merger, consolidation, business combination, or similar
transaction involving the Company or any of its Subsidiaries
(collectively, a "Competing Offer"). Promptly, but in any event
within one business day of receiving any Competing Offer, the
Company or Selling Shareholder shall notify CVCA thereof,
together with all relevant information as to the Person or
Persons making such Competing Offer and the proposed terms
thereof. Notwithstanding anything to the contrary contained in
this Section, nothing shall prevent or restrict the Company (or
the Board of Directors of the Company) from fulfilling its (or
their) fiduciary responsibilities with respect to a Competing
Offer; provided, however, that, in the event the Company or the
Selling Shareholders receive an unsolicited Competing Offer which
it (or they) decide to accept, the Company agrees that it will
not permit such Competing Offer to be consummated until and
unless adequate provision has been made with respect to
compliance with the payment and reimbursement obligations set
forth in Section 7.1(a)(v) below.
VI.1.7. Best Efforts. The Company will use all commercially
reasonable best efforts to cause the conditions in Article III to
be satisfied.
VI.2. Post-Closing Date Covenants of the Company. The
Company covenants and agrees that, at all times from the Closing
Date until the Common Stock ceases to constitute Restricted
Securities, it shall perform, observe and comply with the
covenants set forth in this Section 6.2.
VI.2.1. Use of Proceeds. The Company shall use the proceeds
of the sale of the Common Stock, Preferred Stock, Warrants and
Senior Secured Notes only for the purposes described in Section
2.6 hereof.
VI.2.2. Inspection of Property. Provided such Persons having
access shall maintain the confidentiality of the information to
which they have access, the Company shall permit any
representatives designated by any Purchaser or any Qualified
Holder, upon reasonable notice and during normal business hours,
to (i) visit and inspect any of the properties of the Company and
its Subsidiaries, (ii) examine the corporate and financial
records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and (iii) discuss the affairs,
finances and accounts of the Company and its Subsidiaries with
the officers, key employees and independent accountants of the
Company and its Subsidiaries.
VI.2.3. Compliance with Agreements. The Company shall
perform, observe and comply, in all material respects, with all
agreements, covenants and other obligations set forth herein, in
the Related Documents, the Other Financing Documents, the Amended
and Restated Certificate of Incorporation, By-laws and each other
agreement, document or instrument related thereto by which the
Company is bound.
VI.2.4. Affirmative Covenants. The Company shall, and shall
cause each Subsidiary to:
(a) use all commercially reasonable efforts to cause
to be done all things necessary to maintain, preserve and
renew its corporate existence, all material Licenses,
Approvals, authorizations and permits necessary to the
conduct of its business, except where the failure to do so
will not have a Material Adverse Effect;
(b) maintain and keep its properties in good repair,
working order and condition, and from time to time make all
necessary repairs, renewals and replacements, so that its
businesses may be properly conducted at all times;
(c) pay and discharge when payable all taxes,
assessments and governmental charges imposed upon its
properties or upon the income or profits therefrom (in each
case before the same becomes delinquent and before penalties
accrue thereon) and all claims for labor, materials or
supplies to the extent to which the failure to pay or
discharge such obligations would reasonably be expected to
have a material adverse effect upon the financial condition
of the Company and its Subsidiaries, taken as a whole,
unless and to the extent that the same are being contested
in good faith and by appropriate proceedings and adequate
reserves (as determined in accordance with GAAP,
consistently applied) have been established on its books
with respect thereto;
(d) comply with all other material obligations which
it incurs pursuant to any contract or agreement as such
obligations become due to the extent to which the failure to
so comply would reasonably be expected to have a material
adverse effect upon the financial condition of the Company
and its Subsidiaries, taken as a whole, unless and to the
extent that the same are being contested in good faith and
by appropriate proceedings and adequate reserves (as
determined in accordance with GAAP, consistently applied)
have been established on its books with respect thereto;
(e) comply in all material respects with all
applicable laws, rules and regulations of all governmental
authorities, the violation of which would reasonably be
expected to have a material adverse effect upon the
financial condition of the Company and its Subsidiaries
taken as a whole;
(f) maintain proper books of record and account which
fairly present its financial condition and results of
operations and make provisions on its financial statements
for all such proper reserves as in each case are required in
accordance with GAAP, consistently applied; and
(g) maintain in full force and effect a policy or
policies of standard comprehensive general liability
insurance underwritten by a U.S. insurance company insuring
its properties and business against such losses and risks,
and in such amounts, as are adequate for its business and as
are customarily carried by entities of similar size engaged
in the same or similar business (such policies shall include
property loss insurance policies, with extended coverage,
sufficient in amount to allow the replacement of any of its
tangible properties which might be damaged or destroyed by
the risks or perils normally covered by such policies).
VI.2.5. SBIC Regulatory Provisions.
(a) The Company shall notify each Holder which is a licensed
small business investment company (a "SBIC Holder") as soon as
practicable (and, in any event, not later than 15 days) prior to
taking any action after which the number of record holders of the
Company's voting stock would be increased from fewer than 50 to
50 or more, and the Company shall notify each SBIC Holder of any
other action or occurrence after which the number of record
holders of the Company's voting stock was increased (or would
increase) from fewer than 50 to 50 or more, as soon as
practicable after the Company becomes aware that such other
action or occurrence has occurred or is proposed to occur.
(b) Within 75 days after the Closing, the Company shall
deliver to each SBIC Holder a written statement certified by the
Company's president or chief financial officer describing in
reasonable detail the use of the proceeds of the sale of Common
Stock hereunder by the Company and its Subsidiaries. In addition
to any other rights granted hereunder, the Company shall grant
each SBIC Holder and the United States Small Business
Administration (the "SBA") access to the Company's records for
the purpose of verifying the use of such proceeds to the extent
required pursuant to SBIC Regulations.
(c) Upon the occurrence of a Regulatory Violation or in the
event that any SBIC Holder determines in its reasonable good
faith judgment that a Regulatory Violation has occurred, in
addition to any other rights and remedies to which it may be
entitled as a holder of Common Stock (whether under this
Agreement, the Amended and Restated Certificate of Incorporation
or otherwise), each SBIC Holder shall, subject to the provisions
of the Senior Secured Note Indenture, have the right, after
making all commercially reasonable efforts to transfer its Common
Stock to any Permitted Transferee or to the extent an Event of
Non-Compliance has not occurred and is not then continuing, with
the consent of the Company (which consent shall not be
unreasonably delayed or withheld), any other transferee, to
demand the immediate repurchase of all of the outstanding shares
of Common Stock owned by such SBIC Holder at a price per share
equal to the purchase price paid for such Common Stock hereunder,
plus all accrued but unpaid dividends (whether or not declared)
thereon, by delivering written notice of such demand to the
Company. The Company shall pay the purchase price for such
Common Stock by a cashier's or certified check or by wire
transfer of immediately available funds to each SBIC Holder
demanding repurchase within 45 days after the Company's receipt
of the demand notice, and upon such payment, each such SBIC
Holder shall deliver the certificates evidencing the Common Stock
or to be repurchased duly endorsed for transfer or accompanied by
duly executed forms of assignment.
(d) Promptly after the end of each fiscal year (but in any
event prior to February 28 of each year), the Company shall
deliver to each SBIC Holder a written assessment of the economic
impact of each SBIC Holder's investment in the Company,
specifying the full-time equivalent jobs created or retained in
connection with the investment, the impact of the investment on
the revenues and profits of the business and on taxes paid by the
business and its employees.
(e) For purposes of this Agreement, "Regulatory Violation"
means, with respect to any SBIC Holder providing Financing under
this Agreement, a change in the principal business activity of
the Company and its Subsidiaries to an ineligible business
activity (within the meaning of the SBIC Regulations as in effect
on the date hereof) if such change occurs within one year after
the Closing Date hereunder and either (x) the Company shall not
have obtained the prior written consent of such SBIC Holder to
such change or (y) such SBIC Holder shall have requested the
SBA's approval of such SBIC Holder's retention of its investment
in the Company (as contemplated by Section 107.760(b) of the SBIC
Regulations) and the SBA shall have denied such request. "SBIC
Regulations" means the Small Business Investment Act of 1958 and
the regulations issued thereunder as set forth in 13 CFR 107 and
121, as amended. "Financing" shall have the meaning set forth in
the SBIC Regulations.
VI.2.6. Regulatory Compliance Cooperation.
(a) In the event that any SBIC Holder determines that it has a
Regulatory Problem (as defined below), to the extent reasonably
necessary, such SBIC Holder shall have the right to transfer its
Common Stock to any (x) Affiliate or (y) to the extent an Event
of Non-Compliance has not occurred and is not then continuing,
with the consent of the Company (which consent shall not be
unreasonably delayed or withheld), an unaffiliated third party
without regard to any restrictions on transfer set forth in this
Agreement or the Related Documents other than federal and state
securities law restrictions (provided that the transferee agrees
to acquire and assume the rights and obligations of such SBIC
Holder under this Agreement), and the Company shall take all such
actions as are reasonably requested by such SBIC Holder in order
to (i) effectuate and facilitate such transfer by such SBIC
Holder of any securities of the Company then held by such SBIC
Holder to such Person, (ii) permit such SBIC Holder (or any of
its Affiliates) to exchange all or any portion of voting Common
Stock then held by it on a share-for-share basis for shares of a
class of nonvoting Common Stock of the Company, which nonvoting
Common Stock shall be identical in all respects to such voting
Common Stock, except that such non-voting Common Stock shall be
nonvoting and shall be convertible into voting Common Stock on
such terms as are requested by such SBIC Holder in light of
regulatory considerations then prevailing, (iii) continue and
preserve the respective allocation of the voting interests with
respect to the Company arising out of the SBIC's ownership of
voting securities and/or provided for in the Stockholders
Agreement before the transfers and amendments referred to above
(including entering into such additional agreements as are
reasonably requested by such SBIC Holder to permit any Person(s)
designated by such SBIC Holder to exercise any voting power which
is relinquished by such SBIC Holder and (iv) amend this
Agreement, the Amended and Restated Certificate of Incorporation,
and any other related documents, agreements or instruments to
effectuate and reflect the foregoing. The parties to this
Agreement agree to vote their securities in favor of such
amendments and actions.
(b) For purposes of this Agreement, a "Regulatory Problem"
means any set of facts or circumstances wherein it has been
asserted by any governmental regulatory agency (or any SBIC
Holder reasonably believes in good faith that there is a
substantial risk of such assertion) that such SBIC Holder and its
Affiliates are not entitled to hold, or exercise any significant
right with respect to, the Common Stock.
VI.2.7. Further Assurances. The Company will use its
commercially reasonable efforts to cure promptly any defects in
the creation and issuance of the Common Stock, and in the
execution and delivery of this Agreement. The Company, at its
expense, will promptly execute and deliver to each Purchaser upon
reasonable request all such other and further documents,
agreements and instruments in compliance with or pursuant to its
covenants and agreements herein, and will make any recordings,
file any notices, and obtain any consents as may be reasonably
necessary or appropriate in connection therewith.
VI.3. Covenants of the Selling Shareholders. The Selling
Shareholders covenant and agree that, at all times prior to the
Closing Date, they shall each vote or execute a written consent
in favor of the Merger, waive any dissenter rights, approval
rights or similar rights in connection with the Merger and take
all other necessary or desirable action in connection with the
consummation of the Merger and the other transactions
contemplated hereby as reasonably requested by the Company or a
majority-in-interest of the Purchasers.
ARTICLE VII
TERMINATION
VII.1. Termination. (a) This Agreement may be terminated
at any time prior to the Closing:
(i) by mutual consent of the Company, a majority-in-interest
of the Selling Shareholders and a majority-in-interest of the
Purchasers;
(ii) by either the Company, a majority-in-interest of the
Selling Shareholders or a majority-in-interest of the Purchasers
if the Closing shall not have occurred by July 31, 1996;
provided, however, that the failure to consummate the
transactions contemplated hereby is not a result of the failure
by the party so electing, or any member of the group so electing,
as applicable, to terminate this Agreement to perform any of its
obligations hereunder;
(iii) by either the Company, a majority-in-interest of the
Selling Shareholders or a majority-in-interest of the Purchasers
if a material breach of any provision of this Agreement has been
committed by a party other than the party so electing or any
member of the group so electing, as applicable, and such breach
has not been satisfied, cured or waived;
(iv) by the Company, a majority-in-interest of the Selling
Shareholders or a majority-in-interest of the Purchasers, if any
of the respective conditions to such Person's performance set
forth in Section 3.1, 3.2, 3.3 or 3.4 hereof, as applicable, have
not been satisfied or waived as of the Closing Date or if
satisfaction of any such a condition is or becomes impossible to
satisfy (other than through the failure of the Person or member
of a group of Persons seeking to terminate this Agreement
pursuant to this clause (d) to comply with any of its respective
obligations under this Agreement); or
(v) by either the Company or a majority-in-interest of the
Selling Shareholders upon (x) delivery by the Company to each of
CVCA and International of notice that the Company has or the
Selling Shareholders have, as the case may be, received an
unsolicited proposal for a Competing Offer which the Company or
such Selling Shareholders have decided to accept and (y) the
payment to and receipt by each of International (or its
designee(s)) and CVCA (or its designee(s)) of $5,000,000 (in
cash) from the Selling Shareholders, which payment shall be made
concurrently with the receipt by the Selling Shareholders of the
consideration paid with respect to the consummation of the
Competing Offer and (z) simultaneously with the payment described
in the preceding clause (y), the reimbursement by the Selling
Shareholders of reasonable out-of-pocket expenses incurred by the
Purchasers (including fees and expenses of legal counsel and
other advisors or consultants to the Purchasers), in connection
with the evaluation of the transactions contemplated hereunder
and the review, preparation and negotiation of this Agreement,
the Related Agreements on behalf of the Purchasers, the documents
of formation and governance of Aetna and all other documents,
agreements or instruments related hereto or thereto. Any amounts
payable pursuant to clauses (y) and (z) above shall be paid
ratably by the Selling Shareholders based on each Selling
Shareholder's Proportionate Percentage, provided that no Selling
Shareholder shall be obligated to pay any such amount in excess
of such Selling Shareholder's Proportionate Percentage.
(b) If the Closing has not occurred on or prior to September
30, 1996, this Agreement shall automatically terminate unless the
parties hereto unanimously agree, in writing on or prior to such
date, to postpone such termination.
VII.2. Effect of Termination. If this Agreement shall be
terminated pursuant to Section 7.1, all obligations,
representations and warranties of the parties hereto under this
Agreement shall terminate and there shall be no liability of any
party to another party except as otherwise expressly provided
herein.
ARTICLE VIII
MISCELLANEOUS
VIII.1. Payment of Costs and Expenses. If the Closing
occurs, the Company agrees to pay on demand all reasonable
expenses of the Purchasers and the Selling Shareholders
(including the reasonable fees and out-of-pocket expenses of
counsel to the Purchasers and of local counsel, if any, who may
be retained by counsel to the Purchasers) in connection with:
(a) the evaluation of the transactions contemplated hereunder;
the review, negotiation, preparation, execution and delivery of
this Agreement and the Related Documents, including schedules and
exhibits, the documents of formation and governance of Aetna and
any other documents, agreements or instruments related hereto or
thereto; and any amendments, waivers, consents, supplements or
other modifications hereto or thereto as may from time to time
hereafter be required, whether or not the transactions
contemplated hereby are consummated; and
(b) the preparation and/or review of the form of any document
or instrument relevant to the transactions contemplated hereby,
by the Related Documents, the Other Financing Documents or any
other document or instrument related hereto or thereto.
The Company further agrees to pay, and to save the Purchasers and
Selling Shareholders harmless from all liability for, any stamp
or other similar taxes which may be payable in connection with
the execution or delivery of this Agreement, the issuance and
sale of Common Stock. The Company also agrees to reimburse the
Purchasers or the Selling Shareholders upon demand for all
reasonable out-of-pocket expenses (including attorneys' fees and
legal expenses) incurred by the Purchasers or the Selling
Shareholders in connection with the Purchasers' or the Selling
Shareholders', as the case may be, enforcement of the Company's
obligation hereunder or under the Related Documents.
VIII.2. General Indemnity.
(a) In consideration of each Purchaser's execution and
delivery of this Agreement and such Purchaser's acquisition of
the Common Stock hereunder, each Selling Shareholder, severally
(and not jointly or jointly and severally) shall, in the event
the Closing is consummated, defend, protect, indemnify and hold
harmless each Purchaser and each of its officers, directors and
employees (collectively, the "Indemnitees") from and against any
and all actions, causes of action, suits, claims, demands,
notices, losses, costs, penalties, fees, liabilities, damages and
expenses in connection therewith (irrespective of whether any
such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to any breach,
incorrectness or incompleteness of the representations or
warranties of any Selling Shareholder or the Company set forth
herein; provided, however that the liability of the Selling
Shareholders under the foregoing shall be limited as follows:
(i) the Selling Shareholders shall not have any liability
pursuant to this Section 8.2(a) until Indemnified Liabilities
exceed $1,500,000, in the aggregate, in which case the Selling
Shareholders shall be liable only for such excess;
(ii) the aggregate liability of the Selling Shareholders
hereunder shall be limited to $15,000,000, except with respect to
breaches of representations and warranties set forth in Section
4.1.11 (Taxes) and Section 4.1.25 (Environmental), for which the
aggregate liability of the Selling Shareholders shall be limited
to $25,000,000, less the amount of all Indemnified Liabilities
determined to be due and owing by the Selling Shareholders other
than with respect to breaches of representations and warranties
set forth in Section 4.1.11 (Taxes) and Section 4.1.25
(Environmental) (such limitations on aggregate liability
described herein being, as applicable, the "Indemnity Cap");
(iii) the obligations of the Selling Shareholders to
indemnify the Indemnitees pursuant to this Agreement shall
terminate at the close of business on the date that is 15 months
following the Closing Date; provided, however, that such
obligations to indemnify shall not terminate (A) with respect to
breaches of representations set forth in Section 4.1.11 (Taxes)
until the expiration of the statute of limitations applicable to
the matters covered thereby, (B) with respect to breaches of
representations set forth in Section 4.1.25 (Environmental),
until the third anniversary of the Closing Date and (C) with
respect to any items as to which there shall have theretofore
been made claims (stating the basis thereof) by the delivery of a
notice to the Indemnification Escrow Agent, which shall be
obligated to provide copies of such claims to all other Selling
Shareholders; and
(iv) anything contained herein to the contrary notwithstanding,
in no event shall any Selling Shareholder be liable for any
Indemnified Liabilities in excess of such Selling Shareholder's
Proportionate Percentage of the Indemnity Cap.
The Purchasers must first offset indemnification
amounts due to them pursuant to this Agreement against
payments due to the Selling Shareholders pursuant to the
Indemnification Escrow Agreement.
To the extent that the foregoing undertaking by the
Selling Shareholders may be unenforceable for any reason,
the Selling Shareholders shall make the maximum
contributions to the payment and satisfaction of each of the
Indemnified Liabilities which are permissible under
applicable law.
(b) Promptly after the assertion by any third party of any
claim, demand or notice (a "Third Party Claim") against any
Person entitled to indemnification under this Section 8.2 that
results or may result in the incurrence by such indemnified party
of any Indemnified Liability, such indemnified party shall
promptly notify the parties from whom such indemnification could
be sought of such Third Party Claim. Thereupon, the indemnifying
parties shall have the right, upon written notice (the "Defense
Notice") to the indemnified party within 30 days after receipt by
the indemnifying parties of notice of the Third Party Claim (or
sooner if such claim so requires) to conduct, at their own
expense, the defense against the Third Party Claim in their own
names or, if necessary, in the name of the indemnified party.
The Defense Notice shall specify the counsel the indemnifying
parties shall appoint to defend such Third Party Claim (the
"Defense Counsel") and the indemnified party shall have the right
to approve the Defense Counsel, which approval shall not be
unreasonably withheld. In the event the indemnifying parties and
the indemnified party cannot agree on such counsel within 10 days
after the Defense Notice is given, then the indemnifying parties
shall propose an alternate Defense Counsel, which shall be
subject again to the indemnified party's approval, which approval
shall not be unreasonably withheld. Any indemnified party shall
have the right to employ separate counsel in any such Third Party
Claim and/or to participate in the defense thereof, but the fees
and expenses of such counsel shall not be included as part of any
Indemnified Liability incurred by the indemnified party unless
(i) the indemnifying parties shall have failed to give the
Defense Notice within the prescribed period, (ii) such
indemnified party shall have received an opinion of counsel,
reasonably acceptable to the indemnifying parties, to the effect
that the interests of the indemnified party and the indemnifying
parties with respect to the Third Party Claim are sufficiently
adverse to prohibit the representation by the same counsel of
both parties under applicable ethical rules, or (iii) the
employment of such counsel at the expense of the indemnifying
parties has been specifically authorized by the indemnifying
parties. The party or parties conducting the defense of any
Third Party Claim shall keep the other parties apprised of all
significant developments and shall not enter into any settlement,
compromise or consent to judgment with respect to such Third
Party Claim unless such other parties consent, such consent not
to be unreasonably withheld. In the event that the indemnifying
parties shall fail to give a Defense Notice within such 30-day
period (or such shorter period if the claim so requires), they
shall be deemed to have elected not to conduct the defense of the
subject claim. A failure by an indemnified party to give timely,
complete or accurate notice as provided in this Section 8.2(b)
will not affect the rights or obligations of any party hereunder
except and only to the extent that, as a result of such failure,
any party entitled to receive such notice was damaged or
prejudiced as a result of such failure to give timely notice.
VIII.3. Remedies. The remedies provided herein shall be the
exclusive remedies available for breach of this Agreement, and
shall preclude assertion by any party hereto of any other rights
or the seeking of any other remedies against the other party
hereto, whether at law or in equity.
VIII.4. Brokerage. Each party hereto will indemnify and hold
harmless the others against and in respect of any claim for
brokerage or other commission relative to this Agreement or to
the transaction contemplated hereby, based in any way on
agreements, arrangements or understandings made or claimed to
have been made by such party with any third party.
VIII.5. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provisions shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
VIII.6. Parties in Interest. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective
legal representatives, successors and assigns of the parties
hereto whether so expressed or not.
VIII.7. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the
provisions of this Agreement or any Related Document shall be in
writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable
express courier service (charges prepaid), mailed to the
recipient by certified or registered mail, return receipt
requested and postage prepaid, or sent by telecommunications
facsimile. Such notices, demands and other communications shall
be sent to the Company, the Selling Shareholders and the
Purchasers at the addresses (or facsimile numbers) set forth
opposite their respective names on the Schedules hereto or to
such other address (or facsimile number) or to the attention of
such other Person as the recipient party has specified by prior
written notice to the sending party has specified by prior
written notice to the sending party.
