UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 15, 1995
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BALL CORPORATION
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(Exact name of registrant as specified in its charter)
Indiana
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(State or other jurisdiction of incorporation)
1-7349 35-0160610
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(Commission File Number) (IRS Employer Identification No.)
345 South High Street, Muncie, IN 47307-0407
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Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (317) 747-6100
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<PAGE>
BALL CORPORATION
FORM 8-K
Dated September 29, 1995
Item 2. Acquisition or Disposition of Assets.
On September 15, 1995, Ball Glass Container Corporation, a Delaware corporation
("Ball Glass") and wholly-owned subsidiary of Ball Corporation, an Indiana
corporation ("Ball"), sold substantially all of its assets (representing Ball's
glass food and beverage container manufacturing business) to Ball-Foster Glass
Container Corporation, a Delaware limited liability company ("Ball-Foster") for
an aggregate purchase price of approximately $320 million in cash, subject to
adjustment in certain circumstances. Ball-Foster is a newly formed Delaware
limited liability company. Ball indirectly owns 42 percent of the interests of
Ball-Foster while 58 percent of the ownership interests of Ball-Foster are
owned, indirectly, by Company de Saint-Gobain, a French corporation
("Saint-Gobain"). The assets of Ball Glass were acquired by Ball-Foster pursuant
to an Asset Purchase Agreement dated as of June 26, 1995, among Ball-Foster,
Ball Glass and Ball (the "Ball Glass Purchase Agreement"). For a complete
description of the terms of the Ball Glass Purchase Agreement, reference is made
to such agreement, which is filed herewith as Exhibit 2.1 and incorporated
herein by reference. Concurrently with the disposition of the assets of Ball
Glass, Ball Glass contributed $180.6 million to Ball-Foster in respect of its
ownership interest in Ball-Foster.
Concurrently with the above-described transactions, Ball-Foster acquired
substantially all of the assets of the Foster Forbes glass division ("Foster
Forbes") of American National Can Company, a subsidiary of Pechiney, S.A., a
French corporation, for an aggregate purchase price of $680 million in cash,
subject to adjustment in certain circumstances.
In connection with the formation of Ball-Foster, indirect subsidiaries of Ball
and Saint-Gobain entered into a Limited Liability Company Agreement, dated as of
June 26, 1995 (the "LLC Agreement"). The LLC Agreement provides, among other
things, for the governance and management of Ball-Foster, distributions to
members and funding of capital requirements in certain circumstances,
restrictions on transfer and rights of first refusal with respect to certain
transfers of members' interests, certain put and call rights with respect to
Ball's interest in Ball-Foster and certain registration rights under Federal and
state securities laws with respect to Ball's interest in Ball-Foster. For a
complete description of the terms of the LLC Agreement, reference is made to
such agreement, which is filed herewith as Exhibit 2.2 and incorporated herein
by reference.
Financing for the acquisitions of the assets of Ball Glass and Foster Forbes by
Ball-Foster was provided through capital contributions of Ball and Saint-Gobain
of $180.6 million and $249.4 million, respectively, and through a $400 million
term loan facility and a $245 million revolving credit facility provided to
Ball-Foster by Saint-Gobain. The assets acquired by Ball-Foster had been used by
Foster Forbes and Ball Glass in the business of manufacturing glass food and
beverage containers and are expected to continue to be used in such business
after the closing of the acquisitions described above.
Ball estimates that it will incur a charge of up to $75 million after tax (up to
$2.50 per share) in the third quarter of 1995 in connection with the sale of the
assets of Ball Glass. The actual amount of the charge may vary depending on the
resolution of certain post-closing adjustments and other matters relating to the
transaction.
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
It is impracticable at this time to provide the audited historical
financial statements of Ball Glass Container Corporation and the
Foster-Forbes glass operations of American National Can as required by
this Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, audited
financial statements for the fiscal years ending December 31, 1993 and
1994 and unaudited interim financial statements will be filed by
amendment to this Form 8-K as soon as practicable but no later than
November 30, 1995.
(b) Pro forma financial information.
It is impracticable at this time to provide the pro forma financial
information required by this Item 7(b). In accordance with Item 7(b) of
Form 8-K, pro forma financial information will be filed by amendment to
this Form 8-K as soon as practicable but no later than November 30,
1995.
