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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) MAY 9, 2000
BPC HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-75706-01 33-1814673
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
101 OAKLEY STREET
EVANSVILLE, INDIANA 47710
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(Address of principal executive
offices including Zip Code)
(812) 424-2904
(Registrant's telephone number,
including area code)
N.A.
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(Former name or former address, if changed since last
report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 9, 2000, Berry Plastics Corporation ("Berry Plastics"), a Delaware
corporation and wholly-owned subsidiary of BPC Holding Corporation (the "Registrant"),
acquired (the "Acquisition") all of the outstanding capital stock of Poly-Seal Corporation
("Poly-Seal") through a merger of Berry Plastics Acquisition Corporation ("BPAC"), a
wholly-owned subsidiary of Berry Plastics, with and into Poly-Seal. Poly-Seal was the
surviving corporation. Pursuant to the terms of the Agreement and Plan of Merger, dated
as of May 5, 2000 (the "Agreement"), among Berry Plastics, BPAC, Poly-Seal, and certain
shareholders of Poly-Seal, the aggregate consideration paid, including amounts required to
pay indebtedness, was $57.3 million, subject to adjustment. A copy of the Agreement is
filed as Exhibit 2.1 hereto, and such document is hereby incorporated by reference herein.
Pursuant to the Escrow Agreement dated as of May 9, 2000 (the "Escrow
Agreement"), among Berry Plastics, Poly-Seal, Michael C. Larned, Michael D. deMilt,
certain shareholders of Poly-Seal and Old National Trust Company, $1.2 million in cash is
being held in escrow for an eighteen-month period to satisfy certain indemnification
obligations. At the end of the eighteen-month period, the remaining balance, if any, will
be paid to the shareholders of Poly-Seal. A copy of the Escrow Agreement is filed as
Exhibit 99.1 hereto, and such document is hereby incorporated by reference herein.
In order to finance a portion of the consideration delivered in connection with
the Acquisition, the Registrant issued, pursuant to a Preferred Stock and Warrant Purchase
Agreement dated as of May 9, 2000 (the "Preferred Agreement") by and among the Registrant,
Chase Venture Capital Associates, LLC ("CVCA") and The Northwestern Mutual Life Insurance
Company ("Northwestern"), 1,000,000 shares of Series A-1 Preferred Stock in a private
placement (the "Preferred Placement") for an aggregate price of $25 million. In
connection with the Preferred Placement, the Registrant issued warrants to purchase 25,997
shares of its Series B Non-Voting Common Stock. The Registrant also extended the
expiration period of currently outstanding warrants to purchase Series B Non-Voting Common
Stock and Series B Voting Common Stock held by CVCA and Northwestern to May 9, 2006. A
copy of the Series A-1 Preferred Agreement is filed as Exhibit 4.1 hereto, and such
document is hereby incorporated by reference herein.
Berry Plastics financed the remaining portion of the consideration delivered in
connection with the Acquisition through a new term loan under its credit facility with
Banc of America N.A., which was amended and restated.
Further details of the Acquisition are provided in a press release issued by
Berry Plastics, which is filed as Exhibit 99.2 hereto, and such document is hereby
incorporated by reference herein.
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ITEM 5. OTHER EVENTS.
Berry Plastics and its subsidiaries supplemented the Indentures dated July 6, 1999,
August 24, 1998 and April 21, 1994 (collectively, the "Indentures") through a First
Supplemental Indenture, a Third Supplemental Indenture and a Ninth Supplemental Indenture,
respectively (collectively the "Supplemental Indentures"). Under the Supplemental
Indentures, Poly-Seal and Berry Plastics Acquisition Corporation III, a wholly owned
subsidiary of Berry Plastics, entered into guarantees under the Indentures. The
Supplemental Indentures are filed as Exhibits 4.8, 4.9 and 4.10 hereto, and such documents
are hereby incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) and (b) The financial statements and pro forma financial information that are
required to be included herein are not so included, and such statements and
information shall be filed not later than August 2, 2000.
(c) Exhibits
EXHIBIT NO. REFERENCE
2.1 Merger Agreement dated as of May 5, Filed herewith
2000 among Berry Plastics, BPAC, Poly-
Seal, and certain shareholders of Poly-
Seal
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4.1 Series A-1 Preferred Stock Purchase Filed herewith
Agreement dated as of May 9, 2000 among
the Registrant, CVCA and Northwestern
4.2 Warrant No. CBNV-1 to purchase 15,599 Filed herewith
shares of Series B Non-Voting Common Stock
issued to CVCA
4.3 Warrant No. CBNV-2 to purchase 10,398 Filed herewith
shares of Series B Non-Voting Common Stock
issued to Northwestern
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4.7 Amended and Restated Warrant No. 5 to Filed herewith
purchase 5,623 shares of Class B Voting
Common Stock issued to CVCA
4.6 Amended and Restated Warrant No. 6 to Filed herewith
purchase 17837 shares of Class B Non-
Voting Common Stock issued to CVCA
4.5 Amended and Restated Warrant No. 7 to Filed herewith
purchase 3,749 shares of Series B Voting
Common Stock issued to Northwestern
4.4 Amended and Restated Warrant No. 8 to Filed herewith
purchase 11,891 shares of Series B Non-
Voting Common Stock issued to Northwestern
4.8 First Supplemental Indenture to the Filed herewith
Indenture dated July 6, 1999, as
supplemented, among the Registrant, Berry
Plastics, the other subsidiaries of the
Registrant, and United States Trust
Company of New York, as trustee
4.9 Third Supplemental Indenture to the Filed herewith
Indenture dated August 24, 1998, as
supplemented, among the Registrant, Berry
Plastics, the other subsidiaries of the
Registrant, and United States Trust
Company of New York, as trustee
4.10 Ninth Supplemental Indenture to Filed herewith
the Indenture dated April 21, 1994, as
supplemented, among the Registrant, Berry
Plastics, the other subsidiaries of the
Registrant, and United States Trust
Company of New York, as trustee
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99.1 Escrow Agreement dated as of May Filed herewith
9, 2000 among Berry Plastics, Poly-Seal,
Michael Larned, Michael D. deMilt, certain
Shareholders of Poly-Seal and Old National
Trust Company
99.2 Press release Filed herewith
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BPC HOLDING CORPORATION
(Registrant)
Dated May ___, 2000 By: /s/ James M. Kratochvil
Name: James M. Kratochvil
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Title: Executive Vice President,
Chief Financial Officer, Treasurer
and Secretary
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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2.1 Merger Agreement dated as of May 5, 2000 among Berry
Plastics, BPAC, Poly-Seal, and certain shareholders of
Poly-Seal
4.1 Series A-1 Preferred Stock Purchase Agreement dated as
of May 9, 2000 among the Registrant, CVCA and
Northwestern
4.2 Warrant No. CBNV-1 to purchase 15,599 shares of Series
B Non-Voting Common Stock issued to CVCA
4.3 Warrant No. CBNV-2 to purchase 10,398 shares of Series
B Non-Voting Common Stock issued to Northwestern
4.4 Amended and Restated Warrant No. 5 to purchase 5,623
shares of Class B Voting Common Stock issued to CVCA
4.5 Amended and Restated Warrant No. 6 to purchase 17837
shares of Class B Non-Voting Common Stock issued to
CVCA
4.6 Amended and Restated Warrant No. 7 to purchase 3,749
shares of Series B Voting Common Stock issued to
Northwestern
4.7 Amended and Restated Warrant No. 8 to purchase 11,891
shares of Series B Non-Voting Common Stock issued to
Northwestern
4.8 First Supplemental Indenture to the Indenture dated
July 6, 1999, as supplemented, among the Registrant,
Berry Plastics, the other subsidiaries of the Registrant,
and United States Trust Company of New York, as
trustee
4.9 Third Supplemental Indenture to the Indenture dated
August 24, 1998, as supplemented, among the
Registrant, Berry Plastics, the other subsidiaries of the
Registrant, and United States Trust Company of New
York, as trustee
4.10 Ninth Supplemental Indenture to the Indenture dated
April 21, 1994, as supplemented, among the Registrant,
Berry Plastics, the other subsidiaries of the Registrant,
and United States Trust Company of New York, as
trustee
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99.1 Escrow Agreement dated as of May 9, 2000 among Berry
Plastics, Poly-Seal, Michael Larned, Michael D.
deMilt, certain Shareholders of Poly-Seal and Old
National Trust Company
99.2 Press Release
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_____________________________________
AGREEMENT AND PLAN OF MERGER
among
BERRY PLASTICS ACQUISITION CORPORATION,
BERRY PLASTICS CORPORATION,
POLY-SEAL CORPORATION
and
THE SHAREHOLDERS OF POLY-SEAL
CORPORATION NAMED HEREIN
Dated as of May 5, 2000
_____________________________________
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TABLE OF CONTENTS
PAGE
AGREEMENT AND PLAN OF MERGER .......................................... 1
PRELIMINARY STATEMENTS................................................. 1
ARTICLE I THE MERGER; EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS.............................. 1
Section 1.1. The Merger........................................... 1
Section 1.2. Closing.............................................. 2
Section 1.3. Effect of the Merger................................. 2
Section 1.4. Certificate of Incorporation and Bylaws of the
Surviving Corporation............................... 2
Section 1.5. Directors and Officers of the Surviving
Corporation......................................... 2
Section 1.6. Effect on Capital Stock.............................. 2
Section 1.7. Certain Defined Terms................................ 4
Section 1.8. Determination of Adjustments......................... 7
Section 1.9. Payments.............................................11
Section 1.10. Escrows.............................................13
Section 1.11. Payment of Indebtedness, Capital Lease
Obligations and Transaction Expense Amounts.........14
Section 1.12. No Duplication......................................14
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SHAREHOLDER PARTIES.......................................15
Section 2.1. Due Execution and Delivery, Etc......................15
Section 2.2. No Violation.........................................16
Section 2.3. Capital Stock........................................16
Section 2.4. Organization of the Company..........................17
Section 2.5. Consents and Approvals...............................18
Section 2.6. Financial Statements.................................18
Section 2.7. Absence of Certain Changes...........................18
Section 2.8. Absence of Undisclosed Liabilities...................19
Section 2.9. Litigation...........................................19
Section 2.10. Compliance with Applicable Law, Permits.............19
Section 2.11. Environmental Matters...............................20
Section 2.12. Intellectual Property...............................21
Section 2.13. Employee Benefit Plans..............................21
Section 2.14. Employees and Labor Relations.......................23
Section 2.15. Taxes...............................................24
Section 1.16. Material Contracts..................................25
Section 2.17. Suppliers, Distributors and Customers...............26
Section 2.18. Assets Necessary to Business........................26
Section 2.19. Tangible Personal Property..........................26
Section 2.20. Real Property.......................................27
i
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Section 2.21. Insurance...........................................28
Section 2.22. Related Party Transactions..........................28
Section 2.23. Accounts and Notes Receivable.......................28
Section 2.24. Disclosure..........................................29
Section 2.25. Brokers.............................................29
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARENT and MERGER
SUB.......................................................29
Section 3.1. Organization and Authority of Parent and Merger
Sub.................................................29
Section 3.2. No Violation.........................................30
Section 3.3. Consents and Approvals...............................30
Section 3.4. Investment...........................................30
Section 3.5. Legal Proceedings....................................30
Section 3.6. Solvency, Etc........................................30
Section 3.7. Brokers..............................................30
ARTICLE IV COVENANTS...................................................31
Section 4.1. Conduct of the Business..............................31
Section 4.2. Access to Information by Parent......................33
Section 4.3. Reasonable Efforts...................................33
Section 4.4. Stock Options........................................34
Section 4.5. Collective Bargaining Agreement......................34
Section 4.6. Access to Records by Shareholders....................34
Section 4.7. Certain Limitations on Representations and
Warranties..........................................35
Section 4.8. Supplemental Schedules...............................36
Section 4.9. Guarantee by Parent..................................36
Section 4.10. Further Assurances..................................36
Section 4.11. Certain Tax Matters.................................36
Section 4.12. Termination of Affiliate Transactions...............40
Section 4.13. Notice of Prospective Breach........................40
Section 4.14. Release.............................................41
Section 4.15. Disclosure of Information...........................41
Section 4.16. Negotiation with Others; Disposition and Voting
of Securities......................................41
Section 4.17. Use of Name.........................................43
ARTICLE V CONDITIONS...................................................43
Section 5.1. Conditions to Each Party's Obligations...............43
Section 5.2. Conditions to Obligations of the Parent and Merger
Sub.................................................43
Section 5.3. Conditions to Obligations of the Shareholder
Parties and the Company.............................45
Section 5.4. Waiver...............................................46
ARTICLE VI TERMINATION AND AMENDMENT...................................46
Section 6.1. Termination..........................................46
Section 6.2. Effect of Termination................................47
Section 6.3. Amendment............................................48
ii
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ARTICLE VII SURVIVAL; INDEMNIFICATION..................................48
Section 7.1. Survival Periods.....................................48
Section 7.2. Indemnification......................................48
Section 7.3. Certain Limitations..................................49
Section 7.4. Claims...............................................51
Section 7.5. Exclusive Remedy.....................................52
Section 7.6. Adjustments..........................................52
Section 7.7. No Contribution from the Corporation or the
Surviving Corporation...............................52
Section 7.8. Tax Claims...........................................52
ARTICLE VIII MISCELLANEOUS.............................................54
Section 8.1. Shareholder Party Representatives....................54
Section 8.2. Notices..............................................54
Section 8.3. Headings.............................................56
Section 8.4. Counterparts.........................................56
Section 8.5. Entire Agreement; Assignment.........................56
Section 8.6. Governing Law........................................56
Section 8.7. Specific Performance.................................57
Section 8.8. Press Releases.......................................57
Section 8.9. Binding Nature; No Third Party Beneficiaries.........57
Section 8.10. Severability........................................57
Section 8.11. Certain Interpretive Matters and Definitions........57
Section 8.12. Payment of Expenses.................................58
Section 8.13. Remedies............................................58
Section 8.14. Independence of Covenants and Representations and
Warranties.........................................58
iii
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SCHEDULES AND EXHIBITS
Schedule 1.7(ix) Closing CapEx Amount
Schedule 1.7(xi) Closing Working Capital Amount
Schedule 1.7 (xiv) Estimated Adjustment Amount
Schedule 1.7(xvii) Estimated Tax Amount
Schedule 1.8(a) Pro Forma Net Working Capital Calculation
Schedule 2.2(a) No Violation -- Shareholder Parties
Schedule 2.2(b) No Violation -- Company
Schedule 2.3(a) Company Common Stock
Schedule 2.3(b) Stock Option Plan
Schedule 2.3(c) Title to Shares
Schedule 2.4(b) Subsidiaries and other Equity Interests
Schedule 2.6 Financial Statements
Schedule 2.7 Absence of Certain Changes
Schedule 2.8 Absence of Undisclosed Liabilities
Schedule 2.9 Litigation
Schedule 2.10 Compliance with Applicable Law
Schedule 2.11 Environmental Matters
Schedule 2.12 Intellectual Property
Schedule 2.13(a),(d),(e)&(f) Employee Benefit Plans
Schedule 2.15(a),(b),(c)&(e) Taxes
Schedule 2.16 Material Contracts
Schedule 2.17 Suppliers, Distributors and Customers
Schedule 2.19 Tangible Personal Property
Schedule 2.20 Real Property
Schedule 2.21 Insurance
Schedule 2.22(b) Related Party Transactions
Schedule 2.23 Accounts and Notes Receivable
Schedule 4.1 Conduct of Business
Schedule 4.12 Termination of Affiliate Transactions
Schedule 8.1 Principal Shareholders
Schedule 8.11 Certain Interpretive Matters and Definitions
Exhibit A Form of Escrow Agreement
Exhibit B Form of Opinion of Counsel to Shareholder Parties and
Company
Exhibit C Form of Opinion of Counsel to Parent and Merger Sub
iv
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TABLE OF DEFINED TERMS
TERM SECTION
Actual Unpaid Amount............................... 4.11(a)(iii)
Accountant's Determination......................... 1.8(c)
Accounting Firm.................................... 1.8(c)
Actual CapEx Amount................................ 1.7(i)
Actual Tax Liability............................... 4.11(d)
Additional Escrow Amount............................1.7(ii)
Affiliate.......................................... 2.22(a)
Aggregate Merger Consideration..................... 1.7(iii)
Agreement.......................................... Introductory Paragraph
Applicable Percentage.............................. 1.7(iv)
Audited Financial Statements....................... 2.6
Best Knowledge of the Company...................... 8.11(a)
Business........................................... Preliminary Statements
Business Day....................................... 1.7(v)
Buyer Group........................................ 7.2(a)
CapEx Overpayment Amount........................... 1.8(e)(i)
CapEx Underpayment Amount.......................... 1.8(e)(ii)
CapEx Target....................................... 1.7(vi)
Capital Lease Obligations.......................... 1.7(vii)
Capital Lease Obligations Amount................... 1.7(viii)
Certificate of Merger.............................. 1.2
Closing............................................ 1.2
Closing Date....................................... 1.2
Closing Date Payment Amount........................ 1.7(x)
Closing Date Balance Sheet......................... 1.8(a)
Closing Working Capital Amount..................... 1.7(xi)
Code............................................... 2.13
Company............................................ Introductory Paragraph
Company Common Stock............................... 1.6(a)(ii)
Compensation Deductions............................ 4.11(a)(iv)
Confidentiality Agreement.......................... 4.2(a)
Consulting and Non-Competition Agreement........... 5.2(q)
Covered Refund..................................... 4.11(b)
Credited Prepayments............................... 4.11(b)
deMilt Receivable.................................. 2.22(a)
Damages............................................ 7.2(a)
December Balance Sheet............................. 2.6
DGCL............................................... 1.1
Dissenting Shareholder............................. 1.6(c)
Effective Time..................................... 1.2
Employee Plans..................................... 2.13(a)
Environmental Law.................................. 2.11(b)
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ERISA.............................................. 2.13(a)
ERISA Affiliate.................................... 2.13(d)(iii)
Escrow Agent....................................... 1.10(a)
Escrow Adjustment Amount Account................... 1.10(c)
Escrow Agreement................................... 1.10(a)
Escrow Amount...................................... 1.10(a)
Escrow Expense Account............................. 1.10(d)
Escrow Expense Amount.............................. 1.7(xii)
Escrow Holdback Account............................ 1.10(a)
Escrow Holdback Amount............................. 1.7(xiii)
Escrow Holdback Fund............................... 1.10(a)
Escrow Tax Account................................. 1.10(e)
Estimated Adjustment Amount........................ 1.7(xiv)
Estimated CapEx Overpayment Amount................. 1.7(xv)
Estimated CapEx Underpayment Amount................ 1.7(xvi)
Estimated Tax Amount............................... 1.7(xvii)
Estimated Working Capital Overpayment Amount....... 1.7(xviii)
Estimated Working Capital Underpayment Amount...... 1.7(xix)
Exclusive Period................................... 4.16(a)
Fair Market Value Per Share........................ 4.4
Final Separate Return Year......................... 4.11(a)(i)
Final Separate Return Year Tax Returns............. 4.11(a)(ii)
Financial Statements............................... 2.6
Financing Documents................................ 3.6
Franchise Taxes.................................... 1.7(xx)
GAAP............................................... 2.6
Governmental Entity................................ 2.4(a)
Hazardous Substance................................ 2.11(c)
Herdrich Receivable................................ 2.22(a)
HSR Act............................................ 2.5(a)
Income Taxes....................................... 1.7(xxi)
Indebtedness....................................... 1.7(xxii)
Indemnified Party.................................. 7.4(a)
Indemnifying Party................................. 7.4(a)
Intellectual Property.............................. 2.12(b)
Knowledge of the Company........................... 8.11(a)
Law................................................ 2.4(a)
Leased Real Property............................... 2.20
Liability.......................................... 2.8
Liens.............................................. 2.3(c)
Material Adverse Effect............................ 2.4(a)
Merger............................................. 1.1
Merger Sub......................................... Introductory Paragraph
Merger Sub Common Stock............................ 1.6(i)
Names.............................................. 4.17
Net Working Capital................................ 1.7(xxiii)
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Nonresponsive Shareholder.......................... 4.11(a)(iv)
Notice of Disagreement............................. 1.8(b)
Owned Real Property................................ 2.20
Outstanding Company Common Stock................... 1.6(a)(ii)
Overpayment Amount................................. 1.8(d)(ii)
Parent............................................. Introductory Paragraph
Parent Adjustment Amounts.......................... 1.8(f)
Permitted Liens.................................... 2.19
Per Share Merger Consideration..................... 1.6(a)(ii)
Post-Closing 1999 Returns.......................... 4.11(d)
Potential Transaction.............................. 4.16(a)
Purchase Price..................................... 1.2
Rate............................................... 1.9(c)
Real Property...................................... 2.20
Refund............................................. 4.11(b)
Related Documents.................................. 1.7(xxiv)
Schroders.......................................... 2.25
Shareholder Adjustment Amounts..................... 1.8(g)
Shareholder Parties................................ Introductory Paragraph
Shareholder Payments Escrow Account................ 1.10(b)
Shareholder Party Representatives.................. Introductory Paragraph
Statement.......................................... 1.8(a)
Stock Option....................................... 4.4
Stock Option Plan.................................. 2.3(b)
Straddle Year...................................... 4.11(a)(ii)
Straddle Year Tax Returns.......................... 4.11(a)(ii)
Subsidiary......................................... 2.4(b)
Survival Date...................................... 7.1
Surviving Corporation.............................. 1.2
Surviving Corporation Common Stock................. 1.6(a)(i)
Tax................................................ 2.15(g)
Tax Claim.......................................... 7.8
Tax Return......................................... 2.15(g)
Third Party Claim.................................. 7.4(e)
Transaction Expense Amounts........................ 1.7(xxv)
Underpayment Amount................................ 1.8(d)(i)
Unused Expense Amount.............................. 1.7(xxvi)
Working Capital Target............................. 1.7(xxvii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of May 5,
2000, among Berry Plastics Corporation, a Delaware corporation (the
"PARENT") , Berry Plastics Acquisition Corporation, a Delaware
corporation ("MERGER SUB"), Poly-Seal Corporation, a Delaware corporation
(the "COMPANY"), the individuals and trusts who are shareholders of the
Company listed in the signature pages to this Agreement (such
shareholders being collectively referred to as the "SHAREHOLDER
PARTIES"), and Michael C. Larned and Michael D. deMilt, as
representatives of the Shareholder Parties (the "SHAREHOLDER PARTY
REPRESENTATIVES").
PRELIMINARY STATEMENTS
A. The Company is engaged in the business of manufacturing and
selling plastic caps and closures and related activities (the
"BUSINESS").
B. The Board of Directors of each of the Parent and the Company
have determined that the acquisition of the Company, upon the terms and
subject to the conditions set forth herein, pursuant to a merger whereby
Merger Sub will be merged with and into the Company, is in the best
interests of their respective companies and shareholders.
C. Merger Sub is a wholly-owned subsidiary of Parent created solely
for the purpose of effecting the transactions contemplated hereby and
which will conduct no other activity and will be merged with and into the
Company.
D. The parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement
and the transactions contemplated hereby.
E. The Shareholder Party Representatives are to act as
representatives of the Shareholder Parties for certain purposes
hereunder.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below,
the parties agree as following:
ARTICLE I
THE MERGER; EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
Section 1.1 The Merger.
Subject to the terms and provisions of this Agreement and in
accordance with Subchapter IX of the Delaware General Corporation Law
(the "DGCL"), at the Effective Time (as defined in section 1.2), Merger
Sub shall be merged with and into the Company (the "MERGER"). As a
result of the Merger, the
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separate corporate existence of Merger Sub shall cease and the Company
shall continue as the surviving corporation (the "SURVIVING CORPORATION").
Section 1.2 Closing.
The closing of the Merger (the "CLOSING") will take place at 10:00
a.m. at the offices of O'Sullivan, Graev and Karabell LLP, 30 Rockefeller
Plaza, New York, New York, 10112 (or at such other place or time as the
parties mutually agree in writing) on a date to be specified by Parent
and the Company, which shall be no later than the third Business Day
after satisfaction or, if permissible, waiver of the conditions set forth
in Article V (the time and date of the Closing being referred to herein
as the "CLOSING DATE"), unless another date is agreed to by Parent and
the Company. On the Closing Date, a Certificate of Merger with respect
to the Merger in such form as is required by the DGCL (the "CERTIFICATE
OF MERGER") shall be duly prepared, executed and delivered to the
Secretary of State of the State of Delaware for filing, as provided in
the DGCL. The Merger shall become effective at the later of the time of
filing of the Certificate of Merger or at such time as is agreed upon by
the parties and specified in the Certificate of Merger (the "EFFECTIVE
TIME").
Section 1.3. Effect of the Merger.
Upon becoming effective, the Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all properties, rights,
privileges, powers and franchises of Merger Sub and the Company shall
vest in the Surviving Corporation, and all debts, liabilities and duties
of Merger Sub and the Company shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 1.4. Certificate of Incorporation and Bylaws of the Surviving
Corporation.
From and after the Effective Time, and until changed or amended as
provided by law, the Certificate of Incorporation of the Company and
Bylaws of Merger Sub as in effect immediately prior to the Effective Time
shall be the Certificate of Incorporation and Bylaws, respectively, of
the Surviving Corporation.
Section 1.5. Directors and Officers of the Surviving Corporation.
The directors of Merger Sub immediately prior to the Effective Time
shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and Bylaws of
the Surviving Corporation. The officers of Merger Sub immediately prior
to the Effective Time shall be the initial officers of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation.
Section 1.6. Effect on Capital Stock.
(a) As of the Effective Time, by virtue of the Merger and without any
action on the part of any holder thereof:
(i)Each share of Common Stock, par value $.01 per share, of Merger
Sub ("MERGER SUB COMMON STOCK") issued and outstanding immediately prior
to the Effective Time shall be converted into and become one fully paid
and non-assessable share of Common Stock, par value $.01 per share, of
the Surviving Corporation ("SURVIVING CORPORATION COMMON STOCK"), so
that, after the Effective Time, the Parent will be the holder of all of
the issued and outstanding shares of
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Surviving Corporation Common Stock. From and after the Effective Time,
each outstanding certificate representing Merger Sub Common Stock shall
be deemed for all purposes to evidence ownership of and to represent the
same number of shares of Surviving Corporation Common Stock. After the
Effective Time, a certificate or certificates evidencing shares of Surviving
Corporation Common Stock shall be issued by the Surviving Corporation in
exchange for the certificate or certificates which formerly represented all
of the issued and outstanding shares of Merger Sub Common Stock, which shall
then be cancelled.
(ii)Each share of Common Stock, par value $0.005 per share, of the
Company ("COMPANY COMMON STOCK") issued and outstanding immediately prior
to the Effective Time ("OUTSTANDING COMPANY COMMON STOCK") (except
Outstanding Company Common Stock held by Dissenting Shareholders as
defined in Section 1.6(c), if any, or held by the Company as set forth in
Section 1.6(a)(iii)) shall be converted into and become the right to
receive, from and after the Effective Time in accordance with the terms
and provisions of this Agreement and the Escrow Agreement (as defined
below), the Aggregate Merger Consideration divided by the total number of
shares of Outstanding Company Common Stock, and shall otherwise cease to
be outstanding, shall be cancelled and retired and cease to exist. From
and after the Effective Time, the holders of certificates representing
Outstanding Company Common Stock (each a "SHAREHOLDER" and collectively,
the "SHAREHOLDERS") shall cease to have any rights as stockholders of the
Company, except for the right to receive the Aggregate Merger
Consideration in respect of such Outstanding Company Common Stock at the
times and in the manner provided in this Agreement and the Escrow
Agreement and except for such rights, if any, as they may have pursuant
to the DGCL.
(iii)Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time and owned directly or indirectly
by the Company (whether as treasury stock or otherwise) shall, by virtue
of the Merger and without any action on the part of the holder thereof,
be canceled and no consideration shall be delivered in exchange therefor.
(iv)Each authorized but unissued share of Company Common Stock
immediately prior to the Effective Time shall be canceled.
(b)__As of the Effective Time, by virtue of the Merger and
without any action on the part of any party, the stock transfer books of
the Company shall be closed and no transfer of Company Common Stock shall
thereafter be made.
(c)__Notwithstanding anything in this Agreement to the
contrary, to the extent required by the DGCL, any Outstanding Company
Common Stock held by a person who validly asserts and perfects appraisal
rights pursuant to Section 262 of the DGCL (a "DISSENTING SHAREHOLDER")
shall not be converted as described in Section 1.6(a)(ii), but shall be
converted into the right to receive such consideration as may be
determined to be due to such Dissenting Shareholder pursuant to Section
262 of the
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DGCL. If, after the Effective Time, such Dissenting
Shareholder withdraws his demand or fails to perfect or otherwise loses
his rights as a Dissenting Shareholder to payment of fair value, in any
case pursuant to the DGCL, each of the shares of Outstanding Company
Common Stock of such Dissenting Shareholder shall be deemed to be
converted as of the Effective Time into the right to receive those
amounts set forth in Section 1.6(a)(ii).
Section 1.7. Certain Defined Terms.
As used herein, the following terms shall have the following
respective meanings:
(i)"ACTUAL CAPEX AMOUNT" means the aggregate amount of capital
expenditures made or accrued for during the period from January 1, 1999
through the Closing Date (excluding any capital expenditures made by the
Company not set forth on the latest capital expenditure budget delivered
on or prior to the date hereof to the Parent) and set forth on the
Statement;
(ii)"ADDITIONAL ESCROW AMOUNT" means the Escrow Holdback Amount
MINUS the amount, if any, required to be paid out to satisfy Damages with
respect to which payments may be made from the Escrow Holdback Account
under the Escrow Agreement;
(iii)"AGGREGATE MERGER CONSIDERATION" means the net amount of (i)
the Closing Date Payment Amount, PLUS (ii) the Underpayment Amount, if
any, PLUS (iii) the CapEx Underpayment Amount, if any, PLUS (iv) the
Additional Escrow Amount, if any, PLUS (v) any amounts to which
Shareholders may be entitled under Sections 4.11(a)(iii), 4.11(a)(iv),
4.11(b) and 4.11(d), PLUS (vi) the Unused Expense Amount, if any, LESS
(vii) the Overpayment Amount, if any, and LESS (viii) the CapEx
Overpayment Amount, if any;
(iv)"APPLICABLE PERCENTAGE" in respect of any Shareholder or
Shareholders means the fraction, expressed as a percentage, of which the
numerator is the total number of shares of Outstanding Company Common
Stock owned of record by such Shareholder or Shareholders and the
denominator is the total number of shares of Outstanding Company Common
Stock of all Shareholders;
(v)"BUSINESS DAY" means any day other than a Saturday or a Sunday or
a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to be closed;
(vi)"CAPEX TARGET" means the sum of (1) $5,175,000 plus (2) $8,300
per day during the period between January 1, 2000 and the Closing Date;
(vii)"CAPITAL LEASE OBLIGATIONS" means the obligations of the
Company, on a consolidated basis, to pay rent or other amounts under any
lease of (or other arrangement covering the right to use) real or
personal property, which obligations are required to be classified and
accounted for as capital leases on a
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consolidated balance sheet of the Company as of such date computed in
accordance with GAAP, consistently applied with the Financial Statements;
(viii)"CAPITAL LEASE OBLIGATIONS AMOUNT" means the aggregate amount
required to satisfy and pay off all liabilities and obligations
(including any prepayment penalties) arising under any Capital Lease
Obligations to the extent not satisfied and paid off prior to the
Closing;
(ix)"CLOSING CAPEX AMOUNT" means the aggregate amount of capital
expenditures actually made or accrued for by the Company during the
period between January 1, 1999 and the Closing Date estimated in good
faith by the Company as set forth in Schedule 1.7(ix) hereto or, if the
Closing Date shall not occur on or prior to May 9, 2000, as set forth in
a revised Schedule to be delivered by the Shareholder Party
Representatives to the Parent at least one Business Day prior to the
Closing Date;
(x)"CLOSING DATE PAYMENT AMOUNT" means the net amount equal to (i)
$57,312,230.84, (ii) MINUS the aggregate amount of Indebtedness of the
Company to the extent not satisfied and paid off prior to the Closing,
(iii) MINUS the Capital Lease Obligations Amount, (iv) MINUS the
Estimated Tax Amount, (v) MINUS the Escrow Holdback Amount, (vi) MINUS
the Estimated CapEx Overpayment Amount, if any, (vii) MINUS the Estimated
Working Capital Overpayment Amount, if any, (viii) MINUS the Escrow
Expense Amount and (ix) MINUS the Transaction Expense Amounts;
(xi)"CLOSING WORKING CAPITAL AMOUNT" means the amount of Net Working
Capital as of the Closing Date estimated in good faith by the Company,
calculated on a basis consistent with, and using the same accounting
policies, practices and procedures used in preparing the Working Capital
Target (but including cash, which was not included in the determination
of the Working Capital Target), and set forth on Schedule 1.7(xi) hereto
or, if the Closing Date shall not occur on or prior to May 9, 2000, as
set forth in a revised Schedule to be delivered by the Shareholder Party
Representatives to the Parent at least one Business Day prior to the
Closing Date;
(xii)"ESCROW EXPENSE AMOUNT" means $200,000;
(xiii)"ESCROW HOLDBACK AMOUNT" means $1,200,000;
(xiv)"ESTIMATED ADJUSTMENT AMOUNT" means the sum of (A) the
Estimated Working Capital Underpayment Amount, if any, PLUS (B) the
Estimated CapEx Underpayment Amount, if any, as set forth in Schedule
1.7(xiv) hereto or, if the Closing Date shall not occur on or prior to
May 9, 2000, as set forth in a revised Schedule to be delivered by the
Shareholder Party Representatives to the Parent at least one Business Day
prior to the Closing Date;
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(xv)"ESTIMATED CAPEX OVERPAYMENT AMOUNT" means the amount equal to
the difference, but only to the extent that such amount, if any, is
greater than zero, of (A) the CapEx Target minus (B) the Closing CapEx
Amount;
(xvi)"ESTIMATED CAPEX UNDERPAYMENT AMOUNT" means the amount equal to
the difference, but only to the extent that such amount, if any, is
greater than zero, of (A) the Closing CapEx Amount minus (B) the CapEx
Target;
(xvii)"ESTIMATED TAX AMOUNT" means the good faith estimated amount
of the accrued but unpaid liability of the Company, as of the Closing
Date, for Income Taxes and Franchise Taxes in respect of any Final
Separate Return Year and the portion of any Straddle Year ending on the
Closing Date as set forth on Schedule 1.7(xvii) hereto, or if the Closing
Date shall not occur on or prior to May 9, 2000, as set forth in a
revised Schedule to be delivered by the Company to the Parent at least
one Business Day prior to the Closing Date;
(xviii)"ESTIMATED WORKING CAPITAL OVERPAYMENT AMOUNT" means the
amount equal to the difference, but only to the extent that such amount,
if any, is greater than zero, of (A) the Working Capital Target minus
(B) the Closing Working Capital Amount;
(xix)"ESTIMATED WORKING CAPITAL UNDERPAYMENT AMOUNT" means the
amount equal to the difference, but only to the extent that such amount,
if any, is greater than zero, of (A) the Closing Working Capital Amount
minus (B) the Working Capital Target;
(xx)"FRANCHISE TAXES" means franchise, net worth, capital or similar
Taxes;
(xxi)"INCOME TAXES" means Taxes on income (whether based on or
measured by gross or net income) or in the nature of an income tax or
imposed in lieu thereof;
(xxii)"INDEBTEDNESS" means the aggregate amount (including the
current portions thereof), net of cash and cash equivalents, of all (i)
indebtedness for money borrowed from others and purchase money
indebtedness (other than accounts payable in the ordinary course), (ii)
indebtedness of the type described in clause (i) above guaranteed in any
manner by the Company, or in effect guaranteed, directly or indirectly,
in any manner by the Company through an agreement, contingent or
otherwise, to supply funds to, or in any other manner invest in, the
debtor, or to purchase indebtedness, or to purchase and pay for property
if not delivered or pay for services if not performed, primarily for the
purpose of enabling the debtor to make payment of the indebtedness or to
assure the owners of the indebtedness against loss, but excluding
endorsement of checks and other instruments in the ordinary course, (iii)
all indebtedness of the type described in clause (i) above secured by any
Lien upon property owned by the Company, even though the Company has not
in any manner become liable for the
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payment of such indebtedness, and (iv) all interest expense accrued but
unpaid, and all prepayment premiums on, or relating to, any of such
indebtedness, including, but not limited to, the obligations arising under
the loan agreements referred to in Schedule 2.2(b);
(xxiii)"NET WORKING CAPITAL" means current assets minus current
liabilities, determined in accordance with generally accepted accounting
principles consistently applied, as reflected on the Closing Date Balance
Sheet, adjusted as necessary so that CURRENT ASSETS shall include only:
cash, cash equivalents, accounts receivable (net of reserves and less the
amounts due from Affiliates/Supply-Line, Inc.), inventory (net of
reserves) and prepaid expenses (less any prepaid pension cost), and
CURRENT LIABILITIES shall include only: accounts payable, accrued wages,
benefits, salaries and commissions, and all other accruals, as of the
Closing Date, including accruals for Taxes (including real estate and
similarly based taxes to the extent allocable to the period ending on the
Closing Date, determined on a per diem basis) that are not yet due and
payable (federal, state and local); PROVIDED, HOWEVER, that Net Working
Capital (A) shall not take into account as a current liability any
accruals for (1) Income Taxes or (2) Franchise Taxes, (B) shall not take
into account as a current asset any refund or other item in respect of
any Income Tax or Franchise Tax, (C) shall not include as a current
liability the current portion of Indebtedness and Capital Lease
Obligations and (D) shall not include as a current liability the
additional vacation accrual reflected in general ledger account #604;
(xxiv)"RELATED DOCUMENTS" means, collectively, the Certificate of
Merger and the Escrow Agreement;
(xxv)"TRANSACTION EXPENSE AMOUNTS" means (i) $1,910,400 payable to
Schroders and (ii) $540,000 payable to Dewey Ballantine LLP in connection
with the transactions contemplated by this Agreement;
(xxvi)"UNUSED EXPENSE AMOUNT" means the Escrow Expense Amount MINUS
amounts required to be paid out to the Shareholder Party Representatives
from the Escrow Expense Account as provided in the Escrow Agreement; and
(xxvii)"WORKING CAPITAL TARGET" means $12,891,500.
Section 1.8. Determination of Adjustments.
(a)__Within 120 calendar days after the Closing Date, the
Parent shall cause the Surviving Corporation to prepare and deliver to
the Shareholder Party Representatives (as representatives of the
Shareholder Parties) (i) the unaudited consolidated balance sheet of the
Company and its subsidiaries as of the close of business on the Closing
Date (the "CLOSING DATE BALANCE SHEET"), which shall present fairly the
consolidated financial condition of the Company as of the close of
business on the Closing Date and which shall be prepared in accordance
with GAAP and on a basis consistent with, and using the same accounting
policies, practices and procedures used in
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preparing the December Balance Sheet (as defined in Section 2.6) to the
extent such policies, practices and procedures are in accordance with GAAP,
and (ii) a statement (the "STATEMENT") setting forth the Net Working Capital
and the Actual CapEx Amount which shall be prepared on a basis consistent
with, and using the same accounting policies, practices and procedures used
in preparing, the Working Capital Target (except with respect to the
inclusion of cash, which was not included in the determination of the Working
Capital Target) and the Closing CapEx Amount. Attached hereto as Schedule
1.8(a)is a PRO FORMA calculation of Net Working Capital, based on the December
Balance Sheet assuming that the Closing Date occurred on December 31,
1999. The parties acknowledge and agree that such Schedule (i) reflects
the general ledger accounts to be included in determining Net Working
Capital (except that the parties acknowledge that the $1,850,000 Note
Receivable referred to therein has been paid and, accordingly, will not
be reflected, as such, as a current asset), (ii) has been calculated on a
basis consistent with, and using the same accounting policies and
procedures used in preparing, the Working Capital Target and (iii)
reflects the manner in which the parties agree that the actual Net
Working Capital as of the close of business on the Closing Date shall be
calculated.
(b)__During the 30 calendar day period following receipt of the
Closing Date Balance Sheet and the Statement by the Shareholder Party
Representatives (and thereafter during the 45 calendar day period
referred to in Section 1.8(c), if applicable) the Shareholder Parties,
Shareholder Party Representatives and their independent auditors shall
have reasonable on site access during normal business hours to the
properties, books, records, schedules, analyses and working papers of the
Parent and the Surviving Corporation and be permitted to review and make
copies reasonably required of the working papers and any schedules,
analyses and other documentation of the Parent, the Surviving Corporation
and their independent auditors relating to the Closing Date Balance Sheet
and the Statement. The Closing Date Balance Sheet and the Statement
shall become final and binding upon the parties on the thirtieth calendar
day following delivery thereof, unless the Shareholder Party
Representatives give written notice of their disagreement with the
Closing Date Balance Sheet and/or the Statement ("NOTICE OF
DISAGREEMENT") to the Parent prior to such date. Any Notice of
Disagreement shall (i) specify in reasonable detail the nature of any
disagreement so asserted, and (ii) only include disagreements based on
mathematical errors or based on the Closing Date Balance Sheet or the
Statement not being prepared in accordance with this Agreement. If a
Notice of Disagreement complying with the preceding sentence is received
by the Parent in a timely manner, then the Closing Date Balance Sheet and
the Statement (as revised in accordance with clause (x) or (y) below)
shall become final and binding upon the parties on the earlier of (x) the
date the Shareholder Parties and the Parent resolve in writing any
differences they have with respect to the matters specified in the Notice
of Disagreement or (y) the date any disputed matters are finally resolved
in writing by the Accounting Firm (as defined below).
(c)__During the 45 calendar day period following the delivery
of a Notice of Disagreement that complies with the preceding paragraph,
the Shareholder Parties and the Parent shall seek in good faith to
resolve in writing any differences which they may have with respect to
the matters specified in the Notice of Disagreement.
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During such period the Parent, the Surviving Corporation and their
representatives shall be permitted to review and make copies reasonably
required of the working papers and any schedules, analyses and any other
documentation of the Shareholder Parties, the Shareholder Party
Representatives and their independent auditors relating to the preparation
of the Notice of Disagreement. If, at the end of such 30-day period, the
Shareholder Parties and the Parent have not so resolved such differences, the
Shareholder Parties and the Parent shall submit to Arthur Andersen or, in
the event for any reason Arthur Andersen is unwilling or unable to act or
the Parent and the Shareholder Party Representatives otherwise agree (it
being understood that no party has any unilateral right to object to the
retention of Arthur Andersen for purposes of this Section 1.8), such
other nationally recognized accounting firm as the Parent and Shareholder
Party Representatives shall mutually designate (the "ACCOUNTING FIRM")
for review and resolution any and all matters which remain in dispute and
which were properly included in the Notice of Disagreement. The
Shareholder Parties and the Parent shall use reasonable efforts to cause
the Accounting Firm to render a decision resolving the matters in dispute
within 30 calendar days following the submission of such matters to the
Accounting Firm. The Closing Date Balance Sheet and the Statement will
be deemed to be as determined by the Accounting Firm. Such determination
(the "ACCOUNTANTS' DETERMINATION") shall be (A) in writing, (B) furnished
to the Shareholder Party Representatives and Parent as soon as
practicable after the items in dispute have been referred to the
Accounting Firm, (C) made in accordance with the provisions of this
Section 1.8 and (D) nonappealable and incontestable by any Shareholder,
the Surviving Corporation, the Parent and each of their respective
Affiliates and successors and not subject to collateral attack for any
reason, absent manifest error. Notwithstanding any of the foregoing to
the contrary, the Parent shall not be prejudiced by the delivery of the
Closing Date Balance Sheet and the Statement and the Shareholder Parties
shall not be prejudiced by the delivery of the Notice of Disagreement and
neither the Parent nor the Shareholder Parties shall be precluded from
raising any issues, objections or adjustments not previously raised at
any time prior to either the Accountant's Determination or the final
determination of the matters contemplated by this Section 1.8. The
Shareholder Parties, the Parent and the Surviving Corporation agree that
judgment may be entered upon the determination of the Accounting Firm in
any court having jurisdiction over the party against which such
determination is to be enforced. Except as specified in the following
sentence, the cost of any arbitration (including the fees and expenses of
the Accounting Firm) pursuant to this Section 1.8 shall be borne by the
Shareholder Parties and the Parent in inverse proportion as they may
prevail on matters resolved by the Accounting Firm, which proportionate
allocations shall also be determined by the Accounting Firm at the time
the determination of the Accounting Firm is rendered on the merits of the
matters submitted. The fees and expenses of the Parent's and Surviving
Corporation's independent auditors incurred in connection with the
preparation of the Closing Date Balance Sheet and the Statement and the
review by them of any Notice of Disagreement shall be borne by the Parent
and the Surviving Corporation, and the fees and expenses of the
Shareholder Parties' independent auditors incurred in connection with any
review by them of the Closing Date Balance Sheet and the Statement shall
be borne by the Shareholders.
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(d)__(i) If the Net Working Capital plus the Estimated Working Capital
Overpayment Amount, if any, is greater than the Working Capital Target (the
amount of such excess being referred to herein as the "UNDERPAYMENT AMOUNT"),
then the Shareholders shall be entitled to receive, as part of the Aggregate
Merger Consideration, the Underpayment Amount and, within five (5)
Business Days following the final determination of the Net Working
Capital, the Surviving Corporation shall pay, or cause to be paid, to the
Shareholders an amount equal to the Underpayment Amount, such payments to
the Shareholders to be made to each Shareholder in accordance with such
Shareholder's Applicable Percentage.
(ii)If the Net Working Capital plus the Estimated Working Capital
Overpayment Amount, if any, is less than the Working Capital Target (the
amount of such shortfall being referred to herein as the "OVERPAYMENT
AMOUNT"), then the Surviving Corporation shall be entitled to receive the
Overpayment Amount and, within five (5) Business Days following the final
determination of the Net Working Capital, the Shareholders shall pay, or
cause to be paid, to the Surviving Corporation the Shareholder's
respective Applicable Percentages of the Overpayment Amount.
(e)__(i)If the CapEx Target less the Estimated CapEx Overpayment
Amount, if any, is greater than the Actual CapEx Amount (the amount of such
excess being referred to herein as the "CAPEX OVERPAYMENT AMOUNT"), then the
Surviving Corporation shall be entitled to receive the CapEx Overpayment Amount
and, within five (5) Business Days following the final determination of
the Actual CapEx Amount, the Shareholders shall pay, or cause to be paid,
to the Surviving Corporation the Shareholder's respective Applicable
Percentages of the CapEx Overpayment Amount.
(ii)If the CapEx Target less the Estimated CapEx Overpayment Amount,
if any, is less than the Actual CapEx Amount (the amount of such
shortfall being referred to herein as the "CAPEX UNDERPAYMENT AMOUNT"),
then the Shareholders shall be entitled to, as part of the Aggregate
Merger Consideration, the CapEx Underpayment Amount and, within five (5)
Business Days following the final determination of the Actual CapEx
Amount, the Surviving Corporation shall pay, or cause to be paid, to the
Shareholders an amount equal to the CapEx Underpayment Amount, such
payments to the Shareholders to be made to each Shareholder in accordance
with such Shareholder's Applicable Percentage.
(f)__If any of the Overpayment Amount and the CapEx Overpayment
Amount, in each case, if any (collectively, the "PARENT ADJUSTMENT
AMOUNTS"), is not satisfied within five (5) Business Days, such Parent
Adjustment Amounts may, at the option of the Parent, to the extent of any
remaining unsatisfied amount, be satisfied out of the Escrow Holdback
Account and Parent the Shareholder Party Representative shall execute and
deliver to the Escrow Agent joint written instructions directing the
Escrow Agent to (i) pay such Parent Adjustment Amounts to the Surviving
Corporation out of the Escrow Holdback Account and (ii) after payment of
any amounts to be paid from the
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Escrow Adjustment Amount Account to the Shareholders as contemplated in
Section 1.8(g), if any, release any funds contained in the Escrow Adjustment
Amount Account to the Surviving Corporation. Within 15 days after the date
the Parent Adjustment Amounts are paid to the Surviving Corporation from the
Escrow Holdback Account pursuant to the immediately preceding sentence, the
Shareholders, in accordance with their Applicable Percentages, shall deliver
to the Escrow Agent an amount equal to the Parent Adjustment Amounts to
replenish the Escrow Holdback Account. Nothing contained in this subparagraph
shall be construed as an election of remedies by Parent and the Surviving
Corporation and the Parent and the Surviving Corporation shall have and
retain all other rights and remedies existing in their favor at law or in
equity for a breach of the provisions of this Section 1.8.
(g)__If any of the Underpayment Amount and the CapEx
Underpayment Amount, in each case, if any (collectively, the "SHAREHOLDER
ADJUSTMENT AMOUNTS"), is not satisfied within five (5) Business Days,
such Shareholder Adjustment Amounts may, at the option of the Shareholder
Party Representatives be satisfied out of the Escrow Adjustment Amount
Account and the Parent and the Shareholder Party Representatives shall
execute and deliver to the Escrow Agent joint written instructions
directing the Escrow Agent to (i) pay such Shareholder Adjustment Amounts
to the Shareholders, such payment to be made to each Shareholder in
accordance with such Shareholder's Applicable Percentage and (ii) release
the balance of the Escrow Adjustment Amount Account, if any, to the
Surviving Corporation. Nothing contained in this subparagraph shall be
construed as an election of remedies by any Shareholder or the
Shareholder Party Representatives and the Shareholders and Shareholder
Party Representatives shall have and retain all other rights and remedies
existing in their favor at law or in equity for breach of the provisions
of this Section 1.8.
(h)__Parent and the Surviving Corporation agree that following
the Closing they shall not take any actions which would affect the
Closing Date Balance Sheet or the Statement with respect to the
accounting books and records of the Company on which the Closing Date
Balance Sheet or the Statement is to be based that are not consistent
with the Company's past practices.
Section 1.9. Payments.
(a)__From time to time, on and after the Closing Date, the
Parent shall make available and pay, or cause to be made available and to
be paid, cash in amounts and at the times necessary for the prompt
payment of all amounts payable to the Shareholders or to be placed into
escrow as provided in this Agreement.
(b)__The Aggregate Merger Consideration shall be paid as
follows:
(i)At the Effective Time, each Shareholder shall become entitled to
receive, upon surrender by such Shareholder of the certificate(s) which
immediately prior to the Effective Time represented the Outstanding
Company Common Stock held by such Shareholder, from the Shareholder
Payments Escrow Account in accordance with Section 1.10(b) and the
applicable provisions
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of the Escrow Agreement, such Shareholder's
Applicable Percentage (based on the certificates so surrendered) of the
Closing Date Payment Amount;
(ii)The Overpayment Amount, the Underpayment Amount, the CapEx
Overpayment Amount, and the CapEx Underpayment Amount, in each case, if
any, shall be paid in accordance with Section 1.8 and the applicable
provisions of the Escrow Agreement;
(iii)The Additional Escrow Amount, if any, shall be paid from the
Escrow Holdback Account in accordance with Section 1.10(a) and the
applicable provisions of the Escrow Agreement;
(iv)The Unused Expense Amount, if any, shall be paid from the Escrow
Expense Account in accordance with Section 1.10(d) and the applicable
provisions of the Escrow Agreement; and
(v)Amounts payable pursuant to Sections 4.11(a)(iii), 4.11(a)(iv),
4.11(b) and 4.11(d) shall be paid in accordance with such Sections,
Section 1.10(e) and the applicable provisions of the Escrow Agreement.
(c)__Any payments to be made to the Shareholders pursuant to
this Article I (including payments payable pursuant to this Article I
contemplated by Section 4.11) shall be made by wire transfer of
immediately available funds to the Escrow Agent for payment to the
Shareholders in accordance with the provisions of the Escrow Agreement or
directly to the Shareholders in the same manner as payments from the
Escrow Agent to the Shareholders as provided in the Escrow Agreement.
(d)__Except as provided in the Escrow Agreement, no interest
will be paid or will accrue on the Closing Date Payment Amount payable
upon the surrender of any certificates representing Outstanding Company
Common Stock. Until surrendered as contemplated by Section 1.9(b) and
the Certificate of Merger, each certificate representing a share of
Outstanding Company Common Stock shall be deemed, at and after the
Effective Time, to represent only the right to receive upon such
surrender cash as contemplated by this Article I, the Certificate of
Merger and the DGCL.
(e)__In the event that (A) the Shareholders owe any amounts or
are obligated to make any payments to the Parent, the Surviving
Corporation or any of their Affiliates under the provisions of Article I
of this Agreement (with respect to any adjustment to the Aggregate Merger
Consideration or otherwise) and (B) the Parent or the Surviving
Corporation owes any amount or is obligated to make any payment to the
Shareholders under the provisions of Article I of this Agreement (with
respect to any adjustment to the Aggregate Merger Consideration or
otherwise), then such amounts shall be netted and payment of such net
amount shall be made by the appropriate party (whether by release of
amounts held in escrow in accordance with this Agreement or otherwise).
(f)__If any certificate which immediately prior to the
Effective Time represented Outstanding Company Common Stock shall have
been lost, stolen or
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destroyed, upon the making of an affidavit of that
fact by the Shareholder claiming such certificate to be lost, stolen or
destroyed and the provision by such Shareholder of such indemnity against
any claim that may be made with respect to such certificate as the
Surviving Corporation may reasonably require, such Shareholder shall be
entitled to receive all payments to which such Shareholder would be
entitled upon the actual surrender of such certificate.
Section 1.10. Escrows.
(a)__The Escrow Holdback Amount shall be placed in a separate
escrow account (the "ESCROW HOLDBACK ACCOUNT"), by wire transfer of
immediately available funds on the Closing Date to the Escrow Holdback
Account. The Escrow Holdback Amount shall be delivered to Old National
Trust Company (the "ESCROW AGENT"), to be held and released by the Escrow
Agent in accordance with the Escrow Agreement in substantially the form
of Exhibit A hereto (the "ESCROW AGREEMENT") to be entered into by the
Surviving Corporation, the Shareholder Parties, the Shareholder Party
Representatives, the Parent and the Escrow Agent on the Closing Date.