VIII.8. No Waiver. No failure to exercise and no delay in
exercising any right, power or privilege granted under this
Agreement shall operate as a waiver of such right, power or
privilege. No single or partial exercise of any right, power or
privilege granted under this Agreement shall preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided in this
Agreement are cumulative and are not exclusive of any rights or
remedies provided by law.
VIII.9. Amendments and Waivers. Except as herein provided,
this Agreement may be modified or amended only by a writing
signed by (i) the Company and (ii) (A), prior to the Merger, the
parties hereto constituting (or which will constitute) Purchasers
of 80% of the Common Stock of Mergerco set forth on Schedule I
hereto (considered as a single class) and (B) following the
Merger, the Holders of 80% of the Common Stock (considered as a
single class); provided, however, that, in addition to the
approval required in clauses (i) and (ii) hereof, in the event
(but only in the event) of any modification or amendment of this
Agreement (whether prior or subsequent to the Closing) which
would adversely affect the Selling Shareholders, a writing signed
by 80% in interest of the Selling Shareholders (based on the
Common Stock held by such Selling Shareholders immediately prior
to the Merger) shall be required for any such modification or
amendment. Notwithstanding anything to the foregoing in the
immediately preceding sentence, prior to the Merger, Schedule I
hereto may also be modified or amended by a writing signed by the
Company, International and CVCA.
VIII.10. Understanding Among the Purchasers. The
determination of each Purchaser to purchase the Common Stock
pursuant to this Agreement has been made by such Purchaser
independent of any other Purchaser and independent of any
statements or opinions as to the advisability of such purchase or
as to the properties, business, prospects or condition (financial
or otherwise) of the Company and its Subsidiaries which may have
been made or given by any other Purchaser or by any agent or
employee of any other Purchaser. In addition, it is acknowledged
by each Purchaser that no other Purchaser has acted as an agent
of such Purchaser in connection with making its investment
hereunder and that no other person shall be acting as an agent of
such Purchaser in connection with monitoring its investment
hereunder.
VIII.11. CITEI as Purchaser. Notwithstanding anything to the
contrary contained herein, the defined term Purchaser when used
in Article IV, Sections 5.1.1 and 5.1.2, 5.1.6, Article VI and
Article VIII (excluding Section 8.9(ii)(A) thereof) shall be
deemed to include CITEI and any references made to the "purchase"
or the "purchasing" of Common Stock shall be deemed to refer to
the "exchange" or the "exchanging" of Rollover Stock for Common
Stock.
VIII.12. Survival of Agreements, etc. Except as otherwise
expressly provided herein, all agreements, representations and
warranties contained in this Agreement shall survive the
execution and delivery of this Agreement and shall terminate upon
the Merger.
VIII.13. Governing Law. The corporate law of Delaware shall
govern all issues concerning the relative rights of the Company
and its shareholders. All other issues hereunder shall be
governed by and construed in accordance with the procedural and
substantive laws of the State of New York without regard for its
conflicts of laws rules. The Company agrees that it may be
served with process in the State of New York and any action for
breach of this Agreement prosecuted against it in the courts of
that State.
VIII.14. Entire Understanding. Except for the Confidentiality
Agreement, dated May 14, 1996, between the Aetna Casualty and
Surety Company and Chase Securities, Inc., Confidentiality
Agreement, dated April 17, 1996, between First Atlantic Capital,
Ltd. ("FACL") and The CIT Group and the Confidentiality
Agreement, dated October 19, 1995, between FACL and The Chase
Manhattan Bank, N.A. (which shall survive in accordance with
their respective terms), this Agreement expresses the entire
understanding of the parties and supersedes all other, prior and
contemporaneous agreements and undertakings of the parties with
respect to the subject matter of this Agreement.
VIII.15. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one
agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first above written.
BPC HOLDING CORPORATION
Roberto Buaron
Chairman
BPC MERGERCO, INC.
Roberto Buaron
Chairman
Purchasers:
ATLANTIC EQUITY PARTNERS
INTERNATIONAL II, L.P.
By Atlantic Equity Associates
International II, L.P., its
General Partner
By Buaron Holdings Ltd., its Managing
General Partner
Roberto Buaron
President
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
By Chase Capital Partners,
its General Partner
Donald J. Hoffman
Partner
BPC EQUITY, LLC
By Aetna Life Insurance Company,
its Member
Allan J. Vartelas
Assistant Vice President
Selling Shareholders:
ATLANTIC EQUITY PARTNERS, L.P.
By Atlantic Equity Associates,
L.P., its General Partner
By Buaron Capital
Corporation, its Managing
General Partner
Roberto Buaron
President
CHASE MANHATTAN INVESTMENT
HOLDINGS, INC.
Robert Z. Egan
Principal
THE CIT GROUP/EQUITY INVESTMENTS,
INC.
Paul Laud
President
R. Brent Beeler
Douglas E. Bell
Ira G. Boots
Fred Heseman
Martin R. Imbler
Dave Jochem
James M. Kratochvil
Gary Lannert
Ruth Richmond
Dave Weaver
Chet Wilson
EXHIBIT 2.2
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
dated as of June 12, 1996
by and among
BPC HOLDING CORPORATION
and
BPC MERGERCO, INC.
and
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
and
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS
Section 1.1. Defined Terms 2
Section 1.2. Additional Terms 9
Section 1.3. Construction 10
ARTICLE II
PURCHASE AND SALE TERMS
Section 2.1. Purchase and Sale; Purchase Price 10
Section 2.2. The Merger 10
Section 2.3. The Closing 10
Section 2.4. Payment and Delivery 11
Section 2.5. Restrictive Legend 11
Section 2.6. Use of Proceeds 11
ARTICLE III
CLOSING CONDITIONS
Section 3.1. Conditions of the Purchasers, the Company, and
Mergerco 12
Section 3.1.1. Execution of This Agreement and All Related
Documents 12
Section 3.1.2. Issuance and Purchase of the Units, the Common
Stock and the Senior Secured Notes 12
Section 3.1.3. Merger Effective; Amended and Restated
Certificate of Incorporation 13
Section 3.1.4. Merger Consideration 13
Section 3.1.5. No Litigation, etc. 13
Section 3.1.6. Environmental Report 13
Section 3.1.7. Approvals, etc. 13
Section 3.1.8. Registration Rights Agreement, Institutional
Stockholders Agreement and Management
Stockholders' Agreement 13
Section 3.1.9. Solvency and Fairness Opinions 14
Section 3.1.10. All Proceedings to be Satisfactory 14
Section 3.1.11. Reasonable Satisfaction of Parties and Counsel 14
Section 3.2. Conditions of the Purchasers 14
Section 3.2.1. Representations and Warranties to be True
and Correct; Certificate of Officer of
the Company 14
Section 3.2.2. Supporting Documents 15
Section 3.2.3. Legal Opinion from Counsel for the Company and
Mergerco 17
Section 3.2.4. Delivery of SBA Forms 17
Section 3.2.5. Exchange of Rollover Stock 17
Section 3.2.6. Senior Secured Notes 17
Section 3.3. Conditions of the Company and Mergerco 17
Section 3.3.1. Representations and Warranties to be True and
Correct 17
Section 3.4. Conditions of Northwestern 18
Section 3.4.1. Purchase Permitted By Applicable Law, etc 18
Section 3.4.2. Private Placement Number 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Company 18
Section 4.1.1. Corporate Existence 18
Section 4.1.2. Power and Authority 19
Section 4.1.3. Enforceability, etc. 19
Section 4.1.4. Capitalization 19
Section 4.1.5. Consents, Approvals and Non-Contravention 21
Section 4.1.6. Pro Forma Balance Sheet 21
Section 4.1.7. SEC Reports and Financial Statements 21
Section 4.1.8. Material Adverse Change 22
Section 4.1.9. Events Subsequent to the Date of the Last
Financial Statement 22
Section 4.1.10. Absence of Undisclosed Liabilities 23
Section 4.1.11. Taxes 23
Section 4.1.12. Litigation 24
Section 4.1.13. Insurance 24
Section 4.1.14. Conflicts of Interests 24
Section 4.1.15. Other Relationships 25
Section 4.1.16. Licenses; Compliance with Laws, Other Agreements,
etc. 25
Section 4.1.17. Intellectual Property Rights and Government
Approvals 26
Section 4.1.18. Investment Company Act 26
Section 4.1.19. Brokers, etc. 26
Section 4.1.20. Private Sale 26
Section 4.1.21. Disclosure 27
Section 4.1.22. Contracts and Commitments 27
Section 4.1.23. Customers and Suppliers 29
Section 4.1.24. Employee Matters and Benefits 30
Section 4.1.25. Environmental Matters 33
Section 4.1.26. Small Business Concern 34
Section 4.1.27. Title to Properties 34
Section 4.1.28. Condition and Sufficiency of Assets 35
Section 4.1.29. Real Property 35
Section 4.2. Representations and Warranties of Mergerco 36
Section 4.2.1. Corporate Existence 36
Section 4.2.2. Power and Authority 37
Section 4.2.3. Enforceability, etc. 37
Section 4.2.4. Consents, Approvals and Non-Contravention 37
Section 4.2.5. No Activities 38
Section 4.2.6. Capitalization 38
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Section 5.1. Representations and Warranties of the Purchaser 38
Section 5.1.1. Power and Authority 38
Section 5.1.2. Enforceability, etc. 39
Section 5.1.3. Purchase for Investment 39
Section 5.1.4. Financial Matters 39
Section 5.1.5. Adequate Access to Personnel and Materials 39
Section 5.1.6. Brokers, etc. 40
ARTICLE VI
COVENANTS
Section 6.1. Pre-Closing Date Covenants 40
Section 6.1.1. Access and Investigation 40
Section 6.1.2. Operation of the Businesses of the Company and
its Subsidiaries 40
Section 6.1.3. Negative Covenant 41
Section 6.1.4. Required Approvals 41
Section 6.1.5. Notification 41
Section 6.1.6. No Solicitation 41
Section 6.1.7. Best Efforts 42
Section 6.2. Post-Closing Date Covenants of the Company 42
Section 6.2.1. Use of Proceeds 42
Section 6.2.2. Inspection of Property 42
Section 6.2.3. Compliance with Agreements 42
Section 6.2.4. Affirmative Covenants 42
Section 6.2.5. SBIC Regulatory Provisions 44
Section 6.2.6. Regulatory Compliance Cooperation 45
Section 6.2.7. Further Assurances 46
Section 6.2.8. Reservation and Authorization of Common Stock 46
Section 6.2.9 Financial Statements; Information 47
Section 6.2.10 Form 1099 47
ARTICLE VIA
REGISTRATION RIGHTS IN RESPECT OF REGISTRABLE EQUITY SECURITIES
Section 6A.1 Notice 47
Section 6A.2 Proration 48
Section 6A.3 Registration Procedures 48
Section 6A.4 Holdback on Sales 51
Section 6A.5 Expenses 51
ARTICLE VIB
REGISTRATION RIGHTS IN RESPECT OF EXCHANGE NOTES
Section 6B.1 Shelf Registration 52
Section 6B.2 Registration Procedures 53
Section 6B.3 Holdback Agreements 56
ARTICLE VIC
INDEMNIFICATION IN RESPECT OF REGISTRATION RIGHTS
Section 6C.1 Indemnification by the Company 57
Section 6C.2 Indemnification by the Sellers 58
Section 6C.3 Notices of Claims, etc. 58
Section 6C.4 Contribution 59
ARTICLE VII
TERMINATION
Section 7.1. Termination 60
Section 7.2. Effect of Termination 61
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Payment of Costs and Expenses 61
Section 8.2. [Intentionally Omitted] 62
Section 8.3. Brokerage 62
Section 8.4. [Intentionally Omitted]. 62
Section 8.5. Assignment; Parties in Interest 62
Section 8.7. No Waiver 63
Section 8.8. Amendment 63
Section 8.9. Survival of Representations, Warranties, Covenants
and Agreements. 63
Section 8.10. Governing Law 63
Section 8.11. Specific Performance 63
Section 8.12. Entire Understanding 64
Section 8.13. Counterparts 64
EXHIBITS
Exhibit A By-laws of the Company
Exhibit B-1 Amended and Restated Certificate of Incorporation of the Company
Exhibit B-2 Certificate of Amendment of the Company
Exhibit B-3 Restated Certificate of Incorporation of Mergerco
Exhibit C Form of Warrant
Exhibit D-1 Form of Merger Agreement
Exhibit D-2 Form of Certificate of Merger
Exhibit E Offering Memorandum
Exhibit F Terms of Exchange Notes
Exhibit G Form of Stockholders Agreement
SCHEDULES
Schedule I Purchaser Information
Schedule II Addresses For Notice
Schedule III Capitalization Schedule of the Company
Schedule IV Capitalization Schedule of Mergerco
Schedule V Consents Relating to the Purchasers
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
This PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT, dated
as of June 12, 1996 (as amended or otherwise modified from time
to time, this "Agreement"), is made by and among BPC HOLDING
CORPORATION, a Delaware corporation (the "Company"), BPC
MERGERCO, INC., a Delaware corporation ("Mergerco"), CHASE
VENTURE CAPITAL ASSOCIATES, L.P., a California limited
partnership ("CVCA") and THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY ("Northwestern" and, together with CVCA, the
"Purchasers".)
W I T N E S E T H:
WHEREAS, in order to facilitate a recapitalization
transaction (the "Recapitalization"), Mergerco has been formed;
WHEREAS, in order to provide a portion of the financing for
the consummation of the Recapitalization, the Company and
Mergerco propose to enter into the transactions contemplated by
this Agreement and the Stock Purchase Agreement (as defined
below);
WHEREAS, the Purchasers desire to purchase an aggregate of
(i) 600,000 shares of Preferred Stock, and (ii) warrants in the
form attached hereto as Exhibit C entitling the holder or holders
thereof to purchase, on certain terms and conditions, an
aggregate of 9,372 shares of Class B Voting Common Stock and
29,728 shares of Class B Non-Voting Common Stock, at a purchase
price of $0.01 per share, subject to adjustment as provided
therein (the "Warrants" and, together with the Preferred Stock,
the "Purchased Securities"), all on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Preferred Stock shall, on the terms and subject
to the conditions set forth in this Agreement and in the Amended
and Restated Certificate of Incorporation, be exchangeable (in
whole but not in part) by the Company for the Exchange Notes to
be issued pursuant to the Exchange Indenture;
WHEREAS, Mergerco desires to issue and sell the Purchased
Securities to the Purchasers, on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, immediately following Mergerco's issuance of the
Purchased Securities to the Purchasers, subject to the terms and
conditions hereof, the Company and Mergerco wish to merge
pursuant to the provisions of Section 251 of the Delaware General
Corporation Law (the "Merger"), pursuant to which the classes and
series of capital stock of Mergerco shall be converted into
identical classes and series of capital stock of the Company, in
each case having the rights, preferences and privileges set forth
in the Restated Certificate of Incorporation;
NOW, THEREFORE, based upon the foregoing and the mutual
covenants and agreements herein contained, and for other good and
sufficient consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. Defined Terms. Capitalized terms used but not
otherwise defined in this Agreement shall have the meaning
assigned to such terms in the Stock Purchase Agreement. When
used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person which, directly or indirectly, controls, is under
common control with, or is owned or controlled by, such specified
Person. For purposes of this definition, (i) "control" means,
with respect to any specified Person, either (x) the beneficial
ownership of more than 30 percent of any class of equity
securities or (y) the power to direct the management or policies
of the specified Person through the ownership of voting
securities, by contract, voting agreement or otherwise, and
(ii) the terms "controlling", "control with" and "controlled by",
etc., shall have meanings correlative to the foregoing.
"Amended and Restated Certificate of Incorporation" means
the restated certificate of incorporation of the Company
following the Merger in the form attached hereto as Exhibit B-1,
as amended from time to time in accordance with the requirements
hereof and of the Stockholders Agreement.
"Berry Revolving Credit Facility" means the Berry Revolving
Credit Facility, dated as of April 21, 1994, by and among Berry
and Fleet Capital Corporation, 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 which includes the addition, substitution or replacement of
any or all lenders thereunder under the same or any replacement
agreement.
"By-laws" means the by-laws of the Company in the form
attached hereto as Exhibit A, as amended from time to time in
accordance with the requirements hereof, thereof and of the
Stockholders Agreement.
"Certificate of Amendment" means the Certificate of
Amendment of the Company in the form attached hereto as Exhibit B-
2.
"Certificate of Merger" means the Certificate of Merger,
dated as of the Closing Date, by and between Mergerco and the
Company, in substantially the form of Exhibit D-2 hereto.
"Class A Common Stock" means, as the context may require,
(i) Mergerco's or the Company's Class A Voting Common Stock or
Class A Non-Voting Common Stock or (ii) both the Class A Voting
Common Stock and the Class A Non-Voting Common Stock of Mergerco
or the Company.
"Class A Non-Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class A Non-Voting Common
Stock, which prior to the Merger has a par value of $.00005 per
share and $.01 per share for the Company and Mergerco,
respectively, and following the Merger shall have a par value of
$.01 per share with respect to such stock of the Company.
"Class A Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class A Voting Common Stock,
which prior to the Merger has a par value of $.00005 per share
and $.01 per share for the Company and Mergerco, respectively,
and following the Merger shall have a par value of $.01 per share
with respect to such stock of the Company.
"Class B Common Stock" means, as the context may require,
(i) Mergerco's or the Company's Class B Voting Common Stock or
Class B Non-Voting Common Stock or (ii) both the Class B Voting
Common Stock and the Class B Non-Voting Common Stock of Mergerco
or the Company.
"Class B Non-Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class B Non-Voting Common
Stock, which prior to the Merger has a par value of $.00005 per
share and $.01 per share for the Company and Mergerco,
respectively, and following the Merger shall have a par value of
$.01 per share with respect to such stock of the Company.
"Class B Voting Common Stock" means, as the context may
require, Mergerco's or the Company's Class B Voting Common Stock,
which prior to the Merger has a par value of $.00005 per share
and $.01 per share for the Company and Mergerco, respectively,
and following the Merger shall have a par value of $.01 per share
with respect to such stock of the Company.
"Class C Common Stock" means, as the context may require,
Mergerco's or the Company's Class C Common Stock, which prior to
the Merger has a par value of $.00005 per share and $.01 per
share for the Company and Mergerco, respectively, and following
the Merger shall have a par value of $.01 per share with respect
to such non-voting stock of the Company.
"Class D Common Stock" means the Company's non-voting
$.00005 par value per share Class D Common Stock.
"Class E Common Stock" means the Company's voting $.00005
par value per share Class E Common Stock.
"Class F Common Stock" means the Company's voting $.00005
par value per share Class F Common Stock.
"Class G Common Stock" means the Company's non-voting
$.00005 par value per share Class G Common Stock.
"CMIHI" means Chase Manhattan Investment Holdings, Inc., a
Delaware corporation.
"Common Stock" means the Class A Common Stock, the Class B
Common Stock, the Class C Common Stock, the Class D Common Stock,
the Class E Common Stock, the Class F Common Stock and the Class
G Common Stock of Mergerco or the Company, as the case may be and
as the context may require, and any other classes of common stock
of the Company hereafter authorized in accordance with the
requirements hereof and of the Stockholders Agreement.
"Common Stock Purchasers" means the Persons purchasing
Common Stock on the Closing Date pursuant to the Stock Purchase
Agreement.
"Environmental Law" means any law which relates to or
otherwise imposes liability or standards of conduct concerning
discharges, emissions, releases or threatened releases of noises,
odors or any pollutants, contaminants or hazardous or toxic
wastes, substances or materials, whether as matter or energy,
into ambient air, water, or land, or otherwise relating to the
manufacture, processing, generation, distribution, use,
treatment, storage, disposal, cleanup, transport or handling of
pollutants, contaminants, or hazardous or toxic wastes,
substances or materials, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
and the Superfund Amendments and Reauthorization Act of 1986
(together, as amended, "CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act
Amendments of 1972, the Clean Water Act of 1977, as amended, any
so-called "Superlien" law, and any other similar Federal, state
or local Law.
"Environmental Permit" means any permit, license, approval,
consent or other authorization required by or pursuant to any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor law thereto.
"Event of Noncompliance" has the meaning provided in the
Stockholders Agreement.
"Exchange Indenture" means an indenture between the Company
and a trustee satisfactory to the Company and the Holders of a
majority of the outstanding shares of Preferred Stock in form and
substance satisfactory to the Company and the Holders of at least
66-2/3% of the outstanding shares of Preferred Stock and
reflecting the terms set forth on Exhibit F.
"Exchange Notes" means the Company's exchange notes to be
issued under the Exchange Indenture.
"Governmental Authority" means the government of the United
States or any foreign country or any state or political
subdivision thereof and any entity, body or authority exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product or fractions thereof; or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within
the meaning of any other applicable Federal, state or local
Law, regulation, ordinance or requirement (including consent
decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, all as now
or at any time hereafter in effect.
"Holder" means any Purchaser or any of its permitted
successors and assigns, other than the Company or any of its
Subsidiaries holding any Preferred Stock.
"HSR Act" means the Hart-Scott-Rodino Anti-Trust
Improvements Act of 1976 or any successor law, and regulations
and rules issued pursuant to such Act or any successor law
thereto.
"Institutional Stockholders Agreement" means the
Stockholders Agreement, dated as of February 14, 1991, as amended
by the First Amendment thereto, dated as of March 29, 1994, among
the Company, The Fund, CMIHI, WFC and CITEI.
"Interests" means any evidence of equity ownership of any
Person, whether represented by common stock, preferred stock,
securities convertible into, exchangeable or exercisable for the
purchase or other acquisition of common stock or preferred stock
(including convertible or exchangeable debentures, warrants and
options), trust certificates or general or limited partnership
interests.
"International" means Atlantic Equity Partners International
II, L.P., a Delaware limited partnership domiciled in the Cayman
Islands.
"Investments" means, as to any Person, (i) any direct or
indirect purchase or other acquisition by such Person of any
notes, obligations, instruments, stock, securities or Interests
of any other Person (other than a Subsidiary of such Person) and
(ii) any contribution by such Person to any other Person (other
than a Subsidiary of such Person).
"Lien" means any mortgage, lien (except for any lien for
taxes not yet due and payable), charge, restriction, pledge,
security interest, option, lease or sublease, claim, right of any
third party, easement, encroachment or encumbrance.
"Losses" means all losses, claims, damages, liabilities,
costs (including any costs of investigation and reasonable
attorneys' fees) and expenses.
"Management Stockholders' Agreement" means the Stockholders'
Agreement, dated as of January 22, 1991, among the Company and
those stockholders of the Company parties thereto.
"Material Adverse Effect" means, with respect to any Person,
any fact, event, change, circumstance or effect that has or is
reasonably likely to have a materially adverse effect on the
business, financial condition, results of operations or, to the
actual knowledge of such Person, prospects of such Person and its
Subsidiaries, taken as a whole.