(c) Exhibits.
2.1 Asset Purchase Agreement dated June 26, 1995 among Foster
Ball, L.L.C, Ball Glass Container Corporation and Ball
Corporation.
2.2 Foster Ball, L.L.C. Amended and Restated Limited Liability
Company Agreement dated June 26, 1995 among Saint-Gobain
Holdings I Corp., BG Holdings I, Inc. and BG Holdings II, Inc.
99.1 Press Release dated September 18, 1995 issued by Ball
Corporation.
See Exhibit Index.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BALL CORPORATION
(Registrant)
By: /s/ R. David Hoover
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R. David Hoover
Executive Vice President and
Chief Financial Officer
Date: September 27, 1995
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<PAGE>
BALL CORPORATION
FORM 8-K
Dated September 29, 1995
EXHIBIT INDEX
Exhibit Description
EX-2.1 Asset Purchase Agreement dated June 26,1995 among Foster Ball,
L.L.C., Ball Glass Container Corporation and Ball Corporation.
Registrant agrees to furnish supplementally a copy of any
omitted schedule to the Commission upon request.
EX-2.2 Foster Ball, L.L.C. Amended and Restated Limited Liability
Company Agreement dated June 26, 1995 among Saint-Gobain
Holdings I Corp., BG Holdings I, Inc. and BG Holdings II, Inc.
Registrant agrees to furnish supplementally a copy of any
omitted schedule to the Commission upon request.
EX-99.1 Press Release dated September 18, 1995 issued by Ball
Corporation.
<PAGE>
Exhibit 2.1
ASSET PURCHASE AGREEMENT
dated as of
June 26, 1995
among
FOSTER BALL, L.L.C.
BALL GLASS CONTAINER CORPORATION
and
BALL CORPORATION
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . 1
ARTICLE 2
PURCHASE AND SALE
SECTION 2.1 Purchase and Sale. . . . . . . . . . . . . . 8
SECTION 2.2 Excluded Assets. . . . . . . . . . . . . . . 10
SECTION 2.3 Assumed Liabilities. . . . . . . . . . . . . 11
SECTION 2.4 Excluded Liabilities . . . . . . . . . . . . 11
SECTION 2.5 Assignment of Contracts and Rights . . . . . 12
SECTION 2.6 Purchase Price; Allocation of Purchase Price 13
SECTION 2.7 Closing. . . . . . . . . . . . . . . . . . . 13
SECTION 2.8 Closing Balance Sheet; Madera Closing
Balance Sheet . . . . . . . . . . . . . . . 14
SECTION 2.9 Adjustment Payments. . . . . . . . . . . . . 15
SECTION 2.10 Balance Sheet; Madera Balance Sheet. . . . . 16
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER AND BALL
SECTION 3.1 Corporate Existence and Power. . . . . . . . 17
SECTION 3.2 Corporate Authorization. . . . . . . . . . . 17
SECTION 3.3 Governmental Authorization . . . . . . . . . 18
SECTION 3.4 Non-Contravention. . . . . . . . . . . . . . 18
SECTION 3.5 Required Consents. . . . . . . . . . . . . . 18
SECTION 3.6 Financial Statements . . . . . . . . . . . . 19
SECTION 3.7 Madera Financial Statements. . . . . . . . . 19
SECTION 3.8 Absence of Certain Changes . . . . . . . . . 19
SECTION 3.9 Properties . . . . . . . . . . . . . . . . . 20
SECTION 3.10 Madera Joint Venture . . . . . . . . . . . . 23
SECTION 3.11 Subsidiaries . . . . . . . . . . . . . . . 23
SECTION 3.12 Sufficiency of and Title to the Assets. . . .23
SECTION 3.13 No Undisclosed Liabilities . . . . . . . . . 24
SECTION 3.14 Litigation . . . . . . . . . . . . . . . . . 24
SECTION 3.15 Material Contracts . . . . . . . . . . . . . 25
SECTION 3.16 Licenses and Permits . . . . . . . . . . . . 26
SECTION 3.17 Insurance Coverage . . . . . . . . . . . . . 26
SECTION 3.18 Compliance with Laws and Court Orders. . . . 27