The Escrow Agreement shall provide that the Escrow Holdback Amount,
together with net interest and earnings thereon (collectively, the
"ESCROW HOLDBACK FUND"), will be held in escrow until the date that is
sixteen months from the Closing Date, unless otherwise released earlier,
to satisfy (i) any indemnification claims hereunder, as more fully
described in the Escrow Agreement, (ii) any decrease in the Aggregate
Merger Consideration pursuant to Section 1.8(f), 4.11(a)(iii) or 4.11(d),
or (iii) any fees or expenses payable from the Escrow Account as provided
in Section 8.12(a).
(b)__The Closing Date Payment Amount shall be placed in a
separate escrow account (the "SHAREHOLDER PAYMENTS ESCROW ACCOUNT"), by
wire transfer of immediately available funds on the Closing Date to the
Shareholder Payments Escrow Account, to be held, together with net
interest and earnings thereon, by the Escrow Agent and released to
Shareholders in accordance with the Escrow Agreement.
(c)__The Estimated Adjustment Amount, if any, shall be placed
in a separate escrow account (the "ESCROW ADJUSTMENT AMOUNT ACCOUNT"), by
wire transfer of immediately available funds on the Closing Date to the
Escrow Adjustment Amount Account, to be held, together with net interest
and earnings thereon, by the Escrow Agent and released to the
Shareholders or to the Surviving Corporation in accordance with the
provisions of Sections 1.8(f), 1.8(g) and the Escrow Agreement.
(d)__The Escrow Expense Amount shall be placed in a separate
escrow account (the "ESCROW EXPENSE ACCOUNT"), by wire transfer of
immediately available funds on the Closing Date to the Escrow Expense
Account, to be held, together with net interest and earnings thereon, by
the Escrow Agent and released to the Shareholder Party Representatives
and/or the Shareholders in accordance with the provisions of the Escrow
Agreement.
(e)__Amounts from time to time payable pursuant to Sections
4.11(a)(iii), 4.11(a)(iv), 4.11(b) and 4.11(d) shall be placed in a
separate escrow account
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(the "ESCROW TAX ACCOUNT"), by wire transfer of
immediately available funds to the Escrow Tax Account when due, to be
held, together with net interest and earnings thereon, by the Escrow
Agent and released to the Shareholders in accordance with the provisions
of the Escrow Agreement.
Section 1.11. PAYMENT OF INDEBTEDNESS, CAPITAL LEASE OBLIGATIONS AND
TRANSACTION EXPENSE AMOUNTS.
(a)__On the Closing Date, the Parent shall direct the lenders
who will be providing the financing for the transactions contemplated
hereby to deliver to the holders of Indebtedness and Capital Lease
Obligations (subject to Section 1.11(b) below) an amount sufficient to
repay all Indebtedness and Capital Lease Obligations outstanding as of
the Closing Date, with the result that immediately following the Closing
(subject to Section 1.11(b) below) there will be no further monetary
obligations of the Company with respect to any Indebtedness or Capital
Lease Obligations outstanding immediately prior to the Closing. On the
Closing Date, the Company will provide the Parent, Merger Sub and such
lenders with customary pay-off letters from all holders of Indebtedness
and Capital Lease Obligations in form and substance satisfactory to the
Parent, and make arrangements satisfactory to the Parent for such holders
to provide to the Parent recordable form mortgage and lien releases,
canceled notes, trademark and patent assignments and other documents
reasonably requested by the Parent simultaneously with or promptly
following the Closing.
(b)__In the event that the Parent and the Company mutually
agree to not pay off one or more Capital Lease Obligations at the
Closing, then such Capital Lease Obligation(s) shall not be paid off and
the aggregate outstanding principal amount due on such Capital Lease
Obligation(s) as of the Closing Date (exclusive of any prepayment
premiums or penalties) shall be used to reduce the Capital Lease
Obligations Amount and decrease the purchase price and determine the
Closing Date Payment Amount pursuant to the provisions of Section 1.7
hereof.
(c) On the Closing Date, the Parent shall cause the
lenders who will be providing the financing for the transactions
contemplated hereby to pay the Transaction Expense Amounts.
Section 1.12. No Duplication.
Notwithstanding any provision to the contrary contained in this
Agreement, all adjustments to be made in the determination of the
Aggregate Merger Consideration, including the calculation of the
Overpayment Amount, the Underpayment Amount, the CapEx Overpayment
Amount, the CapEx Underpayment Amount and the Additional Escrow Amount,
shall be made without duplication.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE SHAREHOLDER PARTIES
Subject to the terms and conditions of this Agreement (including
Section 4.7), the Company and each of the Shareholder Parties jointly and
severally represent and warrant to the Parent and Merger Sub with respect
to the matters provided for in Sections 2.1(b), 2.2(b), 2.3(a), 2.3(b),
2.4, 2.5(b) and 2.6 through 2.25, and each of the Shareholder Parties
severally (and, but only to the extent contemplated by the proviso to
Section 7.2(a), jointly) represent and warrant to the Parent and Merger
Sub as to such Shareholder Party (and such Shareholder Party's Company
Common Stock) but not (except as contemplated by the proviso to Section
7.2(a)) as to any other Shareholder Party (or any such other Shareholder
Party's Company Common Stock) with respect to the matters provided for in
Sections 2.1(a), 2.2(a), 2.3(c) and 2.5(a), as follows:
Section 2.1. DUE EXECUTION AND DELIVERY, ETC.
(a)__Each Shareholder Party has all necessary power and
authority (corporate or otherwise) to execute and deliver this Agreement
and the Related Documents and to consummate the transactions contemplated
by this Agreement and the Related Documents. The execution, delivery and
performance of this Agreement and the Related Documents by each
Shareholder Party and the consummation by each Shareholder Party of the
transactions contemplated by this Agreement and the Related Documents
have been duly authorized by all necessary action on the part of such
Shareholder Party and no other proceedings on the part of such
Shareholder Party are necessary to authorize this Agreement or the
Related Documents or for such Shareholder to consummate the transactions
contemplated by this Agreement or the Related Documents. This Agreement
and the Related Documents have been duly and validly executed and
delivered by each Shareholder Party and constitute legal, valid and
binding obligations of such Shareholder, enforceable against such
Shareholder Party in accordance with their respective terms, except as
enforcement hereof may be limited by applicable bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors rights in
general, moratorium laws or general principles of equity. If such
Shareholder Party is a trust, such trust is a validly created and
existing trust under applicable state law.
(b)__The Company has all necessary corporate power and
authority to execute and deliver this Agreement and the Related Documents
to which it is a party. The execution, delivery and performance of this
Agreement and the Related Documents by the Company and the consummation
by the Company of the transactions contemplated by this Agreement and the
Related Documents have been duly authorized by all necessary corporate
action on the part of the Company and, except for the approval of this
Agreement and the transactions contemplated herein by shareholders of the
Company in accordance with the DGCL, no other proceedings on the part of
the Company are necessary to authorize this Agreement or the Related
Documents or for the Company to consummate the transactions contemplated
by this Agreement or the Related Documents.
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This Agreement and the Related Documents have been duly and validly executed
and delivered by the Company and, subject to such shareholder approval,
constitute legal, valid and binding obligations of the Company, enforceable
in accordance with their respective terms, except as enforcement hereof may be
limited by applicable bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights in general, moratorium laws or general
principles of equity.
Section 2.2. No Violation.
(a)__Subject to the shareholder approval referred to in Section
2.1(b) and except as set forth on Schedule 2.2(a), neither the execution,
delivery or performance of this Agreement or the Related Documents by any
Shareholder Party nor the consummation by any Shareholder Party of the
transactions contemplated by this Agreement or the Related Documents nor
compliance by any Shareholder Party with any of the provisions hereof or
thereof will (i) conflict with or result in any breach of any provision
of the certificate of incorporation or by-laws (or similar governing
instrument or organizational document) of such Shareholder Party, (ii)
result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or loss of material benefit)
under, any of the terms, conditions or provisions of any note, lease,
license, contract or agreement to which such Shareholder Party is a party
or by which such Shareholder Party may be bound or (iii) violate any
order, writ, injunction, decree, statute, treaty, rule or regulation
applicable to such Shareholder Party.
(b)__Subject to the shareholder approval referred to in Section
2.1(b) and to receipt of consents and/or waivers under the agreements
listed in Schedules 2.2(a) and 2.2 (b), neither the execution and
delivery of this Agreement or the Related Documents by the Shareholders
Parties or the Company nor the consummation by the Shareholder Parties or
the Company of the transactions contemplated by this Agreement or the
Related Documents nor compliance by any Shareholder Party or the Company
with any of the provisions of this Agreement or the Related Documents
will (i) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws (or similar governing instrument
or organizational document) of the Company, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation
or acceleration or loss of material benefit) under, any of the terms,
conditions or provisions of any note, lease, license, contract or
agreement to which the Company is a party or by which the Company may be
bound or (iii) violate any order, writ, injunction, decree, statute,
treaty, rule or regulation applicable to the Company.
Section 2.3. Capital Stock.
(a)__Schedule 2.3(a) sets forth the total number of outstanding
shares of Company Common Stock of the Company and the number and
percentage of shares of Company Common Stock held by each Shareholder.
Such shares constitute all of the issued and outstanding shares of
capital stock of the Company. Each of such shares is
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duly authorized, validly issued, fully paid and nonassessable and free
of preemptive rights.
(b)__Other than pursuant to the Poly-Seal Corporation 1997
Stock Option Plan (the "STOCK OPTION PLAN") attached as Schedule 2.3(b),
there are no options, warrants, rights or agreements or other commitments
obligating the Company to issue or sell any shares of capital stock, or
any security convertible into or exercisable or exchangeable for any such
shares of capital stock. No option granted under the Stock Option Plan
is outstanding other than as set forth in Schedule 2.3(b).
(c)__Except as set forth in Schedule 2.3(c), each of the
Shareholder Parties has, and at the Closing will have, good and valid
title (both of record and beneficially) to the shares of Company Common
Stock held by such Shareholder Party, free and clear of any Liens. There
are no voting trusts, proxies or other agreements restricting the voting,
dividend rights or disposition of the Shares held by any Shareholder
Parties. As used in this Agreement, the term "LIEN" means and includes
security interests, mortgages, lines, pledges, charges, easements,
reservations, restrictions, equities, rights of way, options, rights of
first refusal and all other encumbrances, whether or not relating to the
extension of credit or the borrowing of money.
Section 2.4. ORGANIZATION OF THE COMPANY.
(a)__The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and has all
requisite corporate power and authority to own, lease or operate its
properties and to carry on its business as now being conducted. The
Company is duly qualified or licensed to do business and in good standing
in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
or licensing necessary, except in such jurisdictions where the failure to
be so duly qualified or licensed and in good standing would not have a
Material Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE
EFFECT" means a change or effect or any event, action, occurrence,
condition or omission that could reasonably be expected to result in a
change or effect on the Business or the Company that, in the aggregate
with all other similar changes or effects, is materially adverse to the
business, assets, condition (financial or otherwise) or results of
operations of the Business taken as a whole, but shall not include any
changes or effects relating to or resulting from (i) general economic,
political or market conditions, (ii) changes in any statute, law,
ordinance, regulation, rule, code, order or other requirement or rule of
law (each, a "LAW") or in the interpretation of any Law by any court of
competent jurisdiction or any governmental, regulatory or administrative
authority, agency or commission (a "GOVERNMENTAL ENTITY"), or
(iii) changes in GAAP (as hereinafter defined) affecting the transactions
contemplated by this Agreement or compliance with the terms hereof.
(b)__The Company has had no Subsidiaries since December 31,
1999. Schedule 2.4(b) sets forth a list of all entities which were
Subsidiaries of the Company within the past five years. As used herein,
a "SUBSIDIARY" of an entity means any entity in
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which the specified entity directly or indirectly owns 50% or more of the
general voting interest. Except as listed in Schedule 2.4(b), the Company
does not own, directly or indirectly, any capital stock or other ownership or
participation interest in any entity.
Section 2.5. CONSENTS AND APPROVALS.
(a)__No filing with, and no permit, authorization, consent or
approval of any Governmental Entity is necessary for execution, delivery
or performance by the Shareholder Parties of this Agreement, except (i)
for the filing of the Certificates of Merger, (ii) for the applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR ACT"), or (iii) as a result of facts or
circumstances particular to the Company, Merger Sub or the Parent.
(b)__No filing with, and no permit, authorization, consent or
approval of any Governmental Entity is necessary for execution, delivery
or performance by the Company of this Agreement, except (i) for the
filing of the Certificate of Merger, (ii) for the applicable requirements
of the HSR Act or (iii) as a result of facts or circumstances particular
to the Shareholder Parties, Merger Sub or the Parent.
Section 2.6 Financial Statements.
Attached as Schedule 2.6 are the audited consolidated balance sheet of
the Company and its Subsidiaries as of December 31, 1999 (the "DECEMBER
BALANCE SHEET") and as of December 31, 1998, and the related audited
consolidated statements of operations, stockholders' equity and cash
flows for the years then ended (collectively, the "FINANCIAL
STATEMENTS"). The Financial Statements (i) are in accordance with the
books and records of the Company and (ii) present fairly, in all material
respects, the consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the consolidated results of
operations of the Company and its Subsidiaries for the periods covered
thereby, in conformity with United States generally accepted accounting
principles ("GAAP"), except as described in Schedule 2.6 hereto or in the
notes to the Financial Statements.
Section 2.7. Absence of Certain Changes.
Except as set forth in Schedule 2.7 and except as a result of matters
permitted or required by this Agreement, since December 31, 1999 through
the date of this Agreement (i) the Company has conducted the Business in
the ordinary course consistent with past practice, (ii) the Company has
not taken any action which would have constituted a violation of Section
4.1(d) if Section 4.1(d) had applied since December 31, 1999 (other than
the payment on March 6, 2000 of the ordinary dividend of $0.06 per share
to Shareholders of record at March 3, 2000), (iii) the Company has not
experienced any material damage, destruction, or loss (whether or not
covered by insurance) to its properties, and (iv) the Company has not
suffered any other Material Adverse Effect. None of the Shareholder
Parties shall have any liability for a breach of the representations and
warranties contained in this Section 2.7, if (i) the facts and
circumstances giving rise to such breach are the subject matter of
another representation or warranty set forth in this Article II, (ii)
such other representation or warranty is qualified by notice, knowledge
(including Knowledge of the Company or Best Knowledge of the Company),
materiality (including Material Adverse Effect) or such other
qualification as is contained in such other representation or warranty,
and (iii)
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such facts and circumstances would not result in a breach of
such other representation or warranty as qualified.
Section 2.8. Absence of Undisclosed Liabilities.
Except as set forth in Schedule 2.8, other than with respect to Taxes
(which are addressed in Section 2.15), and except as a result of matters
permitted or required by this Agreement, as of the date of this
Agreement, the Company has no Liabilities (as defined below) of a type
required to be reflected on a balance sheet prepared in accordance with
GAAP, except (a) Liabilities reflected on the Financial Statements
(including any notes thereto) or in the Schedules hereto, (b) Liabilities
incurred after December 31, 1999 in the ordinary course of business
(other than any Liability arising from breach of contract, breach of
warranty, tort, infringement or violation of any law or any action, suit
or other legal proceeding), and (c) Liabilities (other than any Liability
arising from breach of contract) under contracts which have arisen in the
ordinary cause of business or under any contract disclosed under Section
2.16. Other than as reflected in the Schedules hereto, there are no loss
contingencies (as such term is used in Financial Accounting Standards
Board in March 1975) of or affecting the Company which are not adequately
provided for or disclosed on the balance sheet of the Company and its
Subsidiaries as of December 31, 1999 included in the Financial Statements
(the "December Balance Sheet") (or the notes thereto), or the books and
records of the Company for subsequent periods, in each case to the extent
required by GAAP. None of the Shareholder Parties shall have any
liability for a breach of the representations and warranties contained in
this Section 2.8, if (i) the facts and circumstances giving rise to such
breach are the subject matter of another representation or warranty set
forth in this Article II, (ii) such other representation or warranty is
qualified by notice, knowledge (including Knowledge of the Company or
Best Knowledge of the Company) materiality (including Material Adverse
Effect) or such other qualification as is contained in such other
representation or warranty and (iii) such facts and circumstances would
not result in a breach of such other representation or warranty as
qualified.
As used herein, "LIABILITY" means any liability or obligation,
whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated and whether due or to
become due, regardless of when asserted.
Section 2.9. Litigation.
Except as set forth in Schedule 2.9, other than with respect to Taxes
(which are addressed in Section 2.15), as of the date of this Agreement,
there is no suit (in law or equity), claim, action, proceeding or
investigation pending against the Company or any Subsidiary before any
Governmental Entity or, to the Knowledge of the Company, threatened
against the Company or any Subsidiary. Neither the Company nor any
Subsidiary is subject to, or in default under the terms of, any judgment,
order or decree of any Governmental Entity specifically applicable to the
Company or any Subsidiary.
Section 2.10. Compliance with Applicable Law, Permits.
Schedule 2.10 hereto sets forth a true and complete list of all
material permits, licenses, variances, exemptions, orders, approvals and
authorizations of all Governmental Entities held by the Company.
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The Company possesses all material permits, licenses, variances, exemptions,
orders, approvals and authorizations of all Governmental Entities
necessary for the lawful conduct of the Business substantially as it is
currently conducted and (b) the Business is being conducted in compliance
in all material respects with all applicable laws. This Section 2.10
does not relate to matters with respect to (i) environmental matters,
which are the subject of Section 2.11, (ii) benefits and employment
matters, which are the subject of Section 2.13 and (iii) Taxes, which are
the subject of Section 2.15.
Section 2.11. ENVIRONMENTAL MATTERS.
(a)__Except as set forth in Schedule 2.11, (i) the Company and
its Subsidiaries have complied and are in compliance with all applicable
Environmental Laws (as defined below) in all material respects, (ii) no
Hazardous Substances (as defined below) are present at or have been
disposed on or released or discharged onto, under or from any of the
properties currently or formerly owned, leased or operated by the Company
or its Subsidiaries (including soils, groundwater, surface water,
buildings or other structures) in violation of or so as to give rise to
any Liability (contingent or otherwise) or any investigatory, corrective
or remedial obligation of the Company under any Environmental Law, (iii)
the Company and its Subsidiaries have not disposed of or arranged for the
disposal of any Hazardous Substances at any property in violation of or
so as to give rise to any Liability (contingent or otherwise) or any
investigatory, corrective or remedial obligation of the Company under any
Environmental Law, (iv) neither the Company nor the Shareholder Parties
have received any written notice, demand, letter request for information
or claim alleging that the Company is or may be in violation of or liable
or potentially responsible under any Environmental Law, (v) there are no
underground storage tanks at any facility or property owned or operated
by the Company, (vi) neither the Company nor any of its Subsidiaries has
expressly assumed or undertaken any liability, including, without
limitation, any obligation for corrective or remedial action, of any
other person relating to Environmental Law; and (vii) the Company has
made available to Parent all environmental audits, reports and other
material environmental documents relating to the Company's, its
Subsidiaries, or their respective Affiliates or predecessors' past or
current properties, facilities or operations which are in its possession
or under its reasonable control.
(b)__As used herein, the term "ENVIRONMENTAL LAW" means any
international, national, regional, federal, state, municipal or local
law, regulation, order, judgement, decree or common law or other
requirements of any Governmental Entity, as in effect prior to, on or
after the date hereof relating to the protection of the environment
(including, without limitation, natural resources) or workplace or human
health or safety, including the manufacture, introduction into commerce,
export, import, handling, use, presence, disposal or release of any
Hazardous Substance.
(c)__As used herein, the term "HAZARDOUS SUBSTANCE" means any
pollutant, contaminant, hazardous waste, acutely hazardous waste,
radioactive waste, infectious waste, toxic substance or hazardous
substance or other material, substance or waste with respect to which
liability or standards of conduct may be imposed pursuant to any
Environmental Law.
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(d)__The Shareholder Parties' and the Company's representations
and warranties regarding environmental matters are limited to those
contained in this Section 2.11.
Section 2.12. INTELLECTUAL PROPERTY.
(a)__Schedule 2.12 lists or describes all patents, registered
copyrights and trademarks and applications therefor and material
unregistered trademarks used in the conduct of the Business as of the
date hereof and all material license agreements pursuant to which the
Company is licensee in respect of any patents, trademarks or other
Intellectual Property (as defined below) used in the conduct of the
Business as of the date hereof. The Company owns or has the right to use
all Intellectual Property as is necessary to conduct its business
substantially in the same manner as currently conducted; none of the
Shareholder Parties, the Company or any Subsidiary has received written
notice from any third party regarding any actual or potential
infringement by the Company or any Subsidiary of any Intellectual
Property of any third party or written notice from any third party
regarding any assertion or claim challenging the validity of any such
Intellectual Property; the current conduct of the Business does not, to
the Knowledge of the Company, conflict with any Intellectual Property of
any third party; and, to the Knowledge of the Company, no third party is
infringing the Intellectual Property of the Company.
(b)__As used herein, the term "INTELLECTUAL PROPERTY" includes
all patents, registered and unregistered trademarks, trade names,
copyrights, service marks and registrations and applications therefor,
know-how, trade secrets, proprietary processes and formulae, confidential
information, franchises, licenses, inventions, instructions, marketing
materials, trade dress, logos and designs and all available documentation
and media constituting, describing or relating to the foregoing,
including, without limitation, manuals, memoranda and records.
(c)__The Shareholder Parties' representations and warranties
regarding Intellectual Property and Intellectual Property matters are
limited to those contained in this Section 2.12.
Section 2.13. EMPLOYEE BENEFIT PLANS.
(a)__Schedule 2.13(a) contains a complete list of all employee
benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all employment and
severance agreements, and all bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance and
other similar employee benefit plans, programs and agreements, in each
case that is sponsored, maintained, contributed to or required to be
contributed to by the Company, or to which the Company is a party for the
benefit of any current or former employee of the Company (together, the
"EMPLOYEE PLANS").
(b)__The Shareholder Parties or the Company have delivered or
made available to the Parent accurate and complete copies of the
following with respect to the
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Employee Plans, to the extent applicable:
(i) plan documents and amendments thereto, (ii) summary plan
descriptions, (iii) trust documents, insurance contracts and other
funding instruments, (iv) the most recently prepared financial statement
and actuarial report, (v) the most recently filed annual report and (vi)
determination letters received from the Internal Revenue Service.
(c)__All Employee Plans have been administered and operated in
compliance in all material respects with the requirements of ERISA, the
Internal Revenue Code of 1986, as amended (the "CODE") and all other
applicable Laws. Each Employee Plan that is intended to be qualified
under Section 401(a) of the Code has received a determination letter from
the Internal Revenue Service stating that it is so qualified, and such
determination letter has not been revoked. There have been no
"prohibited transactions" within the meaning of Section 4975 of the Code
or Section 406 of ERISA involving any of the Employee Plans that could
subject the Company to any material penalties or taxes.
(d)__Except as set forth on Schedule 2.13(d):
(i)The Company has made all contributions under the Employee Plans
required to be made under the terms of such plans and applicable law,
including the payment of premiums required to be made to the PBGC, other
insurance premiums and in the case of all Employee Plans that are pension
plans within the meaning of Section 3(2) of ERISA, all employee
contributions have been remitted to the appropriate trusts or accounts on
a timely basis.
(ii)Each Employee Plan that is subject to the minimum funding
requirements of Section 412 of the Code is in compliance with such
requirements, and no Employee Plan has a minimum funding variance or
waiver under Section 412(d) of the Code.
(iii)Neither the Company, its subsidiaries, nor any trade or
business that, together with the Company or any of its subsidiaries,
would be deemed a "single employer" under Section 4001(b) of ERISA (an
"ERISA AFFILIATE") has any liability under Title IV of ERISA including,
without limitation, with respect to previously terminated Employee Plans
(other than for the payment of premiums to the Pension Benefit Guaranty
Corporation) and, to the Best Knowledge of the Company, no condition
exists that presents a material risk to the Company of incurring any
liability under such Title.
(iv)Neither the Company nor any of its subsidiaries participates in
any multiemployer plan (as defined in Section 3(37) of ERISA), nor has
the Company, its subsidiaries or any ERISA Affiliate incurred any
withdrawal liability to a multiemployer plan that has not been satisfied
in full.
(e)__Except as set forth on Schedule 2.13(e), no actual or, to
the Knowledge of the Company, threatened disputes, lawsuits, claims
(other than routine claims for benefits), investigations or audits by any
person or Governmental Entity have
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been filed or, to the Knowledge of the Company, are pending with respect to
the Employee Plans or the Company in connection with any Employee Plan or the
fiduciaries or administrators thereof.
(f)__Except as set forth in Schedule 2.13(f), there is no
contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any
amount that would not be deductible by the Company by reason of Section
280G of the Code.
(g)__No "reportable event" (within the meaning of Section 4043
of ERISA) has occurred with respect to any Employee Plan, within the last
three years, for which the notice requirement has not been waived under
Section 4043 of ERISA or the regulations thereunder, other than as a
result of the transactions contemplated herein.
(h)__The Company and its ERISA Affiliates have neither made nor
agreed to make, nor are required to make (other than to bring any
Employee Plan into compliance with ERISA or the Code) any changes in
benefits that would substantially increase the costs of maintaining any
of the Employee Plans.
(i)__No Employee Plan currently maintained by the Company is or
was a "multiple employer plan" (within the meaning of section 413 of the
Code).
(j)__To the Knowledge of the Company, with respect to any
Employee Plan, there has not been any act or omission by the Company or
any of its ERISA Affiliates that has given rise to or could be reasonably
expected to give rise to any fines, penalties or related charges under
ERISA or the Code for which the Company could be liable, except as would
not be reasonably likely to have a Material Adverse Effect.
(k)__The present value of all accrued benefits (whether or not
vested) under each Employee Plan subject to Title IV of ERISA do not
exceed, and will not exceed, as of the Closing Date, the then current
fair market value of the assets of such Employee Plan (for purposes of
determining the present value of accrued benefits under the Employee
Plans, the actuarial assumptions and methods used under each Employee
Plan for the most recent plan valuation date shall be used).
Section 2.14. Employees and Labor Relations.
Except as set forth on Schedule 2.14, there is (i) no unfair labor
practice, grievance or labor arbitration proceeding pending, or to the
Best Knowledge of the Company, threatened against the Company relating to
the Business, (ii) no strike, labor dispute, slowdown, work stoppage,
picketing, boycott or other labor dispute pending or threatened against
the Business (other than grievances in the ordinary course) and (iii) no
dispute as to union representational status with regard to the employees
of the Business. To the Best Knowledge of the Company, the Company is in
compliance in all material respects with all applicable Laws regarding
employment, employment practices, terms and conditions of employment, the
retention of independent contractors and leased employees, equal
employment opportunity, collective bargaining, wages, hours and
withholding.
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Section 2.15. TAXES.
(a)__Except as set forth in Schedule 2.15, (i) the Company and
each Subsidiary has timely filed (taking into account extensions) all Tax
Returns (as hereinafter defined) required to have been filed under
applicable Laws and such Tax Returns were true, correct and complete in
all material respects; (ii) all Taxes (as hereinafter defined),
including, without limitation, any Taxes shown to be due on such Tax
Returns, that are required to have been paid have been timely paid; (iii)
no deficiency for any amount of Tax has been asserted or assessed in
writing by a taxing authority against the Company or any Subsidiary that
has not been settled or paid; (iv) neither the Company nor any Subsidiary
has requested an extension of time in which to file a Tax Return
otherwise currently due and neither the Company nor any Subsidiary has
consented to extend the time in which any Tax may be assessed or
collected by any taxing authority; (v) there are no audits, examinations,
lawsuits or other administrative or judicial proceedings relating to
Taxes of the Company or any Subsidiary and neither the Company nor any
Subsidiary has been notified in writing by any taxing authority (x) that
any issues have been raised with respect to any Tax Return, or (y) that
they intend to perform an audit with respect to any Tax Return; and (vi)
the Company and each Subsidiary have complied with all applicable Laws
relating to withholding and payment of Taxes.
(b)__Schedule 2.15 lists all income Tax Returns filed with
respect to the Company and any Subsidiaries for tax periods ended on or
after December 31, 1996.
(c)__Except as set forth in Schedule 2.15, (i) the Company is
not and has never been a party to any tax sharing, tax indemnity or
similar agreements; (ii) the Company has no liability for Taxes of any
other Person under Treasury regulations section 1.1502-6, as a transferee
or successor, by contract or otherwise; and (iii) there are no requests
for rulings or determinations relating to the Company pending with any
taxing authority;
(d)__Neither the Company nor any of its Subsidiaries (A) is
treated as or has made an election to be treated as a "consenting
corporation" under Section 341(f) of the Code or (B) is, or has been, a
"personal holding company" within the meaning of Section 542 of the Code;
(e)__Except as set forth in Schedule 2.15, neither the Company
nor any of its Subsidiaries has agreed to or has been required to make
any adjustments or changes to its accounting methods that would give rise
to an adjustment pursuant to Section 481 of the Code either on, before or
after the Closing Date, and the Internal Revenue Service has not proposed
in writing any such adjustments or changes in the accounting methods of
the Company or any of its Subsidiaries;
(f)__Except as set forth in Schedule 2.15, no written claim has
ever been made by any taxing authority in a jurisdiction in which the
Company and its Subsidiaries do not file Tax Returns that the Company is
or may be subject to taxation by that jurisdiction; and
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(g)__For the purposes hereof, (i) the term "TAX" means any
income, gross receipts, profits, capital stock, franchise, unemployment,
property, ad valorem, stamp, excise, occupation, sales, use, transfer,
import, export, value added, employment, social security or other similar
tax imposed by any domestic or foreign taxing authority, and any interest
or penalties in respect of the foregoing; and (ii) the term "TAX RETURN"
means any report, statement, declaration or document with respect to
Taxes.
Section 2.16. MATERIAL CONTRACTS.
(a)__Schedule 2.16 lists the following notes, leases, licenses,
contracts or binding agreements (as used in this Section 2.16,
"CONTRACTS") to which the Company, as of the date of this Agreement, is a
party or is bound:
(i)each contract relating to the borrowing of money, guarantee of
obligations of others or to the mortgaging, pledging or otherwise placing
an encumbrance or Lien on any asset or group of assets of the Company or
any Subsidiary in each case in an amount exceeding $50,000 and which is
not reflected in the December Balance Sheet;
(ii)each contract that materially limits the freedom of the Company
to compete in its lines of business or with any person or in any
geographical area or otherwise to conduct its business as presently
conducted;
(iii)each collective bargaining or union contract;
(iv)each contract for the purchase of capital equipment, materials
or supplies, except those contracts terminable without material penalty
on 30 or fewer days' notice and those involving payment of less than
$100,000 per year;
(v)each contract for the acquisition or disposition of material
assets, other than in the ordinary course of business;
(vi)each contract relating to the leasing of material real property;
(vii)each contract with any health maintenance organization or other
healthcare provider involving the annual payment of at least $25,000;
(viii)each contract which involves the receipt or payment of more
than $50,000 per year, except for customer purchase orders and raw
material purchase orders and those contracts terminable without material
penalty on 30 or fewer days' notice;
(ix)each employment agreement or other contract for the employment
of any officer, director or employee or other person, whether on a full-
time, part-time, consulting or other basis;
(x)each contract or agreement with any current officer, director,
"affiliate" or "associate" (as such terms are defined in Rule 12b-2 under
the
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Securities Exchange Act of 1934, as amended) of the Company not
otherwise listed in response to any other clause of this Section 2.16(a);
(xi)each contract for the lending or investing of funds of the
Company (other than funds under Employee Plans); and
(xii)each other contract not in the ordinary course of business
which could reasonably be determined to be material to the Business.
(b)__The Company is not (and, to the Knowledge of the Company,
nor is any other party) in breach or default in any material respect, and
no event has occurred which would constitute (with or without due notice
or lapse of time or both) a breach or default in any material respect, or
give rise to any right of termination, cancellation or acceleration,
under any contract listed in Schedule 2.16 and each such contract is a
valid and binding obligation of the Company and, to the Knowledge of the
Company, each other party thereto, enforceable against such persons in
accordance with its terms.
Section 2.17. Suppliers, Distributors and Customers.
Schedule 2.17 sets forth a listing of each of the entities
which are, calculated on the basis of payments made by or payments
received by the Company for the 12-month period ended December 31, 1999,
(A) the five largest (by dollar volume) raw material suppliers of the
Company, (B) the five largest (by dollar volume) distributors of the
Company and (C) the five largest (by dollar volume) customers of the
Company. Except as set forth in Schedule 2.17, since the date of the
December Balance Sheet, no supplier, distributor or customer that is
listed in Schedule 2.17 has stopped or materially decreased, or has given
notice to the Company that it will stop or materially decrease, the rate
of business done with the Company, whether as a result of the
transactions contemplated hereby or otherwise (it being understood that
no assurance is given that any such supplier, distributor or customer
will continue to do business with the Company or that the rate of such
business will not decrease). The Company believes that its relationship
with the customers listed in Schedule 2.17 is generally good and, except
as indicated in Schedule 2.17, that no material disagreement or dispute
exists between the Company and any such customer.
Section 2.18. Assets Necessary to Business.
The assets and properties of the Company include all of the
assets and properties necessary for the conduct of the Business in
substantially the manner as it is currently conducted.
Section 2.19. Tangible Personal Property.
Except (a) with respect to the Owned Real Property and the Leased
Real Property (which are the subject of Section 2.20), (b) as listed or
described on Schedule 2.19, and (c) for assets sold in the ordinary
course of business since the date of the December Balance Sheet, the
Company owns all material tangible assets reflected on the December
Balance Sheet as owned by the Company or thereafter purchased or acquired
by the Company, free and clear of all Liens except for (i) Liens that are
listed or described on Schedule 2.19, (ii) mechanics', carriers',
workers', repairmen's, landlord's, warehouse or other Liens arising or
incurred in the ordinary course of business of the Business securing
amounts that are not delinquent, (iii) Liens for taxes, assessments and
other similar governmental charges which are not due and
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payable or which may thereafter be paid without penalty or which are
listed or described on any Schedule, and (iv) Liens that arise under zoning,
land use and other similar Laws and other imperfections of title or
encumbrances, if any, which do not materially affect the marketability of
the property subject thereto and do not materially impair the use of the
property subject thereto in the Business as presently conducted. (The items
referred to in clauses (i) through (iv) of the immediately preceding
sentence being "PERMITTED LIENS.")
Section 2.20. Real Property.
Schedule 2.20 lists all real property owned in fee by the Company (the
"OWNED REAL PROPERTY") or leased by the Company (the "LEASED REAL
PROPERTY" and, together with the Owned Real Property, collectively, the
"REAL PROPERTY").
(a)__The Company has title to the Owned Real Property and title
to the leasehold interests in the Leased Real Property (subject to the
terms of the applicable leases, subleases and related instruments
governing its interests therein, as listed on Schedule 2.20), free and
clear of all Liens other than (i) Liens listed or described on Schedule
2.20, (ii) Permitted Liens, and (iii) easements, covenants, rights-of-way
and other encumbrances or restrictions, whether recorded or referred to
in an applicable lease or unrecorded, which do not materially impair the
continued use of the property subject thereto in the Business as
presently conducted. The leases and subleases related to the Leased Real
Property are valid and subsisting leases or subleases which are in full
force and effect.
(b)__With respect to the Real Property, except as set forth on
Schedule 2.20:
(i)no portion of any Owned Real Property and, to the Best Knowledge
of the Company, no portion of any Leased Real Property is subject to any
pending condemnation proceeding or proceeding by any public or quasi-
public authority and there is no threatened condemnation or proceeding
with respect thereto;
(ii)the Company is the owner and holder of all the leasehold estates
purported to be granted by the leases relating to the Leased Real
Property and each lease is in full force and effect and constitutes a
valid and binding obligation of the Company;
(iii)no notice of any increase in the assessed valuation of any
Owned Real Property and no notice of any contemplated special assessment
in respect of any Owned Real Property has been received by the Company
since December 31, 1999;
(iv)there are no contracts, written or oral, to which the Company is
a party, granting to any party or parties the right of use or occupancy
of any portion of the parcels of the Real Property; and
(v)there are no parties (other than the Company or their lessees
disclosed pursuant to paragraph (iii) above) in possession of the Real
Property.
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Section 2.21. Insurance.
Schedule 2.21 sets forth a true and complete list of all policies of
insurance held or maintained by the Company (specifying the insurer,
amount of coverage, type of insurance, policy number and any pending
claims thereunder). All such insurance policies are in full force and
effect and the Company has not received any notice of cancellation with
respect thereto. The Company has maintained such or similar types of
insurance coverage at all times during the last three years. With
respect to each policy of insurance listed on Schedule 2.21: (i) all
premiums due through the date of this Agreement with respect thereto are
currently paid and are not subject to adjustment other than as a result
of normal policy year audits, and, to the Knowledge of the Company, no
Person is in default in any respect with respect to its obligations under
any such policy, and to the Best Knowledge of the Company, no basis
exists that would give any insurer under any such policy the right to
cancel or unilaterally reduce or limit the stated coverages contained in
such policy or relieve the insurer under any such policy of its
obligations to satisfy in full any claim thereunder and (ii) the Company
has not received any notice that such policy has been or shall be
canceled or terminated or will not be renewed on substantially the same
terms as are now in effect or the premium on such policy shall be
materially increased on the renewal thereof.
Section 2.22. Related Party Transactions.
(a)__Except for (i) arrangements or relationships contemplated
by this Agreement, (ii) arrangements or relationships between the Company
and Shareholder Parties who are or were employees, officers or directors
of the Company pursuant to contracts, agreements and Employee Plans
referred to herein (including the Stock Option Plan) or listed in any of
the Schedules hereto, (iii) service by employees in such capacity in the
ordinary course of business, (iv) service by certain of the Shareholder
Parties as officers of the Company and/or on the Board of Directors of
the Company, and (v) indebtedness to the Company of Michael (and Susanne)
deMilt in the principal amount of $42,359.47 (the "DEMILT RECEIVABLE")
and of William Herdrich in the principal amount of $206,025.33 (the
"HERDRICH RECEIVABLE"), no employee, officer, director or Shareholder or
any person controlled by, controlling or under common control with, or
related by blood or marriage to, any employee, officer, director or
Shareholder (each an "AFFILIATE") has engaged or been involved in any
material business arrangement or relationship with the Company within the
last 12 months and none of employees, officers, directors or Shareholders
of the Company or any of their respective Affiliates owns any material
asset, tangible or intangible, which is used in the business of the
Company.
(b)__Except as set forth on Schedule 2.22, there are no
vehicles, boats, aircraft, apartments or other residential or
recreational properties or facilities owned or operated by the Company
for executive, administrative or sales purposes or any social club
memberships owned or paid for by the Company or any Subsidiary.
Section 2.23. Accounts and Notes Receivable.
All accounts receivable and notes receivable owing to the Company
represent valid and enforceable claims arising from bona fide
transactions made in the ordinary course of business. Except as set
forth on Schedule 2.23, as of May 1, 2000, there is (i) no account debtor
or note debtor delinquent
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in its payment by more than 90 days, (ii) no
account debtor or note debtor has refused or, to the Knowledge of the
Company, threatened to refuse to pay its obligations for any reason,
(iii) to the Knowledge of the Company, no account debtor or note debtor
that is insolvent or bankrupt and (iv) no account receivable or note
receivable pledged to any third party by the Company.
Section 2.24. Disclosure.
The representations and warranties of the Company and the
Shareholder Parties contained in this Agreement, including the Schedules
hereto, do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make any such representation or
warranty, in light of the circumstances under which it is made, not
misleading.
Section 2.25. Brokers.
No broker, investment banker, financial advisor or other person,
other than Schroder & Co. Inc. ("SCHRODERS"), the fees and expenses of
which are the obligation of the Company and, subject to the provisions of
Section 8.12, will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of any Shareholder Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB
Subject to the terms and conditions of this Agreement, the Parent
and Merger Sub, jointly and separately, represent and warrant to the
Company and the Shareholders as follows:
Section 3.1. Organization and Authority of Parent and Merger Sub.
Each of the Parent and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all necessary corporate power
and authority to execute and deliver this Agreement and the Related
Documents and to consummate the transactions contemplated by this
Agreement and the Related Documents. The execution, delivery and
performance of this Agreement and the Related Documents by each of the
Parent and Merger Sub and the consummation by each of the Parent and
Merger Sub of the transactions contemplated by this Agreement and the
Related Documents have been duly authorized by all necessary corporate
action on the part of the Parent and Merger Sub and no other corporate
proceedings on the part of either the Parent or Merger Sub are necessary
to authorize this Agreement or the Related Documents or for the Parent or
Merger Sub to consummate the transactions contemplated by this Agreement
or the Related Documents. This Agreement and the Related Documents have
been duly and validly executed and delivered by each of the Parent and
Merger Sub and constitute legal, valid and binding obligations of each of
the Parent and Merger Sub, enforceable against each of the Parent and
Merger Sub in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
or other similar laws affecting the enforcement of creditors rights in
general, moratorium laws or general principles of equity.
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Section 3.2. No Violation.
Neither the execution, delivery or performance of this Agreement
or the Related Documents by the Parent or Merger Sub nor the consummation
by the Parent or Merger Sub of the transactions contemplated by this
Agreement or the Related Documents nor compliance by the Parent or Merger
Sub with any of the provisions hereof or thereof will (i) conflict with
or result in any breach of any provision of the certificates of
incorporation or by-laws (or similar governing instrument or
organizational document) of the Parent or Merger Sub, (ii) result in a
violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, lease, license contract or
agreement to which the Parent or Merger Sub is a party or by which the
Parent or Merger Sub may be bound or (iii) violate any order, writ,
injunction, decree, statute, treaty, rule or regulation applicable to the
Parent or Merger Sub.
Section 3.3. Consents and Approvals.
No filing with, and no permit, authorization, consent or approval
of, any Governmental Entity, is necessary for execution, delivery or
performance by the Parent or Merger Sub of this Agreement, except (i) for
the filing of the Certificate of Merger, (ii) for the applicable
requirements of the HSR Act, or (iii) as a result of facts or
circumstances particular to the Shareholder Parties or the Company.
Section 3.4. Investment.
Parent is acquiring the capital stock of the Surviving
Corporation solely for the purpose of investment and not with a view to
any resale or distribution thereof in violation of any applicable
securities Law.
Section 3.5. Legal Proceedings.
There is no suit, claim, action, proceeding or investigation
pending, or to the knowledge of the Parent or Merger Sub, threatened
against the Parent or Merger Sub affecting, or which may affect, the
Parent's or Merger Sub's ability to perform its obligations under this
Agreement.
Section 3.6. Solvency, Etc.
Neither the Parent nor Merger Sub is, and after giving
effect to the financing obligations undertaken in connection with this
Agreement and to the transactions contemplated hereby, including the
payment of the Aggregate Merger Consideration, none of the Parent, Merger
Sub or the Surviving Corporation will be, insolvent, left with
unreasonably small or impaired capital or indebted beyond its ability to
pay such debts as they mature.
Section 3.7. Brokers.
No broker, investment banker, financial advisor or other person
is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on
behalf of the Parent or Merger Sub or any Subsidiary or Affiliate of the
Parent or Merger Sub.
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ARTICLE IV
COVENANTS
Section 4.1. CONDUCT OF THE BUSINESS.
(a)__During the period from the date hereof to the Closing, the
Company shall, except as otherwise expressly provided in this Agreement,
operate only in the ordinary course of business, consistent with past
custom and practice (including the collection of receivables, the payment
of payables and the maintenance of supplies). The Company shall use all
commercially reasonable efforts to preserve intact the present
organization of the Business, keep available the services of officers and
directors, and preserve the Company's relationships with customers,
suppliers and others having significant business dealings with the
Business.
(b)__During the period from the date hereof to the Closing, the
Company shall use commercially reasonable efforts to maintain the assets
of the Company in customary repair, order and condition, maintain
insurance reasonably comparable to that in effect on the date of the
December Balance Sheet, replace in accordance with past practice
inoperable or worn out assets with assets of comparable quality and, in
the event of a casualty, loss or damage to any of such assets or
properties prior to the Closing Date for which the Company is insured or
the condemnation of any assets or properties, either repair or replace
such assets or property or, if the Parent or Merger Sub agrees, cause the
Company or such Subsidiary to retain such insurance or condemnation
proceeds.
(c)__The Company will promptly inform the Parent in writing of
any variances from the representations and warranties contained in
Section 2 of which the Company becomes aware between the date hereof and
the Closing Date.
(d)__Without limiting the generality of the foregoing, and
except as set forth in Schedule 4.1 or as otherwise expressly provided in
this Agreement, from the date of this Agreement to the Closing, the
Company shall not, without the prior written consent of the Parent (which
consent shall not be unreasonably withheld or delayed):
(i)amend or propose to amend its certificate of incorporation or by-
laws (or other similar organizational documents);
(ii)except for the issuance of Company Common Stock upon the
exercise of options granted under the Stock Option Plan, issue, deliver,
pledge, encumber or sell, or authorize or propose the issuance, delivery,
pledge, encumbrance or sale of any shares of capital stock of the
Company, or any securities convertible into, or exchangeable for, any
such shares, or rights, warrants or options to acquire any such shares of
capital stock or other convertible securities or propose any change in
its equity capitalization;
(iii)other than as contemplated in Section 4.4, (w) make any payment
directly or indirectly to any Shareholder other than in such
Shareholder's capacity
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as an employee, officer or director of the
Company, (x) declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock, (y) redeem, repurchase or
otherwise acquire any of its securities, other than as contemplated in
Section 4.4, or (z) split, combine or reclassify any of its capital
stock;
(iv)acquire or dispose of any material assets, securities, rights or
other properties or interests unless in the ordinary course of business
consistent with past practice;
(v)other than in the ordinary course of business or to fund any
payment to be made as contemplated in Section 4.4, (x) incur or assume
any material indebtedness or issue or sell any debt securities or rights
to acquire any debt securities, (y) assume, guarantee, endorse or
otherwise become liable for the obligations of any other person or (z)
make any loans, advances or capital contributions to, or investments in,
any other person;
(vi)enter into, adopt, amend or terminate any employee benefit plan,
increase the compensation or fringe benefits of any officer or employee
of the Company or pay any benefit not required by any existing plan,
except in the ordinary course of business or as may be required by
applicable law or existing contractual arrangements or as necessary to
carry out this Agreement (including Section 4.4);
(vii)enter into or amend any employment or severance agreement with
any employee, adopt, enter into or amend any collective bargaining
agreement, except in the ordinary course of business or as may be
required by applicable Law or existing contractual arrangements;
(viii)enter into, amend, accelerate or terminate any contract except
in the ordinary course of business or as contemplated by this Agreement;
(ix)engage in any transactions with Affiliates other than in the
ordinary course of business;
(x)make any Tax elections or settle or compromise any Tax Liability;
(xi)other than as contemplated under this Agreement and the Related
Documents, create, establish or acquire any Subsidiary or acquire or
agree to acquire by merging or consolidating with, or by purchasing any
material portion of the capital stock or assets of, or by any other
manner, any business or any corporation, partnership, association or
other business organization or division thereof;
(xii)delay or postpone the payment of accounts payable and other
obligations and liabilities or accelerate the collection of accounts
receivable, other than in the ordinary course of business consistent with
past custom and practice; or
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(xiii)other than in the ordinary course of business, take or cause
to be taken any action which is designed or intended to have the effect
of discouraging customers, employees, suppliers, lessors and other
associates of the Company from maintaining the same business
relationships with the Company after the date of this Agreement as were
maintained with the Company prior to the date of this Agreement.
Section 4.2. Access to Information by Parent.
(a)__Prior to the Closing, the Company shall, upon reasonable
notice, afford to the officers, employees, accountants, counsel and other
representatives of the Parent (i) reasonable access during normal
business hours to executive personnel of the Company and to all
properties, books, records (including tax returns filed and those in
preparation) of the Company relating to the Business, and furnish
promptly to the Parent all information concerning the business,
properties and personnel of the Business as the Parent may reasonably
request, (ii) full access to the audit work papers and other records of
the independent certified public accountants of the Company, (iii) the
opportunity to review such financial and operating data and other
information with respect to the Business as the Parent or Merger Sub may
from time to time reasonably request and (iv) access to the customers of
the Company under mutually agreeable circumstances. All such information
shall be kept confidential pursuant to the Confidentiality Agreement
dated September 29, 1999 between the Parent and the Company (the
"CONFIDENTIALITY AGREEMENT").
(b)__Notwithstanding the foregoing, neither the Company nor the
Shareholder Parties shall be required to disclose, or cause the
disclosure of, any information with respect to which the Company or the
Shareholder Parties, as the case may be, reasonably believe may violate
applicable law.
Section 4.3. REASONABLE EFFORTS.
(a)__Upon the terms and subject to the conditions of this
Agreement (including, without limitation, Section 4.3(c)), each of the
parties hereto shall use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate
and make effective the transactions contemplated by this Agreement as
promptly as practicable, including, but not limited to, (i) the
preparation and filing of all forms, registrations and notices required
to be filed to consummate the transactions contemplated by this Agreement
and the taking of such actions as are necessary to obtain any requisite
approvals, consents, orders, exemptions or waivers by any Governmental
Entity, including making the filings pursuant to the HSR Act within 10
business days of the date hereof, and (ii) using all reasonable efforts
to cause the satisfaction of all conditions to Closing. Each party shall
promptly consult with the other with respect to, provide any necessary
information with respect to and as reasonably necessary provide the other
(or its counsel) copies of, all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement and the
transactions contemplated by this Agreement.
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(b)__Each party hereto shall promptly inform the others of any
communication from any Government Entity regarding any of the
transactions contemplated by this Agreement. If any party receives a
request for additional information or documentary material from any such
Government Entity with respect to the transactions contemplated by this
Agreement, then such party will endeavor in good faith to make, or cause
to be made, as soon as reasonably practicable and after consultation with
the other party, an appropriate response in compliance with such request.
(c)__Parent, the Company and the Shareholder Parties agree and
acknowledge that they each shall use their commercially reasonable
efforts to obtain any required clearances under any antitrust law
(including, without limitation, the HSR Act) and the Parent will pay and
be responsible for all filing fees payable in connection therewith. The
Parent, the Company and the Shareholder Parties shall promptly take all
commercially reasonable actions to avoid and eliminate any impediment,
and to secure any required clearances, under any antitrust law to the
consummation of the transactions contemplated hereby, it being understood
that such action shall not include any sale or divestiture of any
business or assets. The Parent, the Company and the Shareholder Parties
shall use commercially reasonable efforts to prevent the entry of any
order or injunction that would prevent or delay the consummation of the
transactions contemplated hereby and, if any such order or injunction is
issued, take all steps, including the appeal thereof, the posting of a
bond or the steps contemplated by the immediately preceding sentence, to
vacate, modify or suspend such injunction as to permit the consummation
of the transactions contemplated hereby as promptly as practicable.
Section 4.4. Stock Options.
Each outstanding stock option pursuant to the Stock Option Plan
(each, a "STOCK OPTION") shall be cancelled prior to Closing, and each
holder of any Stock Option, whether or not then vested or exercisable,
shall be paid by the Company for each such Stock Option an amount in cash
(less any required tax withholdings) determined by multiplying (i) the
excess, if any, of the Fair Market Value Per Share (as hereinafter
defined) over the applicable exercise price of such Stock Option by (ii)
the number of shares of Company Common Stock subject to such Stock
Option. For the purposes hereof, "FAIR MARKET VALUE PER SHARE" shall
mean the fair value of such shares, on a fully diluted basis, as
determined by the Board of Directors as contemplated by the Stock Option
Plan.
Section 4.5. Collective Bargaining Agreement.
Parent agrees that, as of the Closing Date, it shall cause the
Surviving Corporation to (i) recognize USWA Local 6967, as the exclusive
collective bargaining representative of the Surviving Corporation's
bargaining unit employees, and (ii) honor in accordance with its terms
the collective bargaining agreement dated April 21, 1997 between USWA
Local 6967 and the Company.
Section 4.6. Access to Records by Shareholders.
Parent and Company agree that, from and after the Closing
for a period of six years, the Shareholder Party Representatives and
their attorneys, agents, accountants and designees may have such
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reasonable access to the books and records of the Business and such right
to make copies thereof as the Shareholder Party Representatives and their
attorneys, agents, accountants and designees may reasonably deem
necessary. Any such examination shall be performed at the place where
such books and records are regularly maintained, shall be conducted
during normal business hours, and shall be done in a reasonable manner so
as to minimize the disruption and interference with normal business
activities. Such access shall extend only insofar as such books and
records relate to the Shareholders or events arising on or prior to the
Closing Date with respect to the Business or the Shareholders. Parent
shall ensure that no such books and records are destroyed for a period of
at least six years from the Closing Date. After such six-year period, at
least 90 calendar days' prior written notice to such effect shall be
given to the Shareholder Representatives, who shall be given an
opportunity during such 90-day period, at their own cost and expense, to
remove and retain all or any part of such books and records they may
select.
Section 4.7. CERTAIN LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
(a)__Each of the parties hereby acknowledges and agrees that no
party has relied or will rely upon any document or written or oral
information previously furnished to or discovered by it or its
representatives, including, without limitation, the Information
Memorandum prepared by the Company and Schroders, as financial advisor to
the Company, any information provided to the Parent or Merger Sub
pursuant to any presentation by or on behalf of the Shareholder Parties,
the Company or Schroders in connection with the transactions contemplated
herein or any financial projection or forecast delivered to the Parent or
Merger Sub with respect to the revenues or profitability which may arise
from the operation of the Business after the Closing Date, other than
this Agreement (including the Schedules and Exhibits hereto). With
respect to any projection or forecast delivered by or on behalf of
Schroders, the Company or any of the Shareholder Parties to the Parent or
Merger Sub, each of the Parent and Merger Sub acknowledges that (A) there
are uncertainties inherent in attempting to make such projections and
forecasts, (B) it is familiar with such uncertainties, and (C) Parent is
acquiring the Business as a going concern, and has prepared its own
financial forecasts for the Business.