"Merger Agreement" means the Agreement and Plan of Merger,
dated as of the Closing Date, by and between Mergerco and the
Company, in substantially the form of Exhibit D-1 hereto.
"Offering Memorandum" means the Preliminary Offering
Memorandum, dated May 31, 1996, relating to the offering of the
Senior Secured Notes of the Company, a true, correct and complete
copy of which is attached hereto as Exhibit E. Reference to the
Offering Memorandum shall include any amendments or supplements
thereto effected prior to the Closing Date that are reasonably
satisfactory to the Purchasers.
"Other Financing Documents" means the Senior Secured Note
Indenture, the Stock Purchase Agreement, the Exchange Agreement,
the Senior Secured Note Purchase Agreement, the Registration
Rights Agreement (as defined in the Senior Secured Note
Indenture), the Holding Pledge Agreement (as defined in the
Senior Secured Note Indenture), and the Escrow and Disbursement
Agreement (as defined in the Senior Secured Note Indenture).
"Person" means any individual, corporation, general or
limited partnership, joint venture, association, limited
liability company, joint stock company, trust, business trust,
bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization, cooperative, association
or governmental branch, authority, agency or political
subdivision thereof.
"Plan" means any plan regulated under ERISA.
"Preferred Stock" means the $.01 par value per share Senior
Cumulative Exchangeable Preferred Stock, Series A, of Mergerco or
the Company, as the context may require.
"Purchased Securities" has the meaning specified in the
recitals of this Agreement.
"Registrable Debt Securities" means the Exchange Notes,
provided that as to any particular Exchange Note, once issued
such securities shall cease to be Registrable Debt Securities,
when (i) a registration statement with respect to the sale of
such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been
distributed to the public pursuant to Rule 144 or have become
eligible for sale pursuant to paragraph (k) of Rule 144 or
(iii) they shall have ceased to be outstanding.
"Registrable Equity Securities" means the Preferred Stock,
the Warrants and the Warrant Stock, provided that as to any
particular shares of Preferred Stock, Warrants or Warrant Stock,
once issued such securities shall cease to be Registrable Equity
Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (ii) they shall have
been distributed to the public pursuant to Rule 144 or have
become eligible for sale pursuant to paragraph (k) of Rule 144 or
(iii) they shall have ceased to be outstanding.
"Registrable Securities" means the Registrable Debt
Securities and the Registrable Equity Securities.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of December 24, 1990, as amended by
the First Amendment thereto, dated as of March 29, 1994, among
the Company, The Fund, CMIHI, WFC and CITEI.
"Related Documents" means the Restated Certificate of
Incorporation, the Warrants, the Merger Agreement, the
Certificate of Merger and the Stockholders Agreement.
"Restated Certificate of Incorporation" means (a) with
respect to the Company, its amended and restated certificate of
incorporation filed with the Secretary of State of the State of
Delaware on December 20, 1990 (amending and restating the
certificate of incorporation of the Company filed on December 11,
1990), as amended by the amended and restated certificate of
incorporation filed on April 19, 1994, as amended by the
certificate of amendment filed on May 5, 1995, and (b) with
respect to Mergerco, its restated certificate of incorporation in
the form attached hereto as Exhibit B-3.
"Restricted Securities" means (i) the Preferred Stock, (ii)
the Exchange Notes, (iii) the Warrants, (iv) the Warrant Stock
and (v) any securities issued with respect to the securities
specified in the foregoing clauses (i), (ii), (iii) or (iv) by
way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
other reorganization. Any security referred to in the preceding
sentence shall cease to be a Restricted Security when it has (a)
been disposed of pursuant to an effective registration statement
under the Securities Act, (b) become eligible for sale pursuant
to paragraph (k) of Rule 144 or (c) otherwise been transferred
and new certificates therefor not bearing the legend set forth in
Section 2.5 have been issued.
"Senior Secured Note Indenture" means the Indenture, dated
the Closing Date, between the Company and First Trust of New
York, a national association, regarding the Senior Secured Notes,
as such Indenture may be amended or otherwise modified from time
to time.
"Senior Secured Note Purchase Agreement" means the Purchase
Agreement, dated June 12, 1996, by and among the Company, Berry
Plastics Corporation, a Delaware corporation ("Berry") and
Donaldson, Lufkin & Jenrette Securities Corporation.
"Senior Secured Notes" means the 12-1/2% senior secured
notes in the aggregate principal amount of $105,000,000 issued by
the Company pursuant to the Senior Secured Note Purchase
Agreement.
"Stockholders Agreement" means the Stockholders Agreement,
dated as of the Closing Date, among the Company, CVCA,
International, the institutional investors named therein,
certain members of management of the Company and CVCA and
Northwestern as holders of Preferred Stock with respect to
certain provisions thereof, as amended from time to time pursuant
to its terms, in substantially the form of Exhibit G.
"Stock Purchase Agreement" means the Stock Purchase and
Recapitalization Agreement, dated as of the date hereof, among
the Company, Mergerco, certain purchasers listed on Schedule I
thereto and the Selling Shareholders named therein, as amended
from time to time pursuant to its terms.
"Subsidiary" or "Subsidiaries" of any Person means any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such
Person.
"The Fund" means Atlantic Equity Partners, L.P., a Delaware
limited partnership domiciled in the Cayman Islands.
"'33 Act" or "Securities Act" means the Securities Act of
1933, as amended, and the rules and regulations issued in respect
thereto.
"'34 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations issued in respect thereto.
"Units" has the meaning specified in the recitals of this
Agreement.
"Warrants" has the meaning specified in the recitals of this
Agreement.
"Warrant Stock" means all shares of Class B Common Stock
issuable from time to time upon exercise of the Warrants.
"WFC" means Whirlpool Financial Corporation, a Delaware
corporation.
Section 1.2. Additional Terms. The following terms shall have the
meanings indicated or referred to in the following Sections of
this Agreement:
Term Section
Agreement Preamble
Approval 4.15(a)
Balance Sheet 4.1.9
Blue Sky Laws 4.1.4(c)
Capitalization Schedule 3.13
CERCLA definition of Environmental Law
Closing 2.3
Closing Date 2.3
Code 1st Recital
Company Preamble
CVCA Preamble
Financial Statements 4.1.7(b)
Financing 6.2.5(e)
GAAP 4.1.7(b)
GMI 3.1.6
Indemnified Seller 6C.1
Intellectual Property 4.1.17
Licenses 4.1.16
Managing Underwriter 6B.1
Merger 7th Recital
Mergerco Preamble
Northwestern Preamble
Public Offering 6B.1
Purchasers Preamble
Recapitalization 2nd Recital
Regulatory Problem 6.2.6(b)
Regulatory Violation 6.2.5(e)
SBA 6.2.5(b)
SBA Compliance Documents 3.2.4
SBIC Holder 6.2.5(a)
SBIC Regulations 6.2.5(e)
SEC Reports 4.17(a)
Seller 6A.1
Seller Notice 6A.1
Selling Security holder 6B.2
Shelf Registration 6B.1
Section 1.3. Construction. When used herein, the masculine form
of words includes the feminine and the neuter and vice versa,
and, unless the context otherwise requires, the singular form of
words includes the plural and vice versa. The words "herein",
"hereof", "hereunder" and other words of similar import when used
in this Agreement refer to this Agreement as a whole, and not to
any particular section or subsection.
ARTICLE II
PURCHASE AND SALE TERMS
Section 2.1. Purchase and Sale; Purchase Price. Subject to the terms
of this Agreement, Mergerco agrees to authorize, issue and sell
to the Purchasers, and the Purchasers severally agree to purchase
from Mergerco, (i) an aggregate of 600,000 shares of Preferred
Stock and (ii) Warrants to purchase an aggregate of 9,372 shares
of Class B Voting Common Stock and 29,728 shares of Class B Non-
Voting Common Stock (subject to adjustment). Shares of the
Preferred Stock and the Warrants shall be issued and sold to the
Purchasers in units (the "Units"), each Unit consisting of 1,000
shares of Preferred Stock and Warrants to purchase 15.62 shares
of Class B Voting Common Stock and 49.5466666 shares of Class B
Non-Voting Common Stock. The purchase price for each Unit shall
be $25,000, for an aggregate purchase price of $15,000,000 (the
"Purchase Price"), payable in immediately available funds at the
Closing in the manner provided in Section 2.4. Each Purchaser
will purchase the number of Units set forth opposite the name of
such Purchaser on Schedule I hereto.
Section 2.2. The Merger. Subject to the terms of this Agreement, the
Company and Mergerco shall effect the Merger at the Closing in
accordance with the terms of the Merger Agreement.
Section 2.3. The Closing. The closing of the purchase and sale of the
Units, the purchase and sale of the Common Stock, the exchange
and cancellation of the Rollover Stock and the consummation of
the Merger, shall take place at the offices of O'Sullivan, Graev
& Karabell, LLP, located at 30 Rockefeller Plaza, New York, New
York 10112 or at such other location as the Company and the
Purchasers may designate (the "Closing"). The Closing shall
occur on or before July 31, 1996, or such later date as the
Company and the Purchasers may designate (the "Closing Date").
It is the intention of the parties hereto that the Closing Date
shall occur simultaneously with the issuance of the Common Stock
under the Stock Purchase Agreement and the Exchange Agreement,
the issuance of the Units hereunder and the issuance of the
Senior Secured Notes under the Senior Secured Note Purchase
Agreement.
Section 2.4. Payment and Delivery. At the Closing, each Purchaser will
deliver the portion of the Purchase Price set forth opposite such
Purchaser's name on Schedule I hereto by wire or interbank
transfer in immediately available funds to an account designated
in writing by Mergerco prior to the Closing Date, against
delivery by Mergerco to each of the Purchasers of (i) one or more
(as designated by such Purchaser) duly executed stock
certificates evidencing the number of shares of Preferred Stock
to be purchased by such Purchaser (as set forth on Schedule I
hereto) and (ii) the duly executed warrant certificates, in such
numbers as may be requested by each of the Purchasers, evidencing
Warrants to purchase the aggregate number of shares of Class B
Voting Common Stock and Class B Non-Voting Common Stock set forth
opposite such Purchaser's name on Schedule I hereto, each such
certificate to be dated the Closing Date and registered in the
name of such Purchaser or its nominee.
Section 2.5. Restrictive Legend. In addition to any legend required by
the DGCL, each certificate evidencing the Preferred Stock and the
Warrants issued at the Closing will bear, and each certificate
representing a Restricted Security will bear, a legend in the
following terms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
ACCORDINGLY, SUCH SECURITIES MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
THE REGISTRATION OR QUALIFICATION PROVISIONS OF
APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM."
Whenever any particular security ceases to be a Restricted
Security, the holder thereof shall be entitled to receive from
the Company, without expense, new securities of like tenor, not
bearing the above legend.
Section 2.6. Use of Proceeds. The Company shall use the net cash
proceeds received from the sale of the Common Stock of Mergerco,
together with the net cash proceeds received from the sale of the
Senior Secured Notes and the Units, solely for purposes of
effecting the Merger, paying certain extraordinary bonuses
awarded to several management employees (not to exceed $2,600,000
in the aggregate), funding the Merger Consideration to be paid to
the Selling Shareholders and the other selling shareholders,
funding the escrow account established under the Indemnification
Escrow Agreement, funding the Escrow Account under the Escrow and
Disbursement Agreement (as defined in the Senior Secured Note
Indenture), making net payments to the holders of the Old Private
Warrants and the Old Public Warrants and paying the costs,
expenses and fees incurred in connection therewith.
ARTICLE III
CLOSING CONDITIONS
Section 3.1. Conditions of the Purchasers, the Company, and
Mergerco. The obligation of each of the Purchasers to purchase,
and the obligation of Mergerco to issue and sell, the Units, as
applicable, and the obligation of the Company to effect the
Merger on the Closing Date, shall be subject to satisfaction of
the following conditions on or prior to such date (unless
otherwise specified below):
Section 3.1.1. Execution of This Agreement and All Related
Documents. The Company, Mergerco, each of the Purchasers, the
Selling Shareholders and all other requisite parties shall have
duly authorized and executed copies of this Agreement, each
Related Document, each Other Financing Document and each other
agreement, document or instrument related hereto or thereto, to
which any such Person is a party, required in connection with the
consummation of the transactions contemplated hereby and thereby.
This Agreement, each such Related Document, each such Other
Financing Document and each other related agreement, document or
instrument shall remain in full force and effect.
Section 3.1.2. Issuance and Purchase of the Units, the Common Stock
and the Senior Secured Notes. Mergerco shall have duly issued
and delivered applicable certificates to each of the Purchasers
representing the number of shares of Preferred Stock and Warrants
purchased by each of the Purchasers as provided in Article II
hereof; Mergerco shall have duly issued and delivered
certificates to each of the Common Stock Purchasers representing
the number of shares of Common Stock purchased by such Common
Stock Purchasers pursuant to the Stock Purchase Agreement; the
Purchasers shall have purchased and paid for such Preferred Stock
and Warrants of Mergerco to be purchased by them pursuant to such
Article II; and each Common Stock Purchaser shall have purchased
and paid for the Common Stock to be purchased by it pursuant to
the Stock Purchase Agreement. The Company shall have duly issued
and delivered certificates to each of the Rollover Shareholders
evidencing the number of shares of Common Stock being issued to
such Rollover Shareholder as provided in the Exchange Agreement,
and each Rollover Shareholder shall have surrendered to the
Company for cancellation certificates representing the Rollover
Stock being exchanged by such Rollover Shareholder pursuant to
the terms thereto. The Company shall also have duly issued and
delivered to the purchasers thereof (or a trustee or fiduciary
for such purchasers) the Senior Secured Notes, and the Company
shall have received not less than $105,000,000 in gross cash
proceeds (of which approximately $34,500,000 will be deposited
into the Escrow Account under the Escrow and Disbursement
Agreement (as defined in the Senior Secured Note Indenture)) from
the issuance and sale of the Senior Secured Notes.
Section 3.1.3. Merger Effective; Amended and Restated Certificate of
Incorporation. On the Closing Date, the Merger shall be
effective under Delaware law. Prior to the Merger and the
effectiveness of the issuance and purchase of the Units and the
Common Stock and the exchange of the Rollover Stock pursuant to
the Exchange Agreement, the Restated Certificate of Incorporation
of Mergerco, the Certificate of Amendment of the Company, the
Certificate of Merger and the Amended and Restated Certificate of
Incorporation of the Company shall have been filed with the
Secretary of State of Delaware in accordance with Delaware law
and be in effect, except for the Certificate of Merger and the
Amended and Restated Certificate of Incorporation of the Company
which shall be in effect as of the effectiveness of the Merger.
Immediately after giving effect to the Closing and the
consummation of the transactions contemplated hereby and under
the Stock Purchase Agreement, the Company's capitalization shall
be as set forth on Schedule III hereto (the "Capitalization
Schedule").
Section 3.1.4. Merger Consideration. Upon the effectiveness of the
Merger, the Company shall have paid the Selling Shareholders the
Merger Consideration pursuant to the Stock Purchase Agreement.
Section 3.1.5. No Litigation, etc. No litigation, arbitration,
governmental investigation or proceeding shall, as of the Closing
Date, be pending or, to the knowledge of the Company, threatened,
which seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement, the other Related
Documents, the Other Financing Documents or any other material
agreement related hereto or thereto.
Section 3.1.6. Environmental Report. The Purchasers shall have
received a copy of the environmental report from Geraghty &
Miller Inc. ("GMI") dated May, 1996, as supplemented by the
letter to Chase Capital Partners by GMI, dated June 11, 1996 (the
"Environmental Report"), regarding the operations and real
property assets of the Company and its Subsidiaries.
Section 3.1.7. Approvals, etc. All Approvals set forth on Item
4.1.5 ("Consents and Approvals") of the Disclosure Schedule
hereto shall have been obtained or otherwise satisfied, and all
applicable waiting or appeal periods with respect thereto shall
have passed, in each case to the satisfaction of each of the
Purchasers.
Section 3.1.8. Registration Rights Agreement, Institutional
Stockholders Agreement and Management Stockholders' Agreement.
On the Closing Date,
(a) the Registration Rights Agreement shall have
been terminated by the parties thereto in accordance
therewith;
(b) the Institutional Stockholders Agreement shall
have been terminated by the parties thereto in accordance
therewith; and
(c) the Management Stockholders' Agreement shall
have been amended and restated, in form and substance
satisfactory to the Company and the Purchasers, by the
parties thereto.
Section 3.1.9. Solvency and Fairness Opinions. At the Company's
expense, the Company and the Purchasers shall have received a
copy of (i) a solvency opinion addressed to the Company from
Houlihan, Lokey, Howard & Zukin, Inc., dated the Closing Date,
opining that, both before and after giving effect to the
transactions contemplated hereby, by the Related Documents and by
the Other Financing Documents, the Company was not and will not
be insolvent; and (ii) a fairness opinion addressed to the
Company from Patricof & Co. Capital Corp., dated the Closing
Date, opining, among other things, that the Merger Consideration
paid to the Selling Shareholders for the Merger Stock is fair
from a financial point of view. Each of the solvency opinion and
the fairness opinion shall be in form, scope and substance
satisfactory to the Company and the Purchasers.
Section 3.1.10. All Proceedings to be Satisfactory. (a) All
corporate and other proceedings to be taken by the Company in
connection with the transactions contemplated hereby, (b) the
other Related Documents and the Other Financing Documents, and
(c) all documents incident thereto, shall be satisfactory in form
and substance to the Purchasers and their counsel, and the
Purchasers and said counsel shall have received all such
counterpart originals or certified or other copies of such
documents as they may reasonably request.
Section 3.1.11. Reasonable Satisfaction of Parties and Counsel. All
instruments applicable to the issuance and sale of the Common
Stock, the Preferred Stock, the Warrants and the Senior Secured
Notes and the other transactions contemplated hereby shall be
reasonably satisfactory to the parties hereto and their
respective counsel.
Section 3.2. Conditions of the Purchasers The obligations of each
of the Purchasers to purchase the Units shall be further subject
to the satisfaction of the following conditions on or prior to
such date (unless otherwise specified below):
Section 3.2.1. Representations and Warranties to be True
and Correct; Certificate of Officer of the Company. The
representations and warranties contained in Article IV, as well
as the representations and warranties set forth in Section 5 of
the Senior Secured Note Purchase Agreement and in Article IV of
the Stock Purchase Agreement shall be true and correct in all
material respects (except with respect to any such representation
or warranty that contains an express materiality limitation, in
which case such representation or warranty shall be true and
correct in all respects) on and as of the Closing Date with the
same effect as though such representations and warranties had
been made on and as of the Closing Date (except to the extent
that any such representations and warranties specifically apply
to a prior date). The Company shall have delivered to each of
the Purchasers a certificate of its chief executive or chief
financial officer certifying that (i) the representations and
warranties set forth herein and therein are in fact true and
correct as stated above, (ii) the Company and Mergerco have
performed or complied with all agreements and conditions
contained herein which are required to be performed or complied
with by them on or before the Closing Date, (iii) the Company,
Berry or Mergerco, as the case may be, has performed or complied
with all agreements and conditions contained in the Senior
Secured Note Purchase Agreement, the Senior Secured Note
Indenture and the Stock Purchase Agreement and (iv) each of the
conditions set forth in Sections 3.1 and 3.2 has been satisfied.
Section 3.2.2. Supporting Documents. On or prior to the Closing
Date, the Purchasers and their counsel shall have received copies
of the following supporting documents:
(a) (i) copies of the Company's Restated Certificate of
Incorporation, as amended by the Certificate of Amendment,
certified as of a recent date by the Secretary of State of the
State of Delaware, (ii) a certificate of said Secretary of State,
dated as of a recent date, as to the due incorporation and good
standing of the Company and its Subsidiaries and listing all
documents of the Company on file with said Secretary of State,
and (iii) a facsimile, telegram or telex from said Secretary as
of the close of business on the business day preceding the
Closing Date as to the continued good standing of the Company;
(b) (i) copies of the Restated Certificate of Incorporation
of Mergerco, certified as of a recent date by the Secretary of
State of the State of Delaware, (ii) a certificate of said
Secretary of State, dated as of a recent date, as to the due
incorporation and good standing of Mergerco and listing all
documents of Mergerco on file with said Secretary of State, and
(iii) facsimile, a telegram or telex from said Secretary as of
the close of business on the business day preceding the Closing
Date as to the continued good standing of Mergerco;
(c) a certificate of the Secretary of the Company, dated
the Closing Date and certifying: (i) that attached thereto is a
true and complete copy of the By-laws of the Company as in effect
on the date of such certification; (ii) that attached thereto is
a true and complete copy of resolutions adopted by the Board of
Directors of the Company authorizing the execution, delivery and
performance of this Agreement, each of the Related Documents and
each of the Other Financing Documents, the issuance, sale and
delivery of the Preferred Stock and Warrants to the Purchasers by
Mergerco, the issuance, sale and delivery by the Company of the
Senior Secured Notes, the Common Stock to the Rollover
Shareholders in exchange for the Rollover Stock pursuant to the
Exchange Agreement and the approval of the Merger, and that all
such resolutions are still in full force and effect and are all
the resolutions adopted in connection with the transactions
contemplated hereunder and thereunder; (iii) that the Company's
Restated Certificate of Incorporation, as amended by the
Certificate of Amendment, has not been amended (other than by the
amendment and restatement of the Company's Restated Certificate
of Incorporation by the Amended and Restated Certificate of
Incorporation) since the date of the certificate delivered
pursuant to clause (a)(ii) above; and (iv) the incumbency and
specimen signature of each officer of the Company executing this
Agreement, each of the Related Documents, each of the Other
Financing Documents, the stock certificate or certificates
representing the Common Stock, Preferred Stock, Warrants, the
Senior Secured Notes and any certificate or instrument furnished
pursuant hereto or thereto, and a certification by another
officer of the Company as to the incumbency and signature of the
officer signing the certificate referred to in this clause (c);
and
(d) a certificate of the Secretary of Mergerco, dated the
Closing Date and certifying: (i) that attached thereto is a true
and complete copy of the By-laws of Mergerco as in effect on the
date of such certification; (ii) that attached thereto is a true
and complete copy of resolutions adopted by the Board of
Directors of Mergerco authorizing the execution, delivery and
performance of this Agreement, each of the Related Documents and
each of the Other Financing Documents to which Mergerco is a
party, the issuance, sale and delivery of the Common Stock, the
Preferred Stock, the Warrants and the approval of the Merger, and
that all such resolutions are still in full force and effect and
are all the resolutions adopted in connection with the
transactions contemplated hereunder and thereunder; (iii) that
the Restated Certificate of Incorporation of Mergerco has not
been amended since the date of the certificate delivered pursuant
to clause (b)(ii) above; and (iv) the incumbency and specimen
signature of each officer of Mergerco executing this Agreement,
each of the Related Documents to which it is a party, each of the
Other Financing Documents to which it is a party, the stock
certificate or certificates representing the Common Stock, the
Preferred Stock, the Warrants and any certificate or instrument
furnished pursuant hereto or thereto, and a certification by
another officer of Mergerco as to the incumbency and signature of
the officer signing the certificate referred to in this clause
(d); and
(e) such additional supporting documents, instruments,
certificates, opinions and other information with respect to the
operations and affairs of the Company and Mergerco as the
Purchasers or their counsel may reasonably request.