SECTION 3.19 Intellectual Property. . . . . . . . . . . . 27
SECTION 3.20 Employees. . . . . . . . . . . . . . . . . . 27
SECTION 3.21 Products . . . . . . . . . . . . . . . . . . 27
SECTION 3.22 Finders' . . . . . . . . . . . . . . . . . . 28
SECTION 3.23 Environmental Matters. . . . . . . . . . . . 28
SECTION 3.24 Representations as to Madeira. . . . . . . . 29
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.1 Organization and Existence . . . . . . . . . 29
SECTION 4.2 Authorization. . . . . . . . . . . . . . . . 30
SECTION 4.3 Governmental Authorization . . . . . . . . . 30
SECTION 4.4 Non-Contravention. . . . . . . . . . . . . . 30
SECTION 4.5 Finders' Fees. . . . . . . . . . . . . . . . 30
SECTION 4.6 Litigation . . . . . . . . . . . . . . . . . 30
ARTICLE 5
COVENANTS OF SELLER AND BALL
SECTION 5.1 Conduct of the Business. . . . . . . . . . . 31
SECTION 5.2 Access to Information; Confidentiality . . . 31
SECTION 5.3 Trademarks; Tradenames . . . . . . . . . . . 32
SECTION 5.4 Notices of Certain Events. . . . . . . . . . 32
ARTICLE 6
COVENANTS OF THE PARTIES
SECTION 6.1 Confidentiality. . . . . . . . . . . . . . . 33
SECTION 6.2 Reasonable Best Efforts; Further Assurances. 33
SECTION 6.3 Resolution of Claims . . . . . . . . . . . . 33
SECTION 6.4 Public Announcements . . . . . . . . . . . . 34
SECTION 6.5 WARN Act . . . . . . . . . . . . . . . . . . 34
SECTION 6.6 Undertaking. . . . . . . . . . . . . . . . . 34
SECTION 6.7 Regulatory and Other Authorizations;
Consents . . . . . . . . . . . . . . . . . . 34
ARTICLE 7
TAX MATTERS
SECTION 7.1 Tax Definitions. . . . . . . . . . . . . . . 35
SECTION 7.2 Tax Matters. . . . . . . . . . . . . . . . . 35
SECTION 7.3 Tax Cooperation: Allocation of Taxes . . . . 36
ARTICLE 8
EMPLOYEE BENEFITS
SECTION 8.1 Employee Benefits Definitions. . . . . . . . 37
SECTION 8.2 ERISA Representations. . . . . . . . . . . . 38
SECTION 8.3 Labor Matters. . . . . . . . . . . . . . . . 40
SECTION 8.4 Offer of Employment. . . . . . . . . . . . . 40
SECTION 8.5 Compensation and Benefit Arrangements. . . . 41
SECTION 8.6 Collective Bargaining Agreements . . . . . . 42
SECTION 8.7 Seller Pension Plans . . . . . . . . . . . . 42
SECTION 8.8 Seller Hourly Pensions Plans -- Further
Discussions. . . . . . . . . . . . . . . . . 43
SECTION 8.9 Defined Contribution Plan. . . . . . . . . . 43
SECTION 8.10 Multiemployer Plans. . . . . . . . . . . . . 44
SECTION 8.11 WARN Act . . . . . . . . . . . . . . . . . . 45
SECTION 8.12 Transition Services. . . . . . . . . . . . . 45
SECTION 8.13 No Third Party Beneficiaries . . . . . . . . 45
ARTICLE 9
CONDITIONS TO CLOSING
SECTION 9.1 Conditions to Obligations of Each Party. . . 45
SECTION 9.2 Conditions to Obligation of Buyer. . . . . . 46
SECTION 9.3 Conditions to Obligations of Seller and Ball 48
ARTICLE 10
SURVIVAL; INDEMNIFICATION
SECTION 10.1 Survival . . . . . . . . . . . . . . . . . . 49
SECTION 10.2 Indemnification. . . . . . . . . . . . . . . 49
SECTION 10.3 Procedures; Exclusivity. . . . . . . . . . . 50
ARTICLE 11
TERMINATION
SECTION 11.1 Grounds for Termination. . . . . . . . . . . 52
SECTION 11.2 Effect of Termination. . . . . . . . . . . . 52
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 Notices. . . . . . . . . . . . . . . . . . . 53
SECTION 12.2 Amendments and Waivers . . . . . . . . . . . 54
SECTION 12.3 Records. . . . . . . . . . . . . . . . . . . 54
SECTION 12.4 Successors and Assigns . . . . . . . . . . . 55