(b)__Except as expressly stated herein, in the Related
Documents and in the Schedules hereto, neither the Company nor any of the
Shareholder Parties makes any representations or warranties with respect
to the Business, the Company Common Stock, or the transactions
contemplated hereby or the events giving rise thereto.
(c)__Notwithstanding any other provision hereof, (i) the
inclusion of an item in a Schedule will not be deemed an admission that
such item represents a material exception or fact, event or circumstance
or that such item would result in a Material Adverse Effect and (ii) the
representations and warranties made in this Agreement by the Shareholder
Parties and the Company will be deemed for all purposes to be qualified
by the disclosures made in the Schedules, it being understood that any
disclosure made on a Schedule shall be deemed to be included on any other
Schedule if such disclosure could reasonably be expected to be pertinent
to the representation and warranty to which such other Schedule relates.
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Section 4.8. Supplemental Schedules.
The Shareholder Parties may (but will not be required to), from time
to time prior to two days before the Closing, by notice in accordance
with this Agreement, supplement or amend any Schedule, including, without
limitation, one or more supplements or amendments to correct any matter
which would otherwise constitute a breach of any representation, warranty
or covenant herein contained; PROVIDED, HOWEVER, that subject to the
following sentence, no such supplement or amendment will affect the
rights or obligations of the parties to this Agreement. Notwithstanding
any other provision hereof, no such supplement or amendment will affect
the Parent's or Merger Sub's right not to complete the transactions
contemplated hereby in the circumstances specified in Section 5.2(a) or
otherwise under this Agreement, but, if the Closing occurs, any such
supplement or amendment of any Schedule will be effective to cure and
correct for all purposes (including, without limitation, Article VII) any
breach of any representation, warranty or covenant which would have
existed by reason of the Shareholder Parties' not having made such
supplement or amendment.
Section 4.9. Guarantee by Parent.
The Parent hereby unconditionally guarantees the full and timely
performance by Merger Sub, and from and after the Effective Time by the
Surviving Corporation, of all of Merger Sub's and Surviving Corporation's
respective obligations under this Agreement (including the obligation to
pay the Per Share Merger Consideration) and hereby irrevocably waives all
suretyship defenses (other than satisfaction and payment) that otherwise
may now or in the future be available to the Parent in connection
therewith. Without limiting the generality or effect of the foregoing,
the Parent will cause Merger Sub, and from and after the Effective Time,
the Surviving Corporation, (a) to perform in accordance with the terms of
this Agreement all covenants to be performed by Merger Sub or the
Surviving Corporation, as the case may be, and (b) to have cash on hand
and other capital resources sufficient to discharge on a timely basis all
of Merger Sub's and the Surviving Corporation's respective obligations
hereunder.
Section 4.10. Further Assurances.
From time to time after the Closing, without additional
consideration, the parties will execute and deliver such further
instruments and take such other action as may be necessary to make
effective the transactions contemplated by this Agreement.
Section 4.11. Certain Tax Matters.
(A)__PREPARATION OF FINAL SEPARATE RETURN YEAR INCOME AND
FRANCHISE TAX RETURNS, ETC.
(i)Parent and the Shareholder Parties agree that, for U.S.
federal income tax purposes, the current taxable year of the Company
shall end on and as of the Closing Date (the "FINAL SEPARATE RETURN
YEAR"). In the event, as to any state or local jurisdiction, an election
or other action is required to be taken to terminate the Company's
taxable year on the Closing Date, Parent shall (or shall cause the
Company to) make such election or take such action.
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(ii)Parent shall cause the Company to prepare and shall timely
file (A) all applicable Income and Franchise Tax Returns for the
Company's Final Separate Return Year ("FINAL SEPARATE RETURN YEAR TAX
RETURNS") and (B) as to any state or local jurisdiction that will not
permit a Tax Return filed on the basis that the taxable year terminated
on the Closing Date, all applicable Income and Franchise Tax Returns
("STRADDLE YEAR TAX RETURNS") for the taxable year of the Company that
includes but does not end on the Closing Date (a "STRADDLE YEAR"), on a
basis consistent with past practices of the Company and applicable law.
At least forty-five (45) days prior to the due date for filing any such
Tax Return (and prior to the filing of such Tax Return), Parent shall
provide drafts of such Tax Returns as prepared by Parent and Company to
the Shareholder Party Representatives for their review and comment.
Further, in the case of any Straddle Year Tax Return, Parent shall set
forth its proposed allocation of the total Taxes shown as due on the
draft Tax Return for the Straddle Year between the period ended on the
Closing Date (for which the Shareholders shall be accountable) and the
period following the Closing Date (for which Parent and the Company shall
be accountable). Such allocation shall be a specific allocation, so as
to reflect, as nearly as possible, the outcome had the Company's taxable
year in fact ended on the Closing Date. If the Shareholder Party
Representatives, within fifteen (15) days after delivery of such draft
Tax Returns (and proposed allocation, if any), notify Parent that they
object to any items in such draft Tax Returns (or proposed allocation),
the parties shall proceed in good faith to resolve the disputed items
and, if they are unable to do so within ten (10) days of such
notification, the disputed items shall be resolved by the Accounting Firm
prior to the due date for filing such Tax Returns. Upon resolution of
all disputed items, the affected Tax Returns shall be finalized on a
basis reflecting such resolution, which shall be conclusive as between
the parties. The costs, fees and expenses of the Accounting Firm shall
be borne equally by Parent, on the one hand, and the Shareholders, on the
other.
(iii)If the sum of (A) the Income and Franchise Taxes for all
Final Separate Return Years as reflected on the Final Separate Return
Year Tax Returns net of any estimated tax payments and other payments
made within, or credits attributable to, the period ended on the Closing
Date in respect thereof, plus (B) the portion of any Income Taxes and
Franchise Taxes in respect of Straddle Years as reflected on the Straddle
Year Tax Returns determined to be allocable to the Shareholders net of
any estimated tax payments and other payments made within, or credits
attributable to, the period ended on the Closing Date in respect of
Straddle Year Income and Franchise Taxes (such sum being referred to
herein as the "ACTUAL UNPAID AMOUNT") is greater than the Estimated Tax
Amount, such excess shall be treated as a decrease in Aggregate Merger
Consideration and shall be paid out of the Escrow Holdback Account
pursuant to Section 1.10(a), or, if no funds are available to be paid
from such Account, then the Shareholders shall pay to Parent the amount
by which the Actual Unpaid Amount exceeds the Estimated Tax Amount. If
the Estimated Tax Amount exceeds the Actual Unpaid Amount (including by
such amount as the Actual Unpaid Amount may be less than zero), then,
pursuant to section 4.11(e), Parent shall pay to the Shareholders the
amount by which the Estimated Tax Amount exceeds the Actual Unpaid
Amount. Such payment by the Shareholders or Parent, as the case may be,
shall be made within 15 days after the timely filing of the last of the
affected Tax Returns. In all events, the Shareholders shall have no
responsibility for payment and remittal of the Taxes due with
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the Final Separate Return Year Tax Returns and the Straddle Year Tax Returns,
which, to the contrary, solely shall be the responsibility of Parent and
the Company, which Parent hereby covenants to discharge or cause to be
discharged on a timely basis.
(iv)Parent acknowledges and agrees that payments to employees
of the Company pursuant to Section 4.4 are expected to give rise to
significant deductions in respect of the Company's Final Separate Return
Year (and the portion of the period ended on the Closing Date with
respect to any Straddle Years) and that, without limitation of paragraph
(b) below, the Shareholders specifically bargained for the payment to
them, as additional Purchase Price, of the amount of any refunds or
setoffs of Taxes, as and when received (or, in the case of any setoffs,
realized) by the Company subsequent to the Closing Date, attributable to
a carryback of any net operating loss from the Final Separate Return Year
(or any Straddle Year), relating to any such deductions allowable to the
Company in respect of the exercise or cancellation of employee stock
options and any other severance or change in control payments to existing
or former employees of the Company (collectively, "COMPENSATION
DEDUCTIONS") or relating to any other deductions reportable in the Final
Separate Return Year Tax Returns, or in the case of any Straddle Year Tax
Returns, properly allocable to the portion of the period ended on the
Closing Date. Parent agrees, at the Shareholder's expense, to cause the
Company to file such Tax Returns and refund claims on a timely basis as
may be necessary to effectuate the foregoing, and, within 15 days after
such refund is received (or such setoff is realized), pursuant to Section
4.11(e), shall make, or cause the Company to make, the payments to the
Shareholders contemplated hereby; PROVIDED, that the Company shall
withhold payment from any Shareholder not otherwise a Shareholder Party
that has not agreed in writing to incur the obligations described in the
second paragraph of Section 4.11(b), requiring the return to the Company
of any amounts previously remitted to such party in respect of Refunds,
if the Tax item to which the Refund relates is successfully challenged (a
"NONRESPONSIVE SHAREHOLDER"), it being understood that any Shareholder
who properly signs and submits a Letter of Transmittal as contemplated in
the Escrow Agreement shall not be treated as a Nonresponsive Shareholder
and shall agree to incur such obligation. Any such Tax Returns and
refund claims shall be subject to review and comment by the Shareholder
Party Representatives as set forth in subparagraph (ii) above.
Consistent with the foregoing, without duplication of Section
4.11(a)(iii) above, Parent further agrees to promptly remit to the
Shareholders the amount of any reduction in Straddle Year Taxes, and
other state and local Income and Franchise Taxes, for which Parent
otherwise is accountable attributable solely to the actual use of the
Compensation Deductions to offset income of the Company, the Parent or
any Affiliate thereof, assuming that all other items of loss or expense
are used to offset such income prior to the use of such Compensation
Deductions.
(b)__REMITTAL OF REFUNDS TO SHAREHOLDERS. Any refunds of Taxes
(over and above those addressed in clause (iv) of subparagraph (a) above)
of the Company (including interest paid thereon) for any taxable period
(or portion thereof) ended on or before the Closing Date resulting from
income, losses, deductions, credits or other tax items generated by the
Company during taxable periods (or portions thereof) ended on or prior to
the Closing Date and any amount that would have been so refunded but for
its application by way of setoff or credit ("REFUND") that has not
already been paid or
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credited to the Shareholders shall be for the account of the Shareholders
and, pursuant to Section 4.11(e), Parent shall cause the Company to remit
to the Shareholders the amount of any and all such Refunds within 15 days
after the Refund is received (or otherwise applied); PROVIDED, that the
Company may withhold payment to any Nonresponsive Shareholder. Parent
shall cause the Company to file for and obtain any and all such Refunds
that it shall have identified to be available (neither Parent nor the
Company being under an affirmative obligation to identify any Refunds,
however).
In the event any refund, setoff, credit or reduction in respect
of Taxes as to which the Company has made any payments to a Shareholder
pursuant to this subparagraph (b) or subparagraph (a)(iv) above (a
"COVERED REFUND") shall be challenged successfully by any taxing
authority upon audit, each Shareholder so having previously received any
payments in respect thereof shall be obligated to repay the Company the
amounts previously remitted to him in respect thereof; PROVIDED, HOWEVER,
that such Shareholder (through the Shareholder Party Representatives)
shall have been given the opportunity to contest the taxing authority's
proposed denial of the Covered Refund pursuant to Section 7.8 hereof,
treating such Shareholder as an "Indemnifying Party" and the Company as
an "Indemnified Party" for such purpose.
(c)__AMENDED RETURNS. Unless otherwise required by law,
neither Parent nor the Company shall file any amended Tax Return relating
to a taxable period of the Company ended on or before, or that includes,
the Closing Date without the prior written consent of the Shareholder
Party Representatives.
(d)__PREPARATION OF 1999 INCOME AND FRANCHISE TAX RETURNS, ETC.
With respect to any federal, state and local Income and Franchise Tax
Returns of the Company for the year ended December 31, 1999 that have not
been filed by the Closing Date ("POST-CLOSING 1999 RETURNS"), Parent
shall cause the Company to prepare and shall timely file such Tax
Returns, on a basis consistent with past practices of the Company and
applicable law. At least forty-five (45) days prior to the final due
date (with extensions) for filing any such Post-Closing 1999 Returns (and
prior to the filing of any such Post-Closing 1999 Returns) Parent shall
provide drafts of such Tax Returns as prepared by Parent and Company to
the Shareholder Party Representatives for their review and comment. If
the Shareholder Party Representatives, within fifteen (15) days after
delivery of such draft Tax Returns, notify Parent that they object to any
items in such draft Tax Returns, the parties shall proceed in good faith
to resolve the disputed items and, if they are unable to do so within
ten (10) days of such notification, the disputed items shall be resolved
by the Accounting Firm prior to such due date for filing such Tax
Returns. Upon resolution of all disputed items, the affected Post-
Closing 1999 Returns shall be finalized on a basis reflecting such
resolution, which shall be conclusive as between the parties. To the
extent that the sum of (i) estimated taxes paid by the Company with
respect to the Post-Closing 1999 Returns, (ii) payments made by the
Company upon filing any extensions relating to such Tax Returns
(excluding any such payments made after the Closing Date) and
(iii) amounts of overpayments from prior tax years applied to such Tax
Returns (the sum of (i), (ii) and (iii), the "CREDITED PREPAYMENTS")
exceeds the actual Tax liability for the taxable year as reflected on the
Post-Closing 1999 Returns (the "ACTUAL TAX LIABILITY"), pursuant to
Section 4.11(e),
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Parent shall pay such excess to the Shareholders within
fifteen (15) days after the timely filing of the last of such Tax
Returns. If the Actual Tax Liability exceeds the Credited Prepayments,
such excess shall be a set off against any amounts owed by Parent to the
Shareholders pursuant to Section 4.11(a)(iii) or (iv), and, to the extent
not so used, shall be treated as a decrease in Aggregate Merger
Consideration and shall be paid out of the Escrow Holdback Account
pursuant to Section 1.10(a), or, if no funds are available to be paid
from such Account, the Shareholders shall pay such excess to Parent
within fifteen (15) days after the timely filing of the last of the
Separate Return Year Tax Returns and Straddle Year Tax Returns. In all
events, the Shareholders shall have no responsibility for payment and
remittal of the Taxes due with the Post-Closing 1999 Returns, which, to
the contrary, solely shall be the responsibility of Parent and the
Company, which Parent hereby covenants to discharge or cause to be
discharged on a timely basis. The costs, fees and expenses of the
Accounting Firm shall be borne equally by Parent, on the one hand, and
the Shareholders, on the other.
(e)__PAYMENTS BY PARENT OR THE COMPANY. Any payments to be
made by Parent or the Company to the Shareholders pursuant to this
Section 4.11 shall be made directly to the Escrow Agent, as contemplated
in Section 2(d) of the Escrow Agreement, for the purpose of remittal to
the Shareholders pursuant to Section 8 of the Escrow Agreement.
(f)__FILING EXPENSES. All out-of-pocket expenses incurred in
filing (i) Final Separate Return Year Tax Returns, (ii) Post-Closing 1999
Returns and (iii) any tax return, claim for a refund or other tax filing
for tax benefits or tax refunds to be paid to the Shareholders, and one-
half of the out-of-pocket expenses incurred in filing Straddle Year Tax
Returns, shall be borne by the Shareholders.
Section 4.12. Termination of Affiliate Transactions.
The Company and each Shareholder Party agrees that, effective as of
the Closing and without any further action by the Company, the Surviving
Corporation or any Shareholder, the Company and the Surviving Corporation
shall be released from any and all obligations and liabilities under
agreements, business arrangements or other relationships with such
Shareholder Party and its Affiliates entered into prior to the Closing,
except for obligations and liabilities under this Agreement and the
Related Documents, obligations to the Shareholder Parties in their
capacities as employees (including under Benefit Plans) or as officers or
directors (including indemnification obligations), obligations to
Shareholder Parties under the agreements contemplated by Sections 5.2(p)
and 5.2(q) and arrangements set forth on Schedule 4.12, and all such
agreements, business arrangements and other relationships so released
shall have no further force or effect.
Section 4.13. Notice of Prospective Breach.
Each party shall promptly notify the other parties in writing (it
being understood that notification to or from the Shareholder Parties
shall be accomplished by notification to or from the Shareholder Party
Representatives) upon the occurrence, or failure to occur, of any event,
which occurrence or failure to occur would be reasonably likely to cause
(i) any representation or warranty contained in this Agreement to be
untrue or inaccurate at any time from the date of this Agreement to the
Closing as if such representation and warranty were made at such time
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or (ii) any failure of any party hereto to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement.
Section 4.14. Release.
(a)__Each Shareholder Party hereby irrevocably releases and
forever discharges the Company (for the benefit of the Surviving
Corporation and its shareholders), effective from and after the Effective
Time, of and from all manner of actions, causes of action, suits, rights,
debts, dues, sums of money, accounts, bonds, bills, covenants, contracts,
controversies, omissions, promises, variances, trespasses, damages,
liabilities, judgments, executions, claims and demands whatsoever, in law
or in equity which against the Company such Shareholder Party ever had,
now has or which it hereafter can, shall or may have, whether known or
unknown, suspected or unsuspected, matured or unmatured, fixed or
contingent, for, upon or by reason of any matter or cause arising at any
time on or prior to the Closing (unless occasioned by fraud or willful
misconduct or gross negligence); PROVIDED, HOWEVER, that the foregoing
provisions shall not apply to obligations and liabilities under this
Agreement and the Related Documents, obligations to the Shareholder
Parties in their capacities as employees (including under Benefit Plans)
or as officers or directors (including indemnification obligations),
obligations to Shareholder Parties under the agreements contemplated by
Sections 5.2(p) and 5.2(q) and arrangements set forth on Schedule 4.12.
(b)__Each Shareholder Party specifically represents and
warrants to the Company that such Shareholder Party has not assigned any
claim to be released as set forth in paragraph (a) above, and agrees to
indemnify and hold harmless the Company from and against any and all
losses or damages arising from or in any way related to (i) any such
assignment, and (ii) any action by any third party arising from or in any
way related to the relationship among such Shareholder Party and the
Company which is the subject of this Section 4.14.
Section 4.15. Disclosure of Information.
From and after the Closing, the Shareholder Parties shall not use or
disclose to any Person any Confidential Information for any reason or
purpose whatsoever, nor shall they make use of any of the Confidential
Information for their own purposes or for the benefit of any Person
except the Company, the Parent, Merger Sub, the Surviving Corporation or
any Affiliate thereof; PROVIDED, HOWEVER, that the foregoing shall not be
deemed to restrict or prohibit use or disclosure of any Confidential
Information as required by law or judicial process or in connection with
the enforcement, or otherwise to give effect to, the provisions of this
Agreement and the Related Documents. As used in this Agreement,
"CONFIDENTIAL INFORMATION" means Intellectual Property of the Company and
all information of a proprietary or confidential nature relating to the
Company or the Business, excluding any information that (i) as of the
Closing Date, is in the public domain, (ii) after the Closing Date enters
the public domain through no wrongful action or inaction on the part of
any Shareholder Party or (iii) is communication to a Shareholder Party by
a third party under no duty of secrecy or confidentiality to the Company
or the Parent.
Section 4.16. Negotiation with Others; Disposition and Voting of Securities.
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(a)__During the period from the date hereof to the earlier of
the Closing or the termination of this Agreement pursuant to Section 6.1
(the "EXCLUSIVE PERIOD"), the Company and the Shareholder Parties shall
deal exclusively with the Parent and Merger Sub regarding the acquisition
of or investment in the Company, whether by way of merger, purchase of
capital stock, purchase of assets or otherwise (a "POTENTIAL
TRANSACTION") and, without the prior written consent of the Parent,
neither the Company nor any Shareholder Party shall, directly or
indirectly, (i) solicit, initiate discussions with or engage in
negotiations with any Person (whether such negotiations are initiated by
the Company or any Shareholder Party or otherwise), other than the Parent
and its Affiliates or a party designated by the Parent, relating to a
Potential Transaction, (ii) provide information or documentation with
respect to the Company, any Subsidiary or the Business to any Person,
other than the Parent and its Affiliates or a party designated by the
Parent, relating to a Potential Transaction or (iii) enter into an
agreement with any Person, other than the Parent, Merger Sub or any
Affiliate thereof, providing for any Potential Transaction. The Company
and the Shareholder Parties represent to the Parent that they are not
legally bound to negotiate or enter into a Potential Transaction with any
person other than the Parent.
(b)__During the Exclusive Period, each Shareholder Party shall,
as to himself, herself or itself, and the Company, except as contemplated
by this Agreement, shall:
(i)without the prior written consent of the Parent, refrain from
transferring, selling or assigning to any Person, or agreeing in any
manner to transfer, sell or assign to any Person, or pledge, encumber,
deposit in a voting trust or grant a proxy (other than for purposes of
effectuating the transactions contemplated by this Agreement and the
Related Documents and other than with respect to the granting of any
proxy to, or entering into any voting trust with, any Principal
Shareholder or in the normal course of corporate governance which is not
intended to impede or delay the transactions contemplated by this
Agreement) with respect to, any securities of the Company presently or
hereafter owned or controlled by him, her or it; and
(ii)vote the shares of capital stock of the Company presently or
hereafter owned or controlled by such Shareholder Party or the Company
(or any other security which has voting rights) against any merger (other
than the Merger), consolidation, sale of assets, reorganization,
recapitalization, liquidation or winding up of the Company at every
meeting of shareholders of the Company called therefor and at every
adjournment thereof (or withhold consent in writing to any such action
proposed to be taken by written consent in lieu of a meeting).
(c)__The parties recognize and acknowledge that a breach by the
Company or any Shareholder Party of this Section 4.16 will cause
irreparable and material loss and damage to the Parent and Merger Sub as
to which they will not have an adequate remedy at law or in damages.
Accordingly, each party acknowledges and agrees that the issuance of an
injunction or other equitable remedy is an appropriate remedy for any
such breach.
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Section 4.17. Use of Name.
From and after the Closing, the Shareholder Parties shall not allege
or assert that the name "Poly-Seal", "Moldcraft", "Supply-Line" or any
substantially similar variants thereof (the "NAMES") have not become
distinctive and unique and none of the Shareholder Parties shall allege
or assert that the Names have not obtained secondary meaning, identifying
the Names or any variant thereof as the source of goods associated with
such Name. The Shareholder Parties undertake in this Agreement as a
matter of contract to refrain, from and after the Closing, from,
(A) owning any interest, directly or indirectly, in, or becoming
associated with or otherwise lending any aid or support to, any Person
(other than the Surviving Corporation, the Parent or any Affiliate
thereof) using the Names or (B) performing any service or offering any
goods identified with the Names in a manner that is likely to cause
confusion in the minds of ordinary purchasers, except on behalf of the
Surviving Corporation, the Parent of any Affiliate thereof. In
connection therewith, it is agreed that the undertaking under this
Section 4.17 is of a special and unique nature, the loss of which cannot
be adequately compensated for in damages by an action at law, and that
the breach or threatened breach of the provisions of this Section 4.17
would cause the Surviving Corporation, the Parent and their Affiliates
irreparable harm. In the event of any such breach, the Surviving
Corporation and the Parent shall be entitled, as a matter of right, to
injunctive and other equitable relief without waiving any other rights
which they may have to damages or otherwise.
ARTICLE V
CONDITIONS
Section 5.1. Conditions to Each Party's Obligations.
The respective obligation of each party to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction or
waiver of the following conditions:
(a)__No statute, rule, regulation, order, decree or injunction
shall have been enacted, entered, promulgated or enforced by a
Governmental Entity which prohibits the consummation of the transactions
contemplated by this Agreement shall be in effect.
(b)__All material consents and approvals of any Governmental
Entity required for the consummation of the transactions contemplated by
this Agreement shall have been obtained.
Section 5.2. Conditions to Obligations of the Parent and Merger Sub.
The obligation of the Parent and Merger Sub to effect the
transactions contemplated by this Agreement are further subject to the
satisfaction or waiver of the following conditions:
(a)__The representations and warranties of the Company and the
Shareholder Parties in this Agreement shall be true and correct in all
material respects (except for those qualified by materiality which shall
be true and correct in all respects) at and as of the Closing Date with
the same effect as though such representations and warranties had been
made at and as of such time, provided that any representations and
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warranties that speak as of a specific date or time need only be true and
correct in all material respects, or, in the case of any such
representation or warranty qualified by materiality, in all respects, as
of such specific date or time.
(b)__The Shareholder Parties and the Company shall have
performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing,
including, without limitation, approval of the Merger by the Shareholders
as required under the DGCL.
(c)__The Parent and Merger Sub shall have received certificates
signed by the Shareholder Party Representatives (on behalf of the
Shareholder Parties) and by the President and the Chief Financial Officer
of the Company to the effects set forth in clauses (a) and (b) above.
(d)__Parent shall have obtained on terms and conditions
satisfactory to the Parent in its sole discretion all of the financing
needed in order to consummate the transactions contemplated hereby.
(e)__The Shareholder Parties and the Company shall have
delivered or caused to be delivered an opinion of counsel in form and
substance substantially as set forth in Exhibit B, addressed to the
Parent and Merger Sub and dated as of the Closing Date.
(f)__No Material Adverse Effect shall have occurred between the
date hereof and the Closing Date.
(g)__Each of the Parent, Surviving Corporation, the Shareholder
Party Representatives and the Escrow Agent shall have executed and
delivered the Escrow Agreement.
(h)__The Parent and the Surviving Corporation shall have
received the written resignations, effective the Effective Time, of
Michael C. Larned (as Chairman of the Board of Directors of the Company),
Michael D. deMilt (as Secretary and Director of the Company), Pieter V.C.
Litchfield (as Treasurer and Director of the Company), William Herdrich
(as President and Director of the Company) and Robert Weilminster (as
Vice-President Finance and Administration of the Company).
(i)__The Parent and Merger Sub shall have received duly
executed letter agreements in form and substance reasonably satisfactory
to the Parent, Merger Sub and their counsel, providing for (i) the
payment and cancellation of all of the Indebtedness and Capital Lease
Obligations as of the Closing Date and (ii) the release of any Lien on
the assets of the Company and its Subsidiaries relating thereto.
(j)__The Parent and Merger Sub shall have received certified
copies of the resolutions of the Company's board of directors and the
Shareholders, approving the Merger, this Agreement, all other documents
contemplated hereby and the consummation of the transactions contemplated
hereby.
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(k)__The Company shall have delivered to the Parent and Merger
Sub an officer's certificate certifying the Company's Charter, the
Company's By-laws and the incumbency of each officer executing on behalf
of the Company this Agreement or any agreement or instrument contemplated
hereby.
(l)__The Company shall have delivered to the Parent and Merger
Sub certificates of the Secretaries of State of the States of Delaware
and Maryland, dated as of the Closing Date (or as close thereto as
reasonably practicable), certifying as to the good standing and non-
delinquent status of the Company.
(m)__The Company shall have delivered to the Parent a
certificate, dated as of the Closing Date, certifying that the Company is
not, and has not in the last five years been, a United States real
property holding corporation as defined in Section 897(c)(2) of the Code.
(n)__The Company shall have delivered to the Parent and Merger
Sub a copy of the HSR Act pre-merger notification form filed by the Trust
U/W/O Edward S. Litchfield in connection with the consummation of the
transactions contemplated hereby.
(o)__The Shareholder Party Representatives shall have delivered
to the Parent the Schedules contemplated by Sections 1.7(ix), 1.7(xi),
1.7(xiv) and 1.7(xvii).
(p)__Parent and Merger Sub shall have received counterparts of
the Employment Agreements between the Surviving Corporation and each of
Robert C. Weilminster and Dale Finley, each dated as of the Closing Date,
duly executed by each of Robert C. Weilminster and Dale Finley.
(q)__Parent and Merger Sub shall have received counterparts of
the Consulting and Non-Competition Agreement between the Surviving
Corporation and William J. Herdrich, dated as of the Closing Date (the
"CONSULTING AND NON-COMPETITION AGREEMENT"), duly executed by William J.
Herdrich.
(r)__The Parent shall have received evidence reasonably
satisfactory to the Parent of the repayment in full (including accrued
interest) of the deMilt Receivable and the Herdrich Receivable.
Section 5.3. Conditions to Obligations of the Shareholder Parties and
the Company.
The obligation of the Company to effect the transactions contemplated
by this Agreement are further subject to the Company's and the
Shareholder Parties' satisfaction or waiver of the following conditions:
(a)__The representations and warranties of the Parent and
Merger Sub in this Agreement shall be true and correct in all material
respects at and as of the Closing Date with the same effect as though
such representations and warranties had been made at and as of such time,
other than representations and warranties that speak as of a specific
date or time (which need only be true and correct in all material
respects as of such date or time).
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(b)__Each of the Parent and Merger Sub shall have performed in
all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing.
(c)__The Company and the Shareholder Party Representatives
shall have received a certificate from the President of each of the
Parent and Merger Sub to the effects set forth in clauses (a) and (b)
above.
(d)__The Parent and Merger Sub shall have delivered or caused
to be delivered an opinion of counsel in form and substance substantially
as set forth in Exhibit C, addressed to the Company and to the
Shareholder Party Representatives (as representatives of the Shareholder
Parties).
(e)__Each of the Parent, Merger Sub and the Escrow Agent shall
have executed and delivered the Escrow Agreement.
(f)__The Shareholder Party Representatives and the Company
shall have received certified copies of the resolutions of the Parent and
Merger Sub's board of directors, approving the Merger, this Agreement,
all other documents contemplated hereby and the consummation of the
transactions contemplated hereby.
(g)__The Parent and Merger Subs shall have delivered to the
Shareholder Party Representatives and the Company an officer's
certificate certifying the Parent and Merger Sub's Charter, the Parent
and Merger Sub's By-laws and the incumbency of each officer executing
this Agreement or any agreement or instrument contemplated hereby.
(h)__The Parent and Merger Subs shall have delivered to the
Shareholder Party Representatives and the Company certificates of the
Secretary of State of the State of Delaware, dated as of the Closing Date
(or as close thereto as reasonably practicable), certifying as to the
good standing and non-delinquent status of such entity.
Section 5.4. Waiver.
Any of the foregoing conditions in this Article V may be waived or the
time for performance thereof extended (i) insofar as it is a condition to
the obligations of the Parent and Merger Sub, by the Parent and Merger
Sub at their option and (ii) insofar as it is a condition to the
obligations of the Company and the Shareholder Parties, by the Company
and the Shareholder Party Representatives at their option.
ARTICLE VI
TERMINATION AND AMENDMENT
Section 6.1. Termination.
This Agreement may be terminated at any time prior to the Closing
by:
(a)__mutual written consent of the Shareholder Party
Representatives, the Company, the Parent and Merger Sub;
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(b)__the Company or the Shareholder Party Representatives if
the Closing shall not have occurred on or before May 9, 2000 (unless the
failure to consummate the Closing shall be due to the action or failure
to act of the Company or the Shareholder Parties);
(c)__Parent if the Closing shall not have occurred on or before
May 31, 2000 or such other date mutually agreed upon in writing by the
parties hereto (unless the failure to consummate the Closing shall be due
to the action or failure to act of Parent and/or Merger Sub);
(d)__the Company or the Shareholder Party Representatives or
the Parent if any court of competent jurisdiction or other competent
Governmental Entity shall have issued a statute, rule, regulation, order,
decree or injunction or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such statute, rule, regulation, order, decree or injunction
or other action shall have become final and nonappealable;
(e)__the Parent, if there has been a breach by the Company or
any Shareholder Party of any representation, warranty, covenant or
agreement set forth in this Agreement on the part of the Company or any
Shareholder Party which breach is material and which such party fails to
cure within 10 Business Days after notice thereof is given by the Parent
(except no cure period shall be provided for a breach which by its nature
cannot be cured), or within 30 Business Days after notice thereof is
given if such party, using its reasonable best efforts, cannot cure said
breach within said 10-Business Day period; or
(f)__the Company or the Shareholder Party Representatives, if
there has been a breach by the Parent or Merger Sub of any
representation, warranty, covenant or agreement set forth in this
Agreement on the part of the Parent or Merger Sub which breach is
material and which such party fails to cure within 10 Business Days after
notice thereof is given by the Company or the Shareholder Party
Representatives (except no cure period shall be provided for a breach
which by its nature cannot be cured), or within 30 Business Days after
notice thereof is given if such party, using its reasonable best efforts,
cannot cure said breach within said 10-Business Day period.
Section 6.2. Effect of Termination.
In the event of the termination and abandonment of this Agreement
pursuant to Section 6.1 hereof, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party
hereto or its affiliates (including trustees, directors, officers or
stockholders); PROVIDED, HOWEVER, that the Confidentiality Agreement
shall survive in accordance with the terms and conditions provided for
therein and this Section 6.2 and Article VIII shall survive the
termination of this Agreement; and PROVIDED, FURTHER, that the liability
of any party for any breach by such party of the representations,
warranties, covenants or agreements of such party set forth in this
Agreement occurring prior to the termination of this Agreement shall
survive the termination of this Agreement and, in addition, in the event
of any action for breach of contract in the event of a termination of
this Agreement, the
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prevailing party shall be reimbursed by the other party to the action
for reasonable attorneys' fees and expenses relating to such action.
Section 6.3. Amendment.
This Agreement may be amended or modified at any time by the
parties hereto, but only by an instrument in writing signed on behalf of
each of the Parent, Merger Sub, the Shareholder Party Representatives and
the Company.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
Section 7.1. Survival Periods.
All representations and warranties of the parties contained in
Article II and Article III of this Agreement shall survive until the date
which is sixteen months after the Closing Date, and, if notice of a claim
(setting forth in reasonable detail the facts, circumstances and basis of
the claim) is provided by such date, shall survive until the final
resolution thereof, provided that: (i) the representations and
warranties in Section 2.13 shall survive until the fourth anniversary of
the date of the Closing Date; (ii) the representations and warranties
contained in Section 2.15 shall survive the Closing Date until the date
that is 30 days after the expiration of the statute of limitations, if
any, applicable to the matters set forth therein; and (iii) the
representations and warranties contained in Sections 2.1, 2.3, 2.4 and
2.25 shall survive the Closing Date without any time limit. The
covenants and other agreements of the parties contained in this Agreement
shall survive the Closing Date until they are otherwise terminated,
whether by their terms or as a matter of applicable law. The date upon
which any representation, warranty, covenant or other agreement contained
herein shall terminate, if any, is referred to as the "SURVIVAL DATE",
and the parties acknowledge that, in the event that a claim is made under
this Article VII with respect to any representation, warranty, covenant
or other agreement contained herein prior to the applicable Survival
Date, such representation, warranty, covenant or other agreement shall
survive until such time as such claim is resolved (whether hereunder,
judicially or otherwise).
Section 7.2. Indemnification.
Subject to the other provisions of this Article VII, from and
after the Closing:
(a)__Each Shareholder Party agrees severally, and not jointly
(except to the limited extent contemplated below), to indemnify and hold
harmless the Parent, Merger Sub, the Surviving Corporation and their
respective Affiliates, trustees, employees, officers, directors, agents
and other representatives (collectively, the "BUYER GROUP") from and
against any and all costs or expenses (including reasonable attorneys'
and accountant's and other professional fees), judgments, fines,
penalties, losses, shortages, claims, assessments, Taxes incurred as a
result of the receipt of indemnification payments, Liability and damages,
net of (I) any Tax benefits actually realized as of the time the
indemnification payment is made due to the events giving rise thereto and
(II) the net present value of any future Tax benefits to be realized (as
reasonably estimated by Parent in good faith) due to the events giving
rise to an indemnification payment hereunder (collectively, "DAMAGES") it
may suffer, sustain or incur as a result of the untruth, inaccuracy or
breach of any representation or warranty of
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such Shareholder Party contained in Sections 2.1(a), 2.2(a), 2.3(c) and
2.5(a); PROVIDED, HOWEVER, that notwithstanding the foregoing, each of
the Trust U/W/O Edward S. Litchfield and The Philip A. Litchfield Trust
U/A/D 12/30/96 (but not any of the other Shareholder Parties) shall be
jointly and severally liable to the Buyer Group in respect of Damages
the Buyer Group may suffer, sustain or incur as a result of any untruth,
inaccuracy or breach of any such representation or warranty by either of
such trusts (but not as to any other Shareholder Party).
(b)__The Shareholder Parties, jointly and severally, shall
indemnify and hold harmless the Buyer Group from and against any Damages
incurred by them that arise out of (i) any inaccuracy or breach of any
representation or warranty contained herein made by the Company or the
Shareholder Parties (other than the representations and warranties
contained in Sections 2.1(a), 2.2(a), 2.3(c) and 2.5(a)) or in the
certificate delivered pursuant to Section 5.2(c), (ii) failure to perform
any covenant or obligation made by the Shareholder Parties or the Company
(but not the Surviving Corporation) in this Agreement; or (iii) any
amounts to which any Dissenting Shareholder shall become entitled on
account of the exercise of such Dissenting Shareholders' rights under
Section 262 of the DGCL to the extent such amounts exceed the amounts to
which such Dissenting Shareholder otherwise would be entitled pursuant to
the terms and provisions of this Agreement.
(c)__The Parent and the Surviving Corporation, jointly and
severally, shall indemnify and hold harmless the Shareholders and their
Affiliates, trustees, beneficiaries, agents (including the Shareholder
Party Representatives) and other representatives, from and against any
Damages actually incurred by them that arise out of (i) any breach of any
representation or warranty herein made by the Parent or Merger Sub; or
(ii) failure to perform any covenant or obligation made by the Parent or
Merger Sub in this Agreement.
(d)__Michael deMilt, severally, shall indemnify the Buyer Group
for any amount owed and not received by the Company in respect of the
deMilt Receivable. William Herdrich, severally, shall indemnify the
Buyer Group for any amount owed and not received by the Company in
respect of the Herdrich Receivable.
Section 7.3. CERTAIN LIMITATIONS.
(a)__Notwithstanding any provision to the contrary contained in
this Agreement, none of the Shareholder Parties shall be obligated to
indemnify the Buyer Group for any Damages, other than any Damages as to
which the substantive basis for the claim relates to Tax ("Tax Damages"),
pursuant to Section 7.2(b)(i) unless and until the dollar amount of all
Damages (excluding Tax Damages) for which the Shareholder Parties, but
for this Section 7.3(a) (but after giving effect to Sections 7.3(c) and
7.3(d)), would otherwise be liable pursuant to Section 7.2(b)(i) equals
in the aggregate $680,000, and then only for the excess over such amount;
PROVIDED, HOWEVER, that in no event shall the limitation set forth in
this Section 7.3(a) apply to (i) the rights of the Buyer Group under
Section 7.2(b)(i) with respect to the representations and warranties set
forth in
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Sections 2.1(b), 2.3(a), 2.3(b), 2.4(a) and 2.25 or (ii) any
willful breach by the Company or the Shareholder Parties of any
representation or warranty contained in Article II.
(b)__Notwithstanding any provision to the contrary contained in
this Agreement, the maximum aggregate amount of Damages (including Tax
Damages) payable pursuant to Section 7.2(b)(i) by the Shareholder Parties
shall not exceed $11,600,000; PROVIDED, HOWEVER, that in no event shall
the limitation set forth in this Section 7.3(b) apply to (i) the rights
of the Buyer Group under Section 7.2(b)(i) with respect to the
representations and warranties set forth in Sections 2.1(b), 2.3(a),
2.3(b), 2.4(a) and 2.25 or (ii) any willful breach by the Company or the
Shareholder Parties of any representation or warranty contained in
Article II.
(c)__Notwithstanding any provision to the contrary contained in
this Agreement, Damages shall not include and no Person will have any
obligation under Section 7.2(a) or 7.2(b) in respect of any lost profits
or consequential, incidental, indirect, special or punitive damages.
(d)__Notwithstanding any provision to the contrary contained in
this Agreement, in no event shall any Shareholder Party have any
obligation under Section 7.2(a) and Section 7.2(b) for any Damages to the
extent such Damages have been taken into account in determining any
adjustment to the Aggregate Merger Consideration under Article I
(including any payment pursuant to Section 4.11).
(e)__Notwithstanding any provision to the contrary contained in
this Agreement, the maximum liability of each of Pieter V. C. Litchfield,
Michael C. Larned, Michael deMilt, William Herdrich and Robert
Weilminster for any Damages pursuant to Section 7.2(b) shall in no event
exceed in any particular case such individual's Applicable Percentage of
the total amount of Damages for which indemnification may be claimed
pursuant to such Section (after giving effect to Sections 7.3(a), 7.3(b),
7.3(c), 7.3(d) and 7.3(f)).
(f)__Notwithstanding any provision to the contrary contained in
this Agreement, no Indemnifying Parties shall have any obligation to
indemnify any Indemnified Party under this ARTICLE VII for any Damages
that are actually recovered by the Indemnified Party from any third party
(including any amounts recovered under insurance policies), and in the
event of a recovery by such Indemnified Party subsequent to an
indemnification payment being made the Indemnified Party shall reimburse
the Indemnifying Party to the extent of such amount actually recovered.
(g)__ Notwithstanding any provision to the contrary contained
in this Agreement, in no event shall any claim be made pursuant to
Section 7.2(c) based on any breach of any representation or warranty
contained in Section 3.7 unless the Parent or the Surviving Corporation
shall be the subject of a bankruptcy proceeding under the United States
Bankruptcy Code, as amended.
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Section 7.4. CLAIMS.
(a)__The persons to whom indemnification is provided hereunder
are referred to herein as the "INDEMNIFIED PARTIES" and the persons
providing indemnification are referred to as the "INDEMNIFYING PARTIES."
(b)__The parties shall cooperate with each other with respect
to resolving any claim or liability which one party may be obligated to
provide indemnification hereunder, including making all reasonable
efforts to mitigate or resolve any claim or liability. If the
Indemnified Party does not make such efforts, the Indemnifying Party
shall not be obligated to provide indemnification for any Damages that
could reasonably be expected to have been avoided if such party had made
such efforts.
(c)__If an Indemnified Party intends to seek indemnification
pursuant to this Article VII, such Indemnified Party shall promptly
notify the Indemnifying Party in writing of such claim. The Indemnified
Party will provide the Indemnifying Party with prompt notice of any third
party claim in respect of which indemnification is sought. The failure
to provide either such notice (PROVIDED that it is given within the
survival period provided for in Section 7.1) will not affect any rights
hereunder except to the extent the Indemnifying Party is materially
prejudiced thereby. Any such notice shall set forth in reasonable detail
the facts, circumstances and basis of the claim.
(d)__Any obligation of any Shareholder Party to indemnify the
Buyer Group (other than on account of any inaccuracy or breach of any
representation or warranty contained in Sections 2.1(a), 2.2(a), 2.3(c)
and 2.5(a)) shall be satisfied (i) first, in cash, from the Escrow
Holdback Account, and the Shareholder Party Representatives and the
Parent shall execute joint written instructions to the Escrow Agent
directing the Escrow Agent to make payment to the Surviving Corporation
or the appropriate member of the Buyer Group and (ii) second, in cash,
from the Shareholder Parties liable therefor by payment to the Surviving
Corporation or the appropriate member of the Buyer Group. Any obligation
of any Shareholder Party to indemnify the Buyer Group on account of any
inaccuracy or breach of any representation or warranty contained in
Section 2.1(a), 2.2(a), 2.3(c) or 2.5(a) shall be satisfied, in cash,
from the Shareholder Party or the Shareholder Parties liable therefor.
(e)__If such claim involves a claim by a third party (other
than with respect to Taxes) (a "THIRD PARTY CLAIM") against the
Indemnified Party, the Indemnifying Party may assume, through counsel of
its own choosing and at its own expense, the settlement or defense
thereof, and the Indemnified Party shall cooperate with it in connection
therewith (including by furnishing such information as the Indemnifying
Party may reasonably request); PROVIDED, that the Indemnified Party may
participate in such defense through counsel chosen by it, at its own
expense; PROVIDED, HOWEVER, that the Indemnifying Parties shall not have
the right to assume the defense of any Third Party Claim, notwithstanding
the giving of such written acknowledgment, if (i) the claim seeks only an
injunction or other equitable relief, (ii) the Indemnified Parties shall
have been advised by counsel that there are one or more legal or
equitable defenses available to
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them which are different from or in addition to those available to the
Indemnifying Parties, and, in the reasonable opinion of the Indemnified
Parties, counsel for the Indemnifying Parties could not adequately represent
the interests of the Indemnified Parties because such interests could be
in conflict with those of the Indemnifying Parties, (iii) such action or
proceeding involves, or could have a material effect on, any material matter
beyond the scope of the indemnification obligation of the Indemnifying Parties
or (iv) the Indemnifying Parties shall not have assumed the defense of
the Third Party Claim in a timely fashion; PROVIDED, FURTHER, HOWEVER,
that the Indemnifying Parties shall nonetheless be permitted to
participate in (but not control) the defense of such Third Party Claim
through counsel of their choosing, at their own expense. The Indemnified
Party shall not pay or settle, or admit any liability with respect to,
any claim without the Indemnifying Party's prior written consent, unless
the Indemnifying Party is contesting a claim pursuant to the terms hereof
but is failing to do so in good faith. The Indemnifying Party will not
settle any claim without the Indemnified Party's prior written consent if
such settlement would materially restrict the operation of the Business.
If the Indemnifying Party is not contesting such claim in good faith,
then the Indemnified Party may, upon at least 10 days' notice to the
Indemnifying Party (unless the Indemnifying Party shall assume such
settlement or defense within such 10 day period), conduct and control,
through counsel of its own choosing and at the expense of the
Indemnifying Party, the settlement or defense thereof, and the
Indemnifying Party shall cooperate with it in connection therewith. The
failure of the Indemnified Party to participate in, conduct or control
such defense shall not relieve the Indemnifying Party of any obligation
it may have hereunder.
Section 7.5. Exclusive Remedy.
Following the Closing, the provisions of this Article VII shall
be the exclusive remedy for monetary damages with regard to the matters
covered hereby, provided that nothing herein shall relieve any party from
any liability for fraud.
Section 7.6. Adjustments.
To the extent permitted by law, the parties will treat all
indemnity payments as adjustments to the Aggregate Merger Consideration
and liabilities for indemnified Losses as having been in existence as of
the Closing Date.
Section 7.7. No Contribution from the Corporation or the Surviving
Corporation.
The obligations of the Shareholder Parties to indemnify the Buyer
Group pursuant to the terms of this Agreement are primary obligations of
the Shareholder Parties, subject to the limitations set forth herein.
The Shareholder Parties hereby waive any rights to seek or obtain
indemnification or contribution from the Company or the Surviving
Corporation for Damages as a result of any breach by the Company of any
representation, warranty or covenant contained in this Agreement.
Section 7.8. Tax Claims.
The Indemnified Party shall promptly notify the Indemnifying Party in
writing of the commencement of any claim, audit, examination, or other
proposed change or adjustment relating to Taxes of which it or any of its
affiliates (including the Company) has been informed in writing by any
taxing authority which may affect the liability of the Indemnifying Party
under Section 7.2 (each, a "TAX CLAIM"). Such notice shall describe the
asserted Tax Claim in reasonable detail and shall
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include copies of any notices and other documents received from any taxing
authority in respect of any such asserted Tax Claim. If notice of a Tax
Claim is not given by the Indemnified Party to the Indemnifying Party
within a sufficient period of time to allow the Indemnifying Party to
effectively contest such Tax Claim, or in reasonable detail to apprise the
Indemnifying Party of the nature of the Tax Claim or if the Indemnified
Party otherwise fails to follow the requirements of this Section 7.8, the
Indemnifying Party shall not be liable to the Indemnified Party, any of
its affiliates or any of their respective officers, directors, employees,
stockholders, agents or representatives and the amount of any indemnity payment
pursuant to Section 7.2 shall be reduced, to the extent that the
Indemnifying Party is harmed or its position is actually prejudiced as a
result thereof.
With respect to any Tax Claim (other than a Tax Claim relating
to a Straddle Year), at the Indemnifying Party's election (to be made not
later than 10 business days following the Indemnifying Party's receipt of
a notification of a Tax Claim from the Indemnified Party), the
Indemnifying Party shall have the sole right to represent the Company's
interests in any Tax audit or administrative or court proceeding and to
employ counsel of its choice, and, without limiting the foregoing, may in
its sole discretion pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with any taxing authority with
respect thereto, and may, in its sole discretion, either pay the Tax
claimed and sue for a refund where applicable law permits such refund
suits or contest the Tax Claim in any permissible manner PROVIDED, the
Indemnifying Party shall not settle any claim without the Indemnified
Party's prior written consent (not to be unreasonably withheld or
delayed) if such settlement would materially affect the tax liability of
the Company for any period commencing after the Closing Date. Subject to
the foregoing, the Indemnifying Party may settle any issues and take any
other actions in its discretion in connection with such audit or
proceedings. The Indemnified Party may participate in such defense
through counsel chosen by it, at its own expense. The Indemnified Party
shall cooperate fully with the Indemnifying Party (including, but not
limited to, by granting to the Indemnifying Party a power of attorney
reasonably necessary to represent the Company in any such audit or
proceeding and by causing the Company, at the Indemnifying Party's
reasonable request, to take such requested actions in the defense against
or compromise of any claim in any Tax audit or proceeding which the
Indemnifying Party controls pursuant hereto), timely make available to
the Indemnifying Party all data and other information reasonably
requested by the Indemnifying Party in connection with such audit or
proceedings, make employees available on a mutually convenient basis to
provide additional information or explanation of any material provided
hereunder or to testify at proceedings relating to such Tax Claim and
facilitate the Indemnifying Party's participation in the contest of all
Tax Claims.
In no case shall the Indemnified Party or any of its affiliates
or any of their respective officers, directors, employees, stockholders,
agents or representatives settle or otherwise compromise any Tax Claim
without the Indemnifying Party's prior written consent.
With respect to a Tax Claim relating to a Straddle Year, Parent
and the Shareholder Parties shall jointly control all proceedings and
neither party shall settle or otherwise compromise such Tax Claim without
the other party's prior written consent.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. Shareholder Party Representatives.
Following the signing of this Agreement, the Shareholder Party
Representatives, acting individually or jointly, shall, in addition to
being authorized to take any action which they are specifically
authorized or permitted to take pursuant to this Agreement or the Escrow
Agreement, be authorized to act for and on behalf of each of the
Shareholders listed on Schedule 8.1 hereto (the "Principal Shareholders")
with respect to this Agreement and the Escrow Agreement, including,
without limitation, in all instances where the Principal Shareholders or
any of them are required or permitted to give any approval or consent or
to take any other action under this Agreement or the Escrow Agreement.
The Parent, Merger Sub, the Company and the Surviving Corporation shall
not be responsible for the proper application by the Shareholder Party
Representatives of any payment, assignment, instrument or other delivery
made to the Shareholder Party Representatives, including payment to the
Shareholder Party Account, for the benefit of any of the Principal
Shareholders or for the Shareholder Party Representatives' compliance
with the terms and provisions of this Agreement or the Escrow Agreement
and shall be entitled to rely conclusively upon the actions of the
Shareholder Party Representatives as actions for and on behalf of the
Principal Shareholders with respect to this Agreement and the Escrow
Agreement. Notwithstanding anything to the contrary contained herein,
neither of the Shareholder Party Representatives shall be required to
take, or liable for failing to take, any action not expressly required to
be taken by the Shareholder Party Representatives pursuant to the terms
of this Agreement and in no event shall either of the Shareholder Party
Representatives be personally responsible or liable for any obligation or
liability hereunder or under the Escrow Agreement of any Shareholder or
other party hereto or for the proper application by any Principal
Shareholder or any other person of any payment, assignment, instrument or
other delivery made by either of the Shareholder Party Representatives to
such Principal Shareholder or other person. Wherever in this Agreement
or in the Escrow Agreement the Shareholder Party Representatives are
authorized or permitted to take any action, such action may be taken by
either or both of them and the act of either of them shall be deemed to
be the act of both, and the Parent, Merger Sub, Surviving Corporation and
Escrow Agent shall be entitled to rely upon any such action accordingly.
Section 8.2. Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed given upon receipt by the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
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(a)__if to the Parent and/or Merger Sub, to:
Berry Plastics Corporation
101 Oakley Street
Evansville, Indiana 47710
Attention: James M. Kratochvil
Telecopy: (812) 421-9604
with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: Michael J. O'Brien
Telecopy: (212) 408-2420
(b)__if to the Company, to:
Poly-Seal Corporation
1810 Portal Street
Baltimore, Maryland 21224-6512
Attention: William Herdrich
Telecopy: (410) 633-1928
with a copy to:
the Shareholder Parties, as provided hereinbelow.
(c)__if to the Shareholder Parties or Shareholder Party
Representatives, to:
Michael C. Larned
as Shareholder Party Representative
178 Farms Road
Stamford, Connecticut, 06903
Telecopy: (203) 986-1522
and/or
Michael D. deMilt
as Shareholder Party Representative
62 Woodmere Road
Stamford, Connecticut, 06905
55
<PAGE>
Telecopy: (203) 986-1522
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Attention: Brian J. Morris
Telecopy: 212-259-6333
Section 8.3. Headings.
The headings herein are inserted for convenience only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
Section 8.4. Counterparts.
This Agreement may be executed in two or more counterparts, all
of which shall be considered one and the same instrument. Any
counterpart or other signature to this Agreement or any Related Document
that is delivered by facsimile shall be deemed for all purposes as
constituting good and valid execution and delivery by such party of this
Agreement or such Related Document.
Section 8.5. Entire Agreement; Assignment.
(a)__This Agreement and the Exhibits (in their executed form)
and Schedules hereto, the Related Documents and the documents and
certificates delivered in connection herewith constitute the entire
agreement among the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, both written and oral, including, without limitation, the
Letter of Intent dated January 3, 2000, as amended, among the parties
with respect to the subject matter hereof.
(b)__This Agreement shall not be assigned by a party hereto
without the prior written consent of the other parties hereto; PROVIDED,
HOWEVER, that anything contained herein to the contrary notwithstanding,
the Parent and Merger Sub may, without the prior written consent of any
other parties, assign any or all of its rights and interests hereunder to
any lender or lenders providing financing for the transactions
contemplated hereby; PROVIDED, FURTHER, HOWEVER, that no such assignment
shall relieve the Parent or Merger Sub from any of its obligations or
liabilities hereunder.