All such documents shall be satisfactory in form and
substance to the Purchasers and their counsel.
Section 3.2.3. Legal Opinion from Counsel for the Company and
Mergerco. On the Closing Date, each of the Purchasers shall have
received the written opinion of O'Sullivan, Graev & Karabell,
LLP, counsel for the Company and Mergerco, in form and substance
satisfactory to each of the Purchasers and their counsel.
Section 3.2.4. Delivery of SBA Forms. In the event that any
Purchaser is a licensed Small Business Investment Company under
the Small Business Investment Act of 1958, as amended, the
Company shall have provided such Purchaser with all information
necessary for such Purchaser to prepare the Size Status
Declaration on Form 480, the Assurance of Compliance for
Nondiscrimination on Form 652 and the Portfolio Financing Report
on Form 1031 (collectively, the "SBA Compliance Documents"), the
Company shall have executed and delivered the Forms 480 and 652
to such Purchaser, as applicable, and all of the information set
forth in the SBA Compliance Documents shall be true and correct
in all respects.
Section 3.2.5. Exchange of Rollover Stock. (a) Management
Shareholders shall have, pursuant to the Exchange Agreement,
exchanged or agreed in writing to exchange, not less than 111,016
shares of Management Rollover Stock.
(b) CITEI shall have, pursuant to the Exchange Agreement,
exchanged or agreed in writing to exchange, not less than 51,238
shares of CITEI Rollover Stock.
Section 3.2.6. Senior Secured Notes. The terms of the Senior Secured
Notes not otherwise set forth in the Preliminary Offering
Memorandum dated May 31, 1996, including the applicable interest
rate on such notes, shall be satisfactory to each of the
Purchasers.
Section 3.3. Conditions of the Company and Mergerco. The
obligations of (a) the Company to effect the Merger and
(b) Mergerco to sell Units shall be further subject to
satisfaction of the following conditions on or prior to such
date:
Section 3.3.1. Representations and Warranties to be True and
Correct. The representations and warranties contained in Article
V shall be true and correct on and as of the Closing Date with
the same effect as though such representations and warranties had
been made on and as of such date (except to the extent that any
such representations and warranties specifically apply to a prior
date).
Section 3.4. Conditions of Northwestern. The obligations of
Northwestern to purchase the Units shall be further subject to
the satisfaction of the following conditions on or prior to the
Closing Date (unless otherwise specified below):
Section 3.4.1. Purchase Permitted By Applicable Law, etc.
On the Closing Date, the purchase of Units by Northwestern shall
(i) be permitted by the laws and regulations of each jurisdiction
to which Northwestern is subject, without recourse to provisions
(such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without
restriction as to the character of the particular investment,
(ii) not violate any applicable law or regulation (including,
without limitation, Regulation G, T or X of the Board of
Governors of the Federal Reserve System) and (iii) not subject
Northwestern to any tax, penalty or liability under or pursuant
to any applicable law or regulation, which law or regulation was
not in effect on the date hereof.
Section 3.4.2. Private Placement Number. A Private Placement number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation
with the Securities Valuation Office of the National Association
of Insurance Commissioners) shall have been requested for the
Preferred Stock and Warrants.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Company. The
Company represents and warrants to each of the Purchasers, as of
the date hereof and the Closing Date (except to the extent any of
the following representations or warranties specifically apply or
relate to a prior date, in which event the Company represents and
warrants such representations and warranties to be true and
correct as of such prior date), as follows:
Section 4.1.1. Corporate Existence. Each of the Company and each of
its Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
set forth for such corporation on Item 4.1.1 ("Company and
Existing Subsidiaries (Name, Jurisdiction of Incorporation") of
the Disclosure Schedule hereto, and is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or use of its assets or
properties, or the conduct or nature of its business, makes such
qualification necessary, except where the failure to so qualify
would not constitute a Material Adverse Effect. The Company has
all requisite corporate power and authority to conduct its
business and own its properties as now conducted and owned.
Attached as Exhibit A hereto is a true and complete copy of the
Company's By-laws, as in effect as of the Closing Date; and
attached as Exhibit B-1 hereto is a true and complete copy of the
Amended and Restated Certificate of Incorporation, as in effect
and as on file with the Secretary of State of the State of
Delaware as of the Closing Date after giving effect to the
Merger.
Section 4.1.2. Power and Authority. The Company has all requisite
corporate power and authority, and has taken all required
corporate and other action necessary, to execute, deliver and
perform this Agreement, all Related Documents, all Other
Financing Documents to which the Company is a party, to issue the
Senior Secured Notes, to issue and exchange the Common Stock for
the Rollover Stock pursuant to the Exchange Agreement and to
effect the Merger, each as herein and therein provided. None of
the foregoing actions will (i) violate any provision of the
Company's By-laws, Restated Certificate of Incorporation, as
amended by the Certificate of Amendment, prior to the Merger or
Amended and Restated Certificate of Incorporation following the
Merger, (ii) result in the breach of or constitute a default
under any contract, agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which it or any of
them is bound, (iii) result in the creation or imposition of any
lien, claim or encumbrance on any asset of the Company or any of
its Subsidiaries, (iv) give any Person rights to terminate any
contracts or agreements with the Company or any of its
Subsidiaries or otherwise to exercise rights against the Company
or any of its Subsidiaries or (v) violate any Approval or any
order, writ, judgment, injunction, decree, statute, rule or
regulation of any court, tribunal or governmental entity
applicable to or bearing upon the Company or any of its
Subsidiaries or any of their respective assets or business,
except, in the case of each of clauses (ii), (iii), (iv) and (v)
above, for occurrences that would not in the aggregate constitute
a Material Adverse Effect.
Section 4.1.3. Enforceability, etc. Each of this Agreement, each of
the Related Documents and each of the Other Financing Documents
to which the Company is a party has been duly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable against it in
accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance
or other similar laws affecting the enforcement of creditors'
rights generally and general equitable principles.
Section 4.1.4. Capitalization. Assuming that all transactions
contemplated hereunder, under the Stock Purchase Agreement and
the Exchange Agreement have been consummated (including the
issuance and sale of the Common Stock, the Preferred Stock, the
Warrants and the Senior Secured Notes, the exchange of the
Rollover Stock and consummation of the Merger) as of the Closing
Date:
(a) the Capitalization Schedule sets forth a true and complete
statement of the capitalization of the Company and each of its
Subsidiaries as of the Closing Date, including a list of all
holders of Interests of or in the Company and its Subsidiaries
(and the amount and type of such Interests);
(b) except as set forth on the Capitalization Schedule,
neither the Company nor any of its Subsidiaries has issued any
Interests, nor are any Interests (or any rights to acquire or
purchase any Interests) outstanding;
(c) the Common Stock delivered to the Rollover Shareholders
will have been duly authorized, validly issued, fully paid and
will be non-assessable and will have been delivered to the
Rollover Shareholders free and clear of any liens, encumbrances,
preemptive rights, escrows, options, rights of first refusal or
other agreements, arrangements, commitments, understandings or
obligations, whether written or oral, or any other restrictions
affecting rights and other incidents of record and beneficial
ownership, other than (i) as set forth herein and in the Related
Documents, and (ii) restrictions on transferability imposed
generally under the '33 Act and under the securities laws of the
several states and the rules and regulations issued in respect
thereof (such state laws, rules and regulations, being,
collectively, "Blue Sky Laws");
(d) The 39,100 shares of Class B Common Stock issuable upon
the exercise of the Warrants will have been duly authorized and
reserved for issuance upon exercise of the Warrants and, when
issued upon such exercise and payment of the exercise price
thereof in accordance with the terms of the Warrants, will have
been duly authorized, validly issued and will be fully paid and
nonassessable and will be delivered to the holder(s) of the
Warrants free and clear of any liens, encumbrances, pre-emptive
rights, escrows, options, rights of first refusal or other
agreements, arrangements, commitments, understandings or
obligations, whether written or oral, or any other restrictions
affecting rights and other incidents of record and beneficial
ownership, other than (i) as set forth herein, and (ii)
restrictions on transferability imposed generally under the '33
Act and under Blue Sky Laws;
(e) The Exchange Notes, if issued in accordance with this
Agreement and the Exchange Indenture, will be legal, valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms except as such enforcement
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by
proceedings in equity or at law); and
Except as set forth on Item 4.1.1 ("Company and Existing
Subsidiaries (Name, Jurisdiction of Incorporation") of the
Disclosure Schedule hereto, the Company has no Subsidiaries. The
Company owns 100% of all issued and outstanding shares of capital
stock of its Subsidiaries, and owns no capital stock, other
securities or Interests, or rights or obligations to acquire the
same, of any other Person.
Section 4.1.5. Consents, Approvals and Non-Contravention. Except as
set forth on Item 4.1.5 ("Consents and Approvals") of the
Disclosure Schedule hereto, neither the execution, delivery and
performance by the Company of this Agreement, any Related
Documents or any of the Other Financing Documents to which it is
a party, nor the consummation of any transaction related hereto
or thereto, nor the issuance, sale or delivery of the Common
Stock issued on exercise of the Warrants, the Preferred Stock or
Warrants will:
(a) require any consent, approval, license, permit, waiver
or other authorization of, filing or taking of any other action
with, or notice to, any Person, including any local, state or
federal governmental agency, authority, branch or instrumentality
(collectively, an "Approval"), except where the failure to obtain
an Approval would not in the aggregate constitute a Material
Adverse Effect; or
(b) violate any of the Company's, or any of its
Subsidiaries', Licenses, except where such violation would not in
the aggregate constitute a Material Adverse Effect.
Section 4.1.6. Pro Forma Balance Sheet. The pro forma balance sheet
set forth on Item 4.1.6 ("Pro Forma Balance Sheet") of the
Disclosure Schedule hereto fairly presents in all material
respects the financial condition of the Company and its
Subsidiaries on a consolidated basis as of the date of the
Balance Sheet, giving effect to the consummation of the
transactions contemplated hereby and by the Related Documents and
the Other Financing Documents as if such transactions had been
consummated as of such date. Item 4.1.6 ("Pro Forma Balance
Sheet") of the Disclosure Schedule also sets forth a pro forma
consolidating balance sheet of each of the Company and its
Subsidiaries.
Section 4.1.7. SEC Reports and Financial Statements. (a) The
Company has filed all forms, reports and documents required to be
filed with the Securities and Exchange Commission ("SEC") since
December 31, 1994, and has made available to the Purchasers (i)
its Annual Reports on Form 10-K for the two fiscal years ended
December 31, 1994, and December 31, 1995, (ii) all other reports,
information and registration statements filed by the Company with
the SEC since December 31, 1994 and (iii) all amendments and
supplements to all such reports, information and registration
statements filed by the Company with the SEC (collectively, the
"SEC Reports"). The SEC Reports (1) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act,
as the case may be, and the rules and regulations promulgated
thereunder and (2) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. True and complete copies of each
SEC Report, including all exhibits thereto, have been made
available to the Purchasers.
(b) Except as set forth on Item 4.1.7 ("Financial
Statements") of the Disclosure Schedule hereto, each of the
consolidated financial statements (including, in each case, any
related notes thereto) (the "Financial Statements") contained in
the SEC Reports (i) was prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (except as may be expressly
described in the notes thereto) and (ii) fairly presents the
consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial
statements included in the Company's Form 10-QA reports were or
are subject to normal and recurring year-end adjustments.
Section 4.1.8. Material Adverse Change. Except as set forth on Item
4.1.8 ("Material Adverse Change") of the Disclosure Schedule
hereto, since the date of the last audited Financial Statement,
(i) there has been no material adverse change in the assets,
liabilities or financial condition of the Company and its
Subsidiaries from that reflected in such audited Financial
Statement, except for changes in the ordinary course of business
individually or in the aggregate and (ii) there has been no event
that would result in a Material Adverse Effect.
Section 4.1.9. Events Subsequent to the Date of the Last Financial
Statement. Since the date of the last audited Financial
Statements, except as contemplated by this Agreement or as set
forth in the balance sheet included in the Company's Form 10-QA
for the period ending March 31, 1996 (the "Balance Sheet") or
Item 4.1.9 ("Subsequent Events") of the Disclosure Schedule
hereto, neither the Company nor any of its Subsidiaries has
(i) issued any stock, bond or other corporate security other than
in connection with the exercise of options issued pursuant to the
Company's 1991 Stock Option Plan, (ii) borrowed any amount or
incurred or become subject to any material liability (absolute,
accrued or contingent), except liabilities under the Senior Bank
Agreement and in respect of the Senior Secured Notes and the
Senior Subordinated Notes (as defined in the Stockholders
Agreement), current liabilities incurred and liabilities under,
contracts entered into in the ordinary course of business,
(iii) discharged or satisfied any lien or encumbrance or incurred
or paid any obligation or liability (absolute, accrued or
contingent) other than current liabilities shown on the Balance
Sheet and current liabilities incurred since the date of the
Balance Sheet in the ordinary course of business, (iv) except as
contemplated pursuant to the Stock Purchase Agreement or the
Exchange Agreement, declared or made any payment or distribution
to stockholders or purchased or redeemed any of its capital
stock, (v) except in connection with the transactions
contemplated by the Senior Secured Note Indenture, mortgaged,
pledged or subjected to any lien or encumbrance any of its
assets, tangible or intangible, other than liens for current real
property taxes not yet due and payable, (vi) sold, assigned or
transferred any of its tangible assets except in the ordinary
course of business, or cancelled any debt or claim owed to the
Company or any such Subsidiary except in the ordinary course of
business, (vii) sold, assigned, transferred or granted any
exclusive license with respect to any patent, trademark, trade
name, service mark, copyright, trade secret or other intangible
asset, (viii) suffered any substantial loss of property or waived
any right of substantial value other than in the ordinary course
of business, (ix) made any change in officer compensation except
in the ordinary course of business and consistent with past
practice, (x) made any material change in the manner of business
or operations of the Company and its Subsidiaries taken as a
whole, (xi) entered into any transaction except in the ordinary
course of business or as otherwise contemplated hereby or
(xii) entered into any commitment, obligation, understanding or
other arrangement, contingent or otherwise, to effect, directly
or indirectly, any of the foregoing.
Section 4.1.10. Absence of Undisclosed Liabilities. Since the date
of the last audited Financial Statement, neither the Company nor
any of its Subsidiaries had any material loss contingency (as
defined in Statement of Financial Accounting Standards No. 5),
whether matured or unmatured, fixed or contingent, which is not
fully reflected or provided for on the Balance Sheet or disclosed
in a footnote thereto, except (i) obligations to perform under
commitments or other obligations incurred in the ordinary course
of business, (ii) tax and related liabilities which have been
disclosed pursuant to Item 4.1.11 ("Taxes") of the Disclosure
Schedule hereto and (iii) other liabilities as set forth on Item
4.1.10 ("Liabilities") of the Disclosure Schedule hereto or in
the SEC Reports filed prior to the date hereof or in the Offering
Memorandum.
Section 4.1.11. Taxes. Except as set forth on Item 4.1.11 ("Taxes")
of the Disclosure Schedule hereto, the Company has accurately
completed and filed or will file within the time prescribed by
law (including extensions of time approved by the appropriate
taxing authority) all tax returns and reports required to be
filed on behalf of the Company and each of its Subsidiaries with
the Internal Revenue Service, the State of Delaware, any other
states or governmental subdivisions and all foreign countries and
has paid all taxes, interest, penalties, assessments or
deficiencies shown to be due (or, to the knowledge of the
Company, claimed by such authority or jurisdiction to be due) on
or in respect of such tax returns and reports. The Company knows
of (i) no other federal, state, county, municipal or foreign
taxes (or other liabilities in respect thereof) which are due and
payable by the Company or any of its Subsidiaries which have not
been so paid, (ii) no other material federal, state, county,
municipal or foreign tax returns or reports which are required to
be filed which have not been so filed, (iii) no other unpaid
assessment for additional taxes or penalties for any fiscal
period or any basis thereof and (iv) no material tax lien,
whether imposed by any Federal, state, county, municipal or
foreign taxing authority, outstanding against the assets or
business of the Company or any of its Subsidiaries. The federal
income tax returns of the Company and its Subsidiaries have been
audited for the Company's 1991, 1992 and 1993 fiscal years and
the state income tax returns of the Company and its Subsidiaries
are currently being audited. Proper and accurate amounts have
been withheld by the Company and its Subsidiaries from their
respective employees for all periods in compliance with the tax,
social security and any employment withholding provisions of
applicable federal and state law, and proper and accurate federal
and state returns have been filed by the Company for all periods
for which returns were due with respect to employee income tax
withholding, social security and unemployment taxes for the
Company and its Subsidiaries, and the amounts shown thereon to be
due and payable have been paid in full or provision therefor
included on the books of the Company in accordance with and to
the extent required by GAAP. The Company has not made any
election under Section 341(f) of the Code.
Section 4.1.12. Litigation. Except as set forth on Item 4.1.12
("Litigation") of the Disclosure Schedule hereto, there are no
actions, suits, proceedings, orders, investigations or claims
pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries, any of their
respective assets or businesses or any of their respective
directors or employees, at law or in equity, before any court,
arbitration panel, tribunal or governmental department,
commission, board, bureau, agency or instrumentality which could
have a Material Adverse Effect or which could materially
adversely affect the transactions contemplated by this Agreement,
the Related Documents and the Other Financing Documents.
Section 4.1.13. Insurance. Except as set forth on Item 4.1.13
("Insurance") of the Disclosure Schedule hereto, the Company
holds valid policies in full force and effect covering all of the
insurance required to be maintained by it pursuant to
Section 6.2.4(g) hereof.
Section 4.1.14. Conflicts of Interests. Except as set forth on Item
4.1.14 ("Conflict of Interest") of the Disclosure Schedule
hereto, neither the Company, nor any Subsidiary, nor, to the
knowledge of the Company, any of their respective officers,
employees, agents or any other Person acting on behalf of the
Company or any such Subsidiary has, directly or indirectly, given
or agreed to give any money, gift or similar benefit (other than
legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a
customer or supplier, or official or employee of any governmental
agency or instrumentality of any government (domestic or foreign)
or other Person who was, is, or may be in a position to help or
hinder the business of the Company or any of its Subsidiaries (or
assist in connection with any actual or proposed transaction)
which (i) could reasonably be expected to subject the Company or
any of its Subsidiaries to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not
given in the past, could reasonably be expected to constitute a
Material Adverse Effect, or (iii) if not continued in the future,
could reasonably be expected to constitute a Material Adverse
Effect.
Section 4.1.15. Other Relationships. Except as set forth on Item
4.1.15 ("Other Relationships") of the Disclosure Schedule hereto,
to the knowledge of the Company
(a) the officers of the Company and its Subsidiaries have
no interest (other than as non-controlling holders of securities
of a publicly-traded company), either directly or indirectly, in
any Person (whether as an employee, officer, director,
shareholder, agent, independent contractor, security
holder, creditor, consultant or otherwise) that presently
(i) provides any services or designs, produces or sells any
products or product lines, or engages in any activity which is
the same, similar to or competitive with any activity or business
in which the Company or any of its Subsidiaries is now engaged,
(ii) is a supplier of, customer of, creditor of, or has an
existing contractual relationship with, the Company or any of its
Subsidiaries, or (iii) has any direct or indirect interest in any
asset or property used by the Company or any of its Subsidiaries
or any property, real or personal, tangible or intangible, that
is necessary or desirable for the conduct of the business of the
Company or any of its Subsidiaries; and
(b) no current or former stockholder, director, officer or
employee of the Company or any of its Subsidiaries, nor any
Affiliate of any such Person, is at present, or has, since
January 1, 1995, been, directly or indirectly through his
affiliation with any other Person, a party to any transaction
(other than as an employee) with the Company or any of its
Subsidiaries providing for the furnishing of services by, or
rental of real or personal property from, or otherwise requiring
cash payments to any such person.
Section 4.1.16. Licenses; Compliance with Laws, Other Agreements,
etc. Except as set forth on Item 4.1.16 ("Licenses") of the
Disclosure Schedule hereto, the Company and its Subsidiaries have
all franchises, permits, licenses and other rights, including,
without limitation, all Approvals (governmental and otherwise),
which are necessary or required for the conduct of the business
of the Company and its Subsidiaries as currently conducted and as
contemplated to be conducted (pursuant to the Offering
Memorandum) (collectively, the "Licenses"), except where the
failure to obtain such Licenses would not in the aggregate
constitute a Material Adverse Effect. The Company knows of no
basis upon which the renewal of any Licenses would be denied in
the future. Each such License has been validly issued and is in
full force and effect, and neither the Company nor any of its
Subsidiaries is in violation of any such License, except where
such violations would not in the aggregate constitute a Material
Adverse Effect.
Section 4.1.17. Intellectual Property Rights and Government
Approvals. Except as set forth on Item 4.1.17(a) ("Intellectual
Property Rights") of the Disclosure Schedule hereto, the Company
and its Subsidiaries have all patents, trademarks, service marks,
trade names, copyrights, rights or licenses to use the same, and
any and all applications therefor (collectively, the
"Intellectual Property"), necessary to permit the Company and its
Subsidiaries to conduct their business as currently conducted and
as contemplated to be conducted, except where the failure to own
or hold any Intellectual Property would not in the aggregate
constitute a Material Adverse Effect. Except as set forth on
Item 4.1.17(a) of the Disclosure Schedule hereto, neither the
Company nor any of its Subsidiaries has received any formal or
informal notice of infringement or other complaint that any of
their operations infringe any rights under any Intellectual
Property or any other proprietary rights of any other Person, nor
does the Company or any of its Subsidiaries have any reason to
believe that there has been any such infringement that would
constitute a Material Adverse Effect. Except as set forth on
Item 4.1.17(b) ("Royalties and Other Fees") of the Disclosure
Schedule hereto, no royalties, honorariums or fees are or will be
payable by the Company or any of its Subsidiaries to any other
Person by reason of the ownership or use by any of them of any
Intellectual Property.
Section 4.1.18. Investment Company Act. The Company is not, and
immediately after any Closing will not be, an "investment
company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act.
Section 4.1.19. Brokers, etc. Except as set forth on Item 4.1.19
("Brokers") of the Disclosure Schedule hereto, the Company has
not dealt with, nor is the Company obligated to pay any fee or
commission in connection with, any broker, finder or other
similar Person in connection with the offer or sale of the Common
Stock, Preferred Stock, the Warrants or Senior Secured Notes or
any of the transactions contemplated by this Agreement, any
Related Document or any Other Financing Document.