SECTION 12.5 Governing Law. . . . . . . . . . . . . . . . 55
SECTION 12.6 Counterparts; Effectiveness. . . . . . . . . 55
SECTION 12.7 Entire Agreement; Third Party Beneficiaries. 55
SECTION 12.8 Bulk Sales Laws. . . . . . . . . . . . . . . 55
SECTION 12.9 Specific Performance . . . . . . . . . . . . 55
SECTION 12.10 Disputes; Submission to Jurisdiction . . . . 56
SECTION 12.11 Captions . . . . . . . . . . . . . . . . . . 56
EXHIBITS, ANNEXES, SCHEDULES
EXHIBIT A -- Form of Assignment and Assumption Agreement
EXHIBIT B -- Form of Noncompetition and Cash Settlement Agreement
ANNEX I -- Reference Balance Sheet of the Business
ANNEX II -- Reference Balance Sheet of Madera
ANNEX III -- Working Capital Procedures
SCHEDULE 2.2-- Excluded Assets
SCHEDULE 2.4-- Excluded Liabilities
SCHEDULE 3.4 -- Non-Contravention
SCHEDULE 3.5-- Required Consents
SCHEDULE 3.8-- Absence of Certain Changes
SCHEDULE 3.9-- Properties
SCHEDULE 3.13 -- Liabilities
SCHEDULE 3.14 -- Litigation
SCHEDULE 3.15 -- Material Contracts
SCHEDULE 3.16 -- Licenses and Permits
SCHEDULE 3.18 -- Compliance with Laws and Court Orders
SCHEDULE 3.19 -- Intellectual Property
SCHEDULE 3.20 -- Employees
SCHEDULE 3.23 -- Environmental Matters
SCHEDULE 5.1-- Conduct of the Business
SCHEDULE 7.2-- Tax Matters
SCHEDULE 8.2-- ERISA Representations
SCHEDULE 8.3-- Labor Matters
SCHEDULE 8.4-- Salaried Employees
<PAGE>
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of June 26, 1995 among BALL CORPORATION, an Indiana
corporation ("Ball"), BALL GLASS CONTAINER CORPORATION, a Delaware corporation
and a wholly owned subsidiary of Ball ("Seller"), and FOSTER BALL, L.L.C. a
Delaware limited liability company ("Buyer").
W I T N E S S E T H
WHEREAS, Seller conducts a business which is engaged in designing,
developing, manufacturing, marketing and selling glass bottles and jars
(excluding perfume and pharmaceutical bottles) (the "Business");
WHEREAS, Buyer desires to purchase and Seller desires to sell
substantially all of the assets of the Business from Seller, and, in connection
therewith, Buyer is willing to assume substantially all of the liabilities (with
certain exceptions specified below), upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. (a) The following terms, as used herein, have the
following meanings:
"Accounting Referee" means Arthur Andersen & Co., or if such firm declines
to act in such capacity, such other firm of independent nationally recognized
accountants chosen and mutually accepted by Buyer and Seller.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
other Person; provided that for purposes of this Agreement (i) Buyer shall not
be deemed an Affiliate of Seller or Ball and (ii) neither Seller nor Ball shall
be deemed an Affiliate of Buyer. For purposes of this definition, the term
"control" (including its correlative meanings, the terms "controlling",
"controlled by" and "under common control with") as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or otherwise.
"Ancillary Agreements" means (i) the Transition Services Agreement, (ii)
the Technology Licensing Agreements, (iii) the Noncompetition and Cash
Settlement Agreement, (iv) a lease to be entered into by Ball or Seller, as
landlord, to Buyer, as tenant, of the facility described in Section 2.2(f) in
form and substance satisfactory to the parties, and (v) the Assignment and
Assumption Agreement substantially in the form attached as Exhibit A.