Section 8.6. Governing Law.
This agreement shall be governed and construed in accordance with
the laws of the State of New York, without regard to any applicable
conflicts of law principles. The parties hereto expressly and
irrevocably (i) consent to the exclusive jurisdiction of the federal and
state courts sitting in New York, (ii) agree not to bring any action
related to this agreement or the transactions contemplated hereby in any
other court (except to enforce the judgment of such courts), (iii) agree
not to object to venue in such courts or to claim that such forum is
inconvenient and (iv) agree that notice
56
<PAGE>
or the service of process in any proceeding shall be properly served or
delivered if delivered in the manner contemplated by Section 8.2 hereof.
Final judgment by such courts shall be conclusive and may be enforced in
any manner permitted by law. In addition, each of the parties hereto waives
any right to trial by jury with respect to any claim or proceeding related
to or arising out of this agreement or any of the transactions contemplated
hereby.
Section 8.7. Specific Performance.
The parties hereto agree that if any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached, irreparable damage would occur, no adequate
remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
Section 8.8. Press Releases.
Prior to the Closing, no party will issue or cause the publication of
any press release or other public announcement with respect to this
Agreement or the transactions contemplated hereby without the prior
consent of the Shareholders and the Parent, which consent will not be
unreasonably withheld; PROVIDED, HOWEVER, that nothing herein will
prohibit any party from issuing or causing publication of any such press
release or public announcement to the extent that such party determines
such action to be required by Law or the rules of any national stock
exchange applicable to it or its Affiliates, in which event the party
making such determination will, if practicable in the circumstances, use
reasonable efforts to allow the other parties reasonable time to comment
on such release or announcement in advance of its issuance.
Section 8.9. Binding Nature; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and their respective successors, assigns,
trustees, heirs and estates, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person or persons
any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
Section 8.10. Severability.
This Agreement shall be deemed severable and the invalidity or
unenforceability of any term or provision of this Agreement shall not
affect the validity or enforceability of this Agreement or of any other
term hereof, which shall remain in full force and effect.
Notwithstanding the foregoing, if such provision could be more narrowly
drawn so as not to be invalid, prohibited or unenforceable in a given
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn,
without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.11. CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS.
(a)__Unless the context otherwise requires, (i) all references
to Sections, Schedules or Exhibits are to Sections, Schedules or Exhibits
of or to this Agreement, (ii) each accounting term not otherwise defined
in this Agreement has the meaning assigned to it in accordance with GAAP,
(iii) "or" is disjunctive but not necessarily exclusive, (iv)
57
<PAGE>
words in the singular include the plural and VICE VERSA, (v) all reference
to "$" or dollar amounts will be to lawful currency of the United States of
America, (vi) the phrase "KNOWLEDGE OF THE COMPANY" means the actual
knowledge of the persons listed on Schedule 8.11 (the Parent, Merger Sub
and the Surviving Corporation hereby expressly acknowledging that such
persons are under no obligation to conduct any particular inquiry for
purposes of any matter to which such phrase applies) and (vii) the phrase
"BEST KNOWLEDGE OF THE COMPANY" means that knowledge that the individuals
listed in Schedule 8.11 actually have or could have obtained after making
such inquiry as reasonable business persons in the respective positions
of such individuals would have made with respect to the matter to which
such phrase applies.
(b)__No provision of this Agreement will be interpreted in
favor of, or against, any of the parties hereto by reason of the extent
to which any such party or its counsel participated in the drafting
thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
Section 8.12. Payment of Expenses.
Whether or not the transactions contemplated by this Agreement shall
be consummated, each party hereto shall pay its own fees and expenses
incident to preparing for, entering into and carrying out this Agreement,
except as expressly otherwise provided in this Agreement; PROVIDED,
HOWEVER, that, in the event the Merger is consummated, all fees and
expenses incurred by the Company and the Shareholders incident to
preparing for, entering into and carrying out this Agreement (including,
without limitation, all expenses of attorneys, accountants, tax advisors,
brokers and investment bankers (including Schroders and Dewey Ballantine
LLP)), shall, unless and to the extent such fees and expenses are taken
into account in determining the Aggregate Adjustment Amount, be borne by
the Shareholders and not the Parent, Merger Sub or the Surviving
Corporation. To the extent not determinable at the Closing Date, any
such fees and expenses which are the responsibility of the Shareholders
shall be paid by the Shareholders, PRO RATA based on their respective
Applicable Percentages, subsequent to the Closing Date (and, to the
extent not so paid, may be withdrawn by the Surviving Company from the
Escrow Account).
Section 8.13. Remedies.
Subject to the provisions of Sections 7.5 and 6.2, the parties shall
each have and retain all other rights and remedies existing in their
favor at law or equity, including, without limitation, any actions for
specific performance and/or injunctive or other equitable relief
(including, without limitation, the remedy of rescission) to enforce or
prevent any violations of the provisions of this Agreement.
Section 8.14. Independence of Covenants and Representations and Warranties.
Subject to the provisions hereof (including Section 4.7), (i) all
covenants hereunder shall be given independent effect so that if a
certain action or condition constitutes a default under a certain
covenant, the fact that such action or condition is permitted by another
covenant shall not affect the occurrence of such default, unless
expressly permitted under an exception to such initial covenant and,
(ii) all representations and warranties hereunder shall be given
independent effect so that if a particular representation or warranty
proves to be incorrect or is breached, the fact that another
representation or warranty concerning
58
<PAGE>
the same or similar subject matter is correct or is not breached will not
affect the incorrectness of or a breach of a representation and warranty
hereunder.
59
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
BERRY PLASTICS ACQUISITION CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name:James M. Kratochvil
Title:Executive Vice President, Chief Financial Officer, Treasurer and
Secretary
BERRY PLASTICS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name:James M. Kratochvil
Title:Executive Vice President, Chief Financial Officer, Treasurer and
Secretary
POLY-SEAL CORPORATION
By: /S/ MICHAEL C. LARNED
Name:Michael C. Larned
Title:Chairman of the Board
THE SHAREHOLDER PARTIES
TRUST U/W/O EDWARD S. LITCHFIELD
By:/S/ PIETER V. C. LITCHFIELD
Name:Pieter V. C. Litchfield
Title:Trustee
By:/S/ MICHAEL D. DEMILT
Name:Michael D. deMilt
Title:Trustee
</TABLE>
60
<PAGE>
THE PHILIP A. LITCHFIELD
1996 REVOCABLE TRUST U/A/D 12/30/96
By:/S/ PHILIP A. LITCHFIELD
Name:Philip A. Litchfield
Title:Trustee
By:/S/ MICHAEL C. LARNED
Name:Michael C. Larned
Title:Trustee
By:/S/ MICHAEL D. DEMILT
Name:Michael D. deMilt
Title:Trustee
/S/ PIETER V. C. LITCHFIELD
Pieter V. C. Litchfield
/S/ MICHAEL C. LARNED
Michael C. Larned
/S/ MICHAEL D. DEMILT
Michael D. deMilt
/S/ WILLIAM HERDRICH
William Herdrich
/S/ ROBERT WEILMINSTER
Robert Weilminster
61
<PAGE>
THE SHAREHOLDER PARTY REPRESENTATIVES
/S/ MICHAEL C. LARNED
Michael C. Larned
/S/ MICHAEL D. DEMILT
Michael D. deMilt
62
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
dated as of May 9, 2000
by and among
BPC HOLDING CORPORATION,
CHASE VENTURE CAPITAL ASSOCIATES, LLC,
and
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINED TERMS 1
Section 1.1. Defined Terms.......................................1
Section 1.2. Additional Terms....................................6
Section 1.3. Construction........................................7
ARTICLE II PURCHASE AND SALE TERMS 7
Section 2.1. Purchase and Sale; Purchase Price...................7
Section 2.2. The Merger..........................................7
Section 2.3. The Closing.........................................7
Section 2.4. Payment and Delivery................................7
Section 2.5. Restrictive Legend..................................8
Section 2.6. Use of Proceeds.....................................8
ARTICLE III CLOSING CONDITIONS 8
Section 3.1. Conditions of the Purchasers and the Company........8
Section 3.1.1. Execution of This Agreement and All Related
Documents.........................................8
Section 3.1.2. Issuance and Purchase of the Units................8
Section 3.1.3. Merger Effective; Amended and Restated
Certificate of Incorporation......................9
Section 3.1.4. Merger Consideration..............................9
Section 3.1.5. No Litigation, etc................................9
Section 3.1.6. Environmental Report..............................9
Section 3.1.7. Approvals, etc....................................9
Section 3.1.10. All Proceedings to be Satisfactory...............9
Section 3.1.11. Reasonable Satisfaction of Parties and Counsel...9
Section 3.2. Conditions of the Purchasers.......................10
Section 3.2.1. Representations and Warranties to be True
and Correct; Certificate of Officer of the Company....10
Section 3.2.2. Supporting Documents.............................10
Section 3.2.3. Legal Opinion from Counsel for the Company.......11
Section 3.2.4. Delivery of SBA Forms............................11
Section 3.2.5. [Intentionally Omitted]..........................11
Section 3.2.6. Credit Facility..................................11
Section 3.2.7. The Merger.......................................11
Section 3.3. Conditions of the Company.........................12
Section 3.3.1. Representations and Warranties to be True and
Correct..........................................12
Section 3.3.2. The Merger.......................................12
Section 3.4. Conditions of Northwestern.........................12
Section 3.4.1. Purchase Permitted By Applicable Law, etc........12
Section 3.4.2. Private Placement Number.........................12
(i)
<PAGE>
ARTICLE IV REPRESENTATIONS AND WARRANTIES 12
Section 4.1. Representations and Warranties of the Company......12
Section 4.1.1. Corporate Existence..............................13
Section 4.1.2. Power and Authority..............................13
Section 4.1.3. Enforceability, etc..............................13
Section 4.1.4. Capitalization...................................13
Section 4.1.5. Consents, Approvals and Non-Contravention........14
Section 4.1.6. Pro Forma Balance Sheet..........................15
Section 4.1.7. SEC Reports and Financial Statements.............15
Section 4.1.8. Material Adverse Change..........................15
Section 4.1.9. Events Subsequent to the Date of the Last
Financial Statement..............................15
Section 4.1.10. Absence of Undisclosed Liabilities..............16
Section 4.1.11. Taxes...........................................16
Section 4.1.12. Litigation......................................17
Section 4.1.13. Insurance.......................................17
Section 4.1.14. Conflicts of Interests..........................17
Section 4.1.15. Other Relationships.............................18
Section 4.1.16. Licenses; Compliance with Laws, Other
Agreements, etc.................................18
Section 4.1.17. Intellectual Property Rights and Government
Approvals.......................................18
Section 4.1.18. Investment Company Act..........................19
Section 4.1.19. Brokers, etc....................................19
Section 4.1.20. Private Sale....................................19
Section 4.1.21. Disclosure......................................19
Section 4.1.23. Customers and Suppliers.........................19
Section 4.1.24. Employee Matters and Benefits...................20
Section 4.1.25. Environmental Matters...........................22
Section 4.1.26. Lending Activities..............................23
Section 4.1.27. Title to Properties.............................24
Section 4.1.28. Condition and Sufficiency of Assets.............24
Section 4.1.29. Real Property...................................24
Section 4.2. [Intentionally Omitted]............................25
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 25
Section 5.1. Representations and Warranties of the Purchaser....25
Section 5.1.1. Power and Authority..............................25
Section 5.1.2. Enforceability, etc..............................25
Section 5.1.3. Purchase for Investment..........................26
Section 5.1.4. Financial Matters................................26
Section 5.1.5. Access to Personnel and Materials................26
Section 5.1.6. Brokers, etc.....................................26
ARTICLE VI COVENANTS 26
Section 6.1. [Intentionally Omitted]............................26
Section 6.2. Post-Closing Date Covenants of the Company.........26
Section 6.2.1. Use of Proceeds..................................26
(ii)
<PAGE>
Section 6.2.2. Inspection of Property...........................26
Section 6.2.3. Compliance with Agreements.......................27
Section 6.2.4. Affirmative Covenants............................27
Section 6.2.5. SBIC Regulatory Provisions.......................28
Section 6.2.6. Regulatory Compliance Cooperation................28
Section 6.2.7. Further Assurances...............................29
Section 6.2.8. Reservation and Authorization of Common Stock....29
Section 6.2.9. Financial Statements; Information................29
Section 6.2.10. Form 1099.......................................30
ARTICLE VIA REGISTRATION RIGHTS IN RESPECT OF REGISTRABLE
SECURITIES 30
Section 6A.1 Notice.............................................30
Section 6A.2 Proration...........................................30
Section 6A.3 Registration Procedures............................31
Section 6A.4 Holdback on Sales..................................33
Section 6A.5 Expenses...........................................33
ARTICLE VIB [INTENTIONALLY OMITTED] 33
ARTICLE VIC INDEMNIFICATION IN RESPECT OF REGISTRATION RIGHTS 33
Section 6C.1 Indemnification by the Company.....................33
Section 6C.2 Indemnification by the Sellers.....................34
Section 6C.3 Notices of Claims, etc.............................35
Section 6C.4 Contribution.......................................36
ARTICLE VII TERMINATION 36
Section 7.1. Termination........................................36
Section 7.2. Effect of Termination..............................37
ARTICLE VIII MISCELLANEOUS 37
Section 8.1. Payment of Costs and Expenses......................37
Section 8.2. [Intentionally Omitted]............................37
Section 8.3. Brokerage..........................................38
Section 8.4. [Intentionally Omitted]............................38
Section 8.5. Assignment; Parties in Interest....................38
Section 8.6. Notices.............................................38
Section 8.7. No Waiver..........................................38
Section 8.8. Amendment..........................................38
Section 8.9. Survival of Representations, Warranties,
Covenants and Agreements...........................38
Section 8.10. Governing Law.....................................38
Section 8.11. Specific Performance..............................39
Section 8.12. Entire Understanding..............................39
(iii)
<PAGE>
Section 8.13. Counterparts......................................39
EXHIBITS
Exhibit A Amended and Restated Certificate of Incorporation of the
Company
Exhibit B Form of Warrant
Exhibit C-1 Form of Merger Agreement
Exhibit C-2 Form of Certificate of Merger
SCHEDULES
Schedule I Purchaser Information
Schedule II Addresses For Notice
Schedule III Capitalization Schedule of the Company
Schedule IV Consents Relating to the Purchasers
<PAGE>
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
This PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT, dated as of May
9, 2000 (as amended or otherwise modified from time to time, this
"AGREEMENT"), is made by and among BPC HOLDING CORPORATION, a Delaware
corporation (the "COMPANY"), 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, the Company intends to acquire Poly-Seal Corporation in a
merger transaction (the "MERGER"), and has formed a subsidiary, Berry
Plastics Acquisition Corporation, a Delaware corporation ("MERGERCO") in
connection therewith;
WHEREAS, in order to provide a portion of the financing for the
consummation of the Merger, the Company proposes to enter into the
transactions contemplated by this Agreement;
WHEREAS, the Purchasers desire to purchase an aggregate of
(i) 1,000,000 shares of Preferred Stock, and (ii) warrants in the form
attached hereto as EXHIBIT B entitling the holder or holders thereof to
purchase, on certain terms and conditions, an aggregate of 25,997 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 Company desires to issue and sell the Purchased
Securities to the Purchasers, on the terms and subject to the conditions
set forth in this Agreement;
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 Merger
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
<PAGE>
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
Amended and Restated Certificate of Incorporation of the Company in the
form attached hereto as EXHIBIT A and filed in Delaware on the date
hereof, as amended from time to time in accordance with the requirements
hereof.
"AMENDMENT TO STOCKHOLDERS AGREEMENT" means the First Amendment
dated as of May 9, 2000 to the Stockholders Agreement.
"BERRY" means Berry Plastics Corporation, a wholly-owned subsidiary
of the Company.
"BY-LAWS" means the by-laws of the Company, as amended from time to
time in accordance with the requirements hereof and thereof.
"CERTIFICATE OF MERGER" means the Certificate of Merger, dated as of
the Closing Date, by and between Mergerco and Poly-Seal Corporation, in
substantially the form of EXHIBIT C-2 hereto.
"CLASS A COMMON STOCK" means the Company's Class A Voting Common
Stock and Class A Non-Voting Common Stock.
"CLASS A NON-VOTING COMMON STOCK" means the Company's Class A Non-
Voting Common Stock, par value $.01 per share.
"CLASS A VOTING COMMON STOCK" means the Company's Class A Voting
Common Stock, par value $.01 per share.
"CLASS B COMMON STOCK" means the Company's Class B Voting Common
Stock and Class B Non-Voting Common Stock.
"CLASS B NON-VOTING COMMON STOCK" means the Company's Class B Non-
Voting Common Stock, par value $.01 per share.
"CLASS B VOTING COMMON STOCK" means the Company's Class B Voting
Common Stock, par value $.01 per share.
"CLASS C COMMON STOCK" means the Company's non-voting Class C Common
Stock, par value $.01 per share.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the Class A Common Stock, the Class B Common
Stock and the Class C Common Stock and any other classes of common stock
of the Company hereafter authorized in accordance with the requirements
hereof and of the Stockholders Agreement.
2
<PAGE>
"CREDIT FACILITY" means the Third Amended and Restated Financing and
Security Agreement by and among Berry Plastics Corporation, NIM Holdings
Limited, Berry Plastics UK Limited, Bank of America, N.A., Fleet Capital
Corporation, General Electric Capital Corporation, Heller Financial,
Inc., PNC Bank, National Association and Bank of America, N.A. dated as
of May 9, 2000, 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.
"DGCL" means the General Corporation Law of the State of Delaware.
"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
3
<PAGE>
(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.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money
or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof) or
representing Capital Lease Obligations (as defined in the Amended and
Restated Certificate of Incorporation) or the balance deferred and unpaid
of the purchase price of any property or representing Hedging Obligations
(as defined in the Amended and Restated Certificate of Incorporation),
except any such balance that constitutes an accrued expense or trade
payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with
GAAP, and also includes, to the extent not otherwise included, the
Guarantee (as defined in the Amended and Restated Certificate of
Incorporation) of any Indebtedness of such Person or any other Person.
"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.
"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.
"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 May 5, 2000, by and among Mergerco, Berry, Poly-Seal Corporation and
the Shareholder Parties, in substantially the form of EXHIBIT C-1 hereto.
4
<PAGE>
"OTHER FINANCING DOCUMENTS" means the Credit Facility and any
agreements and documents related thereto.
"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.
"PREFERRED STOCK" means the Series A-1 Senior Cumulative Preferred
Stock of the Company, par value $.01 per share.
"PURCHASED SECURITIES" has the meaning specified in the recitals of
this Agreement.
"REGISTRABLE 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 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.
"RELATED DOCUMENTS" means the Amended and Restated Certificate of
Incorporation, the Warrants, the Merger Agreement, the Certificate of
Merger and the Amendment to Stockholders Agreement.
"RESTATED CERTIFICATE OF INCORPORATION" means the Company's 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 further amended by the amended and restated
certificate of incorporation filed on April 19, 1994, as further amended
by the certificate of amendment filed on May 5, 1995, as further amended
by the certificate of amendment filed June 14, 1996.
"RESTRICTED SECURITIES" means (i) the Preferred Stock, (ii) the
Warrants, (iii) the Warrant Stock and (iv) any securities issued with
respect to the securities specified in the foregoing clauses (i), (ii) or
(iii) 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.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated as
of June 18, 1996, 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.
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"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.
"`33 ACT" or "SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations issued in respect thereto.
"`34 ACT" or "EXCHANGE 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 Section 2.1 of this Agreement.
"WARRANTS" has the meaning specified in the recitals of this
Agreement.
"WARRANT STOCK" means all shares of Class B Non-Voting Common Stock
issuable from time to time upon exercise of the Warrants.
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 4.1.5(a)
Balance Sheet 4.1.9
Blue Sky Laws 4.1.4(d)
Capitalization Schedule 3.1.3
CERCLA definition of Environmental Law
Closing 2.3
Closing Date 2.3
Company Preamble
CVCA Preamble
Employee Benefit Plans 4.1.24(b)
Financial Statements 4.1.7(b)
GAAP 4.1.7(b)
Indemnified Seller 6C.1
Intellectual Property 4.1.17
Licenses 4.1.16
Merger 1st Recital
Mergerco 1st Recital
Northwestern Preamble
Proceeding 6C.3
Purchase Price 2.1
Purchasers Preamble
Regulatory Problem 6.2.6(b)
SBA Compliance Document 3.2.4
SBIC Holder 6.2.5(a)
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SEC 4.1.7(a)
SEC Reports 4.1.7(a)
Seller 6A.1
Seller Notice 6A.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, the Company agrees to
authorize, issue and sell to the Purchasers, and the Purchasers severally
agree to purchase from the Company, (i) an aggregate of 1,000,000 shares
of Preferred Stock and (ii) Warrants to purchase an aggregate of 25,997
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 25.997 shares of Class
B Non-Voting Common Stock. The purchase price for each Unit shall be
$25,000, for an aggregate purchase price of $25,000,000 (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 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 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 May
9, 2000, 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 Units hereunder.
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 the Company prior to the Closing Date,
against delivery by the Company 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 Non-Voting Common Stock set forth opposite
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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
Credit Facility and the sale of the Units solely for purposes of
effecting the Merger, funding the Aggregate Merger Consideration and
paying the costs, expenses and fees incurred in connection therewith.
ARTICLE III
CLOSING CONDITIONS
Section 3.1. CONDITIONS OF THE PURCHASERS AND THE COMPANY
. The obligation of each of the Purchasers to purchase, and the
obligation of the Company 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 Shareholder
Parties 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 Company 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 and the Purchasers shall have purchased and
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paid for such Preferred Stock and Warrants of the Company to be purchased
by them pursuant to such ARTICLE II.
Section 3.1.3. MERGER EFFECTIVE; AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION
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. 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").
Section 3.1.4. MERGER CONSIDERATION
Upon the effectiveness of the Merger, the Company shall have paid
the Closing Date Payment Amount to the Shareholder Payments Escrow
Account pursuant to the Merger Agreement and shall have made the escrow
deposits required by the Merger 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 and reviewed a Phase I and
Phase II environmental assessment for each parcel of real property owned
or leased by Poly-Seal Corporation, each of which environmental
assessment has been performed by a reputable and recognized environmental
consulting firm acceptable to the Purchasers and has revealed no material
Hazardous Materials Contamination (as defined in the Credit Facility) or
material violations of any Environmental Laws, and shall otherwise be in
all respects acceptable to the Purchasers.
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. [Intentionally Omitted]
Section 3.1.9. [Intentionally Omitted]
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
Preferred Stock and the Warrants and the other transactions contemplated
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hereby and by the Credit Facility shall be reasonably satisfactory to the
parties hereto and thereto 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 Article IV of the
Credit Facility, 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 has performed or complied with all agreements and conditions
contained herein which are required to be performed or complied with by
it on or before the Closing Date, (iii) Berry has performed or complied
with all agreements and conditions contained in the Credit Facility 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 Amended and Restated Certificate of
Incorporation, certified as of the Closing 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) [Intentionally Omitted];
(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 the Company, 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 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
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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 Preferred Stock, Warrants 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) [Intentionally Omitted];
(e) such additional supporting documents, instruments,
certificates, opinions and other information with respect to the
operations and affairs of the Company 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
On the Closing Date, each of the Purchasers shall have received
the written opinion of O'Sullivan, Graev & Karabell, LLP, counsel for the
Company, 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 Portfolio
Financing Report on Form 1031 (the "SBA COMPLIANCE DOCUMENT"), and all of
the information set forth in the SBA Compliance Document shall be true
and correct in all respects.
Section 3.2.5. [Intentionally Omitted]
Section 3.2.6. CREDIT FACILITY
The terms of the Credit Facility shall be satisfactory to each of
the Purchasers, the Credit Facility shall be in full force and effect,
the Purchasers shall have received copies of the documents comprising the
Credit Facility and the Company shall have borrowed not more than $70
million thereunder.
Section 3.2.7. THE MERGER.
(a) The Merger shall have been completed and closed prior to or
simultaneously herewith in accordance with the Merger Agreement and
all applicable laws.
(b) The Purchasers shall have received photocopies of all
Merger documents executed, delivered and/or furnished in connection
with the Merger, together with a certificate signed by an Officer of
the Company certifying that the Merger Agreement and the other
Merger documents furnished to the Purchasers are true, correct, in
full force and effect and the provisions thereof have not been in
any way modified, amended or waived, except as otherwise disclosed
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in writing to and consented to by the Purchasers on or before the
date of this Agreement.
Section 3.3. CONDITIONS OF THE COMPANY
The obligations of the Company to effect the Merger and 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 3.3.2. THE MERGER
The Merger shall have been completed and closed prior to or
simultaneously herewith in accordance with the Merger Agreement and all
applicable laws.
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, after giving effect to the
transactions contemplated to occur thereon (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:
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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 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 and to effect the
Merger, each as herein and therein provided. Except as disclosed on ITEM
4.1.2 ("Power and Authority") of the Disclosure Schedule hereto, none of
the foregoing actions will (i) violate any provision of the Company's
By-laws, Restated Certificate of Incorporation 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 (except as contemplated by the
Related Documents or the other Financing Documents), (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 have been
consummated (including the issuance and sale of the Preferred Stock and
the Warrants and consummation of the Merger) as of the Closing Date:
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(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) [Intentionally Omitted];
(d) The 25,997 shares of Class B Non-Voting 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 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"); and
(e) [Intentionally Omitted].
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.
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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 1998 and 1999 fiscal years, (ii) all
other reports, information and registration statements filed by the
Company with the SEC since December 31, 1998 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.
As of the date of filing of the last SEC Report, there was no contract or
agreement that was required to be filed as an exhibit thereto which had
not been filed as such, and, other than the Related Documents, since such
date there has been no contract or agreement that would have to be
included in any SEC Reports filed thereafter. 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-
Q 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
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included in the Company's Form 10-K for the period ending January 1, 2000
(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 1996 Stock Option Plan, (ii) borrowed any amount or
incurred or become subject to any material liability (absolute, accrued
or contingent), except liabilities under the Credit Facility, 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) declared or made
any payment or distribution to stockholders or purchased or redeemed any
of its capital stock (other than repurchases from employees permitted
under the Other Financing Documents or any Indenture of the Company),
(v) except in connection with the transactions contemplated by the Credit
Facility, 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.
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)
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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 would be
required to be disclosed pursuant to Item 103 of SEC Regulation S-K in an
Annual Report on Form 10-K being filed on the date hereof.
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.
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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, 1998, 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
Merger) (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
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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 Preferred Stock or the Warrants or any of the transactions
contemplated by this Agreement, any Related Document or any Other
Financing Document.
Section 4.1.20. PRIVATE SALE
In connection with the Merger, the Company has not, either
directly or through any agent, offered any Warrants, Preferred Stock or
any other securities to, or solicited any offers to acquire any Warrants,
Preferred Stock or any other Interests or securities from, or otherwise
approached, negotiated or communicated in respect of any Warrants,
Preferred Stock 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, any Related Document, any Other Financing
Document 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. Except as described
therein, ITEM 4.1.22 ("Contracts and Commitments") of the Disclosure
Schedule hereto, sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of the
Closing Date. Neither the Company nor any Subsidiary is in default and
no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary the outstanding principal
amount of which exceeds $100,000 that would permit (or that with notice
or the lapses of time, or both, would permit) one or more Persons to
cause such Indebtedness to become due and payable before its stated
maturity or before its regular scheduled dates of payment.
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
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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.
(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:
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(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
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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 except as would not be required to be
disclosed in an Annual Report on Form 10-K with respect to the Company
filed on the date hereof:
(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,
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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. LENDING ACTIVITIES
Except as disclosed on ITEM 4.1.26 ("Lending Activities") of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries
currently or is expected to have a loan facility, credit facility, debt
financing, line of credit or other extension of credit from any
depository institution owned by The Chase Manhattan Corporation.
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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;
(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; and
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(C) Liens under the Other Financing Documents.
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. [Intentionally Omitted]
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,
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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. 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 VI
COVENANTS
Section 6.1. [Intentionally Omitted]
Section 6.2. POST-CLOSING DATE COVENANTS OF THE COMPANY
The Company covenants and agrees that, at all times from and
after the Closing Date, 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 Preferred
Stock and Warrants 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
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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;
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(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) The Company shall give CVCA thirty (30) days prior notice
before taking any affirmative steps which would cause the representations
in SECTION 4.1.26 to be untrue, and the Company shall use its best
efforts to notify CVCA promptly at any time in which the Company
reasonably believes the representations contained in SECTION 4.1.26 to be
untrue, whether as a result of the Company's affirmative actions or
otherwise.
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
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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.
(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 Exercise
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.
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(b) The Company shall provide the Purchasers with all financial
statements and other information provided to the lenders pursuant to the
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 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
Securities. Each holder of Registrable Securities that wishes to
register any of its Registrable 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 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 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 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.
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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 efforts, as
the case may be, to effect the registration of any Registrable 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
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 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
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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.
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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 Securities to,
and each such holder, as a condition to including Registrable 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 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 statement), 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 Securities by a Seller hereunder.
ARTICLE VIB
[INTENTIONALLY OMITTED]
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, the Company shall, and
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hereby agrees to, to the full extent permitted by applicable law,
indemnify and hold harmless each seller of Registrable Securities
pursuant to Article 6A ("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) and provided to such Indemnified Seller a
supplemented or amended prospectus as contemplated by Section 6A.3(vi)
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
34
<PAGE>
(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
35
<PAGE>
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 May 31, 2000; 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; or
36
<PAGE>
(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 (other than through the failure of the Person
seeking to terminate this Agreement pursuant to this CLAUSE (IV) to
comply with any of its respective obligations under this Agreement).
(b) If the Closing has not occurred on or prior to May 31, 2000,
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,
special 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]
37
<PAGE>
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 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 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 agrees that it may
be served with process in the State of New York and any action for breach
of this Agreement may be prosecuted against it in the courts of that
State.
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<PAGE>
SECTION 8.11. SPECIFIC PERFORMANCE
Damages in the event of breach of this Agreement by either the
Company or the Purchasers would be difficult, if not impossible, to
ascertain, and it is therefore agreed that the Company 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 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 existence of this
right will not preclude the Company or the Purchasers from pursuing any
other rights and remedies at law or in equity which the Company or the
Purchasers may have.
SECTION 8.12. ENTIRE UNDERSTANDING
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name: James M. Kratochvil
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CHASE VENTURE CAPITAL ASSOCIATES, LLC
By: Chase Capital Partners,
its Investment Manager
By: /S/ RICK WATERS
Name: Rick Waters
Title: General Partner - Mezzanine
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /S/ RICHARD A. STRAIT
Name: Richard A. Strait
Title: Its Authorized Representative
<PAGE>
DISCLOSURE SCHEDULE
ITEM 4.1.1 Company and Existing Subsidiaries (Name, Jurisdiction
of Incorporation)
ITEM 4.1.2 Power and Authority
ITEM 4.1.5 Consents and Approvals
ITEM 4.1.6 Pro Forma Balance Sheet
ITEM 4.1.7 Financial Statements
ITEM 4.1.8 Material Adverse Change
ITEM 4.1.9 Subsequent Events
ITEM 4.1.10 Liabilities
ITEM 4.1.11 Taxes
ITEM 4.1.12 Litigation
ITEM 4.1.13 Insurance
ITEM 4.1.14 Conflict of Interest
ITEM 4.1.15 Other Relationships
ITEM 4.1.16 Licenses
ITEM 4.1.17(a) Intellectual Property Rights
ITEM 4.1.17(b) Royalties and Other Fees
ITEM 4.1.19 Brokers
ITEM 4.1.22 Contracts and Commitments
ITEM 4.1.23 Customers and Suppliers
ITEM 4.1.24 Employee Benefit Plans
ITEM 4.1.25 Environmental Matters
ITEM 4.1.26 Lending Activities
<PAGE>
ITEM 4.1.27 Title to Properties
ITEM 4.1.28 Assets
ITEM 4.1.29 Real Property
<PAGE>
SCHEDULE I
PURCHASER INFORMATION
<TABLE>
<CAPTION>
INVESTOR UNITS SERIES A-1 NON-VOTING WARRANT PURCHASE PRICE
PREFERRED STOCK ($)
SHARES
<S> <C> <C> <C> <C>
Chase Venture Capital 600 600,000 15,599 15,000,000
Associates, LLC
The Northwestern 400 400,000 10,398 10,000,000
Mutual Life Insurance Company
</TABLE>
<PAGE>
SCHEDULE II
ADDRESSES
If to the Company:
BPC Holding Corporation
101 Oakley Street
P.O. Box 959
Evansville, IN 47706-0959
Telecopier: (812) 421-9604
Attention: Mr. Martin R. Imbler
with copies to:
First Atlantic Capital, Ltd. O'Sullivan, Graev & Karabell, LLP
135 East 57th Street 30 Rockefeller Plaza
29th Floor 41st Floor
New York, NY 10022 New York, NY 10112
Telecopier: (212) 750-0954 Telecopier: (212) 408-2420
Attention: Mr. Roberto Buaron Attention: Michael J. O'Brien, Esq.
If to Chase Venture Capital Associates,
LLC:
Chase Venture Capital Associates, LLC
380 Madison Avenue
12th Floor
New York, New York 10017
Telecopier: (212) 622-3950
Attention: John M.B. O'Connor
with copies to:
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
Telecopier: (212) 530-0219
Attention: John T. O'Connor, Esq.
<PAGE>
If to Northwestern:
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telecopier: (414) 299-7124
Attention: Securities Department
<PAGE>
SCHEDULE III
CAPITALIZATION SCHEDULE OF THE COMPANY
<PAGE>
SCHEDULE IV
CONSENTS RELATING TO THE PURCHASERS
None.
WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT DATED AS OF MAY 9, 2000 (THE "PURCHASE AGREEMENT"), BY
AND AMONG BPC HOLDING CORPORATION, A DELAWARE CORPORATION (THE "ISSUER"),
CHASE VENTURE CAPITAL ASSOCIATES, LLC AND THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, AS SUCH PURCHASE AGREEMENT MAY BE MODIFIED AND
SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE PURCHASE
AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE
OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF THE PURCHASE
AGREEMENT.
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.
No. of Stock Units: 15,599 Warrant No. CBNV-1
WARRANT
to Purchase Class B Non-Voting Common Stock of
BPC HOLDING CORPORATION
THIS IS TO CERTIFY THAT CHASE VENTURE CAPITAL ASSOCIATES, LLC,
or its registered assigns, is entitled to purchase in whole or in part
from time to time from BPC Holding Corporation, a Delaware corporation
(the "ISSUER"), at any time on and after the Effective Date (as
hereinafter defined), but not later than 5:00 p.m., New York time, on May
9, 2010 (the "EXPIRATION DATE"), 15,599 Stock Units (as hereinafter
defined and subject to adjustment as provided herein) at a purchase price
of $0.01 per Stock Unit (the "EXERCISE PRICE"), subject to the terms and
conditions provided herein and in the Purchase Agreement (as hereinafter
defined).
This Warrant is issued pursuant to the Preferred Stock and
Warrant Purchase Agreement dated as of May 9, 2000 (as modified and
supplemented and in effect from time to time, the "PURCHASE AGREEMENT")
between the Issuer, Chase Venture Capital Associates, LLC and The
Northwestern Mutual Life Insurance Company.
<PAGE>
SECTION 1. CERTAIN DEFINITIONS. (a) Each capitalized term
used herein without definition shall have the meaning assigned thereto
(or incorporated by reference) in the Purchase Agreement and in the
Exhibits thereto.
(b) As used herein, the following terms shall have the
following meanings (all terms defined in this Section 1 or in other
provisions of this Warrant in the singular to have the same meanings when
used in the plural and vice versa):
"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.
"BOARD" shall mean the Board of Directors of the Issuer.
"BUSINESS DAY" shall mean any day on which commercial banks are
not authorized or required to close in New York City.
"CLASS B COMMON STOCK" means, the Issuer's Class B Non-Voting
Common Stock, $.01 par value per share, or any other common stock or
other securities receivable thereon, or into which the Class B Common
Stock is convertible or exchangeable, as a result of any
recapitalization, reclassification, merger or consolidation of, or
deposition of assets by, the Issuer.
"COMMON STOCK" shall mean the Common Stock of the Issuer, of
any class or series whatsoever, or any other common stock or other
securities receivable thereon, or into which the Common Stock is
convertible or exchangeable, as a result of any recapitalization,
reclassification, merger or consolidation of, or disposition of assets
by, the Issuer.
"CURRENT MARKET PRICE", shall mean, with respect to a share of
Common Stock as of any date (a) for a period of 30 Business Days after
the date of the IPO, the offering price of such Common Stock or (b) in
any other case (i) the fair market value per share of such Common Stock,
as reasonably determined in good faith by the Board, using an appropriate
valuation method, assuming an arms-length sale to an independent party of
all of the Common Stock of the Issuer, without giving regard to the lack
of liquidity of such Common Stock due to any restrictions contained in
the Stockholders Agreement, the Purchase Agreement or otherwise or any
discount for minority interests and assuming the conversion or exchange
of all securities then outstanding which are convertible into or
exchangeable for such Common Stock and the exercise of all rights and
warrants (including the Warrants) then outstanding and exercisable to
purchase shares of such Common Stock or securities convertible into or
exchangeable for shares of such Common Stock, or (ii) if there shall be a
public market for such Common Stock, the average of the daily market
prices for each day during the 30 consecutive trading days commencing 45
Business Days before such date as of which such a price can be
2
<PAGE>
established in the manner set forth below. The market price for each
such Business Day shall be the last sale price on such day as reported in
the Consolidated Last Sale Reporting System or as quoted on Nasdaq, or if
such last sale price is not available, the average of the closing bid and
asked prices as reported in either such system, or in any other case the
higher bid price quoted for such day as reported by The Wall Street
Journal and the National Quotation Bureau pink sheets.
"EFFECTIVE DATE" shall mean the date set forth on the signature
page of this Warrant.
"EXERCISE NOTICE" shall have the meaning assigned to such term
in Section 2 hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term
in the first paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning assigned to such term
in the first paragraph of this Warrant.
"HOLDER" shall mean the registered holder of this Warrant.
"INCLUDE" and "INCLUDING" shall be construed as if followed by
the phrase ", without being limited to,".
"INDEPENDENT FINANCIAL EXPERT" shall mean an investment banking
firm of recognized national standing chosen by the Issuer which is not an
Affiliate of Atlantic Equity Partners International II, L.P. or an
Affiliate or a Stockholder of the Issuer and which is satisfactory to the
holders of a majority in interest of the Warrants and the Warrant Stock.
"IPO" shall mean the Issuer's first firm commitment
underwritten public offering involving the sale of Common Stock of the
Issuer, pursuant to an effective registration statement under the
Securities Act.
"ISSUER" shall have the meaning assigned to such term in the
first paragraph of this Warrant.
"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.
"PURCHASE AGREEMENT" shall have the meaning assigned to such
term in the second paragraph of this Warrant.
"REGULATION Y" shall mean Regulation Y promulgated by the Board
of Governors of the Federal Reserve System (12 C.F.R. <section>225), or
any successor regulation.
3
<PAGE>
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"STOCKHOLDER" shall mean any Person who directly or indirectly
owns any shares of Common Stock (including Warrant Stock).
"STOCK UNIT" shall mean one share of Class B Common Stock, as
such Class B Common Stock is constituted on the date hereof, and
thereafter shall mean such number of shares (including any fractional
shares) of Class B Common Stock and other securities, cash or other
property as shall result from the adjustments specified in Section 4
hereof.
"WARRANT HOLDER" shall mean any Person who acquires Warrants or
Warrant Stock pursuant to the provisions of the Purchase Agreement,
including any transferees of Warrants or Warrant Stock.
"WARRANT STOCK" shall mean all shares of Class B Common Stock
issuable from time to time upon exercise of the Warrants.
"WARRANTS" shall mean the warrants originally issued by the
Issuer pursuant to the Purchase Agreement (of which this Warrant is one),
evidencing rights to purchase up to the aggregate amount of Stock Units
set forth therein, and all Warrants issued upon transfer, division, or
combination of, or in substitution for, such Warrants.
SECTION 2. EXERCISE OF WARRANT. On and after the Effective
Date and until 5:00 p.m., New York time, on the Expiration Date, the
Holder may exercise this Warrant, on one or more occasions, on any
Business Day, in whole or in part, by delivering to the Issuer, at its
office maintained for such purpose pursuant to Section 5.01 hereof, (a) a
written notice of the Holder's election to exercise this Warrant, which
notice shall specify the number of Stock Units to be purchased (the
"EXERCISE NOTICE"), (b) payment of the Exercise Price (payable as set
forth below) for the number of Stock Units as to which this Warrant is
being exercised, and (c) this Warrant. The Exercise Price shall be
payable (a) in cash or by certified or official bank check payable to the
order of the Issuer or by wire transfer of immediately available funds to
the account of the Issuer or (b) by delivery of this Warrant Certificate
to the Issuer for cancellation in accordance with the following formula:
in exchange for each share of Class B Common Stock issuable on exercise
of each Warrant represented by this Warrant Certificate that is being
exercised, such holder shall receive such number of shares of Class B
Common Stock as is equal to the product of (i) the number of shares of
Class B Common Stock issuable upon exercise of the Warrants being
exercised at such time multiplied by (ii) a fraction, the numerator of
which is the Current Market Price per share of Class B Common Stock at
such time minus the Exercise Price per share of Class B Common Stock at
such time, and the denominator of which is the Current Market Price per
share of Class B Common Stock at such time.
Upon receipt thereof, the Issuer shall, as promptly as
practicable and in any event within five Business Days thereafter,
execute or cause to be executed and deliver or cause to be delivered to
the Holder a stock certificate or certificates representing the aggregate
number of shares of Warrant Stock and other securities issuable upon such
exercise and any other property to which such Holder is entitled.
4
<PAGE>
The stock certificate or certificates for Warrant Stock so
delivered shall be in such denominations as may be specified in the
Exercise Notice and shall be registered in the name of the Holder or such
other name or names as shall be designated in such Exercise Notice. Such
stock certificate or certificates shall be deemed to have been issued and
the Holder or any other Person so designated to be named therein shall be
deemed to have become a holder of record of such shares, including, to
the extent permitted by law and to the extent such shares represent
voting stock of the Issuer, the right to vote such shares or to consent
or to receive notice as a Stockholder, as of the date on which the last
of the Exercise Notice, payment of the Exercise Price and this Warrant is
received by the Issuer as aforesaid. If this Warrant shall have been
exercised only in part, the Issuer shall, at the time of delivery of the
certificate or certificates representing Warrant Stock and other
securities, execute and deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Stock Units called
for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or, at the request of the Holder,
appropriate notation may be made on this Warrant and the same returned to
the Holder.
All shares of Class B Common Stock issuable upon the exercise
of this Warrant shall, upon payment therefor in accordance herewith, be
duly and validly issued, fully paid and nonassessable and free and clear
of any liens, charges or other encumbrances of any nature.
The Issuer shall not be required to issue a fractional share of
Class B Common Stock upon exercise of this Warrant. As to any fraction
of a share which the Holder would otherwise be entitled to purchase upon
such exercise, the Issuer shall pay (at the time this Warrant is
exercised for all shares of Class B Common Stock remaining subject
hereto) a cash adjustment in respect of such final fraction in an amount
equal to the same fraction of the Current Market Price per share of Class
B Common Stock on the date of exercise.
SECTION 3. TRANSFER, DIVISION AND COMBINATION. (a)
Notwithstanding anything herein to the contrary, no holder of Warrants
subject to the provisions of Regulation Y shall transfer any Warrants or
shares of Warrant Stock held by it, if, as a result of such transfer or
the right to effect such transfer, such holder would be deemed under
Regulation Y to have the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Issuer (and,
for purposes of this restriction, a reasoned opinion of counsel to such
holder (which is based on facts and circumstances deemed appropriate by
such counsel) to the effect that such holder does not exercise such a
controlling influence shall be conclusive). For the purposes of this
Section 3(a), a holder of Warrants will not be deemed to be subject to
Regulation Y to the extent such holder is entitled to hold the Warrants
pursuant to 12 C.F.R. <section> 225.22(c)(4).
(b) Subject to the foregoing, this Warrant and all rights
hereunder are transferable (subject to any restrictive legends hereon),
in whole or in part, upon surrender of this Warrant to the Issuer,
together with a written assignment of this Warrant duly executed by the
Holder hereof or such holder's agent or attorney. Such written
assignment shall be in the form of the Assignment Form attached as Annex
B hereto. Upon such surrender the Issuer shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and the
original Warrant shall promptly be canceled.
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(c) This Warrant may be exchanged for other Warrants of the
same series upon presentation to the Issuer, together with a written
notice specifying the denominations in which new Warrants are to be
issued, signed by the Holder hereof. The Issuer shall execute and
deliver a new Warrant or Warrants to the holder in exchange for the
Warrant or Warrants to be divided or combined in accordance with such
notice. The Issuer shall pay all expenses, taxes (including transfer
taxes) and other charges payable in connection with the preparation,
issuance and delivery of the Warrants, including any transfer or exchange
thereof.
(d) The Issuer shall maintain books for the registration and
transfer of the Warrants, and shall allow each holder of Warrants to
inspect such books at such reasonable times as such holder shall request.
SECTION 4. ADJUSTMENTS.
(a) DIVIDENDS, DISTRIBUTIONS AND PURCHASES.
(i) If at any time the Issuer shall pay any dividend or make
any other distribution to holders of its Common Stock of any cash,
evidence of indebtedness or other property of any nature whatsoever
(other than as provided in subsections (b), (c)(i)(A) and (d)(i)(A)
hereof), the Issuer shall at the same time pay or distribute to each
holder of Warrants (whether or not such holder exercises such
Warrants) the cash, evidence of indebtedness or other property such
holder would have been entitled to receive if such holder had
exercised such Warrants immediately prior to the record date for
such dividend or distribution.
(ii) If at any time the Issuer shall propose to purchase or
redeem any shares of its Common Stock (other than shares of Class B
or Class C Common Stock validly repurchased or redeemed, solely as
permitted by the terms of the Senior Secured Note Indenture (as
defined in the Amended and Restated Certificate of Incorporation),
pursuant to any management equity subscription, stockholders or
stock option agreement) for cash, evidence of indebtedness or other
property of any nature whatsoever, the Issuer shall deliver to each
holder of Warrants which are by their terms then exercisable for
shares of Warrant Stock a notice of such proposed purchase or
redemption, and each such holder shall, at its option, have the
right to require the Issuer to at the same time purchase or redeem
Warrants and shares of Warrant Stock owned by such holder, in the
same proportion as the number of shares of Common Stock to be so
purchased or redeemed bears to the total number of shares of Common
Stock outstanding at such time, on the same terms and conditions as
the proposed purchase or redemption of such other Common Stock and
for the same consideration per Warrant or share of Warrant Stock, as
the case may be, as is paid to the holders of such other Common
Stock for each share of Common Stock so redeemed or purchased,
minus, in the case of Warrants, the exercise price of the Warrants
to be so purchased or redeemed.
(b) SUBDIVISIONS AND COMBINATIONS. If at any time the Issuer
shall
(i) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or other
distribution of Common Stock;
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<PAGE>
(ii) subdivide or reclassify its outstanding shares of Common
Stock into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as
to equal the number of shares of Warrant Stock which such holder would
have been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
(c) ISSUANCE OF COMMON STOCK. In case at any time the Issuer
(i)(A) shall take a record of the holders of its Common Stock for the
purpose of entitling them to subscribe for or purchase shares of any
class or series of Common Stock or (B) shall otherwise sell or issue any
such securities and (ii) the consideration per share of Common Stock to
be paid upon such issuance or subscription is less than the Current
Market Price per share of Common Stock on such record date, then the
number of shares of Warrant Stock comprising a Stock Unit shall be
adjusted to be that number determined by multiplying the number of shares
of Warrant Stock comprising a Stock Unit immediately prior to such record
date by a fraction (not to be less than one) (i) the numerator of which
shall be equal to the product of (A) the number of shares of Common Stock
outstanding after giving effect to such issuance, distribution,
subscription or purchase and (B) the Current Market Price per share of
Common Stock determined immediately before such record date and (ii) the
denominator of which shall be equal to the sum of (A) the product of (1)
the number of shares of Common Stock outstanding immediately before such
record date and (2) the Current Market Price per share of Common Stock
determined immediately before such record date and (B) the aggregate
consideration to be received by the Issuer for the total number of shares
of Common Stock to be issued, distributed, subscribed for or purchased.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any shares of Common Stock shall be
issued or sold for cash, the consideration received therefor shall be
deemed to be the amount payable to the Issuer therefor. In case any
shares of Common Stock shall be issued or sold for a consideration other
than cash payable to the Issuer, the consideration received therefor
shall be deemed to be the fair value of such consideration as determined
by the Board. In case any shares of Common Stock shall be issued in
connection with any merger of another corporation into the Issuer, the
amount of consideration therefor shall be deemed to be the fair value as
determined by the Board of such portion of the assets of such merged
corporation as the Board shall determine to be attributable to such
shares of Common Stock.
(d) ISSUANCE OF OTHER SECURITIES, RIGHTS OR OBLIGATIONS. In
case at any time the Issuer (i)(A) shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or
purchase options to purchase or rights to subscribe for Common Stock or
securities directly or indirectly convertible into or exchangeable for
Common Stock (or options or rights with respect to such securities) or
(B) shall otherwise issue or sell any such options, rights or securities
and (ii) the consideration per share for which Common Stock is
deliverable upon exercise of such options or rights or conversion or
exchange of such securities (determined by dividing (x) the total amount
received or receivable by the Issuer in consideration of the issuance of
or subscription for such options, rights or securities, plus the minimum
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<PAGE>
aggregate amount of premiums (if any) payable to the Issuer upon such
exercise, conversion or exchange, by (y) the total maximum number of
shares of Common Stock necessary to effect the exercise, conversion or
exchange of all such options, rights or securities) shall be less than
the Current Market Price per share of Common Stock on such record date or
sale or issuance date, as the case may be, then the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock
comprising a Stock Unit immediately prior to such date by a fraction (not
to be less than one) (i) the numerator of which shall be equal to the
product of (A) the total maximum number of shares of Common Stock
outstanding after giving effect to the assumed exercise or conversion of
all such options, rights or securities and (B) the Current Market Price
per share of Common Stock determined immediately before such date and
(ii) the denominator of which shall be equal to the sum of (A) the
product of (1) the number of shares of Common Stock outstanding
immediately before such date and (2) the Current Market Price per share
of the Common Stock determined immediately before such date and (B) the
aggregate consideration per share (determined as set forth in subsection
(ii)(x) and (y) above) for which Common Stock is deliverable upon
exercise conversion or exchange of such options, rights or securities.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any options, rights or convertible or
exchangeable securities (or options or rights with respect thereto) shall
be issued or sold, or exercisable, convertible or exchangeable for cash,
the consideration received therefor shall be deemed to be the amount
payable to the Issuer (determined as set forth in subsection (ii)(x) and
(y) above) therefor. In case any such options, rights or securities
shall be issued or sold, or exercisable, convertible or exchangeable for
a consideration other than cash payable to the Issuer, the consideration
received therefor (determined as set forth in subsection (ii)(x) and (y)
above) shall be deemed to be the fair value of such consideration as
determined by the Board, after deduction therefrom of any expenses
incurred or any underwriting commissions or concessions or discounts paid
or allowed by the Issuer in connection therewith. In case any such
options, rights or securities shall be issued or sold, or exercisable,
convertible or exchangeable in connection with any merger of another
corporation into the Issuer, the amount of consideration therefor shall
be deemed to be the fair value as determined by the Board of such portion
of the assets of such merged corporation as the Board shall determine to
be attributable to such options, rights or securities.
The Current Market Price per share of Common Stock shall be
determined as set forth in Section 5.05 hereof.
(e) SUPERSEDING ADJUSTMENT. If, at any time after any
adjustment in the number of shares of Warrant Stock comprising a Stock
Unit shall have been made on the basis of the issuance of any options or
rights, or convertible or exchangeable securities (or options or rights
with respect to such securities) pursuant to subsection (d) hereof:
(i) the options or rights shall expire prior to exercise or
the right to convert or exchange any such securities shall
terminate; or
(ii) the consideration per share for which shares of Common
Stock are issuable pursuant to the terms of such options or rights
or convertible or exchangeable securities shall be increased or
decreased, other than under or by reason of provisions designed to
protect against dilution;
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<PAGE>
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A) treating the number of shares of Common Stock, if
any, theretofore actually issued or issuable pursuant
to the previous exercise, conversion or exchange of
such options, rights or securities as having been
issued on the date or dates of such exercise,
conversion or exchange and for the consideration
actually received and receivable therefore, and
(B) treating any such options, rights or securities which
then remain outstanding as having been granted or
issued immediately after the time of such increase or
decrease for the consideration per share for which
shares of Common Stock are issuable upon exercise,
conversion or exchange of such options, rights or
securities.
To the extent called for by the foregoing provisions of this Section 4(e)
on the basis aforesaid, a new adjustment in the number of shares of
Warrant Stock comprising a Stock Unit shall be made, determined using the
Current Market Price used at the time of the original determination,
which new adjustment shall supersede the previous adjustment so rescinded
and annulled. If the exercise, conversion or exchange price provided for
in any such option, right or security shall decrease at any time under or
by reason of provisions designed to protect against dilution, then in the
case of the delivery of shares of Common Stock upon the exercise,
conversion or exchange of any such option, right or security, the Stock
Unit purchasable upon the exercise of a Warrant shall forthwith be
adjusted in the manner which would have obtained had the adjustment made
upon issuance of such option, right or security been made upon the basis
of the issuance of (and the aggregate consideration received for) the
shares of Common Stock delivered as aforesaid.
(f) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS
SECTION. The following provisions shall be applicable to the making of
adjustments of the number of shares of Warrant Stock comprising a Stock
Unit:
(i) The sale or other disposition of any issued shares of
Common Stock owned or held by or for the account of the Issuer shall
be deemed to be an issuance thereof for purposes of this Section.