Section 4.1.20. Private Sale. Except for the issuance of the Senior
Secured Notes (with respect to which the Company intends to file
the Exchange Offer Registration Statement (as defined in the
Offering Memorandum)), in connection with the Recapitalization,
the Company has not, either directly or through any agent,
offered any Common Stock, Warrants, Preferred Stock, Senior
Secured Notes or any other securities to, or solicited any offers
to acquire any Common Stock, Warrants, Preferred Stock, Senior
Secured Notes or any other Interests or securities from, or
otherwise approached, negotiated or communicated in respect of
any Common Stock, Warrants, Preferred Stock, Senior Secured Notes
or any other Interests or securities with, any Person in such a
manner as to require that the offer or sale of any such
securities be registered pursuant to the '33 Act or any Blue Sky
Laws.
Section 4.1.21. Disclosure. Neither this Agreement, nor any Related
Document, any Other Financing Document, the Offering Memorandum
for the Senior Secured Notes, nor any of the exhibits, schedules
or attachments hereto or thereto contain any untrue statement of
a material fact or omits a material fact necessary to make each
statement contained herein or therein not misleading; provided,
however, that with respect to any of the financial projections
included therein the Company represents and warrants only that
such projections were based upon assumptions reasonably believed
by the Company to be reasonable and fair as of the date the
projections were prepared in the context of the Company's history
and current and reasonably foreseeable business conditions.
Section 4.1.22. Contracts and Commitments.
(a) Except as expressly contemplated by this Agreement or
as set forth in the SEC Reports filed prior to the date hereof or
on Item 4.1.22 ("Contracts and Commitments") of the Disclosure
Schedule hereto, neither the Company nor any of its Subsidiaries
is a party to any written or oral:
(i) pension, profit sharing, stock option, employee stock
purchase or other plan or arrangement providing for deferred or
other compensation to employees or any other employee benefit
plan or arrangement, or any contract with any labor union, or any
severance agreements;
(ii) contract for the employment of any officer, individual
employee or other Person on a full-time, part-time, consulting or
other basis providing annual compensation in excess of $100,000
per annum or contract relating to loans to officers, directors or
Affiliates;
(iii) contract under which the Company or any of its
Subsidiaries has advanced or loaned any other Person amounts in
the aggregate exceeding $50,000;
(iv) agreement or indenture relating to the borrowing of money
or the mortgaging, pledging or otherwise placing a lien on any
material asset or material group of assets of the Company or any
of its Subsidiaries;
(v) guarantee of any obligation of any Person (other than the
Company or a Subsidiary) involving more than $100,000;
(vi) lease or agreement under which the Company or any of its
Subsidiaries is lessee of or holds or operates any property, real
or personal, owned by any other Person, except for any lease of
real or personal property under which the aggregate annual rental
payments do not exceed $100,000;
(vii) lease or agreement under which the Company or any of
its Subsidiaries is lessor of or permits any third party to hold
or operate any property, real or personal, owned or controlled by
the Company or any of its Subsidiaries, except for any lease
under which the aggregate annual rental payments do not exceed
$100,000;
(viii) contract or group of related contracts with the same
party or group of Affiliated parties the performance of which
involves a consideration in excess of $100,000;
(ix) assignment or license agreement with respect to any
intangible property (including, without limitation, any
Intellectual Property);
(x) warranty agreement with respect to its services rendered
or its products sold or leased;
(xi) agreement under which it has granted any Person any
registration rights or similar rights (including piggyback
rights) or co-sale or similar rights in respect of any securities
of the Company or any of its Subsidiaries;
(xii) sales, distribution or franchise agreement involving
more than $100,000 per annum;
(xiii) agreement with a term of more than six months
involving more than $100,000 per annum which is not terminable by
the Company or any Subsidiary upon less than 30 days' notice
without penalty;
(xiv) contract or agreement prohibiting it from freely
engaging in any business or competing anywhere in the world;
(xv) contract, agreement or other arrangement (including,
without limitation, any stockholders or voting agreement, voting
trust or similar arrangement with respect to any securities of
the Company or any of its Subsidiaries) with any officer,
director, employee, holder of securities or Affiliate, or any
Affiliate of any officer, director, employee or holder of such
securities; or
(xvi) any other agreement which is material to its
operations and business prospects or involves a consideration in
excess of $100,000 annually.
(b) Except as set forth on Item 4.1.22 ("Contracts and
Commitments") of the Disclosure Schedule hereto, all of the
contracts, agreements and instruments set forth on such
Disclosure Schedule are valid, binding and enforceable against
the Company or one or more of its Subsidiaries, as the case may
be, in accordance with their respective terms, all obligations
required to be performed by the Company or any such Subsidiary,
as the case may be, under such contracts, agreements and
instruments have been so performed, and neither the Company nor
any such Subsidiary is in default under or in breach of, nor in
receipt of any claim of default or breach under, any such
contract, agreement or instrument to which it is subject, except
where the failure to perform such obligations or such defaults or
breaches would not in the aggregate constitute a Material Adverse
Effect. No event has occurred which with the passage of time or
the giving of notice or both would result in a default, breach or
event of noncompliance under any such contract, agreement or
instrument, except where such defaults, breaches or events of
noncompliance would not in the aggregate constitute a Material
Adverse Effect; the Company has no present expectation or
intention that either it or any of its Subsidiaries, as the case
may be, will not fully perform all such obligations; the Company
has no knowledge of any breach or anticipated breach by the other
parties to any such contract or commitment; and neither the
Company nor any of its Subsidiaries is a party to any contract
requiring it to purchase or sell goods or services or lease
property above or below (as the case may be) prevailing market
prices and rates.
Section 4.1.23. Customers and Suppliers. Set forth on Item 4.1.23
("Customers and Suppliers") of the Disclosure Schedule hereto is
a list of the ten largest customers of the Company and its
Subsidiaries for each of the two most recent fiscal years, and
set forth opposite the name of each such customer is the
percentage of consolidated net sales attributable to such
customer. Such Disclosure Schedule also lists any additional
current customers which the Company anticipates may be among the
ten largest customers for the current fiscal year. Since the
date of the Balance Sheet, no material supplier of the Company or
any of its Subsidiaries has indicated that it shall stop, or
materially decrease the rate of, supplying materials, products or
services to the Company or any such Subsidiary, and, except as
set forth on Item 4.1.23 of the Disclosure Schedule, no customer
listed on the aforementioned Disclosure Schedule has indicated
that it shall stop, or materially decrease the rate of, buying
materials, products or services from the Company or any such
Subsidiary.
Section 4.1.24. Employee Matters and Benefits.
(a) General. Except as set forth in the SEC Reports filed
prior to the date hereof or on Item 4.1.24 ("Employee Benefit
Plans") of the Disclosure Schedule hereto, neither the Company
nor any of its Subsidiaries is a party to, participates in or has
any liability (contingent or otherwise) with respect to:
(i) any "employee welfare benefit plan" or
"employee pension benefit plan" (as those terms are
respectively defined in sections 3(1) and 3(2) of
ERISA), other than a "multiemployer plan" (as defined
in section 3(37) of ERISA);
(ii) any retirement or deferred compensation
plan, incentive compensation plan, stock plan,
unemployment compensation plan, vacation pay,
severance pay, bonus or benefit arrangement,
insurance or hospitalization program or any other
fringe benefit arrangements for any current or former
employee, director, consultant or agent, whether
pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an employee
benefit plan (as defined in section 3(3) of ERISA);
or
(iii) any contract for the employment of any
officer, individual employee or other Person on a full-
time, part-time, consulting or other basis providing
annual compensation in excess of $100,000 per annum.
(b) Plan Documents and Reports. A true and correct copy of
each of the plans, arrangements, and agreements listed on
Item 4.1.24 ("Employee Benefit Plans") of the Disclosure Schedule
hereto (referred to hereinafter as "Employee Benefit Plans"), and
all contracts relating thereto, or to the funding thereof,
including, without limitation, all trust agreements, insurance
contracts, administration contracts, investment management
agreements, subscription and participation agreements, and
recordkeeping agreements, each as in effect on the date hereof,
has been made available to the Purchasers. In the case of any
Employee Benefit Plan which is not in written form, an accurate
description of such Employee Benefit Plan as in effect on the
date hereof has been made available to the Purchasers. A true
and correct copy of the most recent annual report, actuarial
report, accountant's opinion of the plan's financial statements,
summary plan description and Internal Revenue Service
determination letter with respect to each Employee Benefit Plan,
to the extent applicable, and a current schedule of assets (and
the fair market value thereof assuming liquidation of any asset
which is not readily tradable) held with respect to any funded
Employee Benefit Plan has been made available to the Purchasers,
and there have been no material changes in the financial
condition in the respective plans from that stated in the annual
reports and actuarial reports so made available.
(c) Compliance with Laws; Liabilities. Except as set forth
in Item 4.1.24 ("Employee Benefit Plans") of the Disclosure
Schedule hereto and except for cases that would not in the
aggregate constitute a Material Adverse Effect (it being
understood that for the purposes of this Section 4.1.24 only,
Material Adverse Effect shall not exclude any unfunded
liabilities under any Employee Benefit Plans), as to all Employee
Benefit Plans:
(i) All Employee Benefit Plans comply and have
been administered in form and in operation in all
material respects with all applicable requirements of
law, and no event has occurred which will or could
reasonably be expected to cause any such Employee
Benefit Plan to fail to comply with such requirements
and no notice has been issued by any governmental
authority questioning or challenging such compliance.
(ii) All Employee Benefit Plans which are
employee pension benefit plans comply in form and in
operation with all applicable requirements of
sections 401(a) and 501(a) of the Code; there have
been no amendments to such plans which are not the
subject of a favorable determination letter issued
with respect thereto by the Internal Revenue Service;
and, to the knowledge of the Company, no event has
occurred which will or could reasonably be expected
to give rise to disqualification of any such plan
under such sections or to a tax under section 511 of
the Code.
(iii) None of the assets of any Employee Benefit
Plan that is qualified under Sections 401(a) and 501(a)
of the Code is invested in employer securities or
employer real property.
(iv) There have been no "prohibited
transactions" (as described in section 406 of ERISA
or section 4975 of the Code) with respect to any
Employee Benefit Plan and neither the Company nor any
Subsidiary has engaged in any prohibited transaction.
(v) There have been no acts or omissions which
have given rise to or could reasonably be expected to
give rise to fines, penalties, taxes or related
charges under section 502 of ERISA or Chapters 43, 47
or 68 of the Code for which the Company or any
Subsidiary may be liable.
(vi) None of the payments contemplated by the
Employee Benefit Plans would, in the aggregate,
constitute excess parachute payments (as defined in
section 280G of the Code (without regard to
subsection (b)(4) thereof)).
(vii) There are no actions, suits or claims (other
than routine claims for benefits) pending or, to the
Company's knowledge, threatened involving any Employee
Benefit Plan or the assets thereof and, to the
knowledge of the Company, no facts exist which could
reasonably be expected to give rise to any such
actions, suits or claims (other than routine claims for
benefits).
(viii) No Employee Benefit Plan is subject to Title
IV of ERISA.
(ix) Each Employee Benefit Plan which
constitutes a "group health plan" (as defined in
section 607(1) of ERISA or section 4980B(g)(2) of the
Code), including any plans of current and former
affiliates which must be taken into account under
sections 4980B and 414(t) of the Code or section 601
of ERISA, has been operated in compliance with
applicable law, including coverage requirements of
section 4980B of the Code and section 601 of ERISA to
the extent such requirements are applicable.
(x) Neither the Company nor any Subsidiary has
any liability or contingent liability for providing,
under any Employee Benefit Plan or otherwise, any
post-retirement medical or life insurance benefits,
other than statutory liability for providing group
health plan continuation coverage under Part 6 of
Title I of ERISA and section 4980B of the Code.
(xi) Actuarially adequate accruals for all
obligations under the Employee Benefit Plans are
reflected in the financial statements of the Company
and such obligations include a pro rata amount of the
contributions and the Pension Benefit Guaranty
Corporation premiums which would otherwise have been
made in accordance with past practices and applicable
law for the plan years which include the Closing
Date.
(xii) There has been no act or omission that would
impair the ability of the Company and its Subsidiaries
(or any successor thereto) to unilaterally amend or
terminate any Employee Benefit Plan.
(d) Multiemployer Plans. Neither the Company nor any
Subsidiary contributes to, has contributed to, or has any
liability or contingent liability with respect to a multiemployer
plan.
Section 4.1.25. Environmental Matters. Except as disclosed on
Item 4.1.25 ("Environmental Matters") of the Disclosure Schedule
hereto and the Environmental Report and except for cases that
would not in the aggregate constitute a Material Adverse Effect:
(a) the business, operations and facilities (whether owned or
leased) of the Company and its Subsidiaries, and all existing
uses of and activities on or at any of the properties or
facilities (whether owned or leased) of the Company and its
Subsidiaries, are, to the Company's knowledge, in material
compliance with all Environmental Laws in effect as of the date
hereof, and no condition exists or event has occurred which, with
or without notice or the passage of time or both, would
constitute a violation of or give rise to any Lien under any
Environmental Law; provided, however, that, with respect to any
property or facility which is leased by the Company or any of its
Subsidiaries, if the lessor of such leased property or facility
has leased a portion thereof to a Person other than the Company
or any of its Subsidiaries, the Company makes no representation
or warranty under this clause (a) as to such other Person or
other leased portion;
(b) the Company and its Subsidiaries are in possession of all
Environmental Permits necessary or desirable for the conduct or
operation of its business (or any part thereof), and are in
material compliance with all of the requirements, conditions and
limitations included in such Environmental Permits;
(c) to the Company's knowledge, there is no, and the Company
and its Subsidiaries have not used or stored any, Hazardous
Material in, on, or at any of the properties or facilities now
owned or leased by the Company or its Subsidiaries except for
inventories of substances which are used or are to be used in the
ordinary course of business (which inventories have been stored,
used and disposed of in accordance with all applicable
Environmental Laws and Environmental Permits, including all
so-called "Right To Know Laws");
(d) the Company and its Subsidiaries have not received any
notice, whether formal or informal, from any Governmental
Authority or any other Person that any past or present aspect of
the business, operations or facilities (whether owned or leased)
of the Company or its Subsidiaries is in violation of any
Environmental Law or Environmental Permit, or that the Company or
its Subsidiaries is responsible or liable (or potentially
responsible or liable) for the investigation, cleanup or
remediation of any Hazardous Materials at any location;
(e) the Company and its Subsidiaries have not at any time
deposited or incorporated any Hazardous Material into, on,
beneath, or adjacent to any property except in compliance in all
material respects with all applicable Environmental Laws and in a
manner which does not create any liability under Environmental
Law;
(f) the Company and its Subsidiaries are not the subject of
any litigation or proceedings in any forum, judicial or
administrative, involving a demand for damages, injunctive
relief, penalties, or other potential liability with respect to
violations of or liability under any Environmental Law;
(g) the Company and its Subsidiaries timely filed all reports
and notifications required to be filed with respect to all of
their operations, properties and facilities (whether owned or
leased) and have generated and maintained all required records
and data under all applicable Environmental Laws;
(h) neither the Company, its Subsidiaries nor, to the
knowledge of the Company, any predecessor thereof has transported
or arranged for the transportation of any Hazardous Material to
any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA or on any similar
state list; and
(i) no condition exists or, to the knowledge of the Company,
existed in the past, or event has occurred, with respect to any
property that is currently or was at any time owned or leased by
the Company or its Subsidiaries, or, to the knowledge of the
Company, any predecessor to the Company or its Subsidiaries that
is likely, with or without notice, passage of time or both, to
give rise to any present or future liability of the Company or
its Subsidiaries pursuant to any Environmental Law.
Section 4.1.26. Small Business Concern. To the best of its
knowledge, the Company is a "Small Concern" as defined in Section
107.3 of Title 13 of the Code of Federal Regulations. When
executed and delivered by the Company at the Closing, the Size
Status Declaration on SBA Form 480 and Assurance of Compliance on
SBA Form 652, and the information relating to the Company set
forth in Part A of the Portfolio Financing Report on SBA Form
1031, shall be true and correct to the best of the Company's
knowledge.
Section 4.1.27. Title to Properties. Except as disclosed in the SEC
Reports filed prior to the date hereof or on Item 4.1.27 ("Title
to Properties") of the Disclosure Schedule hereto, the Company
and its Subsidiaries have, and on the Closing Date will have,
good (and, with respect to real property, marketable) title to,
and are, and on the Closing Date will be, the lawful owner of,
(a) all of the tangible and intangible assets, properties and
rights used in connection with the business of the Company and
its Subsidiaries (except for those assets, properties and rights
that the Company leases or otherwise has the right to use or as
to which the failure to own or possess title would not reasonably
be expected to have a Material Adverse Effect) and (b) all of the
tangible and intangible assets, properties and rights reflected
as owned by the Company and its Subsidiaries in the Financial
Statements or the SEC Reports filed prior to the date hereof or
Item 4.1.28 ("Assets") of the Disclosure Schedule hereto or Item
4.1.29 ("Real Property") of the Disclosure Schedule hereto (other
than assets leased under the leases set forth in Item 4.1.28
("Assets") of the Disclosure Schedule hereto or Item 4.1.29
("Real Property") of the Disclosure Schedule hereto and assets
disposed of in the ordinary course of business since the date of
such Financial Statements or the most recently filed SEC Report).
Section 4.1.28. Condition and Sufficiency of Assets. Except as
disclosed on Item 4.1.28 ("Assets") of the Disclosure Schedule
hereto, all of the tangible assets and properties of the Company
and its Subsidiaries, whether real or personal, owned or leased,
are in generally good operating condition and repair (with the
exception of normal wear and tear), and are free from defects
(other than such minor defects as do not either interfere with
the intended use thereof in the conduct of normal operations),
except where the failure to conform to such condition would not
in the aggregate constitute a Material Adverse Effect.
Immediately after the Closing Date, the Company and its
Subsidiaries shall own or have the right to use all the assets,
properties, rights, know-how, key personnel, processes and
ability which are required for or currently used in connection
with the operation of their business as presently conducted,
except where the failure to have a right to use or own any
thereof would not have a Material Adverse Effect.
Section 4.1.29. Real Property. Item 4.1.29 ("Real Property") of the
Disclosure Schedule hereto contains an accurate and complete
list, as of the date of this Agreement, of all fee interests in
real property and buildings and structures of the Company and its
Subsidiaries. The Company and its Subsidiaries have good and
indefeasible title in fee simple to all of the real property and
buildings specified as owned by them in such Item 4.1.29 ("Real
Property") of the Disclosure Schedule hereto, and have such title
in all such listed real property and buildings as is required for
the conduct of the business of the Company and its Subsidiaries,
as presently conducted, in each case free and clear of all
encumbrances, except:
(A) Liens for taxes, easements or governmental charges or levies
if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith by
appropriate proceedings and are not material to the Company or
its Subsidiaries; and
(B) such imperfections of title, if any, as do not individually
or in the aggregate materially detract from the value or
marketability of such real property as presently used or
materially interfere with such real property's present, or to the
knowledge of the Company, proposed use, or that in the aggregate
would have a Material Adverse Effect.
Except as set forth in Item 4.1.29 ("Real Property") of the
Disclosure Schedule hereto, all of the buildings and structures
to the extent owned by the Company or its Subsidiaries are in
good operating condition and repair, suitable for the purposes
for which they are being used and each has adequate rights of
ingress and egress for the operation of the business of the
Company and its Subsidiaries in the ordinary course of business.
To the Company's knowledge, no building or structure to the
extent owned by the Company or its Subsidiaries, or any
appurtenance thereto or equipment therein, or the operation or
maintenance thereof, violates any restrictive covenants or any
provisions of any federal, state, local or foreign law, ordinance
or zoning regulation, or encroaches on any property owned by
others, except to the extent any such violation or encroachment
would not (i) materially interfere with the use or adversely
affect the value of such building, structure or appurtenance or
(ii) have a Material Adverse Effect. No condemnation proceeding
is pending or, to the knowledge of the Company, threatened with
respect to any of the real property listed in Item 4.1.29 ("Real
Property") of the Disclosure Schedule hereto nor to the knowledge
of the Company, is any change in any of the foregoing laws,
ordinances or regulations pending or threatened, which proceeding
or change could reasonably be expected to materially interfere
with the use or materially adversely affect the value of any of
the real property listed in Item 4.1.29 ("Real Property") of the
Disclosure Schedule hereto.
Section 4.2. Representations and Warranties of Mergerco. Mergerco
represents and warrants to each of the Purchasers, as of the
Closing Date, as follows:
Section 4.2.1. Corporate Existence. Mergerco is a corporation duly
incorporated, validly existing and in good standing under the
laws of the jurisdiction set forth for such corporation, and is
duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or use
of its assets or properties, or the conduct or nature of its
business, makes such qualification necessary, except where the
failure to so qualify would not constitute a Material Adverse
Effect. Mergerco has all requisite corporate power and authority
to conduct its business and own its properties as now conducted
and owned. The copies of the Certificate of Incorporation and By-
Laws of Mergerco have previously been made available to the
Purchasers, and such copies are true and correct.
Section 4.2.2. Power and Authority. Mergerco has all requisite
corporate power and authority, and has taken all required
corporate and other action necessary, to execute, deliver and
perform this Agreement, all Related Documents and all Other
Financing Documents to which it is a party, and to issue and sell
the Common Stock, the Preferred Stock and the Warrants as
provided herein and therein. None of the foregoing actions will
(i) violate any provision of Mergerco's By-laws or Restated
Certificate of Incorporation, (ii) result in the breach of or
constitute a default under any contract, agreement or instrument
to which Mergerco is a party or by which it is bound,
(iii) result in the creation or imposition of any lien, claim or
encumbrance on any asset of Mergerco, (iv) give any Person rights
to terminate any contracts or agreements with Mergerco or
otherwise to exercise rights against Mergerco or (v) violate any
Approval or any order, writ, judgment, injunction, decree,
statute, rule or regulation of any court, tribunal or
governmental entity applicable to or bearing upon Mergerco or its
assets or business; except in the case of each of the clauses
(ii), (iii), (iv) and (v) above, for occurrences that would not
in the aggregate constitute a Material Adverse Effect.
Section 4.2.3. Enforceability, etc. Each of this Agreement, each of
the Related Documents and each of the Other Financing Documents
to which it is a party has been duly executed and delivered by
Mergerco and constitutes the legal, valid and binding obligation
of Mergerco enforceable against it in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or other
similar laws affecting the enforcement of creditors' rights
generally and general equitable principles.