(ii) In computing adjustments under this Section, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
(iii) If the Issuer shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend
or distribution or subscription or purchase rights and shall,
thereafter and before the distribution thereof, legally abandon its
plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then thereafter no adjustment shall be required by
reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
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<PAGE>
(g) MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If the
Issuer shall merge or consolidate with another corporation, or shall
sell, transfer or otherwise dispose of all or substantially all of its
assets to another corporation and pursuant to the terms of such merger,
consolidation or disposition of assets, cash, shares of common stock or
other securities of the successor or acquiring corporation, or property
of any nature is to be received by or distributed to the holders of
Common Stock of the Issuer, then each holder of Warrants which are by
their terms then exercisable shall, at such holder's election, have the
right to receive (whether or not such holder exercises such Warrants) the
amount it would have been entitled to receive if such holder had
exercised such Warrants immediately prior to the occurrence of such
merger, consolidation or disposition of assets, net of the exercise price
of such Warrants. In case of any such merger, consolidation or
disposition of assets in which the foregoing election is not made, the
successor or acquiring corporation (and any affiliate thereof issuing
securities) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to
be performed and observed by the Issuer and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably
acceptable to the holders of a majority in interest of the Warrants) in
order to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this
Section. The foregoing provisions shall similarly apply to successive
mergers, consolidations and dispositions of assets.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or
from time to time the Issuer shall take any action affecting its Common
Stock, other than an action described in any of the foregoing subsections
of this Section or an action taken in the ordinary course of the Issuer's
business and consistent with past practice, then, unless in the
reasonable opinion of the Board such action will not have a material
adverse effect upon the rights of the holders of the Warrants, the number
of shares of Warrant Stock comprising a Stock Unit shall be adjusted in
such manner and at such time as the Board shall in good faith determine
to be equitable in the circumstances, but no such adjustment shall
decrease the number of shares of Warrant Stock comprising a Stock Unit.
(i) NOTICE OF ADJUSTMENTS. Whenever the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted pursuant to this
Agreement, the Issuer shall forthwith obtain a certificate signed by a
firm of independent accountants of recognized national standing selected
by the Issuer, setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated and
specifying the number of shares of Warrant Stock comprising a Stock Unit,
after giving effect to such adjustment or change. The Issuer shall
promptly cause a signed copy of such certificate to be delivered to each
holder of Warrants. The Issuer shall keep at its office copies of all
such certificates and cause the same to be available for inspection at
said office during normal business hours by any holder of Warrants or any
prospective purchaser of Warrants designated by the registered holder
hereof.
(j) NOTICE OF CERTAIN CORPORATE ACTION. If the Issuer shall
propose (i) to pay any dividend to the holders of its Common Stock or to
make any other distribution to the holders of its Common Stock; (ii) to
offer to the holders of its Common Stock rights to subscribe for or to
purchase any additional shares of Common Stock (or options or rights with
respect thereto); (iii) to effect any reclassification of its Common
Stock; (iv) to otherwise issue any Common Stock or other securities; (v)
to effect any capital reorganization; (vi) to effect any consolidation,
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<PAGE>
merger or sale, transfer or other disposition of all or substantially all
of its assets; or (vii) to effect the liquidation, dissolution or winding
up of the Issuer, then, in each such case, the Issuer shall give to each
holder of Warrants a notice of such proposed action, which shall specify
the date on which a record is to be taken for the purposes of such
dividend, distribution or rights offer, or the date on which such
reclassification, issuance, reorganization, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of Common
Stock, if any such date is to be fixed, and shall also set forth such
facts with respect thereto as shall be reasonably necessary to indicate
the effect of such action on the Common Stock, and the number of shares
of Warrant Stock which will comprise a Stock Unit after giving effect to
any adjustment which will be required as a result of such action. Such
notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least 20 days prior to the record date for determining
holders of the Common Stock for purposes of such action, and in the case
of any other such action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by
the holders of Common Stock, whichever shall be the earlier.
(k) NO ADJUSTMENT NECESSARY. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection
with, the issuance of shares of Common Stock, or options or warrants to
purchase shares of Common Stock, to management at fair market value (as
determined by the Board in its reasonable judgment) in an amount up to
12% of the outstanding shares of Common Stock on June 12, 1996, on a
fully diluted basis.
SECTION 5. MISCELLANEOUS.
5.01 OFFICE OF ISSUER. So long as any of the Warrants remains
outstanding, the Issuer shall maintain an office in the continental
United States of America where the Warrants may be presented for
exercise, transfer, division or combination as in this Warrant provided.
Such office shall be at c/o 101 Oakley Street, Evansville, Indiana 47710,
unless and until the Issuer shall designate and maintain some other
office for such purposes and give notice thereof to all Warrant Holders.
5.02 NOTICES GENERALLY. Any notices and other communications
pursuant to the provisions hereof shall be sent in accordance with the
provisions of Section 8.6 of the Purchase Agreement.
5.03 GOVERNING LAW. The corporate law of the State of
Delaware shall govern all issues concerning the relative rights of the
Issuer and its Stockholders. 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 Issuer agrees that it may be served with
process in State of New York and any action for breach of this Warrant
may be prosecuted against it in the courts of that State.
5.04 LIMITATION OF LIABILITY. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Class B
Common Stock, and no mere enumeration herein of the rights or privileges
of the Holder, shall give rise to any liability of the Holder for the
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<PAGE>
Exercise Price or as a Stockholder of the Issuer, whether such liability
is asserted by the Issuer, by any creditor of the Issuer or any other
Person.
5.05 DETERMINATION OF CURRENT MARKET PRICE PER SHARE OF COMMON
STOCK. The Current Market Price per share of Common Stock shall in each
instance initially be determined by the Issuer in accordance with the
provisions of the definition of Current Market Price in Section 1 hereof.
The Issuer shall notify the Holders of such determination. If the
holders of a majority in interest of the Warrants disagree with the
determination of the Issuer, the Issuer shall appoint an Independent
Financial Expert to determine the Current Market Price per share of
Common Stock and the determination of the Independent Financial Expert
shall govern for purposes of determining the adjustment pursuant to this
Section. The Issuer shall notify each holder of Warrants of the final
determination of the Current Market Price per share of Common Stock. The
Issuer shall pay the fees and expenses of the Independent Financial
Expert.
5.06 REGISTRATION RIGHTS. The holders of this Warrant shall be
entitled to the benefit of the provisions of Article 6A and Article 6C of
the Purchase Agreement with regard to the registration for sale of the
Warrant Stock.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has duly executed this Warrant.
Dated: May 9, 2000
BPC HOLDING CORPORATION
By: /S/ JAMES KRATOCHVIL
Name: James Kratochvil
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
Annex A
to
Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of Stock Units of the Issuer, and
herewith makes payment therefor, all at the price and on the terms and
conditions specified in this Warrant, and requests that (i) certificates
and/or other instruments covering such Stock Units be issued in
accordance with the instructions given below and (ii) if such Stock Units
shall not include all of the Stock Units to which the Holder is entitled
under this Warrant, that a new Warrant of like tenor and date for the
unpurchased balance of the Stock Units issuable hereunder be delivered to
the undersigned.
Dated: __________________
________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Stock Units:
_______________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _________________________
Please deliver certificate to
the following address:
____________________________________
Street
_____________________________________
City, State and Zip Code
<PAGE>
Annex B
to
Warrant
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the assignee named below
all the rights of the undersigned under this Warrant with respect to the
number of Stock Units covered thereby set forth hereinbelow unto:
Number of
NAME OF ASSIGNEE ADDRESS STOCK UNITS
Dated:__________________
________________________________
(Signature of Registered Holder)
________________________________
Name of Registered Holder
(Please Print)
Witness:
______________________
WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT DATED AS OF MAY 9, 2000 (THE "PURCHASE AGREEMENT"), BY
AND AMONG BPC HOLDING CORPORATION, A DELAWARE CORPORATION (THE "ISSUER"),
CHASE VENTURE CAPITAL ASSOCIATES, LLC AND THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, AS SUCH PURCHASE AGREEMENT MAY BE MODIFIED AND
SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE PURCHASE
AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE
OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF THE PURCHASE
AGREEMENT.
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.
No. of Stock Units: 10,398 Warrant No. CBNV-2
WARRANT
to Purchase Class B Non-Voting Common Stock of
BPC HOLDING CORPORATION
THIS IS TO CERTIFY THAT THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY, or its registered assigns, is entitled to purchase in whole or
in part from time to time from BPC Holding Corporation, a Delaware
corporation (the "ISSUER"), at any time on and after the Effective Date
(as hereinafter defined), but not later than 5:00 p.m., New York time, on
May 9, 2010 (the "EXPIRATION DATE"), 10,398 Stock Units (as hereinafter
defined and subject to adjustment as provided herein) at a purchase price
of $0.01 per Stock Unit (the "EXERCISE PRICE"), subject to the terms and
conditions provided herein and in the Purchase Agreement (as hereinafter
defined).
This Warrant is issued pursuant to the Preferred Stock and
Warrant Purchase Agreement dated as of May 9, 2000 (as modified and
supplemented and in effect from time to time, the "PURCHASE AGREEMENT")
between the Issuer, Chase Venture Capital Associates, LLC and The
Northwestern Mutual Life Insurance Company.
<PAGE>
SECTION 1. CERTAIN DEFINITIONS. (a) Each capitalized term
used herein without definition shall have the meaning assigned thereto
(or incorporated by reference) in the Purchase Agreement and in the
Exhibits thereto.
(b) As used herein, the following terms shall have the
following meanings (all terms defined in this Section 1 or in other
provisions of this Warrant in the singular to have the same meanings when
used in the plural and vice versa):
"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.
"BOARD" shall mean the Board of Directors of the Issuer.
"BUSINESS DAY" shall mean any day on which commercial banks are
not authorized or required to close in New York City.
"CLASS B COMMON STOCK" means, the Issuer's Class B Non-Voting
Common Stock, $.01 par value per share, or any other common stock or
other securities receivable thereon, or into which the Class B Common
Stock is convertible or exchangeable, as a result of any
recapitalization, reclassification, merger or consolidation of, or
deposition of assets by, the Issuer.
"COMMON STOCK" shall mean the Common Stock of the Issuer, of
any class or series whatsoever, or any other common stock or other
securities receivable thereon, or into which the Common Stock is
convertible or exchangeable, as a result of any recapitalization,
reclassification, merger or consolidation of, or disposition of assets
by, the Issuer.
"CURRENT MARKET PRICE", shall mean, with respect to a share of
Common Stock as of any date (a) for a period of 30 Business Days after
the date of the IPO, the offering price of such Common Stock or (b) in
any other case (i) the fair market value per share of such Common Stock,
as reasonably determined in good faith by the Board, using an appropriate
valuation method, assuming an arms-length sale to an independent party of
all of the Common Stock of the Issuer, without giving regard to the lack
of liquidity of such Common Stock due to any restrictions contained in
the Stockholders Agreement, the Purchase Agreement or otherwise or any
discount for minority interests and assuming the conversion or exchange
of all securities then outstanding which are convertible into or
exchangeable for such Common Stock and the exercise of all rights and
warrants (including the Warrants) then outstanding and exercisable to
purchase shares of such Common Stock or securities convertible into or
exchangeable for shares of such Common Stock, or (ii) if there shall be a
public market for such Common Stock, the average of the daily market
prices for each day during the 30 consecutive trading days commencing 45
Business Days before such date as of which such a price can be
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<PAGE>
established in the manner set forth below. The market price for each
such Business Day shall be the last sale price on such day as reported in
the Consolidated Last Sale Reporting System or as quoted on Nasdaq, or if
such last sale price is not available, the average of the closing bid and
asked prices as reported in either such system, or in any other case the
higher bid price quoted for such day as reported by The Wall Street
Journal and the National Quotation Bureau pink sheets.
"EFFECTIVE DATE" shall mean the date set forth on the signature
page of this Warrant.
"EXERCISE NOTICE" shall have the meaning assigned to such term
in Section 2 hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term
in the first paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning assigned to such term
in the first paragraph of this Warrant.
"HOLDER" shall mean the registered holder of this Warrant.
"INCLUDE" and "INCLUDING" shall be construed as if followed by
the phrase ", without being limited to,".
"INDEPENDENT FINANCIAL EXPERT" shall mean an investment banking
firm of recognized national standing chosen by the Issuer which is not an
Affiliate of Atlantic Equity Partners International II, L.P. or an
Affiliate or a Stockholder of the Issuer and which is satisfactory to the
holders of a majority in interest of the Warrants and the Warrant Stock.
"IPO" shall mean the Issuer's first firm commitment
underwritten public offering involving the sale of Common Stock of the
Issuer, pursuant to an effective registration statement under the
Securities Act.
"ISSUER" shall have the meaning assigned to such term in the
first paragraph of this Warrant.
"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.
"PURCHASE AGREEMENT" shall have the meaning assigned to such
term in the second paragraph of this Warrant.
"REGULATION Y" shall mean Regulation Y promulgated by the Board
of Governors of the Federal Reserve System (12 C.F.R. <section>225), or
any successor regulation.
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<PAGE>
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"STOCKHOLDER" shall mean any Person who directly or indirectly
owns any shares of Common Stock (including Warrant Stock).
"STOCK UNIT" shall mean one share of Class B Common Stock, as
such Class B Common Stock is constituted on the date hereof, and
thereafter shall mean such number of shares (including any fractional
shares) of Class B Common Stock and other securities, cash or other
property as shall result from the adjustments specified in Section 4
hereof.
"WARRANT HOLDER" shall mean any Person who acquires Warrants or
Warrant Stock pursuant to the provisions of the Purchase Agreement,
including any transferees of Warrants or Warrant Stock.
"WARRANT STOCK" shall mean all shares of Class B Common Stock
issuable from time to time upon exercise of the Warrants.
"WARRANTS" shall mean the warrants originally issued by the
Issuer pursuant to the Purchase Agreement (of which this Warrant is one),
evidencing rights to purchase up to the aggregate amount of Stock Units
set forth therein, and all Warrants issued upon transfer, division, or
combination of, or in substitution for, such Warrants.
SECTION 2. EXERCISE OF WARRANT. On and after the Effective
Date and until 5:00 p.m., New York time, on the Expiration Date, the
Holder may exercise this Warrant, on one or more occasions, on any
Business Day, in whole or in part, by delivering to the Issuer, at its
office maintained for such purpose pursuant to Section 5.01 hereof, (a) a
written notice of the Holder's election to exercise this Warrant, which
notice shall specify the number of Stock Units to be purchased (the
"EXERCISE NOTICE"), (b) payment of the Exercise Price (payable as set
forth below) for the number of Stock Units as to which this Warrant is
being exercised, and (c) this Warrant. The Exercise Price shall be
payable (a) in cash or by certified or official bank check payable to the
order of the Issuer or by wire transfer of immediately available funds to
the account of the Issuer or (b) by delivery of this Warrant Certificate
to the Issuer for cancellation in accordance with the following formula:
in exchange for each share of Class B Common Stock issuable on exercise
of each Warrant represented by this Warrant Certificate that is being
exercised, such holder shall receive such number of shares of Class B
Common Stock as is equal to the product of (i) the number of shares of
Class B Common Stock issuable upon exercise of the Warrants being
exercised at such time multiplied by (ii) a fraction, the numerator of
which is the Current Market Price per share of Class B Common Stock at
such time minus the Exercise Price per share of Class B Common Stock at
such time, and the denominator of which is the Current Market Price per
share of Class B Common Stock at such time.
Upon receipt thereof, the Issuer shall, as promptly as
practicable and in any event within five Business Days thereafter,
execute or cause to be executed and deliver or cause to be delivered to
the Holder a stock certificate or certificates representing the aggregate
number of shares of Warrant Stock and other securities issuable upon such
exercise and any other property to which such Holder is entitled.
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<PAGE>
The stock certificate or certificates for Warrant Stock so
delivered shall be in such denominations as may be specified in the
Exercise Notice and shall be registered in the name of the Holder or such
other name or names as shall be designated in such Exercise Notice. Such
stock certificate or certificates shall be deemed to have been issued and
the Holder or any other Person so designated to be named therein shall be
deemed to have become a holder of record of such shares, including, to
the extent permitted by law and to the extent such shares represent
voting stock of the Issuer, the right to vote such shares or to consent
or to receive notice as a Stockholder, as of the date on which the last
of the Exercise Notice, payment of the Exercise Price and this Warrant is
received by the Issuer as aforesaid. If this Warrant shall have been
exercised only in part, the Issuer shall, at the time of delivery of the
certificate or certificates representing Warrant Stock and other
securities, execute and deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Stock Units called
for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or, at the request of the Holder,
appropriate notation may be made on this Warrant and the same returned to
the Holder.
All shares of Class B Common Stock issuable upon the exercise
of this Warrant shall, upon payment therefor in accordance herewith, be
duly and validly issued, fully paid and nonassessable and free and clear
of any liens, charges or other encumbrances of any nature.
The Issuer shall not be required to issue a fractional share of
Class B Common Stock upon exercise of this Warrant. As to any fraction
of a share which the Holder would otherwise be entitled to purchase upon
such exercise, the Issuer shall pay (at the time this Warrant is
exercised for all shares of Class B Common Stock remaining subject
hereto) a cash adjustment in respect of such final fraction in an amount
equal to the same fraction of the Current Market Price per share of Class
B Common Stock on the date of exercise.
SECTION 3. TRANSFER, DIVISION AND COMBINATION. (a)
Notwithstanding anything herein to the contrary, no holder of Warrants
subject to the provisions of Regulation Y shall transfer any Warrants or
shares of Warrant Stock held by it, if, as a result of such transfer or
the right to effect such transfer, such holder would be deemed under
Regulation Y to have the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Issuer (and,
for purposes of this restriction, a reasoned opinion of counsel to such
holder (which is based on facts and circumstances deemed appropriate by
such counsel) to the effect that such holder does not exercise such a
controlling influence shall be conclusive). For the purposes of this
Section 3(a), a holder of Warrants will not be deemed to be subject to
Regulation Y to the extent such holder is entitled to hold the Warrants
pursuant to 12 C.F.R. <section> 225.22(c)(4).
(b) Subject to the foregoing, this Warrant and all rights
hereunder are transferable (subject to any restrictive legends hereon),
in whole or in part, upon surrender of this Warrant to the Issuer,
together with a written assignment of this Warrant duly executed by the
Holder hereof or such holder's agent or attorney. Such written
assignment shall be in the form of the Assignment Form attached as Annex
B hereto. Upon such surrender the Issuer shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and the
original Warrant shall promptly be canceled.
5
<PAGE>
(c) This Warrant may be exchanged for other Warrants of the
same series upon presentation to the Issuer, together with a written
notice specifying the denominations in which new Warrants are to be
issued, signed by the Holder hereof. The Issuer shall execute and
deliver a new Warrant or Warrants to the holder in exchange for the
Warrant or Warrants to be divided or combined in accordance with such
notice. The Issuer shall pay all expenses, taxes (including transfer
taxes) and other charges payable in connection with the preparation,
issuance and delivery of the Warrants, including any transfer or exchange
thereof.
(d) The Issuer shall maintain books for the registration and
transfer of the Warrants, and shall allow each holder of Warrants to
inspect such books at such reasonable times as such holder shall request.
SECTION 4. ADJUSTMENTS.
(a) DIVIDENDS, DISTRIBUTIONS AND PURCHASES.
(i) If at any time the Issuer shall pay any dividend or make
any other distribution to holders of its Common Stock of any cash,
evidence of indebtedness or other property of any nature whatsoever
(other than as provided in subsections (b), (c)(i)(A) and (d)(i)(A)
hereof), the Issuer shall at the same time pay or distribute to each
holder of Warrants (whether or not such holder exercises such
Warrants) the cash, evidence of indebtedness or other property such
holder would have been entitled to receive if such holder had
exercised such Warrants immediately prior to the record date for
such dividend or distribution.
(ii) If at any time the Issuer shall propose to purchase or
redeem any shares of its Common Stock (other than shares of Class B
or Class C Common Stock validly repurchased or redeemed, solely as
permitted by the terms of the Senior Secured Note Indenture (as
defined in the Amended and Restated Certificate of Incorporation),
pursuant to any management equity subscription, stockholders or
stock option agreement) for cash, evidence of indebtedness or other
property of any nature whatsoever, the Issuer shall deliver to each
holder of Warrants which are by their terms then exercisable for
shares of Warrant Stock a notice of such proposed purchase or
redemption, and each such holder shall, at its option, have the
right to require the Issuer to at the same time purchase or redeem
Warrants and shares of Warrant Stock owned by such holder, in the
same proportion as the number of shares of Common Stock to be so
purchased or redeemed bears to the total number of shares of Common
Stock outstanding at such time, on the same terms and conditions as
the proposed purchase or redemption of such other Common Stock and
for the same consideration per Warrant or share of Warrant Stock, as
the case may be, as is paid to the holders of such other Common
Stock for each share of Common Stock so redeemed or purchased,
minus, in the case of Warrants, the exercise price of the Warrants
to be so purchased or redeemed.
(b) SUBDIVISIONS AND COMBINATIONS. If at any time the Issuer
shall
(i) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or other
distribution of Common Stock;
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<PAGE>
(ii) subdivide or reclassify its outstanding shares of Common
Stock into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as
to equal the number of shares of Warrant Stock which such holder would
have been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
(c) ISSUANCE OF COMMON STOCK. In case at any time the Issuer
(i)(A) shall take a record of the holders of its Common Stock for the
purpose of entitling them to subscribe for or purchase shares of any
class or series of Common Stock or (B) shall otherwise sell or issue any
such securities and (ii) the consideration per share of Common Stock to
be paid upon such issuance or subscription is less than the Current
Market Price per share of Common Stock on such record date, then the
number of shares of Warrant Stock comprising a Stock Unit shall be
adjusted to be that number determined by multiplying the number of shares
of Warrant Stock comprising a Stock Unit immediately prior to such record
date by a fraction (not to be less than one) (i) the numerator of which
shall be equal to the product of (A) the number of shares of Common Stock
outstanding after giving effect to such issuance, distribution,
subscription or purchase and (B) the Current Market Price per share of
Common Stock determined immediately before such record date and (ii) the
denominator of which shall be equal to the sum of (A) the product of (1)
the number of shares of Common Stock outstanding immediately before such
record date and (2) the Current Market Price per share of Common Stock
determined immediately before such record date and (B) the aggregate
consideration to be received by the Issuer for the total number of shares
of Common Stock to be issued, distributed, subscribed for or purchased.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any shares of Common Stock shall be
issued or sold for cash, the consideration received therefor shall be
deemed to be the amount payable to the Issuer therefor. In case any
shares of Common Stock shall be issued or sold for a consideration other
than cash payable to the Issuer, the consideration received therefor
shall be deemed to be the fair value of such consideration as determined
by the Board. In case any shares of Common Stock shall be issued in
connection with any merger of another corporation into the Issuer, the
amount of consideration therefor shall be deemed to be the fair value as
determined by the Board of such portion of the assets of such merged
corporation as the Board shall determine to be attributable to such
shares of Common Stock.
(d) ISSUANCE OF OTHER SECURITIES, RIGHTS OR OBLIGATIONS. In
case at any time the Issuer (i)(A) shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or
purchase options to purchase or rights to subscribe for Common Stock or
securities directly or indirectly convertible into or exchangeable for
Common Stock (or options or rights with respect to such securities) or
(B) shall otherwise issue or sell any such options, rights or securities
and (ii) the consideration per share for which Common Stock is
deliverable upon exercise of such options or rights or conversion or
exchange of such securities (determined by dividing (x) the total amount
received or receivable by the Issuer in consideration of the issuance of
or subscription for such options, rights or securities, plus the minimum
7
<PAGE>
aggregate amount of premiums (if any) payable to the Issuer upon such
exercise, conversion or exchange, by (y) the total maximum number of
shares of Common Stock necessary to effect the exercise, conversion or
exchange of all such options, rights or securities) shall be less than
the Current Market Price per share of Common Stock on such record date or
sale or issuance date, as the case may be, then the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock
comprising a Stock Unit immediately prior to such date by a fraction (not
to be less than one) (i) the numerator of which shall be equal to the
product of (A) the total maximum number of shares of Common Stock
outstanding after giving effect to the assumed exercise or conversion of
all such options, rights or securities and (B) the Current Market Price
per share of Common Stock determined immediately before such date and
(ii) the denominator of which shall be equal to the sum of (A) the
product of (1) the number of shares of Common Stock outstanding
immediately before such date and (2) the Current Market Price per share
of the Common Stock determined immediately before such date and (B) the
aggregate consideration per share (determined as set forth in subsection
(ii)(x) and (y) above) for which Common Stock is deliverable upon
exercise conversion or exchange of such options, rights or securities.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any options, rights or convertible or
exchangeable securities (or options or rights with respect thereto) shall
be issued or sold, or exercisable, convertible or exchangeable for cash,
the consideration received therefor shall be deemed to be the amount
payable to the Issuer (determined as set forth in subsection (ii)(x) and
(y) above) therefor. In case any such options, rights or securities
shall be issued or sold, or exercisable, convertible or exchangeable for
a consideration other than cash payable to the Issuer, the consideration
received therefor (determined as set forth in subsection (ii)(x) and (y)
above) shall be deemed to be the fair value of such consideration as
determined by the Board, after deduction therefrom of any expenses
incurred or any underwriting commissions or concessions or discounts paid
or allowed by the Issuer in connection therewith. In case any such
options, rights or securities shall be issued or sold, or exercisable,
convertible or exchangeable in connection with any merger of another
corporation into the Issuer, the amount of consideration therefor shall
be deemed to be the fair value as determined by the Board of such portion
of the assets of such merged corporation as the Board shall determine to
be attributable to such options, rights or securities.
The Current Market Price per share of Common Stock shall be
determined as set forth in Section 5.05 hereof.
(e) SUPERSEDING ADJUSTMENT. If, at any time after any
adjustment in the number of shares of Warrant Stock comprising a Stock
Unit shall have been made on the basis of the issuance of any options or
rights, or convertible or exchangeable securities (or options or rights
with respect to such securities) pursuant to subsection (d) hereof:
(i) the options or rights shall expire prior to exercise or
the right to convert or exchange any such securities shall
terminate; or
(ii) the consideration per share for which shares of Common
Stock are issuable pursuant to the terms of such options or rights
or convertible or exchangeable securities shall be increased or
decreased, other than under or by reason of provisions designed to
protect against dilution;
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<PAGE>
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A) treating the number of shares of Common Stock, if
any, theretofore actually issued or issuable pursuant
to the previous exercise, conversion or exchange of
such options, rights or securities as having been
issued on the date or dates of such exercise,
conversion or exchange and for the consideration
actually received and receivable therefore, and
(B) treating any such options, rights or securities which
then remain outstanding as having been granted or
issued immediately after the time of such increase or
decrease for the consideration per share for which
shares of Common Stock are issuable upon exercise,
conversion or exchange of such options, rights or
securities.
To the extent called for by the foregoing provisions of this Section 4(e)
on the basis aforesaid, a new adjustment in the number of shares of
Warrant Stock comprising a Stock Unit shall be made, determined using the
Current Market Price used at the time of the original determination,
which new adjustment shall supersede the previous adjustment so rescinded
and annulled. If the exercise, conversion or exchange price provided for
in any such option, right or security shall decrease at any time under or
by reason of provisions designed to protect against dilution, then in the
case of the delivery of shares of Common Stock upon the exercise,
conversion or exchange of any such option, right or security, the Stock
Unit purchasable upon the exercise of a Warrant shall forthwith be
adjusted in the manner which would have obtained had the adjustment made
upon issuance of such option, right or security been made upon the basis
of the issuance of (and the aggregate consideration received for) the
shares of Common Stock delivered as aforesaid.
(f) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS
SECTION. The following provisions shall be applicable to the making of
adjustments of the number of shares of Warrant Stock comprising a Stock
Unit:
(i) The sale or other disposition of any issued shares of
Common Stock owned or held by or for the account of the Issuer shall
be deemed to be an issuance thereof for purposes of this Section.
(ii) In computing adjustments under this Section, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
(iii) If the Issuer shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend
or distribution or subscription or purchase rights and shall,
thereafter and before the distribution thereof, legally abandon its
plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then thereafter no adjustment shall be required by
reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
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<PAGE>
(g) MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If the
Issuer shall merge or consolidate with another corporation, or shall
sell, transfer or otherwise dispose of all or substantially all of its
assets to another corporation and pursuant to the terms of such merger,
consolidation or disposition of assets, cash, shares of common stock or
other securities of the successor or acquiring corporation, or property
of any nature is to be received by or distributed to the holders of
Common Stock of the Issuer, then each holder of Warrants which are by
their terms then exercisable shall, at such holder's election, have the
right to receive (whether or not such holder exercises such Warrants) the
amount it would have been entitled to receive if such holder had
exercised such Warrants immediately prior to the occurrence of such
merger, consolidation or disposition of assets, net of the exercise price
of such Warrants. In case of any such merger, consolidation or
disposition of assets in which the foregoing election is not made, the
successor or acquiring corporation (and any affiliate thereof issuing
securities) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to
be performed and observed by the Issuer and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably
acceptable to the holders of a majority in interest of the Warrants) in
order to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this
Section. The foregoing provisions shall similarly apply to successive
mergers, consolidations and dispositions of assets.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or
from time to time the Issuer shall take any action affecting its Common
Stock, other than an action described in any of the foregoing subsections
of this Section or an action taken in the ordinary course of the Issuer's
business and consistent with past practice, then, unless in the
reasonable opinion of the Board such action will not have a material
adverse effect upon the rights of the holders of the Warrants, the number
of shares of Warrant Stock comprising a Stock Unit shall be adjusted in
such manner and at such time as the Board shall in good faith determine
to be equitable in the circumstances, but no such adjustment shall
decrease the number of shares of Warrant Stock comprising a Stock Unit.
(i) NOTICE OF ADJUSTMENTS. Whenever the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted pursuant to this
Agreement, the Issuer shall forthwith obtain a certificate signed by a
firm of independent accountants of recognized national standing selected
by the Issuer, setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated and
specifying the number of shares of Warrant Stock comprising a Stock Unit,
after giving effect to such adjustment or change. The Issuer shall
promptly cause a signed copy of such certificate to be delivered to each
holder of Warrants. The Issuer shall keep at its office copies of all
such certificates and cause the same to be available for inspection at
said office during normal business hours by any holder of Warrants or any
prospective purchaser of Warrants designated by the registered holder
hereof.
(j) NOTICE OF CERTAIN CORPORATE ACTION. If the Issuer shall
propose (i) to pay any dividend to the holders of its Common Stock or to
make any other distribution to the holders of its Common Stock; (ii) to
offer to the holders of its Common Stock rights to subscribe for or to
purchase any additional shares of Common Stock (or options or rights with
respect thereto); (iii) to effect any reclassification of its Common
Stock; (iv) to otherwise issue any Common Stock or other securities; (v)
to effect any capital reorganization; (vi) to effect any consolidation,
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<PAGE>
merger or sale, transfer or other disposition of all or substantially all
of its assets; or (vii) to effect the liquidation, dissolution or winding
up of the Issuer, then, in each such case, the Issuer shall give to each
holder of Warrants a notice of such proposed action, which shall specify
the date on which a record is to be taken for the purposes of such
dividend, distribution or rights offer, or the date on which such
reclassification, issuance, reorganization, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of Common
Stock, if any such date is to be fixed, and shall also set forth such
facts with respect thereto as shall be reasonably necessary to indicate
the effect of such action on the Common Stock, and the number of shares
of Warrant Stock which will comprise a Stock Unit after giving effect to
any adjustment which will be required as a result of such action. Such
notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least 20 days prior to the record date for determining
holders of the Common Stock for purposes of such action, and in the case
of any other such action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by
the holders of Common Stock, whichever shall be the earlier.
(k) NO ADJUSTMENT NECESSARY. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection
with, the issuance of shares of Common Stock, or options or warrants to
purchase shares of Common Stock, to management at fair market value (as
determined by the Board in its reasonable judgment) in an amount up to
12% of the outstanding shares of Common Stock on June 12, 1996, on a
fully diluted basis.
SECTION 5. MISCELLANEOUS.
5.01 OFFICE OF ISSUER. So long as any of the Warrants remains
outstanding, the Issuer shall maintain an office in the continental
United States of America where the Warrants may be presented for
exercise, transfer, division or combination as in this Warrant provided.
Such office shall be at c/o 101 Oakley Street, Evansville, Indiana 47710,
unless and until the Issuer shall designate and maintain some other
office for such purposes and give notice thereof to all Warrant Holders.
5.02 NOTICES GENERALLY. Any notices and other communications
pursuant to the provisions hereof shall be sent in accordance with the
provisions of Section 8.6 of the Purchase Agreement.
5.03 GOVERNING LAW. The corporate law of the State of
Delaware shall govern all issues concerning the relative rights of the
Issuer and its Stockholders. 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 Issuer agrees that it may be served with
process in State of New York and any action for breach of this Warrant
may be prosecuted against it in the courts of that State.
5.04 LIMITATION OF LIABILITY. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Class B
Common Stock, and no mere enumeration herein of the rights or privileges
of the Holder, shall give rise to any liability of the Holder for the
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<PAGE>
Exercise Price or as a Stockholder of the Issuer, whether such liability
is asserted by the Issuer, by any creditor of the Issuer or any other
Person.
5.05 DETERMINATION OF CURRENT MARKET PRICE PER SHARE OF COMMON
STOCK. The Current Market Price per share of Common Stock shall in each
instance initially be determined by the Issuer in accordance with the
provisions of the definition of Current Market Price in Section 1 hereof.
The Issuer shall notify the Holders of such determination. If the
holders of a majority in interest of the Warrants disagree with the
determination of the Issuer, the Issuer shall appoint an Independent
Financial Expert to determine the Current Market Price per share of
Common Stock and the determination of the Independent Financial Expert
shall govern for purposes of determining the adjustment pursuant to this
Section. The Issuer shall notify each holder of Warrants of the final
determination of the Current Market Price per share of Common Stock. The
Issuer shall pay the fees and expenses of the Independent Financial
Expert.
5.06 REGISTRATION RIGHTS. The holders of this Warrant shall be
entitled to the benefit of the provisions of Article 6A and Article 6C of
the Purchase Agreement with regard to the registration for sale of the
Warrant Stock.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has duly executed this Warrant.
Dated: May 9, 2000
BPC HOLDING CORPORATION
By: /S/ JAMES KRATOCHVIL
Name: James Kratochvil
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
Annex A
to
Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of Stock Units of the Issuer, and
herewith makes payment therefor, all at the price and on the terms and
conditions specified in this Warrant, and requests that (i) certificates
and/or other instruments covering such Stock Units be issued in
accordance with the instructions given below and (ii) if such Stock Units
shall not include all of the Stock Units to which the Holder is entitled
under this Warrant, that a new Warrant of like tenor and date for the
unpurchased balance of the Stock Units issuable hereunder be delivered to
the undersigned.
Dated: __________________
________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Stock Units:
_______________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _________________________
Please deliver certificate to
the following address:
____________________________________
Street
_____________________________________
City, State and Zip Code
<PAGE>
Annex B
to
Warrant
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the assignee named below
all the rights of the undersigned under this Warrant with respect to the
number of Stock Units covered thereby set forth hereinbelow unto:
Number of
NAME OF ASSIGNEE ADDRESS STOCK UNITS
Dated:__________________
________________________________
(Signature of Registered Holder)
________________________________
Name of Registered Holder
(Please Print)
Witness:
______________________
AMENDED AND RESTATED WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT DATED AS OF JUNE 12, 1996 (THE "PURCHASE AGREEMENT"), BY
AND AMONG BPC HOLDING CORPORATION, A DELAWARE CORPORATION (SUCCESSOR IN
INTEREST TO BPC MERGERCO, INC.) (the "ISSUER"), BPC MERGERCO, INC., A
DELAWARE CORPORATION ("MERGERCO"), CHASE VENTURE CAPITAL ASSOCIATES, LLC
(FORMERLY KNOWN AS CHASE VENTURE CAPITAL ASSOCIATES, L.P.) AND THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY ("NORTHWESTERN"), AS SUCH
PURCHASE AGREEMENT MAY BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME
TO TIME, AND NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A
COPY OF THE PURCHASE AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE,
BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF
THE PURCHASE AGREEMENT.
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.
No. of Stock Units: 5,623 Warrant No. 5
WARRANT
to Purchase Class B Common Stock of
BPC HOLDING CORPORATION
THIS IS TO CERTIFY THAT CHASE VENTURE CAPITAL ASSOCIATES, LLC, or its
registered assigns, is entitled to purchase in whole or in part from time
to time from BPC Holding Corporation a Delaware corporation (the "ISSUER"),
at any time on and after the Effective Date (as hereinafter defined), but
not later than 5:00 p.m., New York time, on May 9, 2010 (the "EXPIRATION
DATE"), 5,623 Stock Units (as hereinafter defined and subject to adjustment
as provided herein) at a purchase price of $0.01 per Stock Unit (the
"EXERCISE PRICE"), subject to the
<PAGE>
terms and conditions provided herein and in the Purchase Agreement
(as hereinafter defined).
This Amended and Restated Warrant ("Warrant") is issued pursuant to the
Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996
(as modified and supplemented and in effect from time to time, the
"PURCHASE AGREEMENT") between the Issuer, Mergerco, Chase Venture Capital
Associates, LLC and Northwestern.
SECTION 1. CERTAIN DEFINITIONS. (a) Each capitalized term used herein
without definition shall have the meaning assigned thereto (or incorporated
by reference) in the Purchase Agreement and in the Exhibits thereto.
(b) As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1 or in other provisions of this Warrant
in the singular to have the same meanings when used in the plural and vice
versa):
"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.
"BOARD" shall mean the Board of Directors of the Issuer.
"BUSINESS DAY" shall mean any day on which commercial banks are not
authorized or required to close in New York City.
"CLASS B COMMON STOCK" means, the Issuer's Class B Voting Common Stock,
$.01 par value per share, or any other common stock or other securities
receivable thereon, or into which the Class B Common Stock is convertible
or exchangeable, as a result of any recapitalization, reclassification,
merger or consolidation of, or deposition of assets by, the Issuer.
"COMMON STOCK" shall mean the Common Stock of the Issuer, of any class or
series whatsoever, or any other common stock or other securities receivable
thereon, or into which the Common Stock is convertible or exchangeable, as
a result of any recapitalization, reclassification, merger or consolidation
of, or disposition of assets by, the Issuer.
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"CURRENT MARKET PRICE", shall mean, with respect to a share of Common Stock
as of any date (a) for a period of 30 Business Days after the date of the
IPO, the offering price of such Common Stock or (b) in any other case (i)
the fair market value per share of such Common Stock, as reasonably
determined in good faith by the Board, using an appropriate valuation
method, assuming an arms-length sale to an independent party of all of the
Common Stock of the Issuer, without giving regard to the lack of liquidity
of such Common Stock due to any restrictions contained in the Stockholders
Agreement, the Stock Purchase Agreement, the Purchase Agreement or
otherwise or any discount for minority interests and assuming the
conversion or exchange of all securities then outstanding which are
convertible into or exchangeable for such Common Stock and the exercise of
all rights and warrants (including the Warrants) then outstanding and
exercisable to purchase shares of such Common Stock or securities
convertible into or exchangeable for shares of such Common Stock, or (ii)
if there shall be a public market for such Common Stock, the average of the
daily market prices for each day during the 30 consecutive trading days
commencing 45 Business Days before such date as of which such a price can
be established in the manner set forth below. The market price for each
such Business Day shall be the last sale price on such day as reported in
the Consolidated Last Sale Reporting System or as quoted in the National
Association of Securities Dealers Automated Quotation System, or if such
last sale price is not available, the average of the closing bid and asked
prices as reported in either such system, or in any other case the higher
bid price quoted for such day as reported by The Wall Street Journal and
the National Quotation Bureau pink sheets.
"EFFECTIVE DATE" shall mean the date set forth on the signature page of
this Warrant.
"EXERCISE NOTICE" shall have the meaning assigned to such term in Section 2
hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"HOLDER" shall mean the registered holder of this Warrant.
"INCLUDE" and "INCLUDING" shall be construed as if followed by the phrase
", without being limited to,".
"INDEPENDENT FINANCIAL EXPERT" shall mean an investment banking firm of
recognized national standing chosen by the Issuer which is not an Affiliate
of Atlantic Equity Partners International II, L.P. or an Affiliate or a
Stockholder of the
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<PAGE>
Issuer and which is satisfactory to the holders of a majority in interest
of the Warrants and the Warrant Stock.
"IPO" shall mean the Issuer's first firm commitment underwritten public
offering involving the sale of Common Stock of the Issuer, pursuant to an
effective registration statement under the Securities Act.
"ISSUER" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"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.
"PURCHASE AGREEMENT" shall have the meaning assigned to such term in the
second paragraph of this Warrant.
"REGULATION Y" shall mean Regulation Y promulgated by the Board of
Governors of the Federal Reserve System (12 C.F.R. <section>225), or any
successor regulation.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"STOCKHOLDER" shall mean any Person who directly or indirectly owns any
shares of Common Stock (including Warrant Stock).
"STOCK UNIT" shall mean one share of Class B Common Stock, as such Class B
Common Stock is constituted on the date hereof, and thereafter shall mean
such number of shares (including any fractional shares) of Class B Common
Stock and other securities, cash or other property as shall result from the
adjustments specified in Section 4 hereof.
"WARRANT HOLDER" shall mean any Person who acquires Warrants or Warrant
Stock pursuant to the provisions of the Purchase Agreement, including any
transferees of Warrants or Warrant Stock.
"WARRANT STOCK" shall mean all shares of Class B Common Stock issuable from
time to time upon exercise of the Warrants.
"WARRANTS" shall mean the warrants originally issued by the Issuer pursuant
to the Purchase Agreement (of which this Warrant is one), evidencing rights
to purchase up to the aggregate amount of Stock Units set forth therein,
and all
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<PAGE>
Warrants issued upon transfer, division, or combination of, or in
substitution for, such Warrants.
SECTION 2. EXERCISE OF WARRANT. On and after the Effective Date and until
5:00 p.m., New York time, on the Expiration Date, the Holder may exercise
this Warrant, on one or more occasions, on any Business Day, in whole or in
part, by delivering to the Issuer, at its office maintained for such
purpose pursuant to Section 5.01 hereof, (a) a written notice of the
Holder's election to exercise this Warrant, which notice shall specify the
number of Stock Units to be purchased (the "EXERCISE NOTICE"), (b) payment
of the Exercise Price (payable as set forth below) for the number of Stock
Units as to which this Warrant is being exercised, and (c) this Warrant.
The Exercise Price shall be payable (a) in cash or by certified or official
bank check payable to the order of the Issuer or by wire transfer of
immediately available funds to the account of the Issuer or (b) by delivery
of this Warrant Certificate to the Issuer for cancellation in accordance
with the following formula: in exchange for each share of Class B Common
Stock issuable on exercise of each Warrant represented by this Warrant
Certificate that is being exercised, such holder shall receive such number
of shares of Class B Common Stock as is equal to the product of (i) the
number of shares of Class B Common Stock issuable upon exercise of the
Warrants being exercised at such time multiplied by (ii) a fraction, the
numerator of which is the Current Market Price per share of Class B Common
Stock at such time minus the Exercise Price per share of Class B Common
Stock at such time, and the denominator of which is the Current Market
Price per share of Class B Common Stock at such time.
Upon receipt thereof, the Issuer shall, as promptly as practicable and in
any event within 5 Business Days thereafter, execute or cause to be
executed and deliver or cause to be delivered to the Holder a stock
certificate or certificates representing the aggregate number of shares of
Warrant Stock and other securities issuable upon such exercise and any
other property to which such Holder is entitled.
The stock certificate or certificates for Warrant Stock so delivered shall
be in such denominations as may be specified in the Exercise Notice and
shall be registered in the name of the Holder or such other name or names
as shall be designated in such Exercise Notice. Such stock certificate or
certificates shall be deemed to have been issued and the Holder or any
other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares, including, to the extent
permitted by law and to the extent such shares represent voting stock of
the Issuer, the right to vote such shares or to consent or to receive
notice as a Stockholder, as of the date on which the last of the Exercise
Notice, payment of the Exercise Price and this Warrant is received by the
Issuer as aforesaid. If this Warrant shall have been exercised only in
part, the Issuer shall, at the time of delivery of the certificate or
certificates
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<PAGE>
representing Warrant Stock and other securities, execute and
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Stock Units called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
and the same returned to the Holder.
All shares of Class B Common Stock issuable upon the exercise of this
Warrant shall, upon payment therefor in accordance herewith, be duly and
validly issued, fully paid and nonassessable and free and clear of any
liens, charges or other encumbrances of any nature.
The Issuer shall not be required to issue a fractional share of Class B
Common Stock upon exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such
exercise, the Issuer shall pay (at the time this Warrant is exercised for
all shares of Class B Common Stock remaining subject hereto) a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price per share of Class B Common Stock on
the date of exercise.
SECTION 3. TRANSFER, DIVISION AND COMBINATION. (a) Notwithstanding
anything herein to the contrary, no holder of Warrants subject to the
provisions of Regulation Y shall transfer any Warrants or shares of Warrant
Stock held by it, if, as a result of such transfer or the right to effect
such transfer, such holder would be deemed under Regulation Y to have the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Issuer (and, for purposes of this
restriction, a reasoned opinion of counsel to such holder (which is based
on facts and circumstances deemed appropriate by such counsel) to the
effect that such holder does not exercise such a controlling influence
shall be conclusive). For the purposes of this Section 3(a), a holder of
Warrants will not be deemed to be subject to Regulation Y to the
extent such holder is entitled to hold the Warrants pursuant to 12 C.F.R.
<section> 225.22(c)(4).
(b) Subject to the foregoing, this Warrant and all rights hereunder are
transferable (subject to any restrictive legends hereon), in whole or in
part, upon surrender of this Warrant to the Issuer, together with a written
assignment of this Warrant duly executed by the Holder hereof or such
holder's agent or attorney. Such written assignment shall be in the form
of the Assignment Form attached as Annex B hereto. Upon such surrender the
Issuer shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such
instrument of assignment, and the original Warrant shall promptly be
canceled.
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<PAGE>
(c)This Warrant may be exchanged for other Warrants of the same series upon
presentation to the Issuer, together with a written notice specifying the
denominations in which new Warrants are to be issued, signed by the Holder
hereof. The Issuer shall execute and deliver a new Warrant or Warrants to
the holder in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. The Issuer shall pay all
expenses, taxes (including transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of the Warrants,
including any transfer or exchange thereof.
(d)The Issuer shall maintain books for the registration and transfer of the
Warrants, and shall allow each holder of Warrants to inspect such books at
such reasonable times as such holder shall request.
SECTION 4. ADJUSTMENTS.
(a) DIVIDENDS, DISTRIBUTIONS AND PURCHASES.
(i) If at any time the Issuer shall pay any dividend or make any other
distribution to holders of its Common Stock of any cash, evidence of
indebtedness or other property of any nature whatsoever (other than as
provided in subsections (b), (c)(i)(A) and (d)(i)(A) hereof), the Issuer
shall at the same time pay or distribute to each holder of Warrants
(whether or not such holder exercises such Warrants) the cash, evidence of
indebtedness or other property such holder would have been entitled to
receive if such holder had exercised such Warrants immediately prior to the
record date for such dividend or distribution;
(ii) If at any time the Issuer shall propose to purchase or redeem any
shares of its Common Stock (other than shares of Class B or Class C Common
Stock validly repurchased or redeemed, solely as permitted by the terms of
the Senior Secured Note Indenture, pursuant to any management equity
subscription, stockholders or stock option agreement) for cash, evidence of
indebtedness or other property of any nature whatsoever, the Issuer shall
deliver to each holder of Warrants which are by their terms then
exercisable for shares of Warrant Stock a notice of such proposed purchase
or redemption, and each such holder shall, at its option, have the right to
require the Issuer to at the same time purchase or redeem Warrants and
shares of Warrant Stock owned by such holder, in the same proportion as the
number of shares of Common Stock to be so purchased or redeemed bears to
the total number of shares of Common Stock outstanding at such time, on the
same terms and conditions as the proposed purchase or redemption of such
other Common Stock and for the same consideration per Warrant or
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<PAGE>
share of Warrant Stock, as the case may be, as is paid to the holders of
such other Common Stock for each share of Common Stock so redeemed or
purchased, minus, in the case of Warrants, the exercise price of the
Warrants to be so purchased or redeemed.
(b) SUBDIVISIONS AND COMBINATIONS. If at any time the Issuer shall
(i) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or other distribution of
Common Stock;
(ii) subdivide or reclassify its outstanding shares of Common Stock
into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as to
equal the number of shares of Warrant Stock which such holder would have
been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
(c) ISSUANCE OF COMMON STOCK. In case at any time the Issuer (i)(A) shall
take a record of the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase shares of any class or series
of Common Stock or (B) shall otherwise sell or issue any such securities
and (ii) the consideration per share of Common Stock to be paid upon such
issuance or subscription is less than the Current Market Price per share of
Common Stock on such record date, then the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock comprising
a Stock Unit immediately prior to such record date by a fraction (not to be
less than one) (i) the numerator of which shall be equal to the product of
(A) the number of shares of Common Stock outstanding after giving effect to
such issuance, distribution, subscription or purchase and (B) the Current
Market Price per share of Common Stock determined immediately before such
record date and (ii) the denominator of which shall be equal to the sum of
(A) the product of (1) the number of shares of Common Stock outstanding
immediately before such record date and (2) the Current Market Price per
share of Common Stock determined immediately before such record date and
(B) the aggregate consideration to be received by the Issuer for the total
number of shares of Common Stock to be issued, distributed, subscribed for
or purchased. Aggregate consideration for purposes of the preceding clause
(B) shall be determined as follows: In case any shares of Common Stock
shall be issued or sold for cash, the consideration received therefor
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<PAGE>
shall be deemed to be the amount payable to the Issuer therefor. In case any
shares of Common Stock shall be issued or sold for a consideration other
than cash payable to the Issuer, the consideration received therefor shall
be deemed to be the fair value of such consideration as determined by the
Board. In case any shares of Common Stock shall be issued in connection
with any merger of another corporation into the Issuer, the amount of
consideration therefor shall be deemed to be the fair value as determined
by the Board of such portion of the assets of such merged corporation as
the Board shall determine to be attributable to such shares of Common
Stock.
(d) ISSUANCE OF OTHER SECURITIES, RIGHTS OR OBLIGATIONS. In case at any
time the Issuer (i)(A) shall take a record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase
options to purchase or rights to subscribe for Common Stock or securities
directly or indirectly convertible into or exchangeable for Common Stock
(or options or rights with respect to such securities) or (B) shall
otherwise issue or sell any such options, rights or securities and (ii) the
consideration per share for which Common Stock is deliverable upon exercise
of such options or rights or conversion or exchange of such securities
(determined by dividing (x) the total amount received or receivable by the
Issuer in consideration of the issuance of or subscription for such
options, rights or securities, plus the minimum aggregate amount of
premiums (if any) payable to the Issuer upon such exercise, conversion or
exchange, by (y) the total maximum number of shares of Common Stock
necessary to effect the exercise, conversion or exchange of all such
options, rights or securities) shall be less than the Current Market Price
per share of Common Stock on such record date or sale or issuance date, as
the case may be, then the number of shares of Warrant Stock comprising a
Stock Unit shall be adjusted to be that number determined by multiplying
the number of shares of Warrant Stock comprising a Stock Unit immediately
prior to such date by a fraction (not to be less than one) (i) the
numerator of which shall be equal to the product of (A) the total maximum
number of shares of Common Stock outstanding after giving effect to the
assumed exercise or conversion of all such options, rights or securities
and (B) the Current Market Price per share of Common Stock determined
immediately before such date and (ii) the denominator of which shall be
equal to the sum of (A) the product of (1) the number of shares of Common
Stock outstanding immediately before such date and (2) the Current Market
Price per share of the Common Stock determined immediately before such date
and (B) the aggregate consideration per share (determined as set forth in
subsection (ii)(x) and (y) above) for which Common Stock is deliverable
upon exercise conversion or exchange of such options, rights or securities.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any options, rights or convertible or
exchangeable securities (or options or rights with respect thereto) shall
be issued or sold, or exercisable, convertible or exchangeable for cash,
the
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<PAGE>
consideration received therefor shall be deemed to be the amount
payable to the Issuer (determined as set forth in subsection (ii)(x) and
(y) above) therefor. In case any such options, rights or securities shall
be issued or sold, or exercisable, convertible or exchangeable for a
consideration other than cash payable to the Issuer, the consideration
received therefor (determined as set forth in subsection (ii)(x) and (y)
above) shall be deemed to be the fair value of such consideration as
determined by the Board, after deduction therefrom of any expenses incurred
or any underwriting commissions or concessions or discounts paid or allowed
by the Issuer in connection therewith. In case any such options, rights or
securities shall be issued or sold, or exercisable, convertible or
exchangeable in connection with any merger of another corporation into the
Issuer, the amount of consideration therefor shall be deemed to be the fair
value as determined by the Board of such portion of the assets of such
merged corporation as the Board shall determine to be attributable to such
options, rights or securities.
The Current Market Price per share of Common Stock shall be determined as
set forth in Section 5.05 hereof.
(e) SUPERSEDING ADJUSTMENT. If, at any time after any adjustment in the
number of shares of Warrant Stock comprising a Stock Unit shall have been
made on the basis of the issuance of any options or rights, or convertible
or exchangeable securities (or options or rights with respect to such
securities) pursuant to subsection (d) hereof:
(i) the options or rights shall expire prior to exercise or the right to
convert or exchange any such securities shall terminate; or
(ii) the consideration per share for which shares of Common Stock are
issuable pursuant to the terms of such options or rights or convertible or
exchangeable securities shall be increased or decreased, other than under
or by reason of provisions designed to protect against dilution;
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A)treating the number of shares of Common Stock, if any, theretofore
actually issued or issuable pursuant to the previous exercise, conversion
or exchange of such options, rights or securities as having been issued on
the date or dates of such exercise, conversion or exchange and for the
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<PAGE>
consideration actually received and receivable therefore, and
(B)treating any such options, rights or securities which then remain
outstanding as having been granted or issued immediately after the time of
such increase or decrease for the consideration per share for which shares
of Common Stock are issuable upon exercise, conversion or exchange of such
options, rights or securities.