Section 4.2.4. Consents, Approvals and Non-Contravention. Neither
the execution, delivery and performance by Mergerco of this
Agreement, any Related Documents or any of the Other Financing
Documents to which it is a party, nor the consummation by
Mergerco of any transaction related hereto or thereto, nor the
issuance, sale or delivery of the Common Stock, the Preferred
Stock or Warrants will:
(a) require any Approval, except where the failure to
obtain an Approval would not in the aggregate constitute a
Material Adverse Effect;
(b) violate any contract, agreement, instrument or other
arrangement to which Mergerco is a party or by which it is bound,
except where such violation would not in the aggregate constitute
a Material Adverse Effect;
(c) violate any order, writ, judgment, injunction, decree,
statute, law, rule or regulation of any court, tribunal or
governmental entity or authority applicable to or bearing upon
Mergerco, or any of its assets or business, except where such
violation would not in the aggregate constitute a Material
Adverse Effect; or
(d) violate any of Mergerco's Licenses, except where such
violation would not in the aggregate constitute a Material
Adverse Effect.
Section 4.2.5. No Activities. Mergerco has not carried on any trade
or business activities and has not acquired any assets or rights
or incurred any indebtedness, commitments or other liabilities
(contingent or otherwise) except those pursuant to this
Agreement, any Related Documents or Other Financing Documents to
which it is a party.
Section 4.2.6. Capitalization. Schedule IV hereto sets forth a true
and complete statement of the capitalization of Mergerco
immediately prior to the Merger and after giving effect to the
issuance and sale by Mergerco of the Common Stock, Preferred
Stock and Warrants. Except as set forth on said Schedule IV,
Mergerco has not issued any Interests, nor are any Interests (or
any rights to acquire or purchase any Interests) outstanding.
The Common Stock, Preferred Stock and Warrants to be delivered to
the Purchasers and Common Stock Purchasers, as applicable, by
Mergerco will be delivered in accordance with the terms hereof
and the Stock Purchase Agreement, and upon such delivery, will be
duly authorized, validly issued, fully paid and non-assessable
and will be delivered to the Purchasers and Common Stock
Purchasers, as applicable, free and clear of any liens,
encumbrances, preemptive rights, escrows, options, rights of
first refusal or other agreements, arrangements, commitments,
understandings or obligations, whether written or oral, or any
other restrictions affecting rights and other incidents of record
and beneficial ownership, other than (a) as set forth herein and
in the Related Documents, and (b) restrictions on transferability
imposed generally under the '33 Act and under the Blue Sky Laws.
The issuance and delivery of the Common Stock, Preferred Stock
and Warrants to the Purchasers and Common Stock Purchasers, as
applicable, are exempt from the registration requirements of the
'33 Act and the Blue Sky Laws or have been qualified as may be
necessary.
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASERS
Section 5.1. Representations and Warranties of the Purchaser.
Each of the Purchasers, severally, but not jointly, represents
and warrants to the Company, as of the date hereof and the
Closing Date, as follows:
Section 5.1.1. Power and Authority. Such Purchaser has full power
and authority and has taken all required corporate action
necessary to permit it to execute and deliver this Agreement and
any Related Documents, Other Financing Documents and other
documents or instruments related hereto or thereto that such
Purchaser is a party to, and to carry out the terms hereof and
thereof. None of the foregoing actions will (i) violate any
provision of such Purchaser's by-laws, charter or other similar
corporate documents, if applicable, (ii) result in the breach of
or constitute a default under any contract, agreement or
instrument to which such Purchaser is a party or by which it is
bound or (iii) violate any order, writ, judgment, injunction,
decree, statute, rule or regulation of any court, tribunal or
governmental entity or authority applicable to or bearing upon
such Purchaser or any of its assets or business, except for any
such occurrences that would not constitute a Material Adverse
Effect.
Section 5.1.2. Enforceability, etc. This Agreement and each of the
Related Documents to which such Purchaser is a party has been
duly executed and delivered by the Purchaser and constitutes the
legal, valid and binding obligation of such Purchaser enforceable
against it in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally and general equitable
principles.
Section 5.1.3. Purchase for Investment. Such Purchaser is
purchasing the Purchased Securities for its own account and with
no intention of distributing or reselling said Purchased
Securities or any part thereof in any transaction that would be
in violation of the securities laws of the United States of
America or any state thereof.
Section 5.1.4. Financial Matters. Such Purchaser represents and
warrants to the Company that it understands that the purchase of
the Purchased Securities involves substantial risk and that such
Purchaser's financial condition and investments are such that it
is in a financial position to hold the Units and any Common Stock
issued upon exercise of the Warrants for an indefinite period of
time and to bear the economic risk of, and withstand a complete
loss of, its investment in the Units and any Common Stock issued
upon exercise of the Warrants. Such Purchaser represents that it
is an "accredited investor" as that term is defined in
Regulation D promulgated under the Securities Act, and that such
Purchaser is a sophisticated investor, capable of evaluating the
merits and risks of investing in the Company.
Section 5.1.5. Adequate Access to Personnel and Materials. During
the negotiation of the transactions contemplated herein, such
Purchaser and its representatives have been afforded access to
the Company's financial statements and records, have been
afforded an opportunity to ask such questions of the Company's
officers and employees concerning the Company's business,
operations, financial condition, assets, liabilities and other
relevant matters, and have been given all such information as has
been requested, in order to evaluate the merits and risks of the
prospective investment contemplated herein.
Section 5.1.6. Brokers, etc. Such Purchaser has not dealt with any
broker, finder or other similar Person in connection with the
offer or sale of the Purchased Securities or any of the
transactions contemplated by this Agreement as a result of which
the Company would be obligated to pay any fee or commission.
ARTICLE 6
COVENANTS
Section 6.1. Pre-Closing Date Covenants of the Company. The
Company covenants and agrees that, at all times prior to the
Closing Date, it shall perform, observe and comply with the
covenants set forth in this Section 6.1.
Section 6.1.1. Access and Investigation. Upon reasonable notice,
and provided each Purchaser and its advisors (collectively,
"Purchaser's Advisors") shall maintain the confidentiality of all
information to which they have access, the Company will, and will
cause each of its Subsidiaries to, (a) afford each Purchaser and
the Purchaser's Advisors full and free access, during normal
business hours without disruption to the normal day-to-day
operation of the business, to the personnel, properties
(including subsurface testing), contracts, books and records and
other documents and data of the Company and its Subsidiaries, (b)
furnish each Purchaser and the Purchaser's Advisors with copies
of all such contracts, books and records and other existing
documents and data as such Purchaser may reasonably request, and
(c) furnish each Purchaser and the Purchaser's Advisors with such
additional financial, operating and other data and information as
such Purchaser may reasonably request.
Section 6.1.2. Operation of the Businesses of the Company and its
Subsidiaries. The Company will, and will cause each of its
Subsidiaries to, (a) conduct their respective businesses only in
the ordinary course of business, (b) use all commercially
reasonable efforts to preserve intact the current business
organization of the Company and its Subsidiaries, keep available
the services of the current officers, employees and agents of the
Company and each of its Subsidiaries, and maintain the relations
and good will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships with
the Company and its Subsidiaries, (c) confer with the Purchasers
concerning operational matters of a material nature, (d)
otherwise operate and conduct the businesses of the Company and
its Subsidiaries in a manner so as not to cause any of the
Company's representations or warranties set forth in Section 4.1
to be false or incorrect in any material respect on the Closing
Date, and (e) upon reasonable request, otherwise report
periodically to the Purchasers concerning the status of the
business, operations and finances of the Company and its
Subsidiary.
Section 6.1.3. Negative Covenant. Except as otherwise expressly
permitted by this Agreement, the Company will not, and will cause
each of its Subsidiaries not to, without the prior consent of
each of the Purchasers take any affirmative action, or fail to
take any reasonable action within their or its control, as a
result of which any of the changes or events listed in Section
4.1.9 could reasonably be expected to occur.
Section 6.1.4. Required Approvals. As promptly as practicable after
the date of this Agreement, the Company will make all filings
required to be made by it in order to consummate the transactions
contemplated hereby and by the Related Documents and Other
Financing Documents (including all filings under the HSR Act).
The Company will (a) cooperate with the Purchasers with respect
to all filings that the Purchasers elect to make or is required
to make in connection with the transactions contemplated hereby
and by the Related Documents and Other Financing Documents, and
(b) cooperate with the Purchasers in obtaining all consents
identified on Schedule V hereof.
Section 6.1.5. Notification. The Company will promptly notify the
Purchasers in writing if the Company becomes aware of any fact or
condition that causes or constitutes a breach of any of the
Company's representations and warranties as of the date of this
Agreement, or if the Company becomes aware of the occurrence
after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause
or constitute a breach of any such representation or warranty had
such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. The Company
will promptly notify the Purchasers of the occurrence of any
breach of any covenant of the Company in this Article VI or of
the occurrence of any event that may make the satisfaction of the
conditions in Article III impossible or unlikely.
Section 6.1.6. No Solicitation. Until such time, if any, as this
Agreement is terminated pursuant to Section 7.1, the Company will
not, and will not permit any of its Subsidiaries to, directly or
indirectly, solicit, initiate, or encourage any inquiries or
proposals from, any Person (other than the Purchasers) relating
to any transaction involving, directly or indirectly, the sale of
the business or assets (other than in the ordinary course of
business) of the Company or any of its Subsidiaries, or any of
the capital stock of any the Company or any of its Subsidiaries,
or any merger, consolidation, business combination, or similar
transaction involving the Company or any of its Subsidiaries
(collectively, a "Competing Offer"). Promptly, but in any event
within one business day of receiving any Competing Offer, the
Company shall notify the Purchasers of the Competing Offer,
together with all relevant information as to the Person or
Persons making such Competing Offer and the proposed terms
thereof. Notwithstanding anything to the contrary contained in
this Section, nothing shall prevent or restrict the Company (or
the Board of Directors of the Company) from fulfilling its (or
their) fiduciary responsibilities with respect to a Competing
Offer; provided, however, that, in the event the Company or the
Selling Shareholders receive an unsolicited Competing Offer which
it (or they) decide to accept, the Company agrees that it will
not permit such Competing Offer to be consummated until and
unless adequate provision has been made with respect to
compliance with the payment and reimbursement obligations set
forth in Section 7.1(a)(v) below.
Section 6.1.7. Best Efforts. The Company will use all commercially
reasonable best efforts to cause the conditions in Article III to
be satisfied.
Section 6.2. Post-Closing Date Covenants of the Company. The
Company covenants and agrees that, at all times from the Closing
Date until the Preferred Stock, Warrants and Common Stock issued
upon exercise of the Warrants cease to constitute Restricted
Securities, it shall perform, observe and comply with the
covenants set forth in this Section 6.2.
Section 6.2.1. Use of Proceeds. The Company shall use the proceeds
of the sale of the Common Stock, Preferred Stock, Warrants and
Senior Secured Notes only for the purposes described in Section
2.6 hereof.
Section 6.2.2. Inspection of Property. Provided such Persons having
access shall maintain the confidentiality of the information to
which they have access, the Company shall permit any
representatives designated by the Purchasers upon reasonable
notice and during normal business hours, to (i) visit and inspect
any of the properties of the Company and its Subsidiaries,
(ii) examine the corporate and financial records of the Company
and its Subsidiaries and make copies thereof or extracts
therefrom and (iii) discuss the affairs, finances and accounts of
the Company and its Subsidiaries with the officers, key employees
and independent accountants of the Company and its Subsidiaries.
Section 6.2.3. Compliance with Agreements. The Company shall
perform, observe and comply, in all material respects, with all
agreements, covenants and other obligations set forth herein, in
the Related Documents, the Other Financing Documents, the Amended
and Restated Certificate of Incorporation, By-laws and each other
agreement, document or instrument related thereto by which the
Company is bound.
Section 6.2.4. Affirmative Covenants. The Company shall, and shall
cause each Subsidiary to:
(a) use all commercially reasonable efforts to cause to be
done all things necessary to maintain, preserve and renew its
corporate existence, all material Licenses, Approvals,
authorizations and permits necessary to the conduct of its
business, except where the failure to do so will not have a
Material Adverse Effect;
(b) maintain and keep its properties in good repair,
working order and condition, and from time to time make all
necessary repairs, renewals and replacements, so that its
businesses may be properly conducted at all times;
(c) pay and discharge when payable all taxes, assessments
and governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same becomes
delinquent and before penalties accrue thereon) and all claims
for labor, materials or supplies to the extent to which the
failure to pay or discharge such obligations would reasonably be
expected to have a material adverse effect upon the financial
condition of the Company and its Subsidiaries, taken as a whole,
unless and to the extent that the same are being contested in
good faith and by appropriate proceedings and adequate reserves
(as determined in accordance with GAAP, consistently applied)
have been established on its books with respect thereto;
(d) comply with all other material obligations which it
incurs pursuant to any contract or agreement as such obligations
become due to the extent to which the failure to so comply would
reasonably be expected to have a material adverse effect upon the
financial condition of the Company and its Subsidiaries, taken as
a whole, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with GAAP,
consistently applied) have been established on its books with
respect thereto;
(e) comply in all material respects with all applicable
laws, rules and regulations of all governmental authorities, the
violation of which would reasonably be expected to have a
material adverse effect upon the financial condition of the
Company and its Subsidiaries taken as a whole;
(f) maintain proper books of record and account which
fairly present its financial condition and results of operations
and make provisions on its financial statements for all such
proper reserves as in each case are required in accordance with
GAAP, consistently applied; and
(g) maintain in full force and effect a policy or policies
of standard comprehensive general liability insurance
underwritten by a U.S. insurance company insuring its properties
and business against such losses and risks, and in such amounts,
as are adequate for its business and as are customarily carried
by entities of similar size engaged in the same or similar
business (such policies shall include property loss insurance
policies, with extended coverage, sufficient in amount to allow
the replacement of any of its tangible properties which might be
damaged or destroyed by the risks or perils normally covered by
such policies).
Section 6.2.5. SBIC Regulatory Provisions.
(a) The Company shall notify each Holder which is a SBIC (a
"SBIC Holder") as soon as practicable (and, in any event, not
later than 15 days) prior to taking any action after which the
number of record holders of the Company's voting stock would be
increased from fewer than 50 to 50 or more, and the Company shall
notify each SBIC Holder of any other action or occurrence after
which the number of record holders of the Company's voting stock
was increased (or would increase) from fewer than 50 to 50 or
more, as soon as practicable after the Company becomes aware that
such other action or occurrence has occurred or is proposed to
occur.
(b) Within 75 days after the Closing, the Company shall
deliver to each SBIC Holder a written statement certified by the
Company's president or chief financial officer describing in
reasonable detail the use of the proceeds of the sale of Common
Stock under the Stock Purchase Agreement and the Units hereunder
by the Company and its Subsidiaries. In addition to any other
rights granted hereunder, the Company shall grant each SBIC
Holder and the United States Small Business Administration (the
"SBA") access to the Company's records for the purpose of
verifying the use of such proceeds to the extent required
pursuant to SBIC Regulations.
(c) Upon the occurrence of a Regulatory Violation or in the
event that any SBIC Holder determines in its reasonable good
faith judgment that a Regulatory Violation has occurred, in
addition to any other rights and remedies to which it may be
entitled as a holder of Preferred Stock or Warrants and any
Common Stock issued upon exercise of the Warrants (whether under
this Agreement, the Restated Certificate of Incorporation prior
to the Merger, the Amended and Restated Certificate of
Incorporation following the Merger or otherwise), each SBIC
Holder shall, subject to the provisions of the Senior Note
Indenture, have the right after making all commercially
reasonable efforts to transfer its Preferred Stock, Warrants and
any Common Stock issued upon exercise of the Warrants to any
other transferee, to demand the immediate repurchase of all of
the outstanding Warrants and shares of Preferred Stock and any
Common Stock issued upon exercise of the Warrants owned by such
SBIC Holder at a price per share equal to the purchase price paid
for such Warrants and shares of Common Stock and/or Preferred
Stock hereunder or under the Warrant, as the case may be, plus
all accrued but unpaid dividends (whether or not declared)
thereon, by delivering written notice of such demand to the
Company. The Company shall pay the purchase price for such
securities by a cashier's or certified check or by wire transfer
of immediately available funds to each SBIC Holder demanding
repurchase within 45 days after the Company's receipt of the
demand notice, and upon such payment, each such SBIC Holder shall
deliver the certificates evidencing the securities or to be
repurchased duly endorsed for transfer or accompanied by duly
executed forms of assignment.
(d) Promptly after the end of each fiscal year (but in any
event prior to February 28 of each year), the Company shall
deliver to each SBIC Holder a written assessment of the economic
impact of each SBIC Holder's investment in the Company,
specifying the full-time equivalent jobs created or retained in
connection with the investment, the impact of the investment on
the revenues and profits of the business and on taxes paid by the
business and its employees.
(e) For purposes of this Agreement, "Regulatory Violation"
means, with respect to any SBIC Holder providing Financing under
this Agreement, a change in the principal business activity of
the Company and its Subsidiaries to an ineligible business
activity (within the meaning of the SBIC Regulations as in effect
on the date hereof) if such change occurs within one year after
the Closing Date hereunder and either (x) the Company shall not
have obtained the prior written consent of such SBIC Holder to
such change or (y) such SBIC Holder shall have requested the
SBA's approval of such SBIC Holder's retention of its investment
in the Company (as contemplated by Section 107.760(b) of the SBIC
Regulations) and the SBA shall have denied such request. "SBIC
Regulations" means the Small Business Investment Act of 1958 and
the regulations issued thereunder as set forth in 13 CFR 107 and
121, as amended. "Financing" shall have the meaning set forth in
the SBIC Regulations.
Section 6.2.6. Regulatory Compliance Cooperation.
(a) In the event that any SBIC Holder determines that it
has a Regulatory Problem (as defined below), to the extent
reasonably necessary, such SBIC Holder shall have the right to
transfer its Warrants, Common Stock issued upon exercise of the
Warrants and/or Preferred Stock to any (x) Affiliate or (y) to
the extent an Event of Non-Compliance has not occurred and is not
then continuing, with the consent of the Company (which consent
shall not be unreasonably delayed or withheld), an unaffiliated
third party without regard to any restrictions on transfer set
forth in this Agreement or the Related Documents other than
federal and state securities law restrictions (provided that the
transferee agrees to acquire and assume the rights and
obligations of such SBIC Holder under this Agreement), and the
Company shall take all such actions as are reasonably requested
by such SBIC Holder in order to (i) effectuate and facilitate
such transfer by such SBIC Holder of any securities of the
Company then held by such SBIC Holder to such Person, (ii) permit
such SBIC Holder (or any of its Affiliates) to exchange all or
any portion of voting Common Stock then held by it on a share-for-
share basis for shares of a class of nonvoting Common Stock of
the Company, which nonvoting Common Stock shall be identical in
all respects to such voting Common Stock, except that such non-
voting Common Stock shall be nonvoting and shall be convertible
into voting Common Stock on such terms as are requested by such
SBIC Holder in light of regulatory considerations then
prevailing, (iii) continue and preserve the respective allocation
of the voting interests with respect to the Company arising out
of the SBIC's ownership of voting securities and/or provided for
in the Stockholders Agreement before the transfers and amendments
referred to above (including entering into such additional
agreements as are reasonably requested by such SBIC Holder to
permit any Person(s) designated by such SBIC Holder to exercise
any voting power which is relinquished by such SBIC Holder, and
(iv) amend this Agreement, the Amended and Restated Certificate
of Incorporation, and any other related documents, agreements or
instruments to effectuate and reflect the foregoing. The parties
to this Agreement agree to vote their securities in favor of such
amendments and actions.
(b) For purposes of this Agreement, a "Regulatory Problem"
means any set of facts or circumstances wherein it has been
asserted by any governmental regulatory agency (or any SBIC
Holder reasonably believes in good faith that there is a
substantial risk of such assertion) that such SBIC Holder and its
Affiliates are not entitled to hold, or exercise any significant
right with respect to, any securities issued by the Company.
Section 6.2.7. Further Assurances. The Company will use its
commercially reasonable efforts to cure promptly any defects in
the creation and issuance of the Preferred Stock, Warrants and
Common Stock issued upon exercise of Warrants, and in the
execution and delivery of this Agreement. The Company, at its
expense, will promptly execute and deliver to the Purchasers upon
reasonable request all such other and further documents,
agreements and instruments in compliance with or pursuant to its
covenants and agreements herein, and will make any recordings,
file any notices, and obtain any consents as may be reasonably
necessary or appropriate in connection therewith.
Section 6.2.8. Reservation and Authorization of Common Stock. (a)
The Company shall at all times reserve and keep available for
issue upon the exercise or conversion of Warrants, such number of
its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding
Warrants.
(b) Before taking any action which would result in an
adjustment in the number of shares of Common Stock comprising a
Stock Unit (as defined in the Warrants) or which would cause an
adjustment reducing the Current Warrant Price (as defined in the
Warrants) per share of Common Stock below the then par value, if
any, of the shares of Common Stock issuable upon exercise of the
Warrants, the Company shall take any corporate action which is
necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock free and
clear of any liens upon the exercise of all the Warrants
immediately after the taking of such action.
(c) The Company will list on each national securities
exchange (including NASDAQ) on which any Common Stock may at any
time be listed, subject to official notice of issuance upon
exercise of the Warrants, and will maintain such listing of, all
shares of Common Stock from time to time issuable upon the
exercise of the Warrants.
Section 6.2.9 Financial Statements; Information. (a) The
Company shall provide the Purchasers with all financial
statements and information pursuant to Section 2.4 of the
Stockholders Agreement as if each Purchaser was a "Qualified
Holder" as defined thereunder and the Company shall comply with
all of the terms of Section 2.4 of the Stock Purchase Agreement
with respect to each Purchaser as though it were a Qualified
Holder thereunder.
(b) The Company shall provide the Purchasers with all
financial statements and other information provided to the
lenders pursuant to the Berry Revolving Credit Facility.
Section 6.2.10 Form 1099. After having made due inquiry,
the Company will not take the position in any respect for
federal, state or local income tax purposes that there is any
actual or constructive dividend paid to any holder of Preferred
Stock based on the terms thereof (other than in connection with
distributions in respect of, or redemptions of, Preferred Stock
paid in cash), unless advised by counsel or the Company's
independent accountants in writing that there is no reasonable
basis for the Company to take the position adopted in this
Section 6.1.10.