To the extent called for by the foregoing provisions of this Section 4(e)
on the basis aforesaid, a new adjustment in the number of shares of Warrant
Stock comprising a Stock Unit shall be made, determined using the Current
Market Price used at the time of the original determination, which new
adjustment shall supersede the previous adjustment so rescinded and
annulled. If the exercise, conversion or exchange price provided for in
any such option, right or security shall decrease at any time under or by
reason of provisions designed to protect against dilution, then in the case
of the delivery of shares of Common Stock upon the exercise, conversion or
exchange of any such option, right or security, the Stock Unit purchasable
upon the exercise of a Warrant shall forthwith be adjusted in the manner
which would have obtained had the adjustment made upon issuance of such
option, right or security been made upon the basis of the issuance of (and
the aggregate consideration received for) the shares of Common Stock
delivered as aforesaid.
(f) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the making of adjustments of
the number of shares of Warrant Stock comprising a Stock Unit:
(i) The sale or other disposition of any issued shares of Common Stock
owned or held by or for the account of the Issuer shall be deemed to be an
issuance thereof for purposes of this Section.
(ii) In computing adjustments under this Section, fractional interests in
Common Stock shall be taken into account to the nearest one-thousandth of a
share.
(iii) If the Issuer shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the taking of such record and any
such adjustment previously made in respect thereof shall be rescinded and
annulled.
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(g) MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If the Issuer shall
merge or consolidate with another corporation, or shall sell, transfer or
otherwise dispose of all or substantially all of its assets to another
corporation and pursuant to the terms of such merger, consolidation or
disposition of assets, cash, shares of common stock or other securities of
the successor or acquiring corporation, or property of any nature is to be
received by or distributed to the holders of Common Stock of the Issuer,
then each holder of Warrants which are by their terms then exercisable
shall, at such holder's election, have the right to receive (whether or not
such holder exercises such Warrants) the amount it would have been entitled
to receive if such holder had exercised such Warrants immediately prior to
the occurrence of such merger, consolidation or disposition of assets, net
of the exercise price of such Warrants. In case of any such merger,
consolidation or disposition of assets in which the foregoing election is
not made, the successor or acquiring corporation (and any affiliate thereof
issuing securities) shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this Warrant to
be performed and observed by the Issuer and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably
acceptable to the holders of a majority in interest of the Warrants) in
order to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section.
The foregoing provisions shall similarly apply to successive mergers,
consolidations and dispositions of assets.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or from time to
time the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections of this
Section or an action taken in the ordinary course of the Issuer's business
and consistent with past practice, then, unless in the reasonable opinion
of the Board such action will not have a material adverse effect upon the
rights of the holders of the Warrants, the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted in such manner and at such
time as the Board shall in good faith determine to be equitable in the
circumstances, but no such adjustment shall decrease the number of shares
of Warrant Stock comprising a Stock Unit.
(i) NOTICE OF ADJUSTMENTS. Whenever the number of shares of Warrant Stock
comprising a Stock Unit shall be adjusted pursuant to this Agreement, the
Issuer shall forthwith obtain a certificate signed by a firm of independent
accountants of recognized national standing selected by the Issuer, setting
forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated and specifying the number of
shares of Warrant Stock comprising a Stock Unit, after giving effect to
such adjustment or change. The
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<PAGE>
Issuer shall promptly cause a signed copy of such certificate to be
delivered to each holder of Warrants. The Issuer shall keep at its office
copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by any holder of
Warrants or any prospective purchaser of Warrants designated by the
registered holder hereof.
(j) NOTICE OF CERTAIN CORPORATE ACTION. If the Issuer shall propose (i)
to pay any dividend to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock; (ii) to offer to the
holders of its Common Stock rights to subscribe for or to purchase any
additional shares of Common Stock (or options or rights with respect
thereto); (iii) to effect any reclassification of its Common Stock; (iv) to
otherwise issue any Common Stock or other securities; (v) to effect any
capital reorganization; (vi) to effect any consolidation, merger or sale,
transfer or other disposition of all or substantially all of its assets; or
(vii) to effect the liquidation, dissolution or winding up of the Issuer,
then, in each such case, the Issuer shall give to each holder of Warrants a
notice of such proposed action, which shall specify the date on which a
record is to be taken for the purposes of such dividend, distribution or
rights offer, or the date on which such reclassification, issuance,
reorganization, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date is
to be fixed, and shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action on the
Common Stock, and the number of shares of Warrant Stock which will comprise
a Stock Unit after giving effect to any adjustment which will be required
as a result of such action. Such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the Common Stock for purposes of
such action, and in the case of any other such action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be
the earlier.
(k)NO ADJUSTMENT NECESSARY. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection
with, the issuance of shares of Common Stock, or options or warrants to
purchase shares of Common Stock, to management at fair market value (as
determined by the Board in its reasonable judgment) in an amount up to 12%
of the outstanding shares of Common Stock on the Closing Date, on a fully
diluted basis.
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<PAGE>
SECTION 5. MISCELLANEOUS.
5.01 OFFICE OF ISSUER. So long as any of the Warrants remains
outstanding, the Issuer shall maintain an office in the continental United
States of America where the Warrants may be presented for exercise,
transfer, division or combination as in this Warrant provided. Such office
shall be at c/o 101 Oakley Street, Evansville, Indiana 47710, unless and
until the Issuer shall designate and maintain some other office for such
purposes and give notice thereof to all Warrant Holders.
5.02 NOTICES GENERALLY. Any notices and other communications pursuant to
the provisions hereof shall be sent in accordance with the provisions of
Section 8.6 of the Purchase Agreement.
5.03 GOVERNING LAW. The corporate law of the State of Delaware shall
govern all issues concerning the relative rights of the Issuer and its
Stockholders. 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
Issuer agrees that it may be served with process in State of New York and
any action for breach of this Warrant may be prosecuted against it in the
courts of that State.
5.04 LIMITATION OF LIABILITY. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Class B Common
Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Exercise
Price or as a Stockholder of the Issuer, whether such liability is asserted
by the Issuer, by any creditor of the Issuer or any other Person.
5.05 DETERMINATION OF CURRENT MARKET PRICE PER SHARE OF COMMON STOCK. The
Current Market Price per share of Common Stock shall in each instance
initially be determined by the Issuer in accordance with the provisions of
the definition of Current Market Price in Section 1 hereof. The Issuer
shall notify the Holders of such determination. If the holders of a
majority in interest of the Warrants disagree with the determination of the
Issuer, the Issuer shall appoint an Independent Financial Expert to
determine the Current Market Price per share of Common Stock and the
determination of the Independent Financial Expert shall govern for purposes
of determining the adjustment pursuant to this Section. The Issuer shall
notify each holder of Warrants of the final determination of the Current
Market Price per share of Common Stock. The Issuer shall pay the fees and
expenses of the Independent Financial Expert.
5.06 REGISTRATION RIGHTS. The holders of this Warrant shall be entitled to
the benefit of the provisions of Article 6A
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<PAGE>
and Article 6C of the Purchase Agreement with regard to the registration
for sale of the Warrant Stock.
15
<PAGE>
IN WITNESS WHEREOF, the Issuer has duly executed this Amended and Restated
Warrant.
Dated: May 9, 2000
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name: James M. Kratochvil
Title: Executive Vice President,
Chief Financial Officer, Treasurer
and Secretary
<PAGE>
Annex A
to
Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Amended and Restated Warrant
("Warrant") irrevocably exercises this Warrant for the purchase of Stock
Units of the Issuer, and herewith makes payment therefor, all at the price
and on the terms and conditions specified in this Warrant, and requests
that (i) certificates and/or other instruments covering such Stock Units be
issued in accordance with the instructions given below and (ii) if such
Stock Units shall not include all of the Stock Units to which the Holder is
entitled under this Warrant, that a new Warrant of like tenor and date for
the unpurchased balance of the Stock Units issuable hereunder be delivered
to the undersigned.
Dated: __________________
________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Stock Units:
________________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _________________________
Please deliver certificate to
the following address:
____________________________________
Street
_____________________________________
City, State and Zip Code
<PAGE>
Annex B
to
Warrant
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this Amended and
Restated Warrant hereby sells, assigns and transfers unto the assignee
named below all the rights of the undersigned under this Warrant with
respect to the number of Stock Units covered thereby set forth hereinbelow
unto:
Number of
NAME OF ASSIGNEE ADDRESS STOCK UNITS
Dated:__________________
________________________________
Signature of Registered Holder
________________________________
Name of Registered Holder
(Please Print)
Witness:
______________________
AMENDED AND RESTATED WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT DATED AS OF JUNE 12, 1996 (THE "PURCHASE AGREEMENT"), BY
AND AMONG BPC HOLDING CORPORATION, A DELAWARE CORPORATION (SUCCESSOR IN
INTEREST TO BPC MERGERCO, INC.) (the "ISSUER"), BPC MERGERCO, INC., A
DELAWARE CORPORATION ("MERGERCO"), CHASE VENTURE CAPITAL ASSOCIATES, LLC
(FORMERLY KNOWN AS CHASE VENTURE CAPITAL ASSOCIATES, L.P.) AND THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY ("NORTHWESTERN"), AS SUCH
PURCHASE AGREEMENT MAY BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME
TO TIME, AND NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A
COPY OF THE PURCHASE AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE,
BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF
THE PURCHASE AGREEMENT.
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.
No. of Stock Units: 17,837 Warrant No. 6
WARRANT
to Purchase Class B Common Stock of
BPC HOLDING CORPORATION
THIS IS TO CERTIFY THAT CHASE VENTURE CAPITAL ASSOCIATES, LLC, or its
registered assigns, is entitled to purchase in whole or in part from time
to time from BPC Holding Corporation, a Delaware corporation (the
"ISSUER"), at any time on and after the Effective Date (as hereinafter
defined), but not later than 5:00 p.m., New York time, on May 9, 2010 (the
"EXPIRATION DATE"), 17,837 Stock Units (as hereinafter defined and subject
to adjustment as provided herein) at a purchase price of $0.01 per Stock
Unit (the "EXERCISE PRICE"), subject to the terms and conditions provided
herein and in the Purchase Agreement (as hereinafter defined).
<PAGE>
This Amended and Restated Warrant ("Warrant") is issued pursuant to the
Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996
(as modified and supplemented and in effect from time to time, the
"PURCHASE AGREEMENT") between the Issuer, Mergerco, Chase Venture Capital
Associates, LLC and Northwestern.
SECTION 1. CERTAIN DEFINITIONS. (a) Each capitalized term used herein
without definition shall have the meaning assigned thereto (or incorporated
by reference) in the Purchase Agreement and in the Exhibits thereto.
(b) As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1 or in other provisions of this Warrant
in the singular to have the same meanings when used in the plural and vice
versa):
"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.
"BOARD" shall mean the Board of Directors of the Issuer.
"BUSINESS DAY" shall mean any day on which commercial banks are not
authorized or required to close in New York City.
"CLASS B COMMON STOCK" means, the Issuer's Class B Non-Voting Common Stock,
$.01 par value per share, or any other common stock or other securities
receivable thereon, or into which the Class B Common Stock is convertible
or exchangeable, as a result of any recapitalization, reclassification,
merger or consolidation of, or deposition of assets by, the Issuer.
"COMMON STOCK" shall mean the Common Stock of the Issuer, of any class or
series whatsoever, or any other common stock or other securities receivable
thereon, or into which the Common Stock is convertible or exchangeable, as
a result of any recapitalization, reclassification, merger or consolidation
of, or disposition of assets by, the Issuer.
"CURRENT MARKET PRICE", shall mean, with respect to a share of Common Stock
as of any date (a) for a period of 30 Business Days after the date of the
IPO, the offering price of
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<PAGE>
such Common Stock or (b) in any other case (i)
the fair market value per share of such Common Stock, as reasonably
determined in good faith by the Board, using an appropriate valuation
method, assuming an arms-length sale to an independent party of all of the
Common Stock of the Issuer, without giving regard to the lack of liquidity
of such Common Stock due to any restrictions contained in the Stockholders
Agreement, the Stock Purchase Agreement, the Purchase Agreement or
otherwise or any discount for minority interests and assuming the
conversion or exchange of all securities then outstanding which are
convertible into or exchangeable for such Common Stock and the exercise of
all rights and warrants (including the Warrants) then outstanding and
exercisable to purchase shares of such Common Stock or securities
convertible into or exchangeable for shares of such Common Stock, or (ii)
if there shall be a public market for such Common Stock, the average of the
daily market prices for each day during the 30 consecutive trading days
commencing 45 Business Days before such date as of which such a price can
be established in the manner set forth below. The market price for each
such Business Day shall be the last sale price on such day as reported in
the Consolidated Last Sale Reporting System or as quoted in the National
Association of Securities Dealers Automated Quotation System, or if such
last sale price is not available, the average of the closing bid and asked
prices as reported in either such system, or in any other case the higher
bid price quoted for such day as reported by The Wall Street Journal and
the National Quotation Bureau pink sheets.
"EFFECTIVE DATE" shall mean the date set forth on the signature page of
this Warrant.
"EXERCISE NOTICE" shall have the meaning assigned to such term in Section 2
hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"HOLDER" shall mean the registered holder of this Warrant.
"INCLUDE" and "INCLUDING" shall be construed as if followed by the phrase
", without being limited to,".
"INDEPENDENT FINANCIAL EXPERT" shall mean an investment banking firm of
recognized national standing chosen by the Issuer which is not an Affiliate
of Atlantic Equity Partners International II, L.P. or an Affiliate or a
Stockholder of the Issuer and which is satisfactory to the holders of a
majority in interest of the Warrants and the Warrant Stock.
3
<PAGE>
"IPO" shall mean the Issuer's first firm commitment underwritten public
offering involving the sale of Common Stock of the Issuer, pursuant to an
effective registration statement under the Securities Act.
"ISSUER" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"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.
"PURCHASE AGREEMENT" shall have the meaning assigned to such term in the
second paragraph of this Warrant.
"REGULATION Y" shall mean Regulation Y promulgated by the Board of
Governors of the Federal Reserve System (12 C.F.R. <section>225), or any
successor regulation.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"STOCKHOLDER" shall mean any Person who directly or indirectly owns any
shares of Common Stock (including Warrant Stock).
"STOCK UNIT" shall mean one share of Class B Common Stock, as such Class B
Common Stock is constituted on the date hereof, and thereafter shall mean
such number of shares (including any fractional shares) of Class B Common
Stock and other securities, cash or other property as shall result from the
adjustments specified in Section 4 hereof.
"WARRANT HOLDER" shall mean any Person who acquires Warrants or Warrant
Stock pursuant to the provisions of the Purchase Agreement, including any
transferees of Warrants or Warrant Stock.
"WARRANT STOCK" shall mean all shares of Class B Common Stock issuable from
time to time upon exercise of the Warrants.
"WARRANTS" shall mean the warrants originally issued by the Issuer pursuant
to the Purchase Agreement (of which this Warrant is one), evidencing rights
to purchase up to the aggregate amount of Stock Units set forth therein,
and all Warrants issued upon transfer, division, or combination of, or in
substitution for, such Warrants.
4
<PAGE>
SECTION 2. EXERCISE OF WARRANT. On and after the Effective Date and until
5:00 p.m., New York time, on the Expiration Date, the Holder may exercise
this Warrant, on one or more occasions, on any Business Day, in whole or in
part, by delivering to the Issuer, at its office maintained for such
purpose pursuant to Section 5.01 hereof, (a) a written notice of the
Holder's election to exercise this Warrant, which notice shall specify the
number of Stock Units to be purchased (the "EXERCISE NOTICE"), (b) payment
of the Exercise Price (payable as set forth below) for the number of Stock
Units as to which this Warrant is being exercised, and (c) this Warrant.
The Exercise Price shall be payable (a) in cash or by certified or official
bank check payable to the order of the Issuer or by wire transfer of
immediately available funds to the account of the Issuer or (b) by delivery
of this Warrant Certificate to the Issuer for cancellation in accordance
with the following formula: in exchange for each share of Class B Common
Stock issuable on exercise of each Warrant represented by this Warrant
Certificate that is being exercised, such holder shall receive such number
of shares of Class B Common Stock as is equal to the product of (i) the
number of shares of Class B Common Stock issuable upon exercise of the
Warrants being exercised at such time multiplied by (ii) a fraction, the
numerator of which is the Current Market Price per share of Class B Common
Stock at such time minus the Exercise Price per share of Class B Common
Stock at such time, and the denominator of which is the Current Market
Price per share of Class B Common Stock at such time.
Upon receipt thereof, the Issuer shall, as promptly as practicable and in
any event within 5 Business Days thereafter, execute or cause to be
executed and deliver or cause to be delivered to the Holder a stock
certificate or certificates representing the aggregate number of shares of
Warrant Stock and other securities issuable upon such exercise and any
other property to which such Holder is entitled.
The stock certificate or certificates for Warrant Stock so delivered shall
be in such denominations as may be specified in the Exercise Notice and
shall be registered in the name of the Holder or such other name or names
as shall be designated in such Exercise Notice. Such stock certificate or
certificates shall be deemed to have been issued and the Holder or any
other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares, including, to the extent
permitted by law and to the extent such shares represent voting stock of
the Issuer, the right to vote such shares or to consent or to receive
notice as a Stockholder, as of the date on which the last of the Exercise
Notice, payment of the Exercise Price and this Warrant is received by the
Issuer as aforesaid. If this Warrant shall have been exercised only in
part, the Issuer shall, at the time of delivery of the certificate or
certificates representing Warrant Stock and other securities, execute and
5
<PAGE>
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Stock Units called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
and the same returned to the Holder.
All shares of Class B Common Stock issuable upon the exercise of this
Warrant shall, upon payment therefor in accordance herewith, be duly and
validly issued, fully paid and nonassessable and free and clear of any
liens, charges or other encumbrances of any nature.
The Issuer shall not be required to issue a fractional share of Class B
Common Stock upon exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such
exercise, the Issuer shall pay (at the time this Warrant is exercised for
all shares of Class B Common Stock remaining subject hereto) a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price per share of Class B Common Stock on
the date of exercise.
SECTION 3. TRANSFER, DIVISION AND COMBINATION. (a) Notwithstanding
anything herein to the contrary, no holder of Warrants subject to the
provisions of Regulation Y shall transfer any Warrants or shares of Warrant
Stock held by it, if, as a result of such transfer or the right to effect
such transfer, such holder would be deemed under Regulation Y to have the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Issuer (and, for purposes of this
restriction, a reasoned opinion of counsel to such holder (which is based
on facts and circumstances deemed appropriate by such counsel) to the
effect that such holder does not exercise such a controlling influence
shall be conclusive). For the purposes of this Section 3(a), a holder of
Warrants will not be deemed to be subject to Regulation Y to the
extent such holder is entitled to hold the Warrants pursuant to 12 C.F.R.
<section> 225.22(c)(4).
(b) Subject to the foregoing, this Warrant and all rights hereunder are
transferable (subject to any restrictive legends hereon), in whole or in
part, upon surrender of this Warrant to the Issuer, together with a written
assignment of this Warrant duly executed by the Holder hereof or such
holder's agent or attorney. Such written assignment shall be in the form
of the Assignment Form attached as Annex B hereto. Upon such surrender the
Issuer shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such
instrument of assignment, and the original Warrant shall promptly be
canceled.
6
<PAGE>
(c)This Warrant may be exchanged for other Warrants of the same series upon
presentation to the Issuer, together with a written notice specifying the
denominations in which new Warrants are to be issued, signed by the Holder
hereof. The Issuer shall execute and deliver a new Warrant or Warrants to
the holder in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. The Issuer shall pay all
expenses, taxes (including transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of the Warrants,
including any transfer or exchange thereof.
(d)The Issuer shall maintain books for the registration and transfer of the
Warrants, and shall allow each holder of Warrants to inspect such books at
such reasonable times as such holder shall request.
SECTION 4. ADJUSTMENTS.
(a) DIVIDENDS, DISTRIBUTIONS AND PURCHASES.
(i) If at any time the Issuer shall pay any dividend or make any other
distribution to holders of its Common Stock of any cash, evidence of
indebtedness or other property of any nature whatsoever (other than as
provided in subsections (b), (c)(i)(A) and (d)(i)(A) hereof), the Issuer
shall at the same time pay or distribute to each holder of Warrants
(whether or not such holder exercises such Warrants) the cash, evidence of
indebtedness or other property such holder would have been entitled to
receive if such holder had exercised such Warrants immediately prior to the
record date for such dividend or distribution;
(ii) If at any time the Issuer shall propose to purchase or redeem any
shares of its Common Stock (other than shares of Class B or Class C Common
Stock validly repurchased or redeemed, solely as permitted by the terms of
the Senior Secured Note Indenture, pursuant to any management equity
subscription, stockholders or stock option agreement) for cash, evidence of
indebtedness or other property of any nature whatsoever, the Issuer shall
deliver to each holder of Warrants which are by their terms then
exercisable for shares of Warrant Stock a notice of such proposed purchase
or redemption, and each such holder shall, at its option, have the right to
require the Issuer to at the same time purchase or redeem Warrants and
shares of Warrant Stock owned by such holder, in the same proportion as the
number of shares of Common Stock to be so purchased or redeemed bears to
the total number of shares of Common Stock outstanding at such time, on the
same terms and conditions as the proposed purchase or redemption of such
other Common Stock
7
<PAGE>
and for the same consideration per Warrant or share of
Warrant Stock, as the case may be, as is paid to the holders of such other
Common Stock for each share of Common Stock so redeemed or purchased,
minus, in the case of Warrants, the exercise price of the Warrants to be so
purchased or redeemed.
(b) SUBDIVISIONS AND COMBINATIONS. If at any time the Issuer shall
(i) take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or other distribution of Common Stock;
(ii) subdivide or reclassify its outstanding shares of Common Stock
into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as to
equal the number of shares of Warrant Stock which such holder would have
been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
(c) ISSUANCE OF COMMON STOCK. In case at any time the Issuer (i)(A) shall
take a record of the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase shares of any class or series
of Common Stock or (B) shall otherwise sell or issue any such securities
and (ii) the consideration per share of Common Stock to be paid upon such
issuance or subscription is less than the Current Market Price per share of
Common Stock on such record date, then the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock comprising
a Stock Unit immediately prior to such record date by a fraction (not to be
less than one) (i) the numerator of which shall be equal to the product of
(A) the number of shares of Common Stock outstanding after giving effect to
such issuance, distribution, subscription or purchase and (B) the Current
Market Price per share of Common Stock determined immediately before such
record date and (ii) the denominator of which shall be equal to the sum of
(A) the product of (1) the number of shares of Common Stock outstanding
immediately before such record date and (2) the Current Market Price per
share of Common Stock determined immediately before such record date and
(B) the aggregate consideration to be received by the Issuer for the total
number of shares of Common Stock to be issued, distributed, subscribed for
or purchased. Aggregate consideration for purposes of the preceding clause
(B) shall be
8
<PAGE>
determined as follows: In case any shares of Common Stock
shall be issued or sold for cash, the consideration received therefor shall
be deemed to be the amount payable to the Issuer therefor. In case any
shares of Common Stock shall be issued or sold for a consideration other
than cash payable to the Issuer, the consideration received therefor shall
be deemed to be the fair value of such consideration as determined by the
Board. In case any shares of Common Stock shall be issued in connection
with any merger of another corporation into the Issuer, the amount of
consideration therefor shall be deemed to be the fair value as determined
by the Board of such portion of the assets of such merged corporation as
the Board shall determine to be attributable to such shares of Common
Stock.
(d) ISSUANCE OF OTHER SECURITIES, RIGHTS OR OBLIGATIONS. In case at any
time the Issuer (i)(A) shall take a record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase
options to purchase or rights to subscribe for Common Stock or securities
directly or indirectly convertible into or exchangeable for Common Stock
(or options or rights with respect to such securities) or (B) shall
otherwise issue or sell any such options, rights or securities and (ii) the
consideration per share for which Common Stock is deliverable upon exercise
of such options or rights or conversion or exchange of such securities
(determined by dividing (x) the total amount received or receivable by the
Issuer in consideration of the issuance of or subscription for such
options, rights or securities, plus the minimum aggregate amount of
premiums (if any) payable to the Issuer upon such exercise, conversion or
exchange, by (y) the total maximum number of shares of Common Stock
necessary to effect the exercise, conversion or exchange of all such
options, rights or securities) shall be less than the Current Market Price
per share of Common Stock on such record date or sale or issuance date, as
the case may be, then the number of shares of Warrant Stock comprising a
Stock Unit shall be adjusted to be that number determined by multiplying
the number of shares of Warrant Stock comprising a Stock Unit immediately
prior to such date by a fraction (not to be less than one) (i) the
numerator of which shall be equal to the product of (A) the total maximum
number of shares of Common Stock outstanding after giving effect to the
assumed exercise or conversion of all such options, rights or securities
and (B) the Current Market Price per share of Common Stock determined
immediately before such date and (ii) the denominator of which shall be
equal to the sum of (A) the product of (1) the number of shares of Common
Stock outstanding immediately before such date and (2) the Current Market
Price per share of the Common Stock determined immediately before such date
and (B) the aggregate consideration per share (determined as set forth in
subsection (ii)(x) and (y) above) for which Common Stock is deliverable
upon exercise conversion or exchange of such options, rights or securities.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any
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<PAGE>
options, rights or convertible or exchangeable securities (or options or
rights with respect thereto) shall be issued or sold, or exercisable,
convertible or exchangeable for cash, the consideration received therefor
shall be deemed to be the amount payable to the Issuer (determined as set
forth in subsection (ii)(x) and (y) above) therefor. In case any such
options, rights or securities shall be issued or sold, or exercisable,
convertible or exchangeable for a consideration other than cash payable
to the Issuer, the consideration received therefor (determined as set
forth in subsection (ii)(x) and (y) above) shall be deemed to be the fair
value of such consideration as determined by the Board, after deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions or discounts paid or allowed by the Issuer in connection
therewith. In case any such options, rights or securities shall be issued
or sold, or exercisable, convertible or exchangeable in connection with any
merger of another corporation into the Issuer, the amount of consideration
therefor shall be deemed to be the fair value as determined by the Board of
such portion of the assets of such merged corporation as the Board shall
determine to be attributable to such options, rights or securities.
The Current Market Price per share of Common Stock shall be determined as
set forth in Section 5.05 hereof.
(e) SUPERSEDING ADJUSTMENT. If, at any time after any adjustment in the
number of shares of Warrant Stock comprising a Stock Unit shall have been
made on the basis of the issuance of any options or rights, or convertible
or exchangeable securities (or options or rights with respect to such
securities) pursuant to subsection (d) hereof:
(i) the options or rights shall expire prior to exercise or the right to
convert or exchange any such securities shall terminate; or
(ii) the consideration per share for which shares of Common Stock are
issuable pursuant to the terms of such options or rights or convertible or
exchangeable securities shall be increased or decreased, other than under
or by reason of provisions designed to protect against dilution;
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A)treating the number of shares of Common Stock, if any, theretofore
actually issued or issuable pursuant to the previous exercise, conversion
or exchange of such options,
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<PAGE>
rights or securities as having been issued on
the date or dates of such exercise, conversion or exchange and for the
consideration actually received and receivable therefore, and
(B)treating any such options, rights or securities which then remain
outstanding as having been granted or issued immediately after the time of
such increase or decrease for the consideration per share for which shares
of Common Stock are issuable upon exercise, conversion or exchange of such
options, rights or securities.
To the extent called for by the foregoing provisions of this Section 4(e)
on the basis aforesaid, a new adjustment in the number of shares of Warrant
Stock comprising a Stock Unit shall be made, determined using the Current
Market Price used at the time of the original determination, which new
adjustment shall supersede the previous adjustment so rescinded and
annulled. If the exercise, conversion or exchange price provided for in
any such option, right or security shall decrease at any time under or by
reason of provisions designed to protect against dilution, then in the case
of the delivery of shares of Common Stock upon the exercise, conversion or
exchange of any such option, right or security, the Stock Unit purchasable
upon the exercise of a Warrant shall forthwith be adjusted in the manner
which would have obtained had the adjustment made upon issuance of such
option, right or security been made upon the basis of the issuance of (and
the aggregate consideration received for) the shares of Common Stock
delivered as aforesaid.
(f) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the making of adjustments of
the number of shares of Warrant Stock comprising a Stock Unit:
(i) The sale or other disposition of any issued shares of Common Stock
owned or held by or for the account of the Issuer shall be deemed to be an
issuance thereof for purposes of this Section.
(ii) In computing adjustments under this Section, fractional interests in
Common Stock shall be taken into account to the nearest one-thousandth of a
share.
(iii) If the Issuer shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution thereof, legally abandon its plan to pay or deliver such
dividend, distribution,
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<PAGE>
subscription or purchase rights, then thereafter no adjustment shall be
required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(g) MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If the Issuer shall
merge or consolidate with another corporation, or shall sell, transfer or
otherwise dispose of all or substantially all of its assets to another
corporation and pursuant to the terms of such merger, consolidation or
disposition of assets, cash, shares of common stock or other securities of
the successor or acquiring corporation, or property of any nature is to be
received by or distributed to the holders of Common Stock of the Issuer,
then each holder of Warrants which are by their terms then exercisable
shall, at such holder's election, have the right to receive (whether or not
such holder exercises such Warrants) the amount it would have been entitled
to receive if such holder had exercised such Warrants immediately prior to
the occurrence of such merger, consolidation or disposition of assets, net
of the exercise price of such Warrants. In case of any such merger,
consolidation or disposition of assets in which the foregoing election is
not made, the successor or acquiring corporation (and any affiliate thereof
issuing securities) shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this Warrant to
be performed and observed by the Issuer and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably
acceptable to the holders of a majority in interest of the Warrants) in
order to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section.
The foregoing provisions shall similarly apply to successive mergers,
consolidations and dispositions of assets.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or from time to
time the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections of this
Section or an action taken in the ordinary course of the Issuer's business
and consistent with past practice, then, unless in the reasonable opinion
of the Board such action will not have a material adverse effect upon the
rights of the holders of the Warrants, the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted in such manner and at such
time as the Board shall in good faith determine to be equitable in the
circumstances, but no such adjustment shall decrease the number of shares
of Warrant Stock comprising a Stock Unit.
(i) NOTICE OF ADJUSTMENTS. Whenever the number of shares of Warrant Stock
comprising a Stock Unit shall be adjusted pursuant to this Agreement, the
Issuer shall forthwith obtain a certificate signed by a firm of independent
accountants of
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<PAGE>
recognized national standing selected by the Issuer, setting
forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated and specifying the number of
shares of Warrant Stock comprising a Stock Unit, after giving effect to
such adjustment or change. The Issuer shall promptly cause a signed copy of
such certificate to be delivered to each holder of Warrants. The Issuer
shall keep at its office copies of all such certificates and cause the same
to be available for inspection at said office during normal business hours
by any holder of Warrants or any prospective purchaser of Warrants
designated by the registered holder hereof.
(j) NOTICE OF CERTAIN CORPORATE ACTION. If the Issuer shall propose (i)
to pay any dividend to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock; (ii) to offer to the
holders of its Common Stock rights to subscribe for or to purchase any
additional shares of Common Stock (or options or rights with respect
thereto); (iii) to effect any reclassification of its Common Stock; (iv) to
otherwise issue any Common Stock or other securities; (v) to effect any
capital reorganization; (vi) to effect any consolidation, merger or sale,
transfer or other disposition of all or substantially all of its assets; or
(vii) to effect the liquidation, dissolution or winding up of the Issuer,
then, in each such case, the Issuer shall give to each holder of Warrants a
notice of such proposed action, which shall specify the date on which a
record is to be taken for the purposes of such dividend, distribution or
rights offer, or the date on which such reclassification, issuance,
reorganization, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date is
to be fixed, and shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action on the
Common Stock, and the number of shares of Warrant Stock which will comprise
a Stock Unit after giving effect to any adjustment which will be required
as a result of such action. Such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the Common Stock for purposes of
such action, and in the case of any other such action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be
the earlier.
(k) NO ADJUSTMENT NECESSARY. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection
with, the issuance of shares of Common Stock, or options or warrants to
purchase shares of Common Stock, to management at fair market value (as
determined by the Board in its reasonable judgment) in an amount up to 12%
of the
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<PAGE>
outstanding shares of Common Stock on the Closing Date, on a fully
diluted basis.
SECTION 5. MISCELLANEOUS.
5.01 OFFICE OF ISSUER. So long as any of the Warrants remains
outstanding, the Issuer shall maintain an office in the continental United
States of America where the Warrants may be presented for exercise,
transfer, division or combination as in this Warrant provided. Such office
shall be at c/o 101 Oakley Street, Evansville, Indiana 47710, unless and
until the Issuer shall designate and maintain some other office for such
purposes and give notice thereof to all Warrant Holders.
5.02 NOTICES GENERALLY. Any notices and other communications pursuant to
the provisions hereof shall be sent in accordance with the provisions of
Section 8.6 of the Purchase Agreement.
5.03 GOVERNING LAW. The corporate law of the State of Delaware shall
govern all issues concerning the relative rights of the Issuer and its
Stockholders. 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
Issuer agrees that it may be served with process in State of New York and
any action for breach of this Warrant may be prosecuted against it in the
courts of that State.
5.04 LIMITATION OF LIABILITY. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Class B Common
Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Exercise
Price or as a Stockholder of the Issuer, whether such liability is asserted
by the Issuer, by any creditor of the Issuer or any other Person.
5.05 DETERMINATION OF CURRENT MARKET PRICE PER SHARE OF COMMON STOCK. The
Current Market Price per share of Common Stock shall in each instance
initially be determined by the Issuer in accordance with the provisions of
the definition of Current Market Price in Section 1 hereof. The Issuer
shall notify the Holders of such determination. If the holders of a
majority in interest of the Warrants disagree with the determination of the
Issuer, the Issuer shall appoint an Independent Financial Expert to
determine the Current Market Price per share of Common Stock and the
determination of the Independent Financial Expert shall govern for purposes
of determining the adjustment pursuant to this Section. The Issuer shall
notify each holder of Warrants of the final determination of the Current
Market Price per share of Common Stock. The Issuer shall pay the fees and
expenses of the Independent Financial Expert.
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<PAGE>
5.06 REGISTRATION RIGHTS. The holders of this Warrant shall be entitled to
the benefit of the provisions of Article 6A and Article 6C of the Purchase
Agreement with regard to the registration for sale of the Warrant Stock.
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<PAGE>
- -
IN WITNESS WHEREOF, the Issuer has duly executed this Amended and Restated
Warrant.
Dated: May 9, 2000
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name: James M. Kratochvil
Title: Executive Vice President,
Chief Financial Officer, Treasurer
and Secretary
<PAGE>
Annex A
to
Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Amended and Restated Warrant
("Warrant") irrevocably exercises this Warrant for the purchase of Stock
Units of the Issuer, and herewith makes payment therefor, all at the price
and on the terms and conditions specified in this Warrant, and requests
that (i) certificates and/or other instruments covering such Stock Units be
issued in accordance with the instructions given below and (ii) if such
Stock Units shall not include all of the Stock Units to which the Holder is
entitled under this Warrant, that a new Warrant of like tenor and date for
the unpurchased balance of the Stock Units issuable hereunder be delivered
to the undersigned.
Dated: __________________
________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Stock Units:
________________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _________________________
Please deliver certificate to
the following address:
____________________________________
Street
_____________________________________
City, State and Zip Code
<PAGE>
Annex B
to
Warrant
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this Amended and
Restated Warrant hereby sells, assigns and transfers unto the assignee
named below all the rights of the undersigned under this Warrant with
respect to the number of Stock Units covered thereby set forth herein below
unto:
Number of
NAME OF ASSIGNEE ADDRESS STOCK UNITS
Dated:__________________
________________________________
Signature of Registered Holder
________________________________
Name of Registered Holder
(Please Print)
Witness:
______________________
AMENDED AND RESTATED WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT DATED AS OF JUNE 12, 1996 (THE "PURCHASE AGREEMENT"), BY
AND AMONG BPC HOLDING CORPORATION, A DELAWARE CORPORATION (SUCCESSOR IN
INTEREST TO BPC MERGERCO, INC.) (the "ISSUER"), BPC MERGERCO, INC., A
DELAWARE CORPORATION ("MERGERCO"), CHASE VENTURE CAPITAL ASSOCIATES, LLC
(FORMERLY KNOWN AS CHASE VENTURE CAPITAL ASSOCIATES, L.P.) ("CVCA") AND THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, AS SUCH PURCHASE AGREEMENT MAY
BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE
PURCHASE AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF THE
PURCHASE AGREEMENT.
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.
No. of Stock Units: 3,749 Warrant No. 7
WARRANT
to Purchase Class B Common Stock of
BPC HOLDING CORPORATION
THIS IS TO CERTIFY THAT THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, or
its registered assigns, is entitled to purchase in whole or in part from
time to time from BPC Holding Corporation a Delaware corporation (the
"ISSUER"), at any time on and after the Effective Date (as hereinafter
defined), but not later than 5:00 p.m., New York time, on May 9, 2010 (the
"EXPIRATION DATE"), 3,749 Stock Units (as hereinafter defined and subject
to adjustment as provided herein) at a purchase price of $0.01 per Stock
Unit (the "EXERCISE PRICE"), subject to the terms and conditions provided
<PAGE>
herein and in the Purchase Agreement (as hereinafter defined).
This Amended and Restated Warrant ("Warrant") is issued pursuant to the
Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996
(as modified and supplemented and in effect from time to time, the
"PURCHASE AGREEMENT") between the Issuer, Mergerco, CVCA and The
Northwestern Mutual Life Insurance Company.
SECTION 1. CERTAIN DEFINITIONS. (a) Each capitalized term used herein
without definition shall have the meaning assigned thereto (or incorporated
by reference) in the Purchase Agreement and in the Exhibits thereto.
(b) As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1 or in other provisions of this Warrant
in the singular to have the same meanings when used in the plural and vice
versa):
"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.
"BOARD" shall mean the Board of Directors of the Issuer.
"BUSINESS DAY" shall mean any day on which commercial banks are not
authorized or required to close in New York City.
"CLASS B COMMON STOCK" means, the Issuer's Class B Voting Common Stock,
$.01 par value per share, or any other common stock or other securities
receivable thereon, or into which the Class B Common Stock is convertible
or exchangeable, as a result of any recapitalization, reclassification,
merger or consolidation of, or deposition of assets by, the Issuer.
"COMMON STOCK" shall mean the Common Stock of the Issuer, of any class or
series whatsoever, or any other common stock or other securities receivable
thereon, or into which the Common Stock is convertible or exchangeable, as
a result of any recapitalization, reclassification, merger or consolidation
of, or disposition of assets by, the Issuer.
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<PAGE>
"CURRENT MARKET PRICE", shall mean, with respect to a share of Common Stock
as of any date (a) for a period of 30 Business Days after the date of the
IPO, the offering price of such Common Stock or (b) in any other case (i)
the fair market value per share of such Common Stock, as reasonably
determined in good faith by the Board, using an appropriate valuation
method, assuming an arms-length sale to an independent party of all of the
Common Stock of the Issuer, without giving regard to the lack of liquidity
of such Common Stock due to any restrictions contained in the Stockholders
Agreement, the Stock Purchase Agreement, the Purchase Agreement or
otherwise or any discount for minority interests and assuming the
conversion or exchange of all securities then outstanding which are
convertible into or exchangeable for such Common Stock and the exercise of
all rights and warrants (including the Warrants) then outstanding and
exercisable to purchase shares of such Common Stock or securities
convertible into or exchangeable for shares of such Common Stock, or (ii)
if there shall be a public market for such Common Stock, the average of the
daily market prices for each day during the 30 consecutive trading days
commencing 45 Business Days before such date as of which such a price can
be established in the manner set forth below. The market price for each
such Business Day shall be the last sale price on such day as reported in
the Consolidated Last Sale Reporting System or as quoted in the National
Association of Securities Dealers Automated Quotation System, or if such
last sale price is not available, the average of the closing bid and asked
prices as reported in either such system, or in any other case the higher
bid price quoted for such day as reported by The Wall Street Journal and
the National Quotation Bureau pink sheets.
"EFFECTIVE DATE" shall mean the date set forth on the signature page of
this Warrant.
"EXERCISE NOTICE" shall have the meaning assigned to such term in Section
2 hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning assigned to such term in the
first paragraph of this Warrant.
"HOLDER" shall mean the registered holder of this Warrant.
"INCLUDE" and "INCLUDING" shall be construed as if followed by the phrase
", without being limited to,".
"INDEPENDENT FINANCIAL EXPERT" shall mean an investment banking firm of
recognized national standing chosen by the Issuer which is not an Affiliate
of Atlantic Equity Partners International II, L.P. or an Affiliate or a
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<PAGE>
Stockholder of the Issuer and which is satisfactory to the holders of a
majority in interest of the Warrants and the Warrant Stock.
"IPO" shall mean the Issuer's first firm commitment underwritten public
offering involving the sale of Common Stock of the Issuer, pursuant to an
effective registration statement under the Securities Act.
"ISSUER" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"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.
"PURCHASE AGREEMENT" shall have the meaning assigned to such term in the
second paragraph of this Warrant.
"REGULATION Y" shall mean Regulation Y promulgated by the Board of
Governors of the Federal Reserve System (12 C.F.R. <section>225), or any
successor regulation.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"STOCKHOLDER" shall mean any Person who directly or indirectly owns any
shares of Common Stock (including Warrant Stock).
"STOCK UNIT" shall mean one share of Class B Common Stock, as such Class
B Common Stock is constituted on the date hereof, and thereafter shall mean
such number of shares (including any fractional shares) of Class B Common
Stock and other securities, cash or other property as shall result from the
adjustments specified in Section 4 hereof.
"WARRANT HOLDER" shall mean any Person who acquires Warrants or Warrant
Stock pursuant to the provisions of the Purchase Agreement, including any
transferees of Warrants or Warrant Stock.
"WARRANT STOCK" shall mean all shares of Class B Common Stock issuable
from time to time upon exercise of the Warrants.
"WARRANTS" shall mean the warrants originally issued by the Issuer
pursuant to the Purchase Agreement (of which this Warrant is one), evidencing
rights to purchase up to the aggregate amount of Stock Units set forth therein,
4
<PAGE>
and all Warrants issued upon transfer, division, or combination of, or in
substitution for, such Warrants.
SECTION 2. EXERCISE OF WARRANT. On and after the Effective Date and
until 5:00 p.m., New York time, on the Expiration Date, the Holder may exercise
this Warrant, on one or more occasions, on any Business Day, in whole or in
part, by delivering to the Issuer, at its office maintained for such
purpose pursuant to Section 5.01 hereof, (a) a written notice of the
Holder's election to exercise this Warrant, which notice shall specify the
number of Stock Units to be purchased (the "EXERCISE NOTICE"), (b) payment
of the Exercise Price (payable as set forth below) for the number of Stock
Units as to which this Warrant is being exercised, and (c) this Warrant.
The Exercise Price shall be payable (a) in cash or by certified or official
bank check payable to the order of the Issuer or by wire transfer of
immediately available funds to the account of the Issuer or (b) by delivery
of this Warrant Certificate to the Issuer for cancellation in accordance
with the following formula: in exchange for each share of Class B Common
Stock issuable on exercise of each Warrant represented by this Warrant
Certificate that is being exercised, such holder shall receive such number
of shares of Class B Common Stock as is equal to the product of (i) the
number of shares of Class B Common Stock issuable upon exercise of the
Warrants being exercised at such time multiplied by (ii) a fraction, the
numerator of which is the Current Market Price per share of Class B Common
Stock at such time minus the Exercise Price per share of Class B Common
Stock at such time, and the denominator of which is the Current Market
Price per share of Class B Common Stock at such time.
Upon receipt thereof, the Issuer shall, as promptly as practicable and
in any event within 5 Business Days thereafter, execute or cause to be
executed and deliver or cause to be delivered to the Holder a stock
certificate or certificates representing the aggregate number of shares of
Warrant Stock and other securities issuable upon such exercise and any
other property to which such Holder is entitled.
The stock certificate or certificates for Warrant Stock so delivered
shall be in such denominations as may be specified in the Exercise Notice and
shall be registered in the name of the Holder or such other name or names
as shall be designated in such Exercise Notice. Such stock certificate or
certificates shall be deemed to have been issued and the Holder or any
other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares, including, to the extent
permitted by law and to the extent such shares represent voting stock of
the Issuer, the right to vote such shares or to consent or to receive
notice as a Stockholder, as of the date on which the last of the Exercise
Notice, payment of the Exercise Price and this Warrant is received by the
Issuer as aforesaid. If this Warrant shall have been exercised only in
part, the Issuer shall, at the time of delivery of the certificate or
5
<PAGE>
certificates representing Warrant Stock and other securities, execute and
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Stock Units called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
and the same returned to the Holder.
All shares of Class B Common Stock issuable upon the exercise of this
Warrant shall, upon payment therefor in accordance herewith, be duly and
validly issued, fully paid and nonassessable and free and clear of any
liens, charges or other encumbrances of any nature.
The Issuer shall not be required to issue a fractional share of Class B
Common Stock upon exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such
exercise, the Issuer shall pay (at the time this Warrant is exercised for
all shares of Class B Common Stock remaining subject hereto) a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price per share of Class B Common Stock on
the date of exercise.
SECTION 3. TRANSFER, DIVISION AND COMBINATION. (a) Notwithstanding
anything herein to the contrary, no holder of Warrants subject to the
provisions of Regulation Y shall transfer any Warrants or shares of Warrant
Stock held by it, if, as a result of such transfer or the right to effect
such transfer, such holder would be deemed under Regulation Y to have the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Issuer (and, for purposes of this
restriction, a reasoned opinion of counsel to such holder (which is based
on facts and circumstances deemed appropriate by such counsel) to the
effect that such holder does not exercise such a controlling influence
shall be conclusive). For the purposes of this Section 3(a), a holder of
Warrants will not be deemed to be subject to Regulation Y to the
extent such holder is entitled to hold the Warrants pursuant to 12 C.F.R.
<section> 225.22(c)(4).
(b) Subject to the foregoing, this Warrant and all rights hereunder are
transferable (subject to any restrictive legends hereon), in whole or in
part, upon surrender of this Warrant to the Issuer, together with a written
assignment of this Warrant duly executed by the Holder hereof or such
holder's agent or attorney. Such written assignment shall be in the form
of the Assignment Form attached as Annex B hereto. Upon such surrender the
Issuer shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such
instrument of assignment, and the original Warrant shall promptly be
canceled.
6
<PAGE>
(c)This Warrant may be exchanged for other Warrants of the same series
upon presentation to the Issuer, together with a written notice specifying the
denominations in which new Warrants are to be issued, signed by the Holder
hereof. The Issuer shall execute and deliver a new Warrant or Warrants to
the holder in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. The Issuer shall pay all
expenses, taxes (including transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of the Warrants,
including any transfer or exchange thereof.
(d)The Issuer shall maintain books for the registration and transfer of
the Warrants, and shall allow each holder of Warrants to inspect such books at
such reasonable times as such holder shall request.
SECTION 4. ADJUSTMENTS.
(a) DIVIDENDS, DISTRIBUTIONS AND PURCHASES.
(i) If at any time the Issuer shall pay any dividend or make any
other distribution to holders of its Common Stock of any cash, evidence
of indebtedness or other property of any nature whatsoever (other than as
provided in subsections (b), (c)(i)(A) and (d)(i)(A) hereof), the Issuer
shall at the same time pay or distribute to each holder of Warrants
(whether or not such holder exercises such Warrants) the cash, evidence
of indebtedness or other property such holder would have been entitled to
receive if such holder had exercised such Warrants immediately prior to
the record date for such dividend or distribution;
(ii) If at any time the Issuer shall propose to purchase or redeem
any shares of its Common Stock (other than shares of Class B or Class C
Common Stock validly repurchased or redeemed, solely as permitted by the
terms of the Senior Secured Note Indenture, pursuant to any management
equity subscription, stockholders or stock option agreement) for cash,
evidence of indebtedness or other property of any nature whatsoever, the
Issuer shall deliver to each holder of Warrants which are by their terms
then exercisable for shares of Warrant Stock a notice of such proposed
purchase or redemption, and each such holder shall, at its option, have
the right to require the Issuer to at the same time purchase or redeem
Warrants and shares of Warrant Stock owned by such holder, in the same
proportion as the number of shares of Common Stock to be so purchased or
redeemed bears to the total number of shares of Common Stock outstanding
at such time, on the same terms and conditions as the proposed purchase or
redemption of such other Common Stock and for the same consideration per
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<PAGE>
Warrant or share of Warrant Stock, as the case may be, as is paid to the
holders of such other Common Stock for each share of Common Stock so
redeemed or purchased, minus, in the case of Warrants, the exercise price
of the Warrants to be so purchased or redeemed.
(b) SUBDIVISIONS AND COMBINATIONS. If at any time the Issuer shall
(i) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or other distribution of
Common Stock;
(ii) subdivide or reclassify its outstanding shares of Common
Stock into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as to
equal the number of shares of Warrant Stock which such holder would have
been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
(c) ISSUANCE OF COMMON STOCK. In case at any time the Issuer (i)(A)
shall take a record of the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase shares of any class or series
of Common Stock or (B) shall otherwise sell or issue any such securities
and (ii) the consideration per share of Common Stock to be paid upon such
issuance or subscription is less than the Current Market Price per share of
Common Stock on such record date, then the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock comprising
a Stock Unit immediately prior to such record date by a fraction (not to be
less than one) (i) the numerator of which shall be equal to the product of
(A) the number of shares of Common Stock outstanding after giving effect to
such issuance, distribution, subscription or purchase and (B) the Current
Market Price per share of Common Stock determined immediately before such
record date and (ii) the denominator of which shall be equal to the sum of
(A) the product of (1) the number of shares of Common Stock outstanding
immediately before such record date and (2) the Current Market Price per
share of Common Stock determined immediately before such record date and
(B) the aggregate consideration to be received by the Issuer for the total
number of shares of Common Stock to be issued, distributed, subscribed for
or purchased. Aggregate consideration for purposes of the preceding clause
(B) shall be determined as follows: In case any shares of Common Stock
shall be issued or sold for cash, the consideration received therefor shall
8
<PAGE>
be deemed to be the amount payable to the Issuer therefor. In case any
shares of Common Stock shall be issued or sold for a consideration other
than cash payable to the Issuer, the consideration received therefor shall
be deemed to be the fair value of such consideration as determined by the
Board. In case any shares of Common Stock shall be issued in connection
with any merger of another corporation into the Issuer, the amount of
consideration therefor shall be deemed to be the fair value as determined
by the Board of such portion of the assets of such merged corporation as
the Board shall determine to be attributable to such shares of Common
Stock.
(d) ISSUANCE OF OTHER SECURITIES, RIGHTS OR OBLIGATIONS. In case at
any time the Issuer (i)(A) shall take a record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase
options to purchase or rights to subscribe for Common Stock or securities
directly or indirectly convertible into or exchangeable for Common Stock
(or options or rights with respect to such securities) or (B) shall
otherwise issue or sell any such options, rights or securities and (ii) the
consideration per share for which Common Stock is deliverable upon exercise
of such options or rights or conversion or exchange of such securities
(determined by dividing (x) the total amount received or receivable by the
Issuer in consideration of the issuance of or subscription for such
options, rights or securities, plus the minimum aggregate amount of
premiums (if any) payable to the Issuer upon such exercise, conversion or
exchange, by (y) the total maximum number of shares of Common Stock
necessary to effect the exercise, conversion or exchange of all such
options, rights or securities) shall be less than the Current Market Price
per share of Common Stock on such record date or sale or issuance date, as
the case may be, then the number of shares of Warrant Stock comprising a
Stock Unit shall be adjusted to be that number determined by multiplying
the number of shares of Warrant Stock comprising a Stock Unit immediately
prior to such date by a fraction (not to be less than one) (i) the
numerator of which shall be equal to the product of (A) the total maximum
number of shares of Common Stock outstanding after giving effect to the
assumed exercise or conversion of all such options, rights or securities
and (B) the Current Market Price per share of Common Stock determined
immediately before such date and (ii) the denominator of which shall be
equal to the sum of (A) the product of (1) the number of shares of Common
Stock outstanding immediately before such date and (2) the Current Market
Price per share of the Common Stock determined immediately before such date
and (B) the aggregate consideration per share (determined as set forth in
subsection (ii)(x) and (y) above) for which Common Stock is deliverable
upon exercise conversion or exchange of such options, rights or securities.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any options, rights or convertible or
exchangeable securities (or options or rights with respect thereto) shall
be issued or sold, or exercisable, convertible or exchangeable for cash,
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<PAGE>
the consideration received therefor shall be deemed to be the amount
payable to the Issuer (determined as set forth in subsection (ii)(x) and
(y) above) therefor. In case any such options, rights or securities shall
be issued or sold, or exercisable, convertible or exchangeable for a
consideration other than cash payable to the Issuer, the consideration
received therefor (determined as set forth in subsection (ii)(x) and (y)
above) shall be deemed to be the fair value of such consideration as
determined by the Board, after deduction therefrom of any expenses incurred
or any underwriting commissions or concessions or discounts paid or allowed
by the Issuer in connection therewith. In case any such options, rights or
securities shall be issued or sold, or exercisable, convertible or
exchangeable in connection with any merger of another corporation into the
Issuer, the amount of consideration therefor shall be deemed to be the fair
value as determined by the Board of such portion of the assets of such
merged corporation as the Board shall determine to be attributable to such
options, rights or securities.
The Current Market Price per share of Common Stock shall be determined
as set forth in Section 5.05 hereof.
(e) SUPERSEDING ADJUSTMENT. If, at any time after any adjustment in the
number of shares of Warrant Stock comprising a Stock Unit shall have been
made on the basis of the issuance of any options or rights, or convertible
or exchangeable securities (or options or rights with respect to such
securities) pursuant to subsection (d) hereof:
(i) the options or rights shall expire prior to exercise or the right
to convert or exchange any such securities shall terminate; or
(ii) the consideration per share for which shares of Common Stock are
issuable pursuant to the terms of such options or rights or convertible or
exchangeable securities shall be increased or decreased, other than under
or by reason of provisions designed to protect against dilution;
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A)treating the number of shares of Common Stock, if any, theretofore
actually issued or issuable pursuant to the previous exercise, conversion
or exchange of such options, rights or securities as having been issued on
the date or dates of such exercise, conversion or exchange and for the
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<PAGE>
consideration actually received and receivable therefore, and
(B)treating any such options, rights or securities which then remain
outstanding as having been granted or issued immediately after the time of
such increase or decrease for the consideration per share for which shares
of Common Stock are issuable upon exercise, conversion or exchange of such
options, rights or securities.
To the extent called for by the foregoing provisions of this Section 4(e)
on the basis aforesaid, a new adjustment in the number of shares of Warrant
Stock comprising a Stock Unit shall be made, determined using the Current
Market Price used at the time of the original determination, which new
adjustment shall supersede the previous adjustment so rescinded and
annulled. If the exercise, conversion or exchange price provided for in
any such option, right or security shall decrease at any time under or by
reason of provisions designed to protect against dilution, then in the case
of the delivery of shares of Common Stock upon the exercise, conversion or
exchange of any such option, right or security, the Stock Unit purchasable
upon the exercise of a Warrant shall forthwith be adjusted in the manner
which would have obtained had the adjustment made upon issuance of such
option, right or security been made upon the basis of the issuance of (and
the aggregate consideration received for) the shares of Common Stock
delivered as aforesaid.
(f) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the making of adjustments of
the number of shares of Warrant Stock comprising a Stock Unit:
(i) The sale or other disposition of any issued shares of Common
Stock owned or held by or for the account of the Issuer shall be deemed
to be an issuance thereof for purposes of this Section.
(ii) In computing adjustments under this Section, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
(iii) If the Issuer shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and
before the distribution thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase rights,
then thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
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<PAGE>
(g) MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If the Issuer shall
merge or consolidate with another corporation, or shall sell, transfer or
otherwise dispose of all or substantially all of its assets to another
corporation and pursuant to the terms of such merger, consolidation or
disposition of assets, cash, shares of common stock or other securities of
the successor or acquiring corporation, or property of any nature is to be
received by or distributed to the holders of Common Stock of the Issuer,
then each holder of Warrants which are by their terms then exercisable
shall, at such holder's election, have the right to receive (whether or not
such holder exercises such Warrants) the amount it would have been entitled
to receive if such holder had exercised such Warrants immediately prior to
the occurrence of such merger, consolidation or disposition of assets, net
of the exercise price of such Warrants. In case of any such merger,
consolidation or disposition of assets in which the foregoing election is
not made, the successor or acquiring corporation (and any affiliate thereof
issuing securities) shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this Warrant to
be performed and observed by the Issuer and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably
acceptable to the holders of a majority in interest of the Warrants) in
order to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section.
The foregoing provisions shall similarly apply to successive mergers,
consolidations and dispositions of assets.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or from time to
time the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections of this
Section or an action taken in the ordinary course of the Issuer's business
and consistent with past practice, then, unless in the reasonable opinion
of the Board such action will not have a material adverse effect upon the
rights of the holders of the Warrants, the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted in such manner and at such
time as the Board shall in good faith determine to be equitable in the
circumstances, but no such adjustment shall decrease the number of shares
of Warrant Stock comprising a Stock Unit.
(i) NOTICE OF ADJUSTMENTS. Whenever the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted pursuant to this Agreement, the
Issuer shall forthwith obtain a certificate signed by a firm of independent
accountants of recognized national standing selected by the Issuer, setting
forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated and specifying the number of
shares of Warrant Stock comprising a Stock Unit, after giving effect to
such adjustment or change. The Issuer shall promptly cause a signed copy of
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<PAGE>
such certificate to be delivered to each holder of Warrants. The Issuer
shall keep at its office copies of all such certificates and cause the same
to be available for inspection at said office during normal business hours
by any holder of Warrants or any prospective purchaser of Warrants
designated by the registered holder hereof.
(j) NOTICE OF CERTAIN CORPORATE ACTION. If the Issuer shall propose (i)
to pay any dividend to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock; (ii) to offer to the
holders of its Common Stock rights to subscribe for or to purchase any
additional shares of Common Stock (or options or rights with respect
thereto); (iii) to effect any reclassification of its Common Stock; (iv) to
otherwise issue any Common Stock or other securities; (v) to effect any
capital reorganization; (vi) to effect any consolidation, merger or sale,
transfer or other disposition of all or substantially all of its assets; or
(vii) to effect the liquidation, dissolution or winding up of the Issuer,
then, in each such case, the Issuer shall give to each holder of Warrants a
notice of such proposed action, which shall specify the date on which a
record is to be taken for the purposes of such dividend, distribution or
rights offer, or the date on which such reclassification, issuance,
reorganization, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date is
to be fixed, and shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action on the
Common Stock, and the number of shares of Warrant Stock which will comprise
a Stock Unit after giving effect to any adjustment which will be required
as a result of such action. Such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the Common Stock for purposes of
such action, and in the case of any other such action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be
the earlier.
(k)NO ADJUSTMENT NECESSARY. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection
with, the issuance of shares of Common Stock, or options or warrants to
purchase shares of Common Stock, to management at fair market value (as
determined by the Board in its reasonable judgment) in an amount up to 12%
of the outstanding shares of Common Stock on the Closing Date, on a fully
diluted basis.
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<PAGE>
SECTION 5. MISCELLANEOUS.
5.01 OFFICE OF ISSUER. So long as any of the Warrants remains
outstanding, the Issuer shall maintain an office in the continental United
States of America where the Warrants may be presented for exercise,
transfer, division or combination as in this Warrant provided. Such office
shall be at c/o 101 Oakley Street, Evansville, Indiana 47710, unless and
until the Issuer shall designate and maintain some other office for such
purposes and give notice thereof to all Warrant Holders.
5.02 NOTICES GENERALLY. Any notices and other communications pursuant
to the provisions hereof shall be sent in accordance with the provisions of
Section 8.6 of the Purchase Agreement.
5.03 GOVERNING LAW. The corporate law of the State of Delaware shall
govern all issues concerning the relative rights of the Issuer and its
Stockholders. 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
Issuer agrees that it may be served with process in State of New York and
any action for breach of this Warrant may be prosecuted against it in the
courts of that State.
5.04 LIMITATION OF LIABILITY. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Class B Common
Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Exercise
Price or as a Stockholder of the Issuer, whether such liability is asserted
by the Issuer, by any creditor of the Issuer or any other Person.
5.05 DETERMINATION OF CURRENT MARKET PRICE PER SHARE OF COMMON STOCK.
The Current Market Price per share of Common Stock shall in each instance
initially be determined by the Issuer in accordance with the provisions of
the definition of Current Market Price in Section 1 hereof. The Issuer
shall notify the Holders of such determination. If the holders of a
majority in interest of the Warrants disagree with the determination of the
Issuer, the Issuer shall appoint an Independent Financial Expert to
determine the Current Market Price per share of Common Stock and the
determination of the Independent Financial Expert shall govern for purposes
of determining the adjustment pursuant to this Section. The Issuer shall
notify each holder of Warrants of the final determination of the Current
Market Price per share of Common Stock. The Issuer shall pay the fees and
expenses of the Independent Financial Expert.
5.06 REGISTRATION RIGHTS. The holders of this Warrant shall be entitled
to the benefit of the provisions of Article 6A
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<PAGE>
and Article 6C of the Purchase
Agreement with regard to the registration for sale of the Warrant Stock.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has duly executed this Amended and Restated
Warrant.
Dated: May 9, 2000
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name: James M. Kratochvil
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
Annex A
to
Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Amended and Restated Warrant
("Warrant") irrevocably exercises this Warrant for the purchase of Stock
Units of the Issuer, and herewith makes payment therefor, all at the price
and on the terms and conditions specified in this Warrant, and requests
that (i) certificates and/or other instruments covering such Stock Units be
issued in accordance with the instructions given below and (ii) if such
Stock Units shall not include all of the Stock Units to which the Holder is
entitled under this Warrant, that a new Warrant of like tenor and date for
the unpurchased balance of the Stock Units issuable hereunder be delivered
to the undersigned.
Dated: __________________
________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Stock Units:
________________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _________________________
Please deliver certificate to
the following address:
____________________________________
Street
_____________________________________
City, State and Zip Code
<PAGE>
Annex B
to
Warrant
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this Amended and
Restated Warrant hereby sells, assigns and transfers unto the assignee
named below all the rights of the undersigned under this Warrant with
respect to the number of Stock Units covered thereby set forth hereinbelow
unto:
Number of
NAME OF ASSIGNEE ADDRESS STOCK UNITS
Dated:__________________
________________________________
Signature of Registered Holder
________________________________
Name of Registered Holder
(Please Print)
Witness:
______________________
AMENDED AND RESTATED WARRANT
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO THE CONDITIONS SPECIFIED IN THAT CERTAIN PREFERRED STOCK AND WARRANT
PURCHASE AGREEMENT DATED AS OF JUNE 12, 1996 (THE "PURCHASE AGREEMENT"), BY
AND AMONG BPC HOLDING CORPORATION, A DELAWARE CORPORATION (SUCCESSOR IN
INTEREST TO BPC MERGERCO, INC.) (the "ISSUER"), BPC MERGERCO, INC., A
DELAWARE CORPORATION ("MERGERCO"), CHASE VENTURE CAPITAL ASSOCIATES, LLC
(FORMERLY KNOWN AS CHASE VENTURE CAPITAL ASSOCIATES, L.P.) ("CVCA") AND THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, AS SUCH PURCHASE AGREEMENT MAY
BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE
PURCHASE AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE ISSUER. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF THE
PURCHASE AGREEMENT.
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.
No. of Stock Units: 11,891 Warrant No. 8
WARRANT
to Purchase Class B Common Stock of
BPC HOLDING CORPORATION
THIS IS TO CERTIFY THAT THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, or
its registered assigns, is entitled to purchase in whole or in part from
time to time from BPC Holding Corporation, a Delaware corporation (the
"ISSUER"), at any time on and after the Effective Date (as hereinafter
defined), but not later than 5:00 p.m., New York time, on May 9, 2010 (the
"EXPIRATION DATE"), 11,891 Stock Units (as hereinafter defined and subject
to adjustment as provided herein) at a purchase price of $0.01 per Stock
Unit (the "EXERCISE PRICE"), subject to the terms and conditions provided
herein and in the Purchase Agreement (as hereinafter defined).
<PAGE>
This Amended and Restated Warrant ("Warrant") is issued pursuant to the
Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996
(as modified and supplemented and in effect from time to time, the
"PURCHASE AGREEMENT") between the Issuer, Mergerco, CVCA and The
Northwestern Mutual Life Insurance Company.
SECTION 1. CERTAIN DEFINITIONS. (a) Each capitalized term used herein
without definition shall have the meaning assigned thereto (or incorporated
by reference) in the Purchase Agreement and in the Exhibits thereto.
(b) As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1 or in other provisions of this Warrant
in the singular to have the same meanings when used in the plural and vice
versa):
"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.
"BOARD" shall mean the Board of Directors of the Issuer.
"BUSINESS DAY" shall mean any day on which commercial banks are not
authorized or required to close in New York City.
"CLASS B COMMON STOCK" means, the Issuer's Class B Non-Voting Common
Stock, $.01 par value per share, or any other common stock or other securities
receivable thereon, or into which the Class B Common Stock is convertible
or exchangeable, as a result of any recapitalization, reclassification,
merger or consolidation of, or deposition of assets by, the Issuer.
"COMMON STOCK" shall mean the Common Stock of the Issuer, of any class or
series whatsoever, or any other common stock or other securities receivable
thereon, or into which the Common Stock is convertible or exchangeable, as
a result of any recapitalization, reclassification, merger or consolidation
of, or disposition of assets by, the Issuer.
"CURRENT MARKET PRICE", shall mean, with respect to a share of Common
Stock as of any date (a) for a period of 30 Business Days after the date of the
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<PAGE>
IPO, the offering price of such Common Stock or (b) in any other case (i)
the fair market value per share of such Common Stock, as reasonably
determined in good faith by the Board, using an appropriate valuation
method, assuming an arms-length sale to an independent party of all of the
Common Stock of the Issuer, without giving regard to the lack of liquidity
of such Common Stock due to any restrictions contained in the Stockholders
Agreement, the Stock Purchase Agreement, the Purchase Agreement or
otherwise or any discount for minority interests and assuming the
conversion or exchange of all securities then outstanding which are
convertible into or exchangeable for such Common Stock and the exercise of
all rights and warrants (including the Warrants) then outstanding and
exercisable to purchase shares of such Common Stock or securities
convertible into or exchangeable for shares of such Common Stock, or (ii)
if there shall be a public market for such Common Stock, the average of the
daily market prices for each day during the 30 consecutive trading days
commencing 45 Business Days before such date as of which such a price can
be established in the manner set forth below. The market price for each
such Business Day shall be the last sale price on such day as reported in
the Consolidated Last Sale Reporting System or as quoted in the National
Association of Securities Dealers Automated Quotation System, or if such
last sale price is not available, the average of the closing bid and asked
prices as reported in either such system, or in any other case the higher
bid price quoted for such day as reported by The Wall Street Journal and
the National Quotation Bureau pink sheets.
"EFFECTIVE DATE" shall mean the date set forth on the signature page of
this Warrant.
"EXERCISE NOTICE" shall have the meaning assigned to such term in Section
2 hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning assigned to such term in the
first paragraph of this Warrant.
"HOLDER" shall mean the registered holder of this Warrant.
"INCLUDE" and "INCLUDING" shall be construed as if followed by the phrase
", without being limited to,".
"INDEPENDENT FINANCIAL EXPERT" shall mean an investment banking firm of
recognized national standing chosen by the Issuer which is not an Affiliate
of Atlantic Equity Partners International II, L.P. or an Affiliate or a
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<PAGE>
Stockholder of the Issuer and which is satisfactory to the holders of a
majority in interest of the Warrants and the Warrant Stock.
"IPO" shall mean the Issuer's first firm commitment underwritten public
offering involving the sale of Common Stock of the Issuer, pursuant to an
effective registration statement under the Securities Act.
"ISSUER" shall have the meaning assigned to such term in the first
paragraph of this Warrant.
"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.
"PURCHASE AGREEMENT" shall have the meaning assigned to such term in the
second paragraph of this Warrant.
"REGULATION Y" shall mean Regulation Y promulgated by the Board of
Governors of the Federal Reserve System (12 C.F.R. <section>225), or any
successor regulation.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"STOCKHOLDER" shall mean any Person who directly or indirectly owns any
shares of Common Stock (including Warrant Stock).
"STOCK UNIT" shall mean one share of Class B Common Stock, as such Class
B Common Stock is constituted on the date hereof, and thereafter shall mean
such number of shares (including any fractional shares) of Class B Common
Stock and other securities, cash or other property as shall result from the
adjustments specified in Section 4 hereof.
"WARRANT HOLDER" shall mean any Person who acquires Warrants or Warrant
Stock pursuant to the provisions of the Purchase Agreement, including any
transferees of Warrants or Warrant Stock.
"WARRANT STOCK" shall mean all shares of Class B Common Stock issuable
from time to time upon exercise of the Warrants.
"WARRANTS" shall mean the warrants originally issued by the Issuer
pursuant to the Purchase Agreement (of which this Warrant is one), evidencing
4
<PAGE>
rights to purchase up to the aggregate amount of Stock Units set forth therein,
and all Warrants issued upon transfer, division, or combination of, or in
substitution for, such Warrants.
SECTION 2. EXERCISE OF WARRANT. On and after the Effective Date and
until 5:00 p.m., New York time, on the Expiration Date, the Holder may exercise
this Warrant, on one or more occasions, on any Business Day, in whole or in
part, by delivering to the Issuer, at its office maintained for such
purpose pursuant to Section 5.01 hereof, (a) a written notice of the
Holder's election to exercise this Warrant, which notice shall specify the
number of Stock Units to be purchased (the "EXERCISE NOTICE"), (b) payment
of the Exercise Price (payable as set forth below) for the number of Stock
Units as to which this Warrant is being exercised, and (c) this Warrant.
The Exercise Price shall be payable (a) in cash or by certified or official
bank check payable to the order of the Issuer or by wire transfer of
immediately available funds to the account of the Issuer or (b) by delivery
of this Warrant Certificate to the Issuer for cancellation in accordance
with the following formula: in exchange for each share of Class B Common
Stock issuable on exercise of each Warrant represented by this Warrant
Certificate that is being exercised, such holder shall receive such number
of shares of Class B Common Stock as is equal to the product of (i) the
number of shares of Class B Common Stock issuable upon exercise of the
Warrants being exercised at such time multiplied by (ii) a fraction, the
numerator of which is the Current Market Price per share of Class B Common
Stock at such time minus the Exercise Price per share of Class B Common
Stock at such time, and the denominator of which is the Current Market
Price per share of Class B Common Stock at such time.
Upon receipt thereof, the Issuer shall, as promptly as practicable and in
any event within 5 Business Days thereafter, execute or cause to be
executed and deliver or cause to be delivered to the Holder a stock
certificate or certificates representing the aggregate number of shares of
Warrant Stock and other securities issuable upon such exercise and any
other property to which such Holder is entitled.
The stock certificate or certificates for Warrant Stock so delivered shall
be in such denominations as may be specified in the Exercise Notice and
shall be registered in the name of the Holder or such other name or names
as shall be designated in such Exercise Notice. Such stock certificate or
certificates shall be deemed to have been issued and the Holder or any
other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares, including, to the extent
permitted by law and to the extent such shares represent voting stock of
the Issuer, the right to vote such shares or to consent or to receive
notice as a Stockholder, as of the date on which the last of the Exercise
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<PAGE>
Notice, payment of the Exercise Price and this Warrant is received by the
Issuer as aforesaid. If this Warrant shall have been exercised only in
part, the Issuer shall, at the time of delivery of the certificate or
certificates representing Warrant Stock and other securities, execute and
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Stock Units called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at
the request of the Holder, appropriate notation may be made on this Warrant
and the same returned to the Holder.
All shares of Class B Common Stock issuable upon the exercise of this
Warrant shall, upon payment therefor in accordance herewith, be duly and
validly issued, fully paid and nonassessable and free and clear of any
liens, charges or other encumbrances of any nature.
The Issuer shall not be required to issue a fractional share of Class B
Common Stock upon exercise of this Warrant. As to any fraction of a share
which the Holder would otherwise be entitled to purchase upon such
exercise, the Issuer shall pay (at the time this Warrant is exercised for
all shares of Class B Common Stock remaining subject hereto) a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price per share of Class B Common Stock on
the date of exercise.
SECTION 3. TRANSFER, DIVISION AND COMBINATION. (a) Notwithstanding
anything herein to the contrary, no holder of Warrants subject to the
provisions of Regulation Y shall transfer any Warrants or shares of Warrant
Stock held by it, if, as a result of such transfer or the right to effect
such transfer, such holder would be deemed under Regulation Y to have the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Issuer (and, for purposes of this
restriction, a reasoned opinion of counsel to such holder (which is based
on facts and circumstances deemed appropriate by such counsel) to the
effect that such holder does not exercise such a controlling influence
shall be conclusive). For the purposes of this Section 3(a), a holder of
Warrants will not be deemed to be subject to Regulation Y to the
extent such holder is entitled to hold the Warrants pursuant to 12 C.F.R.
<section> 225.22(c)(4).
(b) Subject to the foregoing, this Warrant and all rights hereunder are
transferable (subject to any restrictive legends hereon), in whole or in
part, upon surrender of this Warrant to the Issuer, together with a written
assignment of this Warrant duly executed by the Holder hereof or such
holder's agent or attorney. Such written assignment shall be in the form
of the Assignment Form attached as Annex B hereto. Upon such surrender the
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<PAGE>
Issuer shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such
instrument of assignment, and the original Warrant shall promptly be
canceled.
(c)This Warrant may be exchanged for other Warrants of the same series
upon presentation to the Issuer, together with a written notice specifying the
denominations in which new Warrants are to be issued, signed by the Holder
hereof. The Issuer shall execute and deliver a new Warrant or Warrants to
the holder in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. The Issuer shall pay all
expenses, taxes (including transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of the Warrants,
including any transfer or exchange thereof.
(d)The Issuer shall maintain books for the registration and transfer of
the Warrants, and shall allow each holder of Warrants to inspect such books at
such reasonable times as such holder shall request.
SECTION 4. ADJUSTMENTS.
(a) DIVIDENDS, DISTRIBUTIONS AND PURCHASES.
(i) If at any time the Issuer shall pay any dividend or make any
other distribution to holders of its Common Stock of any cash, evidence
of indebtedness or other property of any nature whatsoever (other than as
provided in subsections (b), (c)(i)(A) and (d)(i)(A) hereof), the Issuer
shall at the same time pay or distribute to each holder of Warrants
(whether or not such holder exercises such Warrants) the cash, evidence of
indebtedness or other property such holder would have been entitled to
receive if such holder had exercised such Warrants immediately prior to
the record date for such dividend or distribution;
(ii) If at any time the Issuer shall propose to purchase or redeem
any shares of its Common Stock (other than shares of Class B or Class C
Common Stock validly repurchased or redeemed, solely as permitted by the
terms of the Senior Secured Note Indenture, pursuant to any management
equity subscription, stockholders or stock option agreement) for cash,
evidence of indebtedness or other property of any nature whatsoever, the
Issuer shall deliver to each holder of Warrants which are by their terms
then exercisable for shares of Warrant Stock a notice of such proposed
purchase or redemption, and each such holder shall, at its option, have
the right to require the Issuer to at the same time purchase or redeem
7
<PAGE>
Warrants and shares of Warrant Stock owned by such holder, in the same
proportion as the number of shares of Common Stock to be so purchased or
redeemed bears to the total number of shares of Common Stock outstanding
at such time, on the same terms and conditions as the proposed purchase or
redemption of such other Common Stock and for the same consideration per
Warrant or share of Warrant Stock, as the case may be, as is paid to the
holders of such other Common Stock for each share of Common Stock so
redeemed or purchased, minus, in the case of Warrants, the exercise price
of the Warrants to be so purchased or redeemed.
(b) SUBDIVISIONS AND COMBINATIONS. If at any time the Issuer shall
(i) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution of Common
Stock;
(ii) subdivide or reclassify its outstanding shares of Common Stock
into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as to
equal the number of shares of Warrant Stock which such holder would have
been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
(c) ISSUANCE OF COMMON STOCK. In case at any time the Issuer (i)(A)
shall take a record of the holders of its Common Stock for the purpose of
entitling them to subscribe for or purchase shares of any class or series
of Common Stock or (B) shall otherwise sell or issue any such securities
and (ii) the consideration per share of Common Stock to be paid upon such
issuance or subscription is less than the Current Market Price per share of
Common Stock on such record date, then the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock comprising
a Stock Unit immediately prior to such record date by a fraction (not to be
less than one) (i) the numerator of which shall be equal to the product of
(A) the number of shares of Common Stock outstanding after giving effect to
such issuance, distribution, subscription or purchase and (B) the Current
Market Price per share of Common Stock determined immediately before such
record date and (ii) the denominator of which shall be equal to the sum of
8
<PAGE>
(A) the product of (1) the number of shares of Common Stock outstanding
immediately before such record date and (2) the Current Market Price per
share of Common Stock determined immediately before such record date and
(B) the aggregate consideration to be received by the Issuer for the total
number of shares of Common Stock to be issued, distributed, subscribed for
or purchased. Aggregate consideration for purposes of the preceding clause
(B) shall be determined as follows: In case any shares of Common Stock
shall be issued or sold for cash, the consideration received therefor shall
be deemed to be the amount payable to the Issuer therefor. In case any
shares of Common Stock shall be issued or sold for a consideration other
than cash payable to the Issuer, the consideration received therefor shall
be deemed to be the fair value of such consideration as determined by the
Board. In case any shares of Common Stock shall be issued in connection
with any merger of another corporation into the Issuer, the amount of
consideration therefor shall be deemed to be the fair value as determined
by the Board of such portion of the assets of such merged corporation as
the Board shall determine to be attributable to such shares of Common
Stock.
(d) ISSUANCE OF OTHER SECURITIES, RIGHTS OR OBLIGATIONS. In case at
any time the Issuer (i)(A) shall take a record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase
options to purchase or rights to subscribe for Common Stock or securities
directly or indirectly convertible into or exchangeable for Common Stock
(or options or rights with respect to such securities) or (B) shall
otherwise issue or sell any such options, rights or securities and (ii) the
consideration per share for which Common Stock is deliverable upon exercise
of such options or rights or conversion or exchange of such securities
(determined by dividing (x) the total amount received or receivable by the
Issuer in consideration of the issuance of or subscription for such
options, rights or securities, plus the minimum aggregate amount of
premiums (if any) payable to the Issuer upon such exercise, conversion or
exchange, by (y) the total maximum number of shares of Common Stock
necessary to effect the exercise, conversion or exchange of all such
options, rights or securities) shall be less than the Current Market Price
per share of Common Stock on such record date or sale or issuance date, as
the case may be, then the number of shares of Warrant Stock comprising a
Stock Unit shall be adjusted to be that number determined by multiplying
the number of shares of Warrant Stock comprising a Stock Unit immediately
prior to such date by a fraction (not to be less than one) (i) the
numerator of which shall be equal to the product of (A) the total maximum
number of shares of Common Stock outstanding after giving effect to the
assumed exercise or conversion of all such options, rights or securities
and (B) the Current Market Price per share of Common Stock determined
immediately before such date and (ii) the denominator of which shall be
equal to the sum of (A) the product of (1) the number of shares of Common
9
<PAGE>
Stock outstanding immediately before such date and (2) the Current Market
Price per share of the Common Stock determined immediately before such date
and (B) the aggregate consideration per share (determined as set forth in
subsection (ii)(x) and (y) above) for which Common Stock is deliverable
upon exercise conversion or exchange of such options, rights or securities.
Aggregate consideration for purposes of the preceding clause (B) shall be
determined as follows: In case any options, rights or convertible or
exchangeable securities (or options or rights with respect thereto) shall
be issued or sold, or exercisable, convertible or exchangeable for cash,
the consideration received therefor shall be deemed to be the amount
payable to the Issuer (determined as set forth in subsection (ii)(x) and
(y) above) therefor. In case any such options, rights or securities shall
be issued or sold, or exercisable, convertible or exchangeable for a
consideration other than cash payable to the Issuer, the consideration
received therefor (determined as set forth in subsection (ii)(x) and (y)
above) shall be deemed to be the fair value of such consideration as
determined by the Board, after deduction therefrom of any expenses incurred
or any underwriting commissions or concessions or discounts paid or allowed
by the Issuer in connection therewith. In case any such options, rights or
securities shall be issued or sold, or exercisable, convertible or
exchangeable in connection with any merger of another corporation into the
Issuer, the amount of consideration therefor shall be deemed to be the fair
value as determined by the Board of such portion of the assets of such
merged corporation as the Board shall determine to be attributable to such
options, rights or securities.
The Current Market Price per share of Common Stock shall be determined as
set forth in Section 5.05 hereof.
(e) SUPERSEDING ADJUSTMENT. If, at any time after any adjustment in the
number of shares of Warrant Stock comprising a Stock Unit shall have been
made on the basis of the issuance of any options or rights, or convertible
or exchangeable securities (or options or rights with respect to such
securities) pursuant to subsection (d) hereof:
(i) the options or rights shall expire prior to exercise or the
right to convert or exchange any such securities shall terminate; or
(ii) the consideration per share for which shares of Common Stock
are issuable pursuant to the terms of such options or rights or convertible
or exchangeable securities shall be increased or decreased, other than
under or by reason of provisions designed to protect against dilution;
10
<PAGE>
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A)treating the number of shares of Common Stock, if any,
theretofore actually issued or issuable pursuant to the
previous exercise, conversion or exchange of such options,
rights or securities as having been issued on the date or dates
of such exercise, conversion or exchange and for the
consideration actually received and receivable therefore, and
(B)treating any such options, rights or securities which then
remain outstanding as having been granted or issued immediately
after the time of such increase or decrease for the
consideration per share for which shares of Common Stock are
issuable upon exercise, conversion or exchange of such options,
rights or securities.
To the extent called for by the foregoing provisions of this Section 4(e)
on the basis aforesaid, a new adjustment in the number of shares of Warrant
Stock comprising a Stock Unit shall be made, determined using the Current
Market Price used at the time of the original determination, which new
adjustment shall supersede the previous adjustment so rescinded and
annulled. If the exercise, conversion or exchange price provided for in
any such option, right or security shall decrease at any time under or by
reason of provisions designed to protect against dilution, then in the case
of the delivery of shares of Common Stock upon the exercise, conversion or
exchange of any such option, right or security, the Stock Unit purchasable
upon the exercise of a Warrant shall forthwith be adjusted in the manner
which would have obtained had the adjustment made upon issuance of such
option, right or security been made upon the basis of the issuance of (and
the aggregate consideration received for) the shares of Common Stock
delivered as aforesaid.
(f) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the making of adjustments of
the number of shares of Warrant Stock comprising a Stock Unit:
(i) The sale or other disposition of any issued shares of Common
Stock owned or held by or for the account of the Issuer shall be deemed
to be an issuance thereof for purposes of this Section.
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<PAGE>
(ii) In computing adjustments under this Section, fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share.
(iii) If the Issuer shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and
before the distribution thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(g) MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If the Issuer shall
merge or consolidate with another corporation, or shall sell, transfer or
otherwise dispose of all or substantially all of its assets to another
corporation and pursuant to the terms of such merger, consolidation or
disposition of assets, cash, shares of common stock or other securities of
the successor or acquiring corporation, or property of any nature is to be
received by or distributed to the holders of Common Stock of the Issuer,
then each holder of Warrants which are by their terms then exercisable
shall, at such holder's election, have the right to receive (whether or not
such holder exercises such Warrants) the amount it would have been entitled
to receive if such holder had exercised such Warrants immediately prior to
the occurrence of such merger, consolidation or disposition of assets, net
of the exercise price of such Warrants. In case of any such merger,
consolidation or disposition of assets in which the foregoing election is
not made, the successor or acquiring corporation (and any affiliate thereof
issuing securities) shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this Warrant to
be performed and observed by the Issuer and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board and reasonably
acceptable to the holders of a majority in interest of the Warrants) in
order to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section.
The foregoing provisions shall similarly apply to successive mergers,
consolidations and dispositions of assets.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or from time to
time the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections of this
Section or an action taken in the ordinary course of the Issuer's business
and consistent with past practice, then, unless in the reasonable opinion
of the Board such action will not have a material adverse effect upon the
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<PAGE>
rights of the holders of the Warrants, the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted in such manner and at such
time as the Board shall in good faith determine to be equitable in the
circumstances, but no such adjustment shall decrease the number of shares
of Warrant Stock comprising a Stock Unit.
(i) NOTICE OF ADJUSTMENTS. Whenever the number of shares of Warrant
Stock comprising a Stock Unit shall be adjusted pursuant to this Agreement, the
Issuer shall forthwith obtain a certificate signed by a firm of independent
accountants of recognized national standing selected by the Issuer, setting
forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated and specifying the number of
shares of Warrant Stock comprising a Stock Unit, after giving effect to
such adjustment or change. The Issuer shall promptly cause a signed copy of
such certificate to be delivered to each holder of Warrants. The Issuer
shall keep at its office copies of all such certificates and cause the same
to be available for inspection at said office during normal business hours
by any holder of Warrants or any prospective purchaser of Warrants
designated by the registered holder hereof.
(j) NOTICE OF CERTAIN CORPORATE ACTION. If the Issuer shall propose (i)
to pay any dividend to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock; (ii) to offer to the
holders of its Common Stock rights to subscribe for or to purchase any
additional shares of Common Stock (or options or rights with respect
thereto); (iii) to effect any reclassification of its Common Stock; (iv) to
otherwise issue any Common Stock or other securities; (v) to effect any
capital reorganization; (vi) to effect any consolidation, merger or sale,
transfer or other disposition of all or substantially all of its assets; or
(vii) to effect the liquidation, dissolution or winding up of the Issuer,
then, in each such case, the Issuer shall give to each holder of Warrants a
notice of such proposed action, which shall specify the date on which a
record is to be taken for the purposes of such dividend, distribution or
rights offer, or the date on which such reclassification, issuance,
reorganization, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date is
to be fixed, and shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action on the
Common Stock, and the number of shares of Warrant Stock which will comprise
a Stock Unit after giving effect to any adjustment which will be required
as a result of such action. Such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the Common Stock for purposes of
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<PAGE>
such action, and in the case of any other such action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be
the earlier.
(k)NO ADJUSTMENT NECESSARY. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit shall be made as a result of, or in connection
with, the issuance of shares of Common Stock, or options or warrants to
purchase shares of Common Stock, to management at fair market value (as
determined by the Board in its reasonable judgment) in an amount up to 12%
of the outstanding shares of Common Stock on the Closing Date, on a fully
diluted basis.
SECTION 5. MISCELLANEOUS.
5.01 OFFICE OF ISSUER. So long as any of the Warrants remains
outstanding, the Issuer shall maintain an office in the continental United
States of America where the Warrants may be presented for exercise,
transfer, division or combination as in this Warrant provided. Such office
shall be at c/o 101 Oakley Street, Evansville, Indiana 47710, unless and
until the Issuer shall designate and maintain some other office for such
purposes and give notice thereof to all Warrant Holders.
5.02 NOTICES GENERALLY. Any notices and other communications pursuant
to the provisions hereof shall be sent in accordance with the provisions of
Section 8.6 of the Purchase Agreement.
5.03 GOVERNING LAW. The corporate law of the State of Delaware shall
govern all issues concerning the relative rights of the Issuer and its
Stockholders. 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
Issuer agrees that it may be served with process in State of New York and
any action for breach of this Warrant may be prosecuted against it in the
courts of that State.
5.04 LIMITATION OF LIABILITY. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Class B Common
Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Exercise
Price or as a Stockholder of the Issuer, whether such liability is asserted
by the Issuer, by any creditor of the Issuer or any other Person.
5.05 DETERMINATION OF CURRENT MARKET PRICE PER SHARE OF COMMON STOCK.
The Current Market Price per share of Common Stock shall in each instance
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<PAGE>
initially be determined by the Issuer in accordance with the provisions of
the definition of Current Market Price in Section 1 hereof. The Issuer
shall notify the Holders of such determination. If the holders of a
majority in interest of the Warrants disagree with the determination of the
Issuer, the Issuer shall appoint an Independent Financial Expert to
determine the Current Market Price per share of Common Stock and the
determination of the Independent Financial Expert shall govern for purposes
of determining the adjustment pursuant to this Section. The Issuer shall
notify each holder of Warrants of the final determination of the Current
Market Price per share of Common Stock. The Issuer shall pay the fees and
expenses of the Independent Financial Expert.
5.06 REGISTRATION RIGHTS. The holders of this Warrant shall be entitled
to the benefit of the provisions of Article 6A and Article 6C of the Purchase
Agreement with regard to the registration for sale of the Warrant Stock.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has duly executed this Amended and Restated
Warrant.
Dated: May 9, 2000
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
Name: James M. Kratochvil
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
Annex A
to
Warrant
FORM OF EXERCISE
(To be executed by the registered holder hereof)
The undersigned registered owner of this Amended and Restated Warrant
("Warrant") irrevocably exercises this Warrant for the purchase of Stock
Units of the Issuer, and herewith makes payment therefor, all at the price
and on the terms and conditions specified in this Warrant, and requests
that (i) certificates and/or other instruments covering such Stock Units be
issued in accordance with the instructions given below and (ii) if such
Stock Units shall not include all of the Stock Units to which the Holder is
entitled under this Warrant, that a new Warrant of like tenor and date for
the unpurchased balance of the Stock Units issuable hereunder be delivered
to the undersigned.
Dated: __________________
________________________________
(Signature of Registered Holder)
Instructions for issuance and
registration of Stock Units:
________________________________
Name of Registered Holder
(please print)
Social Security or Other Identifying
Number: _________________________
Please deliver certificate to
the following address:
____________________________________
Street
_____________________________________
City, State and Zip Code
<PAGE>
Annex B
to
Warrant
FORM OF ASSIGNMENT
(To be executed by the registered holder hereof)
FOR VALUE RECEIVED the undersigned registered owner of this Amended and
Restated Warrant hereby sells, assigns and transfers unto the assignee
named below all the rights of the undersigned under this Warrant with
respect to the number of Stock Units covered thereby set forth herein below
unto:
Number of
NAME OF ASSIGNEE ADDRESS STOCK UNITS
Dated:__________________
________________________________
Signature of Registered Holder
________________________________
Name of Registered Holder
(Please Print)
Witness:
______________________
FIRST SUPPLEMENTAL INDENTURE
The undersigned are executing and delivering this First
Supplemental Indenture pursuant to Section 4.13 of the Indenture, dated
as of July 6, 1999, as supplemented (the "Indenture"), among Berry
Plastics Corporation, BPC Holding Corporation, Berry Iowa Corporation,
Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc.,
PackerWare Corporation, Berry Plastics Design Corporation, Venture
Packaging, Inc., Venture Packaging Southeast, Inc., Venture Packaging
Midwest, Inc., NIM Holdings Limited, Berry Plastics U.K. Limited (f/k/a
Norwich Injection Moulders Limited), Norwich Acquisition Limited, Knight
Plastics, Inc., CPI Holding Corporation, Cardinal Packaging, Inc., Berry
Plastics Acquisition Corporation II (f/k/a Berry Plastics Acquisition
Corporation) and United States Trust Company of New York, as trustee (the
"Trustee"). Capitalized terms used herein have the same meanings given
in the Indenture unless otherwise indicated.
By executing and delivering to the Trustee this First
Supplemental Indenture, each of Berry Plastics Acquisition Corporation
III, a Delaware corporation, and Poly-Seal Corporation, a Delaware
corporation (collectively, the "New Guarantors"), hereby becomes a
"Guarantor" under the Indenture and hereby agrees to become a party to,
to be bound by, and to comply with the provisions of the Indenture in the
same manner as if it were an original signatory to such agreement.
Each of the New Guarantors hereby unconditionally guarantees
that (i) the principal of and interest on the Notes will be paid in full
when due, whether at the maturity or interest payment or mandatory
redemption date, by acceleration, call for redemption or otherwise, and
interest on the overdue principal of and interest, if any, on the Notes
and all other obligations of the Company to the Holders or the Trustee
under the Indenture or the Notes will be promptly paid in full or
performed, all in accordance with the terms of the Indenture and the
Notes and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at maturity, by acceleration or
otherwise.
The obligations of each of the undersigned to each Holder and
to the Trustee pursuant hereto are as expressly set forth in Article 10
of the Indenture which terms are incorporated herein by reference.
This is a continuing guarantee and shall remain in full force
and effect and shall be binding upon each of the undersigned and its
successors and assigns until full and final payment of all of the
Company's obligations under the Notes and the Indenture and shall inure
to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon
that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
<PAGE>
Each of the Company and the Guarantors (hereinafter,
collectively, the "Obligors") hereby agrees that all judicial proceedings
brought against it arising out of or relating to the Indenture, or any
obligations hereunder, may be brought in any State or Federal Court of
competent jurisdiction in the State, County and City of New York in the
United States of America. By executing and delivering this First
Supplemental Indenture, each of the Obligors hereby irrevocably: (i)
accepts generally and unconditionally the nonexclusive jurisdiction and
venue of such courts, (ii) waives any defense of FORUM NON CONVENIENS;
(iii) designates and appoints Joseph S. Levy, or such other persons
located in New York State selected by the Obligors from time to time, and
agreeing in writing to so serve, as its agent to receive on its behalf
service of all process in any such proceedings in any such court, such
service being hereby acknowledged by each of the Obligors to be effective
and binding service in every respect (with a copy of any such process so
served to be mailed by registered mail to each of the Obligors at its
address provided that, unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of
such process) and each of the Obligors hereby agrees that service of
process sufficient for personal jurisdiction in any action in the State
of New York may be made by registered or certified mail, return receipt
requested, to it at its address and hereby acknowledges that such service
shall be effective and binding in every respect; and nothing herein shall
affect the right to serve process in any other manner permitted by law or
shall limit the right to bring proceedings against any of the Obligors in
the courts of any other jurisdiction; and (iv) agrees that the provisions
of this First Supplemental Indenture relating to jurisdiction and venue
shall be binding and enforceable to the fullest extent permissible under
New York General Obligations Law, Section 5-1402 or otherwise.
Any and all payments to be made by any of the undersigned to
the Trustee shall be made in U.S. Dollars. If, for the purpose of
calculating the amount of any judgment in any court, it is necessary to
convert into any other currency (the "Judgment Currency") an amount due
in U.S. Dollars under the Indenture, then the conversion shall be made at
the discretion of the Trustee, at the rate of exchange prevailing either
on the date of default or on the day before the day on which the award or
judgment is given (the "Conversion Date"). If there is a change in the
rate of exchange prevailing between the Conversion Date and the date of
actual payment of the amount due, the undersigned will pay such
additional amounts (if any, but in any event, not a lesser amount) as may
be necessary to ensure that the amount paid in the Judgment Currency when
converted at the rate of exchange prevailing on the date of payment will
produce the amount then due in U.S. Dollars.
This First Supplemental Indenture may be executed in
counterparts. Each signed copy shall be an original, but all of them
together represent the same agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
First Supplemental Indenture as of the 9th day of May, 2000.
<TABLE>
<CAPTION>
ATTEST: BERRY PLASTICS ACQUISITION CORPORATION III
BY: /S/ JAMES M. KRATOCHVIL
By: /S/ MARTIN R. IMBLER James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Martin R. Imbler Treasurer and Secretary
President and Chief
Executive Officer
<S> <C>
POLY-SEAL CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY IOWA CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY TRI-PLAS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY STERLING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
AEROCON, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
PACKERWARE CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS DESIGN CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING SOUTHEAST, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING MIDWEST, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
NIM HOLDINGS LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
BERRY PLASTICS U.K. LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
NORWICH ACQUISITION LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
KNIGHT PLASTICS, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CPI HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CARDINAL PACKAGING, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS ACQUISITION CORPORATION II (F/K/A
BERRY PLASTICS ACQUISITION CORPORATION)
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
UNITED STATES TRUST COMPANY OF NEW YORK, AS
TRUSTEE
By: /S/ CYNTHIA CHANEY
Name: Cynthia Chaney
Title: Assistant Vice President
</TABLE>
THIRD SUPPLEMENTAL INDENTURE
The undersigned are executing and delivering this Third
Supplemental Indenture pursuant to Section 4.13 of the Indenture, dated
as of August 24, 1998, as supplemented (the "Indenture"), among Berry
Plastics Corporation, BPC Holding Corporation, Berry Iowa Corporation,
Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc.,
PackerWare Corporation, Berry Plastics Design Corporation, Venture
Packaging, Inc., Venture Packaging Southeast, Inc., Venture Packaging
Midwest, Inc., NIM Holdings Limited, Berry Plastics U.K. Limited (f/k/a
Norwich Injection Moulders Limited), Norwich Acquisition Limited, Knight
Plastics, Inc., CPI Holding Corporation, Cardinal Packaging, Inc., Berry
Plastics Acquisition Corporation II (f/k/a Berry Plastics Acquisition
Corporation) and United States Trust Company of New York, as trustee (the
"Trustee"). Capitalized terms used herein have the same meanings given
in the Indenture unless otherwise indicated.
By executing and delivering to the Trustee this Third
Supplemental Indenture, each of Berry Plastics Acquisition Corporation
III, a Delaware corporation, and Poly-Seal Corporation, a Delaware
corporation (collectively, the "New Guarantors"), hereby becomes a
"Guarantor" under the Indenture and hereby agrees to become a party to,
to be bound by, and to comply with the provisions of the Indenture in the
same manner as if it were an original signatory to such agreement.
Each of the New Guarantors hereby unconditionally guarantees
that (i) the principal of and interest on the Notes will be paid in full
when due, whether at the maturity or interest payment or mandatory
redemption date, by acceleration, call for redemption or otherwise, and
interest on the overdue principal of and interest, if any, on the Notes
and all other obligations of the Company to the Holders or the Trustee
under the Indenture or the Notes will be promptly paid in full or
performed, all in accordance with the terms of the Indenture and the
Notes and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at maturity, by acceleration or
otherwise.
The obligations of each of the undersigned to each Holder and
to the Trustee pursuant hereto are as expressly set forth in Article 10
of the Indenture which terms are incorporated herein by reference.
This is a continuing guarantee and shall remain in full force
and effect and shall be binding upon each of the undersigned and its
successors and assigns until full and final payment of all of the
Company's obligations under the Notes and the Indenture and shall inure
to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon
that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
<PAGE>
Each of the Company and the Guarantors (hereinafter,
collectively, the "Obligors") hereby agrees that all judicial proceedings
brought against it arising out of or relating to the Indenture, or any
obligations hereunder, may be brought in any State or Federal Court of
competent jurisdiction in the State, County and City of New York in the
United States of America. By executing and delivering this Third
Supplemental Indenture, each of the Obligors hereby irrevocably: (i)
accepts generally and unconditionally the nonexclusive jurisdiction and
venue of such courts, (ii) waives any defense of FORUM NON CONVENIENS;
(iii) designates and appoints Joseph S. Levy, or such other persons
located in New York State selected by the Obligors from time to time, and
agreeing in writing to so serve, as its agent to receive on its behalf
service of all process in any such proceedings in any such court, such
service being hereby acknowledged by each of the Obligors to be effective
and binding service in every respect (with a copy of any such process so
served to be mailed by registered mail to each of the Obligors at its
address provided that, unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of
such process) and each of the Obligors hereby agrees that service of
process sufficient for personal jurisdiction in any action in the State
of New York may be made by registered or certified mail, return receipt
requested, to it at its address and hereby acknowledges that such service
shall be effective and binding in every respect; and nothing herein shall
affect the right to serve process in any other manner permitted by law or
shall limit the right to bring proceedings against any of the Obligors in
the courts of any other jurisdiction; and (iv) agrees that the provisions
of this Third Supplemental Indenture relating to jurisdiction and venue
shall be binding and enforceable to the fullest extent permissible under
New York General Obligations Law, Section 5-1402 or otherwise.
Any and all payments to be made by any of the undersigned to
the Trustee shall be made in U.S. Dollars. If, for the purpose of
calculating the amount of any judgment in any court, it is necessary to
convert into any other currency (the "Judgment Currency") an amount due
in U.S. Dollars under the Indenture, then the conversion shall be made at
the discretion of the Trustee, at the rate of exchange prevailing either
on the date of default or on the day before the day on which the award or
judgment is given (the "Conversion Date"). If there is a change in the
rate of exchange prevailing between the Conversion Date and the date of
actual payment of the amount due, the undersigned will pay such
additional amounts (if any, but in any event, not a lesser amount) as may
be necessary to ensure that the amount paid in the Judgment Currency when
converted at the rate of exchange prevailing on the date of payment will
produce the amount then due in U.S. Dollars.
This Third Supplemental Indenture may be executed in
counterparts. Each signed copy shall be an original, but all of them
together represent the same agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Third Supplemental Indenture as of the 9th day of May, 2000.
<TABLE>
<CAPTION>
ATTEST: BERRY PLASTICS ACQUISITION CORPORATION III
BY: /S/ JAMES M. KRATOCHVIL
By: /S/ MARTIN R. IMBLER James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Martin R. Imbler Treasurer and Secretary
President and Chief
Executive Officer
<S> <C>
POLY-SEAL CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY IOWA CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY TRI-PLAS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY STERLING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
AEROCON, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
PACKERWARE CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS DESIGN CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING SOUTHEAST, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING MIDWEST, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
NIM HOLDINGS LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
BERRY PLASTICS U.K. LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
NORWICH ACQUISITION LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
KNIGHT PLASTICS, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CPI HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CARDINAL PACKAGING, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS ACQUISITION CORPORATION II (F/K/A
BERRY PLASTICS ACQUISITION CORPORATION)
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
UNITED STATES TRUST COMPANY OF NEW YORK, AS
TRUSTEE
By: /S/ CYNTHIA CHANEY
Name: Cynthia Chaney
Title: Assistant Vice President
</TABLE>
NINTH SUPPLEMENTAL INDENTURE
The undersigned are executing and delivering this Ninth
Supplemental Indenture pursuant to Section 4.13 of the Indenture, dated
as of April 21, 1994, as supplemented (the "Indenture"), among Berry
Plastics Corporation, BPC Holding Corporation, Berry Iowa Corporation,
Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc.,
PackerWare Corporation, Berry Plastics Design Corporation, Venture
Packaging, Inc., Venture Packaging Southeast, Inc., Venture Packaging
Midwest, Inc., NIM Holdings Limited, Berry Plastics U.K. Limited (f/k/a
Norwich Injection Moulders Limited), Norwich Acquisition Limited, Knight
Plastics, Inc., CPI Holding Corporation, Cardinal Packaging, Inc., Berry
Plastics Acquisition Corporation II (f/k/a Berry Plastics Acquisition
Corporation) and United States Trust Company of New York, as trustee (the
"Trustee"). Capitalized terms used herein have the same meanings given
in the Indenture unless otherwise indicated.
By executing and delivering to the Trustee this Ninth
Supplemental Indenture, each of Berry Plastics Acquisition Corporation
III, a Delaware corporation, and Poly-Seal Corporation, a Delaware
corporation (collectively, the "New Guarantors"), hereby becomes a
"Guarantor" under the Indenture and hereby agrees to become a party to,
to be bound by, and to comply with the provisions of the Indenture in the
same manner as if it were an original signatory to such agreement.
Each of the New Guarantors hereby unconditionally guarantees
that (i) the principal of and interest on the Notes will be paid in full
when due, whether at the maturity or interest payment or mandatory
redemption date, by acceleration, call for redemption or otherwise, and
interest on the overdue principal of and interest, if any, on the Notes
and all other obligations of the Company to the Holders or the Trustee
under the Indenture or the Notes will be promptly paid in full or
performed, all in accordance with the terms of the Indenture and the
Notes and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at maturity, by acceleration or
otherwise.
The obligations of each of the undersigned to each Holder and
to the Trustee pursuant hereto are as expressly set forth in Article 10
of the Indenture which terms are incorporated herein by reference.
This is a continuing guarantee and shall remain in full force
and effect and shall be binding upon each of the undersigned and its
successors and assigns until full and final payment of all of the
Company's obligations under the Notes and the Indenture and shall inure
to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon
that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
<PAGE>
Each of the Company and the Guarantors (hereinafter,
collectively, the "Obligors") hereby agrees that all judicial proceedings
brought against it arising out of or relating to the Indenture, or any
obligations hereunder, may be brought in any State or Federal Court of
competent jurisdiction in the State, County and City of New York in the
United States of America. By executing and delivering this Ninth
Supplemental Indenture, each of the Obligors hereby irrevocably: (i)
accepts generally and unconditionally the nonexclusive jurisdiction and
venue of such courts, (ii) waives any defense of FORUM NON CONVENIENS;
(iii) designates and appoints Joseph S. Levy, or such other persons
located in New York State selected by the Obligors from time to time, and
agreeing in writing to so serve, as its agent to receive on its behalf
service of all process in any such proceedings in any such court, such
service being hereby acknowledged by each of the Obligors to be effective
and binding service in every respect (with a copy of any such process so
served to be mailed by registered mail to each of the Obligors at its
address provided that, unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of
such process) and each of the Obligors hereby agrees that service of
process sufficient for personal jurisdiction in any action in the State
of New York may be made by registered or certified mail, return receipt
requested, to it at its address and hereby acknowledges that such service
shall be effective and binding in every respect; and nothing herein shall
affect the right to serve process in any other manner permitted by law or
shall limit the right to bring proceedings against any of the Obligors in
the courts of any other jurisdiction; and (iv) agrees that the provisions
of this Ninth Supplemental Indenture relating to jurisdiction and venue
shall be binding and enforceable to the fullest extent permissible under
New York General Obligations Law, Section 5-1402 or otherwise.
Any and all payments to be made by any of the undersigned to
the Trustee shall be made in U.S. Dollars. If, for the purpose of
calculating the amount of any judgment in any court, it is necessary to
convert into any other currency (the "Judgment Currency") an amount due
in U.S. Dollars under the Indenture, then the conversion shall be made at
the discretion of the Trustee, at the rate of exchange prevailing either
on the date of default or on the day before the day on which the award or
judgment is given (the "Conversion Date"). If there is a change in the
rate of exchange prevailing between the Conversion Date and the date of
actual payment of the amount due, the undersigned will pay such
additional amounts (if any, but in any event, not a lesser amount) as may
be necessary to ensure that the amount paid in the Judgment Currency when
converted at the rate of exchange prevailing on the date of payment will
produce the amount then due in U.S. Dollars.
This Ninth Supplemental Indenture may be executed in
counterparts. Each signed copy shall be an original, but all of them
together represent the same agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Ninth Supplemental Indenture as of the 9th day of May, 2000.
ATTEST: BERRY PLASTICS ACQUISITION
CORPORATION III
BY: /S/ JAMES M. KRATOCHVIL
By: /S/ MARTIN R. IMBLER James M. Kratochvil
Martin R. Imbler Executive Vice President,
President and Chief Executive Chief Financial Officer,
Officer Treasurer and Secretary
POLY-SEAL CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY IOWA CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
BERRY TRI-PLAS CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY STERLING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
AEROCON, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
PACKERWARE CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS DESIGN CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
VENTURE PACKAGING, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING SOUTHEAST, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
VENTURE PACKAGING MIDWEST, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
NIM HOLDINGS LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
BERRY PLASTICS U.K. LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
<PAGE>
NORWICH ACQUISITION LIMITED
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Director
KNIGHT PLASTICS, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CPI HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
CARDINAL PACKAGING, INC.