ARTICLE VIA
REGISTRATION RIGHTS IN RESPECT OF REGISTRABLE EQUITY SECURITIES
Section 6A.1 Notice. If at any time on or after the
Closing Date, the Company proposes to effect the registration of
all or any part of any equity securities of the Company, whether
as a primary registration or as a registration of securities
requested by a stockholder, under the Securities Act, the Company
shall promptly, and in any event at least 30 days prior to the
effective date of the proposed registration statement, give
written notice of such proposed registration to all holders of
Registrable Equity Securities. Each holder of Registrable Equity
Securities that wishes to register any of its Registrable Equity
Securities (each, a "Seller") shall, within 20 days after receipt
of such notice from the Company, deliver to the Company a notice
(a "Seller Notice") stating that such Seller wishes to
participate in such offering and setting forth the number of
shares of Registrable Equity Securities that such Seller desires
to include in such offering. The Company thereupon shall as
expeditiously as possible, use its best efforts (or in the case
of the Company's initial registered public offering of equity
securities under the Securities Act, reasonable efforts) to
effect the registration under the Securities Act of such shares
of Registrable Equity Securities, subject in all cases to a
determination by the managing underwriter, or financial adviser,
as the case may be, that the registration of such Registrable
Equity Securities will not jeopardize the success of the proposed
offering.
Section 6A.2 Proration. If the underwriter (or, if
the offering is not underwritten, an independent financial
advisor to the Company) determines that marketing factors require
a limitation on the number of securities to be offered and sold
in the offering, including securities requested to be offered and
sold by Sellers, there shall be included in the offering only
that number of securities that the underwriter, or financial
advisor, as the case may be, believes will not jeopardize the
success of the offering. Any reduction in the number of
securities to be so offered shall be pro-rata among the Sellers
and all other Persons (other than the Company or securityholders
who are exercising "demand" registration rights), proposing to
sell securities pursuant to such offering, based on the number of
securities originally proposed to be sold by each such person.
Nothing contained herein shall be construed to limit in any way
the Company's right, in its sole discretion, to withdraw any
registration statement before such registration statement becomes
effective or to postpone the offering of securities contemplated
by any such registration statement.
Section 6A.3 Registration Procedures. If and whenever
the Company is required by the provisions of Section 6A.1 hereof
to use its best efforts, or reasonable best efforts, as the case
may be, to effect the registration of any Registrable Equity
Securities under the Securities Act, the Company shall, as
expeditiously as possible,
(i) prepare and file with the SEC a registration
statement with respect to such securities and use its best
efforts (or reasonable best efforts, as applicable) to cause
such registration statement to become and remain effective
for a period of not less than 120 days in the case of the
Company's initial registration of equity securities under
the Securities Act and 90 days in the case of any subsequent
registration, or such shorter period as is necessary to
permit the sale of such securities in accordance with the
plan of distribution chosen by the Seller or Sellers and the
underwriter;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to
the sale or other disposition of all securities covered by
such registration statement;
(iii) furnish to each Seller such numbers of copies of
a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and
such other documents, as such Seller may reasonably request
in order to facilitate the public sale or other disposition
of the Registrable Equity Securities owned by such Seller;
(iv) use its best efforts to register or qualify the
securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions
within the United States as each Seller shall reasonably
request, and do such other reasonable acts and things as may
be requested of it to enable such Seller to consummate the
public sale or other disposition in such jurisdictions of
the securities owned by such Seller, except that the Company
shall not for any such purpose be required to (i) qualify to
do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, (ii) subject itself to
taxation in any jurisdiction solely by reason of such
registration or qualification or (iii) consent to general
service of process in any jurisdiction;
(v) use its best efforts to cause the securities
covered by such 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 to consummate the disposition of such
securities, except that the Company shall not for any such
purpose be required to (i) qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so
qualified, (ii) subject itself to taxation in any
jurisdiction solely by reason of such registration or
qualification or (iii) consent to general service of process
in any jurisdiction;
(vi) notify each Seller of any securities covered by
such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the
Securities Act, of the Company's becoming aware that the
prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing
(upon receipt of which each Seller agrees to forthwith cease
making offers and sales of such securities pursuant to such
prospectus and to deliver to the Company any copies of such
prospectus then in the possession of such Seller), and at
the request of any such Seller promptly prepare and furnish
to such Seller a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to
the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in
the light of the circumstances then existing;
(vii) make available to its security holders, as soon
as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar
month after the effective date of the registration
statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule
158 promulgated thereunder (or any successor provision);
(viii) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC;
(ix) use its best efforts to list such securities on
any securities exchange on which similar securities then
issued by the Company are then listed, or, if not so listed,
on a national securities exchange (including the Nasdaq
stock market), if the listing of such securities is then
permitted under the rules of such exchange;
(x) provide a transfer agent and registrar for all the
securities covered by such registration statement not later
than the effective date of such registration statement;
(xi) enter into such agreements (including an
underwriting agreement in customary form containing without
limitation customary indemnity and contribution provisions
for the benefit of the underwriter or underwriters and the
Seller or Sellers) and take such other actions as the Seller
or Sellers shall reasonably request in order to expedite or
facilitate the disposition of such securities;
(xii) make available for inspection by any Seller of
securities covered by such registration statement, by any
underwriter participating in any disposition to be effected
pursuant to such registration statement and by any attorney,
accountant or other agent retained by any such Seller or any
such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company,
and cause all of the Company's officers, directors and
employees to supply all information reasonably requested by
any such Seller, underwriter, attorney, accountant or agent
in connection with such registration statement; and
(xiii) permit any Seller of securities covered by such
registration statement to require the insertion therein of
material, furnished to the Company in writing, which in the
reasonable judgment of such Seller should be included.
If any such registration or comparable statement refers to any
Seller by name or otherwise as the holder of any securities of
the Company, then such Seller shall have the right to require (A)
the insertion therein of language, in form and substance
satisfactory to such Seller, to the effect that the holding by
such Seller of such securities is not to be construed as a
recommendation by such Seller of the investment quality of the
Company's securities covered thereby and that such holding does
not imply that such Seller will assist in meeting any future
financial requirements of the Company, or (B) in the event that
such reference to such Seller by name or otherwise is not
required by the Securities Act, the deletion of the reference to
such Seller.
The Company may require each holder of Registrable
Equity Securities to, and each such holder, as a condition to
including Registrable Equity Securities in such registration,
shall, furnish the Company with such information and affidavits
regarding such holder and the distribution of such securities as
the Company may from time to time reasonably request in writing
in connection with such registration. If so required, each
holder of Registrable Equity Securities participating in an
underwritten public offering shall enter into and perform its
obligations under an underwriting agreement, as well as a custody
agreement and power of attorney, all in usual and customary form.
Section 6A.4 Holdback on Sales. The Company and the
Purchasers hereby agree on and after the Closing Date not to
effect any public sale or distribution of any securities similar
to those registered in accordance with Section 6A.3 hereof during
the 14 day period prior to, and during the 180 day period
beginning on, the effective date of any registration statement
(except as part of such registration statement).
Section 6A.5 Expenses. All expenses incurred in
complying with this Article VIA, including, without limitation,
all registration, filing, securities exchange listing fees and
fees of any applicable stock exchange, all registration, filing,
qualification and other fees and expenses of complying with
securities or blue sky laws of any jurisdiction, all word
processing, duplicating and printing expenses, messenger and
delivery expenses, and the fees and disbursements of counsel and
accountants for the Company, the reasonable fees and
disbursements of one counsel for the Seller or the Sellers (to be
chosen by the Seller or by the Sellers holding a majority of the
Preferred Stock to be included by Sellers in a registration state
ment), expenses of any special audits incident to or required by
any such registration, shall be paid by the Company; provided,
that in no event shall the Company be required to pay any
underwriting discounts, commissions or fees attributable to the
sale of Registrable Equity Securities by a Seller hereunder.
ARTICLE VIB
REGISTRATION RIGHTS IN RESPECT OF EXCHANGE NOTES
Section 6B.1 Shelf Registration.
(a) Effective Registration. The Company shall, not
later than ninety (90) days following the Exchange Date (as
defined in the Amended and Restated Certificate of
Incorporation), prepare and file with the SEC a "shelf"
registration statement with respect to the Registrable Debt
Securities on any appropriate form pursuant to Rule 415 under the
Securities Act and/or any similar rule that may be adopted by the
SEC (a "Shelf Registration"), and shall use its best efforts to
have such Shelf Registration declared effective within one
hundred eighty (180) days following the Exchange Date; provided,
that the Company shall not be required to effect a Shelf
Registration of the Registrable Debt Securities if the
Registrable Debt Securities have been called for redemption
pursuant to the Exchange Indenture under which such Registrable
Debt Securities are issued. The Company agrees to use its best
efforts to keep such Shelf Registration continuously effective
for a period of three (3) years following the date on which the
Shelf Registration is declared effective or, if earlier, until
all Registrable Debt Securities included therein have been sold
or are no longer outstanding.
(b) Supplements and Amendments. The Company shall
supplement and amend the Shelf Registration if (i) required by
the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration, (ii)
otherwise required by the SEC, (iii) reasonably requested by the
holders of, or any underwriter for, a majority of the Registrable
Debt Securities to which such Shelf Registration relates or (iv)
requested to do so by any holder of Registrable Debt Securities
to the extent necessary to list such holder as a "Selling
Securityholder" in such registration statement, and the Company
agrees to furnish to the holders of the Registrable Debt
Securities copies of any such supplement or amendment prior to
its being used and/or filed with the SEC.
(c) Registration Expenses. The Company will pay all
expenses incident to the Company's performance of or compliance
with its obligations under this Article VIB to effect the
registration of Registrable Debt Securities, including, without
limitation, all registration, filing, securities exchange listing
fees and fees of any applicable stock exchange, all registration,
filing, qualification and other fees and expenses of complying
with securities or blue sky laws of any jurisdiction, all word
processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the
Company and of its independent public accountants, including the
expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, and the
reasonable fees and disbursements of one counsel for the Seller
or the Sellers (to be chosen by the Seller or by the Sellers
holding a majority of the Registrable Debt Securities to be
included by Sellers in a registration statement), but excluding
underwriting discounts and commissions, transfer taxes, if any,
in respect of Registrable Debt Securities, which shall be borne
by the sellers of the Registrable Debt Securities and which each
such holder agrees, by acquisition of such Registrable Debt
Securities, to bear.
(d) Selection of Underwriters and Counsel. The
holders of a majority of the principal amount of Registrable Debt
Securities to be sold in an underwritten Public Offering (as
defined below) shall have the right to select the Managing
Underwriter (as defined below); provided, however, that such
Managing Underwriter and its counsel must be reasonably
satisfactory to the Company. As used herein, "Managing
Underwriter" means, with respect to any underwritten public
offering of Exchange Notes (a "Public Offering"), the underwriter
or underwriters managing such Public Offering.
Section 6B.2 Registration Procedures. In connection
with the Shelf Registration, the Company shall use its best
efforts to effect such registration to permit the sale of such
Registrable Debt Securities in accordance with the intended
methods of distribution thereof, and pursuant thereto the Company
shall, as expeditiously as possible:
(a) furnish to the holders of Registrable Debt
Securities listed in the Shelf Registration as Selling Security
holders (the "Selling Securityholders") copies of reasonably
complete drafts of all such documents proposed to be filed
(including exhibits) with the SEC and consider in good faith
comments with respect to any such drafts made by the Selling
Securityholders or their legal counsel, and, without limiting the
foregoing, each Selling Securityholder shall have the opportunity
to object to any information pertaining solely to such Selling
Securityholder that is contained therein and the Company will
make the corrections reasonably requested by such Selling
Securityholder with respect to such information prior to filing
any such registration statement or amendment (including, without
limitation, the deletion of such Selling Securityholder as a
"Selling Securityholder" in such registration statement, without
prejudice to such Selling Securityholder's right to become a
"Selling Securityholder" again pursuant to Section 6B.1);
(b) promptly notify each Selling Securityholder and
the Managing Underwriter, if any:
(i) when the Shelf Registration or any prospectus used
in connection therewith, or any amendment or supplement
thereto, has been filed and, with respect to such Shelf
Registration or any post-effective amendment thereto, when
the same has become effective;
(ii) of any written comments from the SEC with respect
to any filing and of any written request by the SEC for
amendments or supplements to such registration statement or
prospectus;
(iii) of the notification to the Company by the SEC
of its initiation of any proceeding with respect to the
issuance by the SEC of, or of the issuance by the SEC of,
any stop order suspending the effectiveness of such
registration statement; and
(iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any
Registrable Debt Securities for sale under the applicable
securities or blue sky laws of any jurisdiction;
(c) furnish to each Selling Securityholder such number
of conformed copies of such registration statement and of each
amendment and supplement thereto (in each case including all
exhibits and documents incorporated by reference), such number of
copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424
promulgated under the Securities Act relating to the holder's
Registrable Debt Securities, any other Registrable Debt
Securities and such other documents, as the holder may reasonably
request to facilitate the disposition of its Registrable Debt
Securities;
(d) use its best efforts to register or qualify all
Registrable Debt Securities under such other securities or blue
sky laws of such jurisdictions as each holder thereof shall
reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably
necessary or advisable to enable such holder to consummate the
disposition in such jurisdictions of the Registrable Debt
Securities owned by such holder, except that the Company shall
not for any such purpose be required (i) to qualify generally to
do business as a foreign corporation in any jurisdiction wherein
it would not but for the requirements of this Section 6B.2(d) be
obligated to be so qualified, (ii) to subject itself to taxation
in any such jurisdiction solely by reason of such registration or
qualification or (iii) to consent to general service of process
in any jurisdiction;
(e) in connection with any underwritten Public
Offering, furnish to each Selling Securityholder a signed
counterpart, addressed to such holder (and the underwriters, if
any), of
(i) an opinion of counsel for the Company, dated the
date of any closing under the underwriting agreement, and
(ii) a "comfort" letter, dated the date of any closing
under the relevant underwriting agreement, signed by the
independent public accountants who have certified the
Company's financial statements included in such registration
statement,
in each case covering substantially the same matters with respect
to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with
respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters
in underwritten Public Offerings of securities;
(f) notify each Selling Securityholder, at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a
result of which any prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and at the request of any such holder promptly
prepare and furnish to such holder a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available
to its securityholders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12)
months, but not more than eighteen (18) months, beginning with
the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder (or any successor provision); and
(h) use its best efforts to cause all Registrable Debt
Securities to be listed, upon official notice of issuance, on any
securities exchange on which any of the securities of the same
class as the Registrable Debt Securities are then listed.
The Company may require each holder of Registrable Debt
Securities to, and each such holder, as a condition to including
Registrable Debt Securities in such registration, shall, furnish
the Company with such information and affidavits regarding such
holder and the distribution of such securities as the Company may
from time to time reasonably request in writing in connection
with such registration. If so required, each holder of
Registrable Debt Securities participating in an underwritten
public offering shall enter into and perform its obligations
under an underwriting agreement, as well as a custody agreement
and power of attorney, all in usual and customary form.
Each holder of Registrable Debt Securities agrees by
acquisition of such Registrable Debt Securities that upon receipt
of any notice from the Company of the happening of any event of
the kind described in Section 6B.2(f), such holder will forthwith
discontinue such holder's disposition of Registrable Debt
Securities pursuant to the registration statement relating to
such Registrable Debt Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated
by Section 6B.2(f) and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such holder's
possession of any prospectus relating to such Registrable Debt
Securities at the time of receipt of such notice.
Section 6B.3 Holdback Agreements.
(a) By the Holders of Registrable Debt Securities. If
and to the extent requested by the Managing Underwriter in
connection with an underwritten Public Offering of Registrable
Debt Securities, each holder of Registrable Debt Securities, by
acquisition of such Registrable Debt Securities, agrees, to the
extent permitted by Law, not to effect any public sale or
distribution (including a sale under Rule 144) of such
securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the fourteen (14) days
prior to and the 180 days after the closing of such underwritten
Public Offering (or for such shorter period of time as is
sufficient and appropriate, in the opinion of the Managing
Underwriter, in order to complete the sale and distribution of
the securities included in such underwritten Public Offering),
except as part of such underwritten Public Offering, whether or
not such holder participates in such underwritten Public
Offering.
(b) By the Company. If and to the extent requested by
the Managing Underwriter in connection with an underwritten
Public Offering of Registrable Debt Securities, the Company
agrees not to effect any public sale or distribution of any
securities similar to those being registered hereunder, or any
securities convertible into or exchangeable or exercisable for
such securities, during the fourteen (14) days prior to and the
180 days after the closing of such underwritten Public Offering
(or for such shorter period of time as is sufficient and
appropriate, in the opinion of the Managing Underwriter, in order
to complete the sale and distribution of the securities included
in such underwritten Public Offering), except pursuant to
registrations on Form S-4 or Form S-8 promulgated by the SEC (or
any successor or similar forms thereto).
ARTICLE VIC
INDEMNIFICATION IN RESPECT OF REGISTRATION RIGHTS
Section 6C.1 Indemnification by the Company. In the
event of any registration by the Company of any of its
Registrable Securities pursuant to Article 6A or in connection
with a Shelf Registration pursuant to Article 6B, the Company
shall, and hereby agrees to, to the full extent permitted by
applicable law, indemnify and hold harmless each seller of
Registrable Securities pursuant to Article 6A or Article 6B
("each, an Indemnified Seller"), and their respective general or
limited partners, directors, officers, employees and each other
Person, if any, who controls such Indemnified Seller within the
meaning of the Securities Act, against any Losses, to which any
such Indemnified Seller or any such other Person may become
subject under the Securities Act or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material
fact contained in the applicable registration statement, any
preliminary prospectus, final prospectus or summary prospectus
contained therein, 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 case of a prospectus, in the light of the
circumstances under which they were made) not misleading, and the
Company will reimburse the Indemnified Sellers and each such
other Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending
any such Loss (or action or proceeding in respect thereof);
provided that the Company shall not be liable in any such case to
the extent that any such Loss (or action or proceeding in respect
thereof) arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in
such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by the Indemnified Seller specifically
for use in the preparation thereof; provided further, however
that with respect to any untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus,
the indemnity agreement contained in this paragraph shall not
apply to the extent that any such Loss results from the fact that
a current copy of the prospectus was not sent or given to the
person asserting any such Loss at or prior to the written
confirmation of the sale of the securities concerned to such
person if the Company had prior thereto given the Indemnified
Seller the notice referred to in Section 6A.3(vi) or 6B.2(f), as
the case may be, and provided to such Indemnified Seller a
supplemented or amended prospectus as contemplated by Section
6A.3(vi) or 6B.2(f), as the case may be, and such current copy of
the prospectus would have cured the defect giving rise to such
Loss. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such
seller or any such other Person, and shall survive the transfer
of such securities by such seller. The Company shall also
indemnify each other Person who participates (including as an
underwriter) in the offering or sale of Registrable Securities,
their partners, officers, directors, employees and each other
Person, if any, who controls any such participating Person within
the meaning of the Securities Act to the same extent as provided
above with respect to Indemnified Sellers.
Section 6C.2 Indemnification by the Sellers. Each
Indemnified Seller, as a condition to including its securities in
the applicable registration statement, shall, to the full extent
permitted by law, indemnify and hold harmless the Company, its
directors, officers, employees, agents and each other Person, if
any, who controls the Company within the meaning of the
Securities Act, against any Losses to which the Company or any
such other Person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration
statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, 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 case of a
prospectus, in the light of the circumstances under which they
were made) not misleading, if such untrue statement or alleged
untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information
furnished to the Company by such Indemnified Seller specifically
for use in the preparation thereof; provided, however, that the
obligation to provide indemnification pursuant to this
Section 6C.2 shall be several, and not joint and several, among
each of the Indemnified Sellers on the basis of the number of
securities included by each in the applicable registration
statement and the aggregate amount which may be recovered from
any holder of securities pursuant to the indemnification provided
for in this Section 6C.2 in connection with any sale of
Registrable Securities shall be limited to the total proceeds
received by such holder from the sale of such securities. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such
other Person and shall survive the transfer of such securities by
an Indemnified Seller.
Section 6C.3 Notices of Claims, etc. Promptly after
receipt by a party entitled to indemnity under this Article 6C of
notice of the commencement of any action or proceeding (including
a governmental action or proceeding) involving a claim referred
to in Section 6C.1. or 6C.2 (a "Proceeding"), such indemnified
party will, if a claim in respect thereof is to be made against a
person obligated to provide indemnity under this Article 6C
pursuant to such provisions, give written notice to the latter
(in the manner provided in Section 8.6 hereof) of the
commencement of such Proceeding; but the omission so to notify
the indemnifying party will not relieve the indemnifying party
from any liability which the indemnifying party may have to any
party entitled to indemnity under this Article 6C except to the
extent that the indemnifying party is materially prejudiced
thereby. The indemnifying party shall have the right,
exercisable by giving written notice to an indemnified party
promptly after the receipt of written notice from such
indemnified party of such Proceeding, to assume, at its expense,
the defense of any such Proceeding with counsel reasonably
satisfactory to such indemnified party; provided, however, that
an indemnified party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (1) the indemnifying
party agrees to pay such fees and expenses, (2) the indemnifying
party fails to assume promptly the defense of such Proceeding or
fails to employ counsel reasonably satisfactory to such
indemnified party or (3) the indemnified party shall have been
advised by counsel, in its reasonable judgment, that there is
reasonably likely to be a conflict between the positions of such
indemnified party and any other party represented by such counsel
in such Proceeding which makes it improper, under generally
acceptable standards of professional conduct, for the same
counsel to represent both the indemnified party and such other
party; provided that the indemnifying party shall not, in
connection with any one such Proceeding or separate but
substantially similar or related Proceedings, be liable for the
fees and expenses of more than one separate firm of attorneys for
all such indemnified parties. The indemnifying party will not be
subject to any liability for any settlement made without its
consent (which will not be unreasonably delayed or withheld);
provided that, if such Proceeding is settled with its written
consent or if there shall be a final judgment for the claimant or
plaintiff in such Proceeding, the indemnifying party shall
indemnify and hold harmless the indemnified party from and
against any Losses by reason of such settlement or judgment for
which such indemnified party would be entitled to indemnification
hereunder. The indemnifying party shall not, without the consent
of an indemnified party, consent to entry of any judgment or
enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release, in form and
substance satisfactory to such indemnified party, from all
liability in respect of such Proceeding for which such
indemnified party would be entitled to indemnification hereunder.
Section 6C.4 Contribution. If the indemnification
provided for in this Article 6C is unenforceable although
available to an indemnified party in respect of any Losses
referred to therein or is insufficient to hold an indemnified
party harmless for any Losses in respect of which the provisions
of Section 6C.1 and/or 6C.2 would otherwise apply by their terms,
then the indemnifying party shall contribute to the aggregate
amount paid or payable by the indemnified party as a result of
such Losses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the
indemnified party on the other hand in connection with statements
or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault 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 indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party
as a result of the Losses referred to above shall be deemed to
include any legal and other expenses reasonably incurred by such
indemnified party in connection with investigating or defending
any Loss which is the subject of this paragraph.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6C.4 were to
be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
ARTICLE VII
TERMINATION
Section 7.1. Termination. (a) This Agreement may be terminated at
any time prior to the Closing:
(i) by mutual consent of the Company and the
Purchasers;
(ii) by either the Company or the Purchasers if the
Closing shall not have occurred by July 31, 1996; provided,
however, that the failure to consummate the transactions
contemplated hereby is not a result of the failure by the
party so electing to terminate this Agreement to perform any
of its obligations hereunder;
(iii) by either the Company or the Purchasers if a
material breach of any provision of this Agreement has been
committed by a party other than the party so electing and
such breach has not been satisfied, cured or waived;
(iv) by the Company or the Purchasers, if any of the
respective conditions to such Person's performance set forth
in Section 3.1, 3.2 or 3.3 hereof, as applicable, have not
been satisfied or waived as of the Closing Date or if
satisfaction of any such a condition is or becomes
impossible to satisfy (other than through the failure of the
Person seeking to terminate this Agreement pursuant to this
clause (d) to comply with any of its respective obligations
under this Agreement); or
(v) by the Company or the Purchasers, in the event
that the Stock Purchase Agreement is terminated pursuant to
and in accordance with Section 7.1(a)(v) thereof, in which
event, upon payment by the Selling Shareholders of the
amounts payable pursuant to clause (y) of Section 7.1(a)(v)
of the Stock Purchase Agreement, the Company shall pay to
each Purchaser an amount equal to all reasonable out-of-
pocket expenses incurred by such Purchaser (including fees
and expenses of legal counsel and other advisors or
consultants to the Purchasers), in connection with the
review, preparation and negotiation of this Agreement and
the Related Documents, and the review of the Other Financing
Documents and all other documents, agreements, or
instruments related hereto or thereto and the evaluation of
transactions contemplated thereunder.
(b) If the Closing has not occurred on or prior to
September 30, 1996, this Agreement shall automatically terminate
unless the parties hereto unanimously agree, in writing on or
prior to such date, to postpone such termination.
Section 7.2. Effect of Termination. If this Agreement shall be
validly terminated pursuant to Section 7.1, all obligations,
representations and warranties of the parties hereto under this
Agreement shall terminate and there shall be no liability of any
party to another party, except as otherwise expressly provided
herein.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Payment of Costs and Expenses. If the Closing
occurs, the Company agrees to pay on demand all reasonable
expenses of each of the Purchasers (including the reasonable fees
and out-of-pocket expenses of Milbank, Tweed, Hadley & McCloy,
counsel to the Purchasers) in connection with:
(a) the evaluation of the transactions contemplated
hereunder; the review, negotiation, preparation, execution and
delivery of this Agreement and the Related Documents and the
review of the Other Financing Documents, in each case including
schedules and exhibits, and any other documents, agreements or
instruments related hereto or thereto; the evaluation of the
transactions thereunder; and any amendments, waivers, consents,
supplements or other modifications hereto or thereto as may from
time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated; and
(b) the preparation and/or review of the form of any
document or instrument relevant to the transactions contemplated
hereby, by the Related Documents, the Other Financing Documents
or any other document or instrument related hereto or thereto.
The Company further agrees to pay, and to save the Purchasers
harmless from all liability for, any stamp or other similar taxes
which may be payable in connection with the execution or delivery
of this Agreement, the issuance and sale of Preferred Stock or
Warrants or the Common Stock issuable upon exercise of the
Warrants. The Company also agrees to reimburse each Purchaser
upon demand for all reasonable out-of-pocket expenses (including
attorneys' fees and legal expenses) incurred by such Purchaser in
connection with such Purchaser's enforcement of the Company's
obligations hereunder or under the Related Documents.
Section 8.2. [Intentionally Omitted]
Section 8.3. Brokerage. Each party hereto will indemnify and hold
harmless the others against and in respect of any claim for
brokerage or other commission relative to this Agreement or to
the transaction contemplated hereby, based in any way on
agreements, arrangements or understandings made or claimed to
have been made by such party with any third party.
Section 8.4. [Intentionally Omitted].
Section 8.5. Assignment; Parties in Interest. Neither this
Agreement nor any right, interest or obligation hereunder may be
assigned by Mergerco or, following the Closing Date, the Company,
without the prior written consent of the Purchasers (which
consent shall not be unreasonably withheld), and any attempt to
do so will be void. Except as set forth in the preceding
sentence, all covenants, agreements, rights and obligations
contained in or arising out of this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of
the respective legal representatives, successors and assigns of
the parties hereto whether so expressed or not.
Section 8.6. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the
provisions of this Agreement or any Related Document shall be in
writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable
express courier service (charges prepaid), mailed to the
recipient by certified or registered mail, return receipt
requested and postage prepaid, or sent by telecommunications
facsimile. Such notices, demands and other communications shall
be sent to Mergerco, the Company and the Purchasers at the
addresses (or facsimile numbers) set forth below their respective
names on Schedule II hereto or to such other address (or
facsimile number) or to the attention of such other Person as the
recipient party has specified by prior written notice to the
sending party.
Section 8.7. No Waiver. No failure to exercise and no
delay in exercising any right, power or privilege granted under
this Agreement shall operate as a waiver of such right, power or
privilege. No single or partial exercise of any right, power or
privilege granted under this Agreement shall preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided in this
Agreement are cumulative and are not exclusive of any rights or
remedies provided by law.
Section 8.8. Amendment. This Agreement may be modified or
amended only by a writing signed by or on behalf of the Company
and the Purchasers.
Section 8.9. Survival of Representations, Warranties,
Covenants and Agreements. The representations, warranties,
covenants and agreements contained in this Agreement or any other
instrument delivered pursuant to this Agreement shall survive the
Closing hereunder.
Section 8.10. Governing Law. The corporate law of Delaware
shall govern all issues concerning the relative rights of the
Company and its shareholders. All other issues hereunder shall
be governed by and construed in accordance with the procedural
and substantive laws of the State of New York without regard for
its conflicts of laws rules. The Company and Mergerco agree that
they may be served with process in the State of New York and any
action for breach of this Agreement may be prosecuted against
them in the courts of that State.
Section 8.11. Specific Performance. Damages in the event
of breach of this Agreement by either the Company, Mergerco or
the Purchasers would be difficult, if not impossible, to
ascertain, and it is therefore agreed that the Company, Mergerco
and the Purchasers, in addition to and without limiting any other
remedy or right it may have, will have the right to an injunction
or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and enforcing specifically the terms
and provisions hereof, and the Company, Mergerco and the
Purchasers hereby waive any and all defenses it may have on the
ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief. The exis
tence of this right will not preclude the Company, Mergerco or
the Purchasers from pursuing any other rights and remedies at law
or in equity which the Company, Mergerco or the Purchasers may
have.
Section 8.12. Entire Understanding. Except for the
Confidentiality Agreement dated October 19, 1995 between FACL and
The Chase Manhattan Bank, N.A. (which shall survive in accordance
with its terms), this Agreement expresses the entire
understanding of the parties and supersedes all other prior and
contemporaneous agreements and undertakings of the parties with
respect to the subject matter of this Agreement.
Section 8.13. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be
an original but all of which taken together shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first above written.
BPC HOLDING CORPORATION
Roberto Buaron
Chairman
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
By Chase Capital Partners,
its General Partner
Donald J. Hofmann
Partner
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
Gary A. Poliner
Vice President
BPC MERGERCO, INC.
Martin R. Imbler
President
EXHIBIT 2.3
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 18, 1996
(this "Agreement"), is made by and between BPC MERGERCO, INC., a
Delaware corporation ("Mergerco") and BPC HOLDING CORPORATION, a
Delaware corporation ("BPC" and together with Mergerco, the
"Constituent Corporations").
This is the Agreement and Plan of Merger referred to in (a)
the Stock Purchase and Recapitalization Agreement dated June 12,
1996 (the "Purchase Agreement") among Mergerco, BPC and certain
Purchasers and Selling Shareholders named therein and (b) the
Preferred Stock and Warrant Purchase Agreement dated June 12,
1996 among Mergerco, BPC, Chase Venture Capital Associates, L.P.
and The Northwestern Mutual Life Insurance Company (the
"Preferred Stock Purchase Agreement"). Capitalized terms used in
this Agreement without definition shall have the respective
meanings given to them in the Purchase Agreement.
RECITALS
WHEREAS, Mergerco, is a corporation duly organized and
existing under the laws of the State of Delaware;
WHEREAS, BPC is a corporation duly organized and existing
under the laws of the State of Delaware;
WHEREAS, a description of the authorized and issued capital
stock of Mergerco is set forth on Annex A hereto;
WHEREAS, a description of the authorized and issued capital
stock of BPC is set forth on Annex B hereto;
WHEREAS, the respective Boards of Directors of Mergerco and
BPC have resolved that Mergerco be merged with and into BPC under
and pursuant to Section 251 of the General Corporation Law of the
State of Delaware ("DGCL"), and BPC shall be the surviving
corporation ("Surviving Corporation"); and
WHEREAS, the respective Boards of Directors and stockholders
of each of Mergerco and BPC have approved the merger upon the
terms and conditions set forth herein and have approved this
Agreement;
NOW THEREFORE, it is agreed as follows:
IX MERGER
9.1. Merger
Subject to Paragraph 4.2 below, and in accordance with the
provisions of this Agreement and the DGCL, Mergerco shall be, at
the Effective Time of Merger (as defined in Paragraph 1.2 below),
merged with and into BPC ("Merger") and BPC shall be the
Surviving Corporation.
9.2. Filing and Effectiveness
The Merger shall become effective upon the filing of the
Certificate of Merger in the form attached as Annex C hereto with
the Secretary of State of the State of Delaware (the "Effective
Time of Merger").
9.3. Certificate of Incorporation
Upon the Effective Time of Merger, the Restated Certificate
of Incorporation of the Surviving Corporation, as amended by the
Certificate of Amendment shall be restated and amended in its
entirety as set forth in Annex D hereto, and, as so restated and
amended, shall be the Restated Certificate of Incorporation of
the Surviving Corporation after the Effective Time of Merger,
until duly amended.
9.4. Bylaws
The Bylaws of BPC as in effect immediately prior to the
Effective Time of Merger shall continue in full force and effect
as the Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.
9.5. Agreements
All agreements, instruments and other documents to which
Mergerco is a party and which are in effect immediately prior to
the Effective Time of Merger shall continue in full force and
effect and shall be assumed in their entirety by the Surviving
Corporation as of the Effective Time of Merger.
9.6. Directors and Officers
The directors and officers of BPC immediately prior to the
Effective Time of Merger shall be the directors and officers of
the Surviving Corporation until their successors shall have been
duly elected and qualified or until otherwise as provided by law,
the Restated Certificate of Incorporation of the Surviving
Corporation or the Bylaws of the Surviving Corporation, in each
case as amended from time to time.
9.7. Effect of Merger
Upon the Effective Time of Merger, the separate existence of
Mergerco shall cease and BPC, as the Surviving Corporation,
(i) shall continue to possess all of its assets, rights, powers
and property as constituted immediately prior to the Effective
Time of Merger, shall be subject to all actions previously taken
by the Board of Directors of Mergerco and shall succeed, without
other transfer, to all of the assets, rights, powers and property
of Mergerco in the manner as more fully set forth in Section 259
of the DGCL, and (ii) shall continue to be subject to all of its
debts, liabilities and obligations as constituted immediately
prior to the Effective Time of Merger and shall succeed, without
other transfer, to all of the debts, liabilities and obligations
of Mergerco in the same manner as if BPC had itself incurred
them, all as more fully provided under the applicable provisions
of the DGCL.
X MANNER OF CONVERSION OF STOCK
10.1. Mergerco Capital Stock
Upon the Effective Time of Merger, each share of each class
and series of capital stock of Mergerco issued and outstanding
immediately prior thereto shall, by virtue of the Merger and
without any action by the holders of such shares or any other
person, be converted into and exchanged for one fully paid and
nonassessable share of the equivalent class and series of capital
stock of the Surviving Corporation, in each case having the
rights, preferences and privileges set forth in the Restated
Certificate of Incorporation. Any warrants to purchase capital
stock of Mergerco shall, at the Effective Time of Merger, by
virtue of the Merger and without any action by the holders of
such warrants or any other person, be converted into warrants to
purchase the equivalent class and series of capital stock of the
Surviving Corporation.
10.2. BPC Capital Stock
(a) Upon the Effective Time of Merger, (i) each share of BPC
Class C Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the Merger and without any action by
the holders of such shares or any other person, be converted into
and exchanged for 0.5855 fully paid and nonassessable shares of
Class B Voting Common Stock of the Surviving Corporation; (ii)
each share of BPC Class D Common Stock issued and outstanding
immediately prior thereto shall, by virtue of the Merger and
without any action by the holders of such shares or any other
person, be converted into and exchanged for 0.5855 fully paid and
non-assessable shares of Class B Non-Voting Common Stock of the
Surviving Corporation; (iii) each share of BPC Class E Common
Stock issued and outstanding immediately prior thereto shall, by
virtue of the Merger and without any action by the holders of
such shares or any other person, be converted into and exchanged
for 5,824.417 fully paid and nonassessable shares of Class C
Common Stock of the Surviving Corporation; (iv) each share of BPC
Class F Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the Merger and without any action by
the holders of such shares or any other person, be converted into
and exchanged for 0.5855 fully paid and non-assessable shares of
Class A Voting Common Stock of the Surviving Corporation; (v)
each share of BPC Class G Common Stock issued and outstanding
immediately prior thereto shall, by virtue of the Merger and
without any action by the holders of such shares or any other
person, be converted into and exchanged for 0.5855 fully paid and
non-assessable shares of Class A Non-Voting Common Stock of the
Surviving Corporation; (vi) each share of BPC capital stock held
as treasury stock and each share of BPC capital stock authorized
but unissued shall be cancelled with no consideration payable in
exchange therefor; and (vii) each share of any other class or
series of capital stock of BPC issued and outstanding immediately
prior thereto shall, by virtue of the Merger and without any
action by the holders of such shares or other person, be
converted into and exchanged for the right to receive from the
Company (subject to Section 2.3(b)) $58.55 per share.
Notwithstanding any provision of this Section 2.2(a), the
aggregate number of shares of any class of the capital stock of
the Surviving Corporation issuable to any holder upon the
Effective Time of Merger shall be rounded to the nearest whole
share.
(b) Upon the Effective Time of Merger, each warrant to
purchase shares of capital stock of BPC issued and outstanding
immediately prior thereto shall, by virtue of the Merger and
without any action by the holders of such warrants or other
person, be converted into and exchanged for the right to receive
from the Surviving Corporation (subject to Section 2.3(b)) (i)
$58.55 per share of common stock issuable upon the exercise of
each warrant, less (ii) the exercise price for each share of
common stock, which exercise price will be deducted from the
amount of Merger Consideration otherwise payable per share of
common stock issuable upon the exercise of such warrants.
10.3. Exchange of Certificate; Payment of Merger Consideration
10.3.1. After the Effective Time of Merger, each
holder of an outstanding certificate that, at the Effective Time
of Merger, represents shares of Mergerco capital stock or BPC
capital stock may at such stockholder's option surrender the same
for cancellation to the Surviving Corporation, and each such
holder shall be entitled to receive in exchange therefor a
certificate representing the number of shares of the Surviving
Corporation's capital stock into which the surrendered shares
were converted as herein provided. Until so surrendered, each
outstanding certificate representing shares of Mergerco capital
stock or BPC capital stock prior to the Effective Time of Merger
shall be deemed for all purposes to represent the number of whole
shares of the Surviving Corporation's capital stock into which
such shares of the capital stock of Mergerco or BPC, as
applicable, were converted in the Merger. The registered owner
on the books and records of the Surviving Corporation of any such
outstanding certificate shall, until such certificate shall have
been surrendered for conversion to the Surviving Corporation,
have and be entitled to exercise any voting and other rights with
respect to, and to receive dividends and other distributions
upon, the shares of capital stock of the Surviving Corporation
represented by such outstanding certificate as provided in this
paragraph 2.3.
10.3.2. On the Effective Time of Merger, the
Surviving Corporation shall deposit $5,000,000 of the aggregate
consideration (the "Merger Consideration") into an escrow
account, such money to be released subject to and in accordance
with the terms of the Escrow Agreement. The Surviving
Corporation shall deduct from the Merger Consideration otherwise
payable, as applicable, (i) certain holders' pro rata share of
the escrow contribution and (ii) the aggregate exercise price
payable by certain holders for the shares of common stock
issuable upon the exercise of warrants held by such holders (the
Merger Consideration as so adjusted, the "Net Merger
Consideration"), in each case in the amounts set forth on Annex
E. The Net Merger Consideration shall be paid by the Company in
cash, by wire transfer of immediately available funds, to the
accounts designated by the holders of the Merger Stock in a
written notice delivered to the Company not less than three
business days prior to the Effective Time of Merger.
10.4. Legends
Each certificate representing capital stock of the Surviving
Corporation issued in the Merger shall bear the same legends, if
any, with respect to restrictions on transferability as the
certificates of Mergerco so converted and given in exchange
therefor, unless otherwise determined by the Board of Directors
of the Surviving Corporation in compliance with applicable laws.
10.5. Endorsement of Surrendered Shares
If any certificate for shares of capital stock of the
Surviving Corporation is to be issued in a name other than that
in which the certificate surrendered in exchange therefor is
registered, it shall be a condition of issuance thereof that the
certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer, that such transfer
otherwise be proper and that the party requesting such transfer
pay to the Surviving Corporation any transfer or other taxes
payable by reason of the issuance of such new certificate in the
name other than that of the registered holder of the certificate
surrendered, or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not payable.
XI COVENANTS TO BE PERFORMED PRIOR TO EFFECTIVE TIME OF MERGER
11.1. Conditions Precedent to the Merger
The respective obligations of each party to effect the
Merger shall be subject to the satisfaction at or prior to the
Effective Time of Merger of the conditions set forth in Article
III of the Purchase Agreement and the Preferred Stock Purchase
Agreement.
11.2. Governmental Authorizations
Each of Mergerco and BPC shall cooperate in filing any
necessary reports or other documents with any federal, state,
local or foreign authorities having jurisdiction with respect to
the Merger.
XII GENERAL
12.1. Further Assurances
Mergerco and BPC each covenants and agrees that it will, at
or before the Effective Time of Merger, take such other actions
as may be required by the DGCL.
12.2. Abandonment
At any time before the Effective Time of Merger, this
Agreement may be terminated and the Merger may be abandoned for
any reason whatsoever by the Board of Directors of either of
Mergerco and BPC, notwithstanding the approval of this Agreement
by the stockholders of both or either of Mergerco and BPC.
12.3. Amendment
The Boards of Directors of the Constituent Corporations may
amend this Agreement at any time prior to the filing of this
Agreement (or certificate in lieu thereof) with the Secretary of
State of the State of Delaware, provided that an amendment made
subsequent to the adoption of this Agreement by the stockholders
of any Constituent Corporation shall not: (1) alter or change the
amount or kind of shares, securities, cash, property and/or
rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such
Constituent Corporation, (2) alter or change any term of the
Restated Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (3) alter or change
any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of any
class or series thereof of such Constituent Corporation.
12.4. Registered Office
The registered office of the Surviving Corporation in the
State of Delaware is located at 9 East Loockerman Street, City of
Dover, County of Kent, Delaware and National Registered Agents,
Inc. is the registered agent of the Surviving Corporation at such
address.
12.5. Agreement
Executed copies of this Agreement will be on file at the
principal place of business of the Surviving Corporation at 101
Oakley Street, Evansville, Indiana 47710 and copies thereof will
be furnished to any stockholder of any Constituent Corporation,
upon request and without cost.
12.6. Governing Law
This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the
laws of the State of Delaware.
12.7. Counterparts
This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, this Agreement, having first been
approved by resolution of the Boards of Directors of Mergerco and
BPC, is hereby executed on behalf of each of such two
corporations and attested by their respective officers thereunto
duly authorized.
BPC MERGERCO, INC.
Roberto Buaron
Chairman
ATTEST:
Joseph S. Levy
Vice President
BPC HOLDING CORPORATION
Roberto Buaron
Chairman
ATTEST:
Joseph S. Levy
Vice President
EXHIBIT 99.1
PRESS RELEASE
BERRY PLASTICS PARENT
COMPLETES RECAPITALIZATION
For Immediate Release:
EVANSVILLE, IN, June 19, 1996 _ BPC Holding Corporation, the
parent company of Berry Plastics Corporation, announced today
that it had consummated the recapitalization transaction
previously announced. As part of the transaction, the Company
raised new equity and debt capital from institutional and other
investors.
The entire management of the Company, including its Chairman,
Roberto Buaron, and its President and CEO, Martin R. Imbler, will
continue in their present positions.
Atlantic Equity Partners International II, L.P. (an investment
fund managed by First Atlantic Capital, Ltd. and an affiliate of
the prior majority shareholder of the Company), Chase Capital
Partners (an affiliate of The Chase Manhattan Corporation), The
CIT Group/Equity Investments, Inc., The Northwestern Mutual Life
Insurance Company and an investment affiliate of Aetna Life
Insurance Company, as well as members of the management of the
Company, invested approximately $70 million in equity into the
Company.
As part of the recapitalization transaction, the Company issued
in a Rule 144A transaction $105 million aggregate principal
amount of 12.5% Senior Secured Notes due 2006. The Senior Secured
Notes have not been registered under the Securities Act of 1933,
as amended, and may not be offered or sold in the United States
absent registration or an applicable exemption from the
registration requirements.
A portion of the proceeds of such financings were used to provide
the cash consideration for a merger transaction whereby the prior
equity holders of the Company received cash in exchange for their
equity interests in the aggregate amount of approximately $120
million.
Mr. Buaron, Chairman of the Board of the Company and of First
Atlantic Capital, stated "We are delighted to welcome among our
investors such strong and sophisticated institutions as Chase
Capital Partners, an Aetna affiliate and Northwestern Mutual.
Their support will help the Company to continue to pursue its
strategic expansion goals and internal growth programs."
Mr. Imbler, President and CEO, added, "Berry's reputation and
success has been built by satisfying our customers. That will
remain our number one focus _ through product quality, technical
support and customer service."
Donald Hofmann, a General Partner of Chase Capital Partners,
indicated "Our investment in Berry Plastics is an exciting
opportunity to back an outstanding management team and a company
that holds the number one market share in most of its market
niches. Berry Plastics is uniquely positioned to succeed in the
current environment of consolidation and new product innovation."
The Board of Directors of the Company will be expanded by the
addition of two representatives of Chase Capital Partners _
Donald J. Hofmann and Robert L. Egan _ and one representative of
Aetna _ David M. Clarke.
First Atlantic Capital, Ltd., a New York private equity
investment firm, which acts as investment manager for Atlantic
Equity Partners International II and its affiliates, initiated
and assisted in the consummation of the transaction.
Berry Plastics, headquartered in Evansville, Indiana, is a
leading domestic manufacturer and marketer of plastic aerosol
overcaps, rigid open-top containers and drink cups.
Contact: Martin R. Imbler (812) 424-2904