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
BERRY PLASTICS ACQUISITION
CORPORATION II (F/K/A BERRY
PLASTICS ACQUISITION
CORPORATION)
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
UNITED STATES TRUST
COMPANY OF NEW YORK, AS
TRUSTEE
By: /S/ CYNTHIA CHANEY
Name: Cynthia Chaney
Title: Assistant Vice
President
ESCROW AGREEMENT dated as of May 9, 2000,
among BERRY PLASTICS CORPORATION, a Delaware
corporation (the "PARENT"), POLY-SEAL
CORPORATION, a Delaware corporation (the
"COMPANY"), MICHAEL C. LARNED AND MICHAEL D. DE
MILT (the "SHAREHOLDER PARTY REPRESENTATIVES"),
the trusts and individuals identified in the
signature pages hereto as shareholder parties
(the "SHAREHOLDER PARTIES") and OLD NATIONAL
TRUST COMPANY (the "ESCROW AGENT").
This Escrow Agreement is being executed in accordance with Section
1.10 of the Agreement and Plan of Merger dated as of May 5, 2000 (the "MERGER
AGREEMENT"), among the Parent, the Company, Berry Plastics Acquisition
Corporation and the Shareholder Parties. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in the Merger
Agreement.
In consideration of the mutual covenants contained herein and in the
Merger Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. APPOINTMENT OF ESCROW AGENT. The Escrow Agent is hereby
appointed to act as escrow agent hereunder, and the Escrow Agent agrees to act
as such.
Section 2. ESCROW FUND AND ESCROW ACCOUNT.
(a). On the date hereof, the Parent is delivering to the Escrow Agent
by wire transfer of immediately available funds the following sums: $1,200,000
(the "ESCROW HOLDBACK AMOUNT"), $50,421,017.70 (the "SHAREHOLDER PAYMENTS
ESCROW AMOUNT"), $544,523.43 (the "ESTIMATED ADJUSTMENT AMOUNT"), $200,000 (the
"Escrow Expense Amount"), and $0.00 (the "Escrow Tax Amount"), and the Escrow
Agent is accepting such sums for deposit in escrow pursuant to the provisions
of this Escrow Agreement. The Escrow Holdback Amount (and additions thereto
pursuant to Section 2(c)), the Shareholder Payments Escrow Amount, the
Estimated Adjustment Amount, the Escrow Expense Amount and the Escrow Tax
Amount (and additions thereto pursuant to Section 2(d)) and interest earned
thereon or proceeds derived therefrom, if any, are referred to herein as the
"ESCROW HOLDBACK FUND," the "SHAREHOLDER PAYMENTS ESCROW FUND", the "ESTIMATED
ADJUSTMENT FUND", the "ESCROW EXPENSE FUND" and the "ESCROW TAX
FUND,"respectively, and are collectively referred to herein as the "ESCROW
FUNDS".
(b). The Escrow Agent shall establish segregated accounts (the "ESCROW
HOLDBACK ACCOUNT," the "SHAREHOLDER PAYMENTS ESCROW ACCOUNT," the "ESTIMATED
ADJUSTMENT AMOUNT ACCOUNT," the "ESCROW EXPENSE ACCOUNT" and, upon receipt of
any funds pursuant to Section 2(d) for deposit into the Escrow Tax Fund, the
"ESCROW TAX ACCOUNT"), at its office located at its address set forth in
Section 10 hereof in which to hold the Escrow Funds and any securities in which
the Escrow Funds may, from time to time, be invested. The Escrow Agent shall
keep appropriate records to reflect the current value from time to time of each
Escrow Fund, including
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appropriate adjustments for disbursements and income earned or losses incurred
in respect thereof.
(c). Pursuant to Section 1.8(f) of the Merger Agreement, the
Shareholders may, from time to time, deliver additional funds to the Escrow
Agent as additions to the Escrow Holdback Amount and for deposit into the
Escrow Holdback Account pursuant to the provisions of this Escrow Agreement.
The Escrow Agent shall accept such funds pursuant to the provisions of this
Escrow Agreement.
(d). Pursuant to Section 4.11 of the Merger Agreement, the Company may,
from time to time, deliver additional funds to the Escrow Agent for deposit
into the Escrow Tax Account. The Escrow Agent shall accept such funds pursuant
to the provisions of this Escrow Agreement.
Section 3. INVESTMENTS.
(a). The Escrow Agent will invest the Escrow Funds in such Permitted
Investments (as hereinafter defined) as directed by the Shareholder Party
Representatives from time to time pursuant to written instructions signed by
the Shareholder Party Representatives and referencing the desired Permitted
Investments and the maturity date thereof. As used in this Escrow Agreement,
"PERMITTED INVESTMENTS" means any of the following:
i) direct obligations of, or obligations fully guaranteed by,
the United States of America or any agency thereof;
ii) bonds, debentures, notes or other evidence of indebtedness
issued by any of the following agencies: Federal Farm Credit System;
Federal Home Loan Bank System; Export-Import Bank of the United States;
Federal National Mortgage Association; Government National Mortgage
Association; Federal Financing Bank; or any agency or instrumentality of
the Federal government which shall be established for the purpose of
acquiring the obligations of any of the foregoing or otherwise providing
financing therefor;
iii) direct and general obligations of, or obligations
unconditionally guaranteed by, any state of the United States or political
subdivision of such state, but only if (A) such obligations or guarantees
are entitled to the full faith and credit of such state or political
subdivision of such state, respectively, and such obligations provide that
the state or political subdivision has the obligation to repay, in full
and on a timely basis, such obligations, and (B) at the time of their
purchase under this Escrow Agreement, such obligations are rated in any of
the two highest rating categories by a nationally recognized bond rating
service;
iv) certificates of deposit, whether negotiable or non-
negotiable, of any bank, trust company or national banking association,
provided that such certificates of deposit shall be (A) issued by a bank,
trust company or national banking association having capital stock and
surplus of more than $500,000,000, (B) fully insured by the Federal
Deposit Insurance Corporation or (C) fully and continuously secured by
direct obligations of, or obligations unconditionally guaranteed by, the
United States of
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America, which (1) shall have a market value (exclusive
of accrued interest) at all times at least equal to the principal amount
of such certificates of deposit, (2) shall be lodged with the Escrow Agent
(or any correspondent bank or trust company designated by the Escrow
Agent), as custodian, by the bank, trust company or national banking
association issuing such certificate of deposit, and (3) the bank, trust
company or national banking association issuing each certificate of
deposit required to be so secured shall furnish the Escrow Agent with an
undertaking satisfactory to it that the aggregate market value of such
obligations securing each such certificate of deposit will at all times be
an amount equal to the principal amount of each such certificate of
deposit (and the Escrow Agent shall be entitled to rely on each such
undertaking);
v) a readily redeemable interest bearing "money market account"
sponsored by a bank described in clause (iv)(A) above and having on the
date of such investment total assets of at least $1,000,000,000; any
repurchase agreement with any bank or trust company organized under the
laws of any state of the United States or any national banking association
or any government securities dealer which is listed as reporting to the
market statistics division of the Federal Reserve Bank of New York secured
by any one or more of the securities described in clauses (i) or (ii)
above;
vi) readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United States of
America or any state thereof or of any corporation that is the holding
company for a bank described in clause (iv)(A) above given on the date of
such investment a credit rating of at least P-1 by Moody's Investors
Service, Inc. or A-1 by Standard & Poor's Corporation, in each case due
within 90 days after the date of the making of the investment; and
vii) a readily redeemable "money market mutual fund" sponsored by
a bank described in clause (iv) (A) above, or a registered broker or
dealer described in clause (vi) above, that has and maintains an
investment policy limiting its investments primarily to instruments of the
types described in clauses (i) through (vii) above and having on the date
of such investment total assets of at least $1,000,000,000.
(b). Maturities or unexpired terms of maturities of instruments in
which the Escrow Fund is invested shall not exceed 90 days. The Escrow Agent
is authorized to sell such investments as may be required to make any payment
under this Escrow Agreement, and the Escrow Agent shall not be liable for any
loss due to early redemption. In the event that no such written instructions
are given by the Parent and the Shareholder Party Representatives as to any
uninvested portion of the Escrow Funds, such portion shall be invested by the
Escrow Agent in commercial paper for a 30-day period given on the date of such
investment a credit rating of at least P-1 by Moody's Investors Service, Inc.
or A-1 by the Standard & Poor's Corporation; PROVIDED, HOWEVER, that if such
period is not available, such portion shall be invested for the closest period
of shorter duration.
Section 4. RIGHTS TO ESCROW FUNDS.
(a). The Escrow Funds shall be for the exclusive benefit of the Buyer
Group and/or the Shareholders, as the case may be, and their respective
successors, assigns, heirs,
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administrators and estates, and no other person or
entity shall have any right, title or interest therein. Any claim of any
person to the Escrow Funds, or any part thereof, shall be subject and
subordinate to the prior right thereto of the Buyer Group and/or the
Shareholders, as the case may be.
(b). It is the intent of the Buyer Group and the Shareholders that each
of their respective interests in the Escrow Funds is merely a contingent right
to payment from the Escrow Funds, and that neither a voluntary or involuntary
case under any applicable bankruptcy, insolvency or similar law nor the
appointment of a receiver, trustee, custodian or similar official in respect of
any member of the Buyer Group or any Shareholder (any of which is referred to
herein as a "BANKRUPTCY EVENT") shall increase its respective interest in the
Escrow Funds or affect, modify, convert or otherwise change the contingent
nature of its respective right to payment from the Escrow Funds in accordance
with the terms of this Escrow Agreement. Accordingly, in order to assure the
foregoing result even if it is determined by a court of competent jurisdiction
(whether or not in connection with a Bankruptcy Event) that the Parent or any
Shareholder has an interest in any of the Escrow Funds that is greater than a
contingent right of payment from the Escrow Fund payable in accordance with the
provisions hereof, the parties agree as follows:
(i) The Parent and the Company hereby grant (effective as of the
date hereof) to the Shareholders a first priority security interest in,
and hereby pledges and assigns to the Shareholders, all of its right,
title and interest in each Escrow Fund to secure the Shareholders' rights
and the obligations of the Parent and the Company hereunder. The Escrow
Agent hereby agrees to act as bailee and possessory agent on behalf of the
Shareholders in respect of the Shareholders' security interest in the
rights of the Parent and the Company to the Escrow Funds. The Escrow
Agent shall, upon receipt of indemnification satisfactory to it from the
Shareholders for its fees and expenses incurred in connection with taking
such actions, take all actions as may be reasonably requested in writing
of it by the Shareholders to further perfect or maintain the security
interest created by the Parent and the Company hereunder in the Escrow
Funds. Such security interest shall automatically be released with
respect to any funds properly distributed from the Escrow Funds pursuant
to the terms of this Escrow Agreement; and
(ii) Each Shareholder hereby grants (effective as of the date
hereof) to the Parent and the Company a first priority security interest
in, and hereby pledges and assigns to the Parent and the Company, all of
his respective right, title and interest in each Escrow Fund to secure the
rights and such Shareholder's obligations hereunder. The Escrow Agent
hereby agrees to act as bailee and possessory agent on behalf of the
Parent and the Company in respect of the security interest of the Parent
and the Company in the Shareholders' rights to the Escrow Funds. The
Escrow Agent shall, upon receipt of indemnification satisfactory to it
from the Parent and the Company for its fees and expenses incurred in
connection with taking such actions, take all actions as may be reasonably
requested in writing of it by the Parent and the Company to further
perfect or maintain the security interest created by each Shareholder
hereunder in the Escrow Funds. Such security interest shall automatically
be released with respect to any funds properly distributed from the Escrow
Fund pursuant to the terms of this Escrow Agreement.
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(c). The parties hereto agree and acknowledge that the establishment
and maintenance of the Escrow Funds hereunder is intended to constitute
possession of the Escrow Funds for the purposes of perfecting the security
interests therein created by this Section 4.
Section 5. SURRENDER OF CERTIFICATES; PAYMENTS FOR SURRENDERED
CERTIFICATES FROM THE SHAREHOLDER PAYMENTS ESCROW ACCOUNT
(a). The Escrow Agent agrees to accept certificates representing shares
of Outstanding Company Common Stock (the "SHARES") surrendered to the Escrow
Agent and to make payments for such surrendered Shares in accordance with the
provisions of this Section 5.
(b). On or promptly after the date hereof, it is intended that the
Company will mail to each Shareholder who is not a Shareholder Party a notice
of merger and appraisal rights which will include, among other things, a Letter
of Transmittal (in the form attached hereto as EXHIBIT A, instructing such
Shareholders to complete and return the Letter of Transmittal to the Escrow
Agent. EXHIBIT B hereto sets forth a list of all Shareholders (including the
Shareholder Parties), showing the number of Shares held by each such
Shareholder, the Applicable Percentage of each such Shareholder and the
certificates (giving certificate numbers) representing such Shares.
(c). The Escrow Agent agrees to examine the Letters of Transmittal,
certificates representing Shares and other documents delivered or mailed to the
Escrow Agent by or for Shareholders, in order to ascertain, to the extent
reasonably determinable by the Escrow Agent, whether:
(i) The Letters of Transmittal appear to be duly executed and
properly completed in accordance with the instructions set forth therein;
(ii) the certificates for the Shares appear to be properly
surrendered;
(iii) the other documents, if any, used in connection with the
surrender of the Shares appear to be duly executed and properly completed
and in the proper form; and
(iv) the certificates for Shares are free of restrictions on
transfer or stop orders.
(d). In the event that the Escrow Agent ascertains that any Letter of
Transmittal or other document has been improperly completed or executed, that
any of the certificates for Shares are not in proper form or some other
irregularity exits, the Escrow Agent shall attempt to resolve promptly the
irregularity and may use its best efforts to contact the appropriate
Shareholder by whatever means of communication it deems most expedient in order
to correct the irregularity. If the Escrow Agent is unable to correct such
irregularity, it shall contact the Company for further instructions.
(e). As soon as practicable after surrender to the Escrow Agent of all
certificates for Shares registered to a particular Shareholder of record (and
only after surrender of all such certificates) and the return of a properly
completed and signed Letter of Transmittal relating thereto, the Escrow Agent
shall pay from the Shareholder Payments Escrow Account, to such
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<PAGE>
Shareholder, in the manner provided in Section 10, such Shareholder's
Applicable Percentage of the Shareholder Payments Escrow Amount, together
with such Shareholder(s)Applicable Percentage of the interest accrued thereon
and proceeds derived in the Shareholder Payments Escrow Account on such amount
from the Closing Date to the date of such payment.
(f). The Escrow Agent shall arrange to comply with all requirements
under the Tax laws of the United States, including those relating to missing
Tax Identification Numbers, and shall file any appropriate reports with the
Internal Revenue 6Service (including without limitation, Forms 1099 and 1099B).
The Escrow Agent may be required to deduct 31% from cash paid to holders who
have not supplied their correct Taxpayer Identification Number or required
certification. Such funds will be turned over to the IRS by the Escrow Agent.
(g). Letters of Transmittal and telegrams, facsimile transmissions and
other materials submitted to the Escrow Agent shall be preserved by the Escrow
Agent until delivered to or otherwise disposed of in accordance with the
instructions of the Company at or prior to the termination hereof.
(h). The Escrow Agent will keep and maintain complete and accurate
ledgers showing all shares surrendered and payments made therefor, and will
make such ledgers available to the Parent, the Company and the Shareholder
Party Representatives upon request.
(i). All certificates for Shares surrendered to the Escrow Agent shall
be retained by the Escrow Agent and following payment therefor shall be
forwarded to the Company, or elsewhere as directed by the Company.
(j). Upon receipt of New York State Stock Transfer Tax stamps from the
Company, the Escrow Agent shall affix such stamps to certificates for shares
surrendered in accordance with the instructions of the Company.
Section 6. CLAIMS; PAYMENTS FROM THE ESCROW HOLDBACK ACCOUNT AND THE
ESTIMATED ADJUSTMENT AMOUNT ACCOUNT.
(a) (i)In the event any member of the Buyer Group asserts a claim for
indemnification or satisfaction of Adjustment Amounts under the Merger
Agreement, the Parent shall execute and deliver to the Escrow Agent and the
Shareholder Party Representatives a written notice to such effect (a "PURCHASER
CLAIM NOTICE"; and the claim being asserted in a Purchaser Claim Notice being
hereinafter referred to as a "PURCHASER CLAIM") setting forth the nature and
details of such Purchaser Claim and the amount thereof (or if not
ascertainable, a reasonable maximum amount thereof), describing in reasonable
detail the basis of the Shareholder Parties' liability therefor under the
Merger Agreement, and instructing the Escrow Agent to deliver, not sooner than
15 days from receipt of the Purchaser Claim Notice, the portion of the Escrow
Holdback Fund specified in the Purchaser Claim Notice and in the aggregate
equal to the amount of the Purchaser Claim (or, if the amount of the Purchaser
Claim to be satisfied from the Escrow Holdback Fund shall be greater than the
balance of such Fund, such remaining balance or balances, as the case may be)
to the Parent or such other member of the Buyer Group as the Parent may direct
in the Purchaser Claim Notice.
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(ii) The Shareholder Party Representatives may object to any
Purchaser Claim Notice by delivering to the Parent and the Escrow Agent, within
14 days after receipt of the Purchaser Claim Notice, a written notice (a
"SHAREHOLDER PARTY OBJECTION NOTICE") stating that all or a portion of the
amount specified in such Purchaser Claim Notice should not be released to the
Parent or such other member of the Buyer Group. The Parent shall deliver to
the Shareholder Party Representatives a copy of each Purchaser Claim Notice on
or prior to the date of the delivery thereof to the Escrow Agent, and the
Escrow Agent shall also deliver a copy thereof to the Shareholder Party
Representatives promptly after receipt (provided that the failure of the
Escrow Agent to make such delivery to the Shareholder Party Representatives
shall not affect the obligation of the Escrow Agent to release funds pursuant
to Section 7(a)(ii) below). The Shareholder Party Representatives shall
deliver to the Parent a copy of each Shareholder Party Objection Notice on or
prior to the date of the delivery thereof to the Escrow Agent, and the Escrow
Agent shall also deliver a copy thereof to the Parent promptly after receipt
from the Shareholder Party Representatives.
(b) (i)In the event that either of the Shareholder Party
Representatives asserts a claim for Shareholder Adjustment Amounts under the
Merger Agreement, such person shall execute and deliver to the Escrow Agent and
the Parent a written notice to such effect (a "SHAREHOLDER PARTY REPRESENTATIVE
CLAIM NOTICE"; and the claim being asserted in a Shareholder Party
Representative Claim Notice being hereinafter referred to as a "SHAREHOLDER
PARTY REPRESENTATIVE CLAIM") setting forth in reasonable detail the nature and
details of such Shareholder Party Representative Claim and the amount thereof
(or if not ascertainable, a reasonable maximum amount thereof) and instructing
the Escrow Agent to deliver, not sooner than 15 days from receipt of the
Shareholder Party Representative Claim Notice, that portion of the Estimated
Adjustment Fund as shall equal the amount of the Shareholder Party
Representative Claim (or, if the amount of the Claim shall be greater than the
Estimated Adjustment Fund the balance of the Estimated Adjustment Fund) to the
Shareholders, in accordance with their respective Applicable Percentages in the
manner provided in Section 10; PROVIDED, HOWEVER, that no amount shall be so
released to any Shareholder that has not surrendered all certificates for
Shares registered in the name of such Shareholder as contemplated in Section 5
(each a "NONRESPONDING SHAREHOLDER") unless and until such Shareholder has
effected such surrender.
(ii) The Parent may object to any Shareholder Party Representative
Claim Notice by delivering to the Shareholder Party Representatives and the
Escrow Agent, within 14 days after receipt of the Shareholder Party
Representative Claim Notice, a written notice (a "PARENT OBJECTION NOTICE")
stating that all or a portion of the amount specified in such Shareholder Party
Representative Claim Notice should not be released to the Shareholder Party
Representatives. The Shareholder Party Representatives shall deliver to the
Parent a copy of each Shareholder Party Representative Claim Notice on or prior
to the date of the delivery thereof to the Escrow Agent, and the Escrow Agent
shall also deliver a copy thereof to the Parent promptly after receipt
(provided that the failure of the Escrow Agent to make such delivery to the
Parent shall not affect the obligation of the Escrow Agent to release funds
pursuant to Section 7(a)(iii) below). The Parent shall deliver to the
Shareholder Party Representatives a copy of each Parent Objection Notice on or
prior to the date of the delivery thereof to the Escrow Agent, and the Escrow
Agent shall also deliver a copy thereof to the Shareholder Party
Representatives promptly after receipt from the Parent.
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Section 7. PAYMENTS FROM ESCROW EXPENSE FUND.
From time to time until the date that is sixteen months following the
date hereof, the Shareholder Party Representatives may deliver to the Escrow
Agent requests for funds from the Escrow Expense Account to pay, or reimburse
the Shareholder Party Representatives for, (i) expenses, fees, costs and other
amounts paid or incurred by the Shareholder Party Representatives in connection
with the performance of any of their duties and responsibilities under, or the
taking of any action which they are required or permitted to take pursuant to,
the Merger Agreement or this Escrow Agreement (including, but without
limitation, the retention of independent accountants in connection with the
finalization for the Closing Date Balance Sheet and the Statement) and (ii)
fees to the Shareholder Party Representatives not to exceed $1,000 per month
per Shareholder Party Representative. The Escrow Agent shall be fully entitled
to rely on any such request and shall not be required to verify or otherwise
determine the accuracy thereof or the reasonableness of any amount requested
therein. Promptly (and, in any event within three (3) Business Days) after
receipt of any such request, the Escrow Agent shall release to the Shareholder
Party Representatives, by wire transfer of immediately available funds to such
account as the Shareholder Party Representatives designate in such request, the
amount so requested.
Section 8. PAYMENTS FROM ESCROW TAX FUND.
Promptly (and, in any event within three (3) Business Days) after
receipt of any funds for deposit in the Escrow Tax Account as contemplated in
Section 2(d), the Escrow Agent shall release to the Shareholders, in accordance
with their respective Applicable Percentages in the manner provided in Section
10, the entire balance of the Escrow Tax Fund; PROVIDED, HOWEVER, that no
amount shall be so released to any Nonresponding Shareholder unless and until
such Shareholder has surrendered all certificates for Shares registered in the
name of such Shareholder as contemplated in Section 5.
Section 9. RELEASE OF ESCROW FUNDS.
(a) The Escrow Agent shall release the Escrow Funds as follows:
(i) Promptly upon receipt of joint written instructions,
substantially in the form of EXHIBIT C hereto, signed by the Parent (or
such other member of the Buyer Group) and the Shareholder Party
Representatives ("JOINT INSTRUCTIONS"), in accordance with, from such
Escrow Fund and to the persons set forth in such Joint Instructions.
(ii) On the 15th day following the receipt of any Purchaser Claim
Notice which is received by the Escrow Agent and which is not the subject
of a Shareholder Party Objection Notice, the Escrow Agent shall release
to the Parent (or such other member of the Buyer Group) such portion of
the Escrow Holdback Fund as is claimed in such Purchaser Claim Notice.
(iii) On the 15th day following the receipt of any Shareholder
Party Representative Claim Notice which is received by the Escrow Agent
and which is not the subject of a Parent Objection Notice, the Escrow
Agent shall release to the Shareholders, in accordance with their
respective Applicable Percentages in the manner provided in
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Section 10, the portion of the Estimated Adjustment Fund as is claimed in
such Shareholder Party Representative Claim Notice; PROVIDED, HOWEVER,
that no amount shall be so released to any Nonresponding Shareholder
unless and until such Shareholder has surrendered all certificates
for Shares registered in the name of such Shareholder as contemplated
in Section 5.
(iv) On the date which is sixteen months following the date
hereof, the Escrow Agent shall release to the Shareholders, in accordance
with their respective Applicable Percentages in the manner provided in
Section 10, the balance of the Escrow Holdback Fund, if any; PROVIDED,
HOWEVER, that no amount shall be so released to any Nonresponding
Shareholder unless and until such Shareholder has surrendered all
certificates for Shares registered in the name of such Shareholder as
contemplated in Section 5.
(v) On the first anniversary of the date hereof, the Escrow
Agent shall release to the Company, Parent or other member of the Buyer
Group the balance of the Shareholder Payments Escrow Amounts, if any;
PROVIDED, HOWEVER, that, subject to any applicable statute of limitations
and/or escheat laws, no such release of funds shall relieve the Company of
any obligations to deliver such amounts to the Shareholders entitled
thereto pursuant to the terms of the Merger Agreement.
(vi) Amounts shall be released from the Escrow Expense Fund from
time to time prior to the date that is sixteen months following the date
hereof, as requested by the Shareholder Party Representatives, in
accordance with Section 7. On the date that is sixteen months following
the date hereof, the Escrow Agent shall release to the Shareholders, in
accordance with their respective Applicable Percentages in the manner
provided in Section 10, the balance of the Escrow Expense Fund, if any;
PROVIDED, HOWEVER, that no amount shall be so released to any
Nonresponding Shareholder unless and until such Shareholder has
surrendered all certificates for Shares registered in the name of such
Shareholder as contemplated in Section 5.
(vii) Amounts shall be released from the Escrow Tax Fund from time
to time in accordance with Section 8.
(b). In the event that the Escrow Agent receives a Shareholder Party
Representative Objection Notice from the Shareholder Party Representatives,
that portion of the Escrow Holdback Fund that is in dispute as reflected in
such Shareholder Party Representative Objection Notice shall be held by the
Escrow Agent until the occurrence of one of the following events:
(i) Receipt by the Escrow Agent of Joint Instructions
instructing the Escrow Agent to release the disputed portion of the Escrow
Holdback Fund to such party or parties and in such amount or amounts as is
specified in such Joint Instructions; or
(ii) Receipt by the Escrow Agent of a written notice (a
"CERTIFIED JUDGMENT NOTICE"), substantially in the form of EXHIBIT D
hereto, from the Parent (or such other member of the Buyer Group) or the
Shareholder Party Representatives
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certifying that a final, nonappealable court judgment or settlement with
respect to the claim covered by the Purchaser Claim Notice is attached
to such Certified Judgment Notice, in which case the Escrow Agent shall
distribute the disputed portion of the Escrow Holdback Fund in accordance
with such judgment on the 30th day following the receipt of any Certified
Judgment Notice, unless prior to such date the Escrow Agent receives a
written notice (an "APPEAL NOTICE"), substantially in the form of EXHIBIT
E hereto, from the party not submitting such Certified Judgment Notice,
stating that the judgment has or can and will be appealed. A party
delivering a Certified Judgment Notice or an Appeal Notice shall deliver
to the other party hereto a copy thereof on or prior to the date of
delivery thereof to the Escrow Agent, and the Escrow Agent shall also
deliver a copy of each Certified Judgment Notice or Appeal Notice to the
party which did not deliver the same promptly after the Escrow Agent's
receipt thereof (provided that the failure of the Escrow Agent to make
such delivery shall not affect the obligation of the Escrow Agent to
release funds pursuant to this Section 9(b)). If the judgment is appealed,
no release of the disputed portion of the Escrow Holdback Fund, will be
made until delivery of a subsequent Certified Judgment Notice to the
Escrow Agent, which notice is not the subject of subsequent Appeal Notice
delivered in accordance with this Section 9(b)(ii).
(c). In the event that the Escrow Agent receives a Parent Objection
Notice or a Shareholder Party Representative Objection Notice, that portion of
the Estimated Adjustment Fund that is in dispute as reflected in such Parent
Objection Notice or such Shareholder Party Representative Objection Notice
shall be held by the Escrow Agent until the occurrence of one of the following
events:
(i) Receipt by the Escrow Agent of Joint Instructions
instructing the Escrow Agent to release the disputed portion of the
Estimated Adjustment Fund to such party or parties and in such amount or
amounts as is specified in such Joint Instructions; or
(ii) Receipt by the Escrow Agent of a Certified Judgment Notice,
substantially in the form of EXHIBIT D hereto, from the Parent or the
Shareholder Party Representatives certifying that a final, nonappealable
court judgment or settlement with respect to the claim covered by the
Purchaser Claim Notice or the Shareholder Party Representative Claim
Notice is attached to such Certified Judgment Notice, in which case the
Escrow Agent shall distribute the disputed portion of the Estimated
Adjustment Fund, in accordance with such judgment on the 30th day
following the receipt of any Certified Judgment Notice, unless prior to
such date the Escrow Agent receives an Appeal Notice, substantially in the
form of EXHIBIT E hereto, from the party not submitting such Certified
Judgment Notice, stating that the judgment has or can and will be
appealed. A party delivering a Certified Judgment Notice or an Appeal
Notice shall deliver to the other party hereto a copy thereof on or prior
to the date of delivery thereof to the Escrow Agent, and the Escrow Agent
shall also deliver a copy of each Certified Judgment Notice or Appeal
Notice to the party which did not deliver the same promptly after the
Escrow Agent's receipt thereof (provided that the failure of the Escrow
Agent to make such delivery shall not affect the obligation of the Escrow
Agent to release funds pursuant to this Section 9(c)). If the judgment is
appealed, no release of the disputed portion of the
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Estimated Adjustment Fund, will be made until delivery of a subsequent
Certified Judgment Notice to the Escrow Agent, which notice is not the
subject of subsequent Appeal Notice delivered in accordance with this
Section 9(c)(ii).
Section 10. MANNER OF MAKING PAYMENTS TO SHAREHOLDERS.
Unless otherwise directed in writing by the Shareholder Party
Representatives, the Escrow Agent shall release or pay any amount to be
released or paid to Shareholders pursuant to this Agreement: (i) in the case
of the shareholders listed on Exhibit F, by wire transfer of immediately
available funds to the account of such Shareholder set forth in Exhibit F, or
as otherwise designated in writing from time to time by such Shareholder to the
Escrow Agent, and (ii) in the case of each other Shareholder, by bank check
drawn on Old National Bank personally delivered to such Shareholder or mailed
to the address of such Shareholder as set forth in the Letter of Transmittal
submitted by such Shareholder as contemplated in Section 5.
Section 11. TERMINATION.
This Escrow Agreement shall terminate upon the payment by the Escrow
Agent of all of the Escrow Funds in accordance with this Escrow Agreement.
Notwithstanding any termination of this Escrow Agreement, the provisions of
Section 12(c) and any outstanding amounts due under 12(d) hereof shall survive
such termination and remain in full force and effect.
Section 12. ESCROW AGENT.
(a). OBLIGATIONS.
(i) The sole obligations of the Escrow Agent are those
specifically provided in this Escrow Agreement and the Escrow Agent shall
have no liability under, or duty to inquire into, the terms and provisions
of any agreement between the parties hereto. The duties of the Escrow
Agent are purely ministerial in nature and it shall not incur any
liability whatsoever, except for willful misconduct or gross negligence.
(ii) The Escrow Agent shall not have any responsibility for the
genuineness or validity of any document or other item deposited with it or
of any signature thereon reasonably believed by it to be signed by the
proper parties and shall not have any liability for acting in accordance
with any written instructions or certificates given to it hereunder and
reasonably believed by it to be signed by the proper parties.
(b). RESIGNATION AND REMOVAL. The Escrow Agent may resign and be
discharged from its duties hereunder at any time by giving at least 30 days
notice of such resignation to the Parent and the Shareholder Party
Representatives, specifying a date upon which such resignation shall take
effect; PROVIDED, HOWEVER, that the resigning Escrow Agent shall continue to
serve as escrow agent until its successor accepts the Escrow Funds and assumes
all responsibilities as escrow agent hereunder. Upon receipt of such notice, a
successor escrow agent shall be jointly appointed by the Parent and the
Shareholder Party Representatives, such successor escrow agent to become the
Escrow Agent hereunder on the resignation date specified in such notice. If an
instrument of acceptance by a successor escrow agent shall not have been
delivered to the
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resigning Escrow Agent within 40 days after the giving of such
notice of resignation, the resigning Escrow Agent may tender onto the registry
or custody of any court of competent jurisdiction any part or all of the Escrow
Funds and thereafter be relieved of its duties and obligations hereunder. The
Parent and the Shareholder Party Representatives may at any time substitute a
new Escrow Agent by giving 30 days written notice thereof to the existing
Escrow Agent and paying all fees and expenses of such Escrow Agent incurred to
the date of the substitution.
(c). INDEMNIFICATION. The Shareholder Parties shall hold the Escrow
Agent harmless from, and shall jointly and severally indemnify the Escrow Agent
against, any loss, liability, expense (including attorney's fees and expenses),
claim or demand (a "LOSS") arising out of or in connection with the performance
of its obligations in accordance with the provisions of this Escrow Agreement
and which are attributable to any act or omission of the Shareholder Parties or
the Shareholder Party Representatives, except for any of the foregoing arising
out of the gross negligence or willful misconduct of the Escrow Agent and
PROVIDED, THAT, the maximum liability of each of Pieter V.C. Litchfield,
Michael C. Larned, Michael D. de Milt, William J. Herdrich and Robert C.
Weilminster for any Loss shall not exceed such individual's Applicable
Percentage of the total amount of such Loss for which indemnification is to be
provided by the Shareholder Parties. The Parent shall hold the Escrow Agent
harmless from, and indemnify the Escrow Agent against, any Loss arising out of
or in connection with the performance of its obligations in accordance with the
provisions of this Escrow Agreement and which are attributable to any act or
omission of the Parent, except for any of the foregoing arising out of the
gross negligence or willful misconduct of the Escrow Agent. The Parent and the
Shareholder Parties shall hold the Escrow Agent harmless from, and indemnify
(with one-half to be borne by the Parent and one-half to be borne by the
Shareholder Parties) the Escrow Agent against, any Loss arising out of or in
connection with the performance of its obligations in accordance with the
provisions of this Escrow Agreement and which are not attributable to any act
or omission of the Parent, the Shareholder Parties or the Shareholder Party
Representatives, except for any of the foregoing arising out of the gross
negligence or willful misconduct of the Escrow Agent and PROVIDED, THAT, the
maximum liability of each of Pieter V.C. Litchfield, Michael C. Larned, Michael
D. de Milt, William J. Herdrich and Robert C. Weilminster for any Loss shall
not exceed such individual's Applicable Percentage of the total amount of such
Loss for which indemnification is to be provided by the Shareholder Parties.
The foregoing indemnities in this paragraph shall survive the resignation or
substitution of the Escrow Agent or the termination of this Escrow Agreement.
(d). FEES AND EXPENSES OF ESCROW AGENT. For its services hereunder,
the Escrow Agent shall be entitled to a one-time fee of $2,500 payable within
ten (10) Business Days of receipt by the Parent and the Shareholder Party
Representatives of an invoice therefor. No increase in the rate of any fee
charged by the Escrow Agent shall be valid hereunder unless previously approved
in writing by the Parent and the Shareholder Party Representatives of an
invoice therefor. Such fees shall be paid one-half by the Parent and one-half
by the Shareholder Party Representatives on behalf of the Shareholder Parties.
In addition, the Escrow Agent shall be reimbursed for all reasonable out-of-
pocket expenses, disbursements and advances (including, but not limited to
postage, courier, overnight mail insurance, money wire transfer, long distance
telephone charges, facsimile, stationery and travel expenses), and including
reasonable attorneys' fees and reasonable accounting fees, incurred by the
Escrow Agent not in the ordinary course of
12
<PAGE>
business. The amount of such reimbursement shall be paid one half by the
Parent and one half by the Shareholder Party Representatives on behalf of the
Shareholder Parties. These fees described in this paragraph (d) do not include
extraordinary services which will be priced according to time and scope of
duties and shall be previously approved in writing by the Parent and the
Shareholder Party Representatives. The fees described in this paragraph (d)
shall be deemed earned in full upon receipt by the Escrow Agent, and no
portion shall be refundable for any reason, including without limitation,
termination of the Escrow Agreement.
Section 13. SHAREHOLDER PARTY REPRESENTATIVES.
Following the signing of this Escrow Agreement, the Shareholder Party
Representatives, acting individually or jointly, shall be authorized to receive
any and all payments, assignments, instruments and other deliveries to be made
or delivered to the Principal Shareholders pursuant to this Escrow Agreement
and to act for and on behalf of each Principal Shareholder with respect to this
Escrow Agreement, including, without limitation, in all instances where the
Principal Shareholders or any of them are required or permitted to give any
approval or consent or to take any other action under this Escrow Agreement.
The Parent, Company and the Escrow Agent shall not be responsible for the
proper application by the Shareholder Party Representatives of any payment,
assignment, instrument or other delivery made to the Shareholder Party
Representatives for the benefit of any of the Principal Shareholders or for the
Shareholder Party Representatives' compliance with the terms and provisions of
this Escrow Agreement and shall be entitled to rely conclusively upon the
actions of the Shareholder Party Representatives as actions for and on behalf
of the Principal Shareholders with respect to this Escrow Agreement.
Notwithstanding anything to the contrary contained herein, neither of the
Shareholder Party Representatives shall be required to take, or liable for
failing to take, any action not expressly required to be taken by the
Shareholder Party Representatives pursuant to the terms of this Escrow
Agreement and in no event shall either of the Shareholder Party Representatives
be personally responsible or liable for any obligation or liability hereunder
of any Shareholder or other party hereto or for the proper application by any
Principal Shareholder or any other person of any payment, assignment,
instrument or other delivery made by either of the Shareholder Party
Representatives to such Principal Shareholder or other person. Wherever in
this Escrow Agreement the Shareholder Party Representatives are authorized or
permitted to take any action, such action may be taken by either or both of
them and the act of either of them shall be deemed to be the act of both, and
the Parent, Company and Escrow Agent shall be entitled to rely upon any such
action accordingly.
Section 14. DISPUTES.
If any dispute should arise with respect to the payment or ownership
or right of possession of the Escrow Funds, the Escrow Agent is authorized and
directed to retain in its possession, without liability to anyone, all or any
part of the Escrow Funds until such dispute shall have been settled either by
mutual agreement of the parties concerned (including the Parent and the
Shareholder Party Representatives) or by the final order, decree or judgment of
a court of competent jurisdiction in the United States of America (the time for
appeal having expired with no appeal having been taken) in a proceeding to
which the Parent (or such other member of the Buyer Group) and the Shareholder
Party Representatives are parties, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings.
13
<PAGE>
Section 15. NOTICES.
All notices and other communications required hereunder or in
connection herewith shall be in writing and shall be deemed to have been duly
given if personally delivered or if sent by nationally-recognized overnight
courier, by telecopy, or by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
IF TO THE PARENT AND/OR COMPANY, TO:
BERRY PLASTICS CORPORATION
101 OAKLEY STREET
EVANSVILLE, INDIANA 47710
ATTENTION: JAMES M. KRATOCHVIL
TELEPHONE: (812) 421-9604
FACSIMILE: (812) 424-2904;
WITH A COPY TO:
O'SULLIVAN GRAEV & KARABELL, LLP
30 ROCKEFELLER PLAZA, 41ST FLOOR
NEW YORK, NEW YORK 10112
ATTENTION: MICHAEL J. O'BRIEN, ESQ.
FACSIMILE: (212) 408-2420
TELEPHONE: (212) 408-2400;
IF TO THE SHAREHOLDER PARTY REPRESENTATIVES OR THE SHAREHOLDER
PARTIES, TO:
MICHAEL C. LARNED
178 FARMS ROAD
STAMFORD, CONNECTICUT 06903
FACSIMILE: (203) 986-1522;
MICHAEL D. DE MILT
62 WOODMERE ROAD
STAMFORD, CONNECTICUT 06905
FACSIMILE (203) 986-1522;
WITH A COPY TO:
DEWEY BALLANTINE LLP
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6092
ATTENTION: BRIAN J. MORRIS, ESQ.
14
<PAGE>
TELECOPIER: (212) 259-6333.
IF TO THE ESCROW AGENT, TO:
OLD NATIONAL TRUST COMPANY
420 MAIN STREET
EVANSVILLE, INDIANA 47708
ATTENTION: SHANNON MARSHALL
FACSIMILE: 812-461-9738;
TELEPHONE: 812-461-9741
or to such other address as the parties hereto to whom notice is to be given
may have furnished in writing to the other parties hereto. Any such notice or
communication shall be deemed to have been received (i) in the case of personal
delivery, on the date of such delivery, (ii) in the case of nationally-
recognized overnight courier, on the next Business Day after the date when
sent, (iii) in the case of telecopy transmission, when received, and (iv) in
the case of mailing, on the third Business Day following that on which the
piece of mail containing such communication is posted.
Section 16. COUNTERPARTS.
This agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 17. GOVERNING LAW.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE
INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW
OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY. IT IS THE INTENTION OF THE PARTIES HERETO THAT THE
SITUS OF THE ESCROW FUND BE AND IT SHALL BE ADMINISTERED IN THE STATE IN WHICH
THE PRINCIPAL OFFICE OF THE ESCROW AGENT FROM TIME TO TIME ACTING HEREUNDER IS
LOCATED.
15
<PAGE>
Section 18. BENEFITS OF ESCROW AGREEMENT.
All the terms and provisions of this Escrow Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Anything contained herein to the contrary
notwithstanding, this Escrow Agreement shall not be assignable by any party
hereto without the consent of the Parent, the Shareholder Party Representatives
and the Escrow Agent; PROVIDED, HOWEVER, that the Parent may assign its rights
hereunder to its lenders and their successors and assigns or any other
financing source of the Parent, PROVIDED, FURTHER, HOWEVER, that no such
assignment shall relieve the Parent from any of its obligations or liabilities
hereunder.
Section 19. MODIFICATION. This Escrow Agreement shall not be altered or
otherwise amended except pursuant to an instrument in writing signed by each of
the parties hereto.
Section 20. DESCRIPTIVE HEADINGS. The descriptive headings in this Escrow
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision hereof.
Section 21. ENTIRE AGREEMENT. This Escrow Agreement and the other
agreements and documents referenced herein contain all the agreements among the
parties with respect to the transactions contemplated hereby and supersede all
prior agreements and understandings among the parties with respect thereto.
* * * * *
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed and delivered on the date first above written.
BERRY PLASTICS CORPORATION
By: /S/ JAMES KRATOCHVIL
Name: James Kratochvil
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
POLY-SEAL CORPORATION
By: /S/ MICHAEL C. LARNED
Name: Michael C. Larned
Title: Chairman of the Board
OLD NATIONAL TRUST COMPANY
By: /S/ SHANNON MARSHALL
Name: Shannon Marshall
Title: Corporate Accounts Officer
SHAREHOLDER PARTY REPRESENTATIVES
/S/ MICHAEL D. DE MILT
Michael D. de Milt
/S/ MICHAEL C. LARNED
Michael C. Larned
<PAGE>
EXHIBIT A
LETTER OF TRANSMITTAL
<PAGE>
EXHIBIT B
SHAREHOLDERS
See Attached.
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER CERTIFICATE # NUMBER OF SHARES Applicable
PERCENTAGE
<S> <C> <C> <C> <C>
Michael C. Larned and Michael D. 318 534 534 0.05
deMilt, Trustees of The Evangela
del Sandys Burton Revocable Trust
u/a/d 11/1/89
c/o The Brooklyn Improvement Co.
Michael C. Larned and Michael D. 475 4,534 4,534 0.43
deMilt, Trustees of The Notrub
Credit Shelter Trust u/w/o John
R. Burton
c/o The Brooklyn Improvement Co.
John R. Burton, III 339 133
340 133 266 0.03
Michael D. deMilt, Trustee of The 493 2,209 2,209 0.21
Emily K. Larned Trust u/a/d
11/01/95
c/o The Brooklyn Improvement Co.
Michael D. deMilt, Trustee 422 1,219
Trust u/a/d 12/27/93 446 450
Marguerita S. Larned 469 540 2,209 0.21
c/o The Brooklyn Improvement Co.
Robert B. Hamill and Michael C. 457 8,205 8,205 0.78
Larned, Trustees of The Robert B.
Hamill Trust u/a/d 6/20/ 97
Michael C. Larned, Trustee of The 311 2,129
Eric H. Litchfield Trust u/a/d 306 2,129 4,258 0.40
2/5/73
c/o Brooklyn Improvement Co.
Michael C. Larned, Trustee of The 321 3,947 3,947 0.38
Eric H. Litchfield Trust u/a/d
11/22/86
c/o Brooklyn Improvement Co.
Michael C. Larned, Trustee of The 428 8,205 8,205 0.78
Amelia H. Hopkins Trust u/a/d
8/25/85
c/o The Brooklyn Improvement Co.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Michael C. Larned, Trustee of The 332 241
Ann L. Schofield Trust u/a/d 361 273
08/29/90 381 280
c/o The Brooklyn Improvement Co. 417 425
437 450
460 540 2,209 0.21
Michael C. Larned, Trustee of The 335 241
Beatrice L. Larned Revocable 362 273
Trust u/a/d 3/1/90 382 280
c/o The Brooklyn Improvement Co. 404 425
438 450
461 540 2,209 0.21
Michael C. Larned, Trustee of The 336 241
Matthew S. Litchfield Trust u/a/d 363 273
12/27/79 383 280
c/o The Brooklyn Improvement Co. 405 425
439 450
462 540 2,209 0.21
Michael C. Larned, Trustee of The 499 2,209 2,209 0.21
Gregory H. Litchfield Trust u/a/d
2/12/96
c/o The Brooklyn Improvement Co.
Michael C. Larned, Trustee of The 333 241
William S. Litchfield Trust u/a/d 365 273
10/31/81 385 280
c/o The Brooklyn Improvement Co. 407 425
441 450
464 540 2,209 0.21
Michael C. Larned, Trustee of The 331 241 0.21
Carolyn A. Schofield Trust u/a/d 366 273
2/22/86 386 280
c/o The Brooklyn Improvement Co. 408 425
442 450
465 540 2,209
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Michael C. Larned, Trustee of The 328 241
Jeremy S. Schofield Trust u/a/d 367 273
6/1/87 387 280
c/o The Brooklyn Improvement Co. 409 425
443 450
466 540 2,209 0.21
Michael C. Larned, Trustee of The 329 241
Jonathan E. Schofield Trust u/a/d 368 273
7/21/91 388 280
c/o The Brooklyn Improvement Co. 410 425
444 450
467 540 2,209 0.21
Michael C. Larned, Trustee of the 330 241
Julia K. Schofield Trust u/a/d 369 273
10/15/82 389 280
c/o The Brooklyn Improvement Co. 411 425
445 450
468 540 2,209 0.21
Pieter V. C. Litchfield 219 5,000
316 3,400
315 3,400
326 241
360 273
380 280
402 425
436 450
459 540 14,009 1.33
Sarah R. Litchfield and Michael 452 2,000 2,000 0.19
C. Larned, Trustees of The Sarah
R. Litchfield 1996 Revocable
Trust u/a/d 12/30/96
c/o The Brooklyn Improvement Co.
Christopher S. Litchfield 312 2,129
305 2,129
323 3,947 8,205 0.78
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER CERTIFICATE # NUMBER OF SHARES Applicable
PERCENTAGE
<S> <C> <C> <C> <C>
Shirley A. Allen 358 25
357 200 225 0.02
John T. Brown 11 200
153 200 400 0.04
Charles W. Burgess 54 100
55 100
56 100
57 100
58 100
154 500 1,000 0.10
Betty H. Coons, Trustee of The 285 4,999 4,000 0.38
Betty H. Coons Survivor's Trust B
u/a/d 8/24/85
Nancy M. Chandler 342 300 300 0.03
Shirley D. Courtney 492 100
126 100
159 200
491 600 1,000 0.10
James A. Dowell, Jr. 138 250
163 250 500 0.05
William E. Freyer 260 400 400 0.04
Kenneth M. Gillman 425 50 50 0.00
Rose Hall 131 50
168 50 100 0.01
Eileen C. House 495 1,000 1,000 0.10
Gilgod C. Iskelov 232 100
235 100 200 0.02
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Earl H. Kahl 34 100
71 100
120 100
141 50
171 350 700 0.07
George M. Kresnosky 474 1,250 1,250 0.12
John W. Limbach 74 250
75 250
112 200
179 700 1,400 0.13
Clara Longo 78 100
183 100 200 0.20
Karl G. Mauck 237 100
297 300 400 0.40
Harry Keith Myers 99 100
100 200
140 100
253 100
254 300
212 400 1,200 0.11
Mauro O'Brien 341 300 300 0.03
Catherine Owsianiecki 77 100
189 100 200 0.02
Patricia Rebbert 42 100 200 0.02
192 100
H.B.B. Robinson 93 66
193 66 132 0.01
H. Thomas Sharpe, Jr. 481 4,000
455 2,000 6,000 0.57
Jeana M. Torzilli 128 100
195 100
230 200 400 0.04
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Richard K. Wahl 483 228 228 0.02
Norman R. Warrell 484 750 750 0.07
TOTAL NUMBER OF AUTHORIZED SHARES: 1,500,000
TOTAL NUMBER OF OUTSTANDING SHARES: 1,051,578
TOTAL NUMBER OF SHAREHOLDERS: 53
</TABLE>
<PAGE>
EXHIBIT C
[Date]
[Escrow Agent]
INSTRUCTIONS FOR RELEASE OF ESCROW FUND
Ladies and Gentlemen:
Reference is made to the Escrow Agreement dated ____________, 2000
(the "ESCROW AGREEMENT"), among Berry Plastics Corporation, Poly-Seal
Corporation, the Shareholder Party Representatives and you. Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed to them
in the Escrow Agreement.
In accordance with Section 6(a)(i) of the Escrow Agreement, the
undersigned hereby instructs you to disburse [indicate amount] from the
[indicate relevant Escrow Fund(s)] to [indicate recipients].
BERRY PLASTICS CORPORATION
By:
Name:
Title:
SHAREHOLDER PARTY REPRESENTATIVES
______________________________
Michael D. de Milt
_____________________________
Michael C. Larned
<PAGE>
EXHIBIT D
[Date]
[ESCROW AGENT]
NOTICE OF CERTIFIED JUDGMENT
Gentlemen:
Reference is made to the Escrow Agreement dated ____________, 2000
(the "ESCROW AGREEMENT"), among Berry Plastics Corporation, Poly-Seal
Corporation, the Shareholder Party Representatives and you. Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed to them
in the Escrow Agreement.
In accordance with [Section 9(b)(ii)/Section 9(c)(ii)] of the Escrow
Agreement, the undersigned hereby instructs you to disburse from the [Escrow
Holdback Fund/Estimated Adjustment Fund] to the persons named in the final
court judgment (a certified copy of which is attached hereto) the amounts set
forth therein.
BERRY PLASTICS CORPORATION
By:_____________________________
Name:
Title:
-or-
SHAREHOLDER PARTY REPRESENTATIVES
_____________________________
Michael D. de Milt
_____________________________
Michael C. Larned
<PAGE>
EXHIBIT E
[Date]
[ESCROW AGENT]
NOTICE OF APPEAL
Gentlemen:
Reference is made to the Escrow Agreement dated ____________, 2000
(the "ESCROW AGREEMENT"), among Berry Plastics Corporation, Poly-Seal
Corporation, the Shareholder Party Representatives and you. Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed to them
in the Escrow Agreement.
In accordance with [Section 9(b)(ii)/Section 9(c)(ii)] of the Escrow
Agreement, the undersigned hereby instructs you not to disburse from the
[Escrow Holdback Fund/Estimated Adjustments Fund] to the persons named in the
court judgment certified to you as final pursuant to a notice dated _________,
20___ . This judgment is or can and will be appealed.
BERRY PLASTICS CORPORATION
By:_____________________________
Name:
Title:
-or-
SHAREHOLDER PARTY REPRESENTATIVES
_____________________________
Michael D. de Milt
_____________________________
Michael C. Larned
<PAGE>
EXHIBIT F
WIRE INSTRUCTIONS
See Attached.
CONTACT:MARTIN R. IMBLER
PRESIDENT & CEO
812/424-2904
BERRY PLASTICS COMPLETES ACQUISITION OF POLY-SEAL
FOR IMMEDIATE RELEASE:
EVANSVILLE, INDIANA, May 10, 2000 - Berry Plastics Corporation announced today
that it has successfully completed its acquisition of Poly-Seal Corporation,
headquartered in Baltimore, Maryland. As a result of the acquisition, Poly-Seal
becomes a wholly-owned subsidiary of Berry Plastics Corporation. Terms of the
transaction were not disclosed.
Poly-Seal, with annual net sales in excess of $50 million, is one of the
nation's leading manufacturers of injection-molded and compression-molded
plastic closures for a wide variety of end-use markets.
"We're delighted to complete this important acquisition," said Martin R.
Imbler, President and Chief Executive Officer of Berry Plastics. "It is a
major step in expanding our participation in the plastic closures business.
This is a new market for us, and although it is related to our existing product
lines, closures offers an additional growth opportunity as well as the chance
to develop innovative new value-added products."
Poly-Seal's plant location in Baltimore will become the primary manufacturing
point for Berry's U.S. plastic closure business. Berry currently produces
plastic closures for the European market at its plant in Norwich, England.
Bill Herdrich, former President and Chief Executive Officer of Poly-Seal, will
continue to work with Berry Plastics as a Consultant focused on the closures
business. Robert Weilminster, former Chief Financial Officer of Poly-Seal, has
accepted the position of Plant Manager in charge of all operations at the
Baltimore facility.
Berry Plastics Corporation is a leading manufacturer and marketer of injection-
molded plastic aerosol overcaps, closures, drink cups, rigid thinwall open-top
containers and housewares. The company is headquartered in Evansville,
Indiana, and, together with its subsidiaries, also has plants in Henderson,
Nevada; Iowa Falls, Iowa; Charlotte, North Carolina; York, Pennsylvania;
Lawrence, Kansas; Suffolk, Virginia; Monroeville, Ohio; Woodstock, Illinois;
Streetsboro, Ohio; Minneapolis, Minnesota; Baltimore, Maryland and Norwich,
England. Berry Plastics' principal owners include affiliates of First Atlantic
Capital, Chase Capital Partners, Aetna Life Insurance Company and members of
Berry's management.