"Balance Sheet" means the audited balance sheet of the Assets and Assumed
Liabilities, excluding Assets and Assumed Liabilities relating to Madera and
excluding any deferred tax assets and deferred tax liabilities (other than with
respect to Madera), as of December 31, 1994, together with the notes thereto,
which Balance Sheet shall reflect any assets transferred after December 31, 1995
but before May 29, 1995 from the facilities located in Asheville, North Carolina
and Okmulgee, Oklahoma which are to be included in the Assets.
"Balance Sheet Date" means December 31, 1994.
"Ball Members" means, together, BG Holdings I, Inc. and BG Holdings II,
Inc.
"Base Net Fixed Assets" means $235,162,000, which amount shall be adjusted
(to the extent necessary) to represent property, plant, equipment and other
fixed assets at cost, less accumulated depreciation, in each case as shown on
the Balance Sheet.
"Base Trade Working Capital" shall be calculated by the parties to their
reasonable satisfaction in accordance with Annex III.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banking institutions in New York City, New York are authorized
to close.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time and any rules or regulations
promulgated thereunder.
"Closing Balance Sheet" means an audited balance sheet of the Assets
(including the equipment purchased pursuant to Section 2.2(a)(iii)) and the
Assumed Liabilities, excluding Assets and Assumed Liabilities relating to Madera
and excluding any deferred tax assets and deferred tax liabilities (other than
with respect to Madera), as of the close of business on the Closing Date,
together with the notes thereto.
"Closing Date" means the date of the Closing.
"Closing Net Fixed Assets" means property, plant, equipment and other
fixed assets at cost, less accumulated depreciation, in each case as reflected
on the Closing Balance Sheet; provided that none of such property, plant and
equipment or other fixed assets shall have been re-valued since the Balance
Sheet Date.
"Closing Trade Working Capital" means current assets less current
liabilities, in each case as reflected on the Closing Balance Sheet, except as
modified by Annex III.
"Confidentiality Agreements" means (i) the Confidentiality Agreement
between Ball and Saint-Gobain Emballage dated October 21, 1994, as amended as of
November 9, 1994 and (ii) the Confidentiality Agreement between Lehman Brothers,
Inc. (as financial advisor to, and on behalf of, Seller and Ball) and Compagnie
de Saint-Gobain dated March 14, 1995, as amended as of such date.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, codes, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and governmental restrictions, whether now or
hereafter in effect, relating to the environment, the effect of the environment
on human health or to emissions, discharges or releases of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial, toxic,
radioactive or hazardous substances or wastes into the environment, including
without limitation ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, petroleum
or petroleum products, chemicals or industrial, toxic, radioactive or hazardous
substances or wastes or the clean-up or other remediation thereof.
"Environmental Liabilities" means any and all liabilities of or relating
to Seller (including any entity which is, in whole or in part, a predecessor of
Seller), whether vested or unvested, contingent or fixed, actual or potential,
known or unknown, other than Excluded Environmental Liabilities, which (i) arise
under or relate to matters covered by Environmental Laws including without
limitation any matters disclosed or required to be disclosed in Schedule 3.23
hereto and (ii) relate to actions occurring or conditions existing on or prior
to the Closing Date.
"Environmental Permits" means all permits, licenses, authorizations,
certificates and approvals of governmental authorities relating to or required
by Environmental Laws and necessary or proper for the Business as currently
conducted.
"Excluded Environmental Liabilities" means any and all liabilities of or
relating to Seller (including any entity which is, in whole or in part, a
predecessor of Seller), whether vested or unvested, contingent or fixed, actual
or potential, known or unknown, which (i) arise in connection with or are in any
way related to: (x) any off-site Environmental Liabilities of the Business, the
Assets or the Real Property (including without limitation off-site disposal);
(y) any liabilities related to the clean-up, remediation or investigation of the
soil and groundwater contamination at the Carteret facility in New Jersey; and
(z) any liability related to the clean-up, remediation or investigation of soil
and groundwater contamination at the El Monte facility in California, and (ii)
relate to actions occurring or conditions existing on or prior to the Closing
Date.
"Final Net Fixed Assets" means Closing Net Fixed Assets (i) as shown in
Seller's calculation delivered pursuant to Section 2.8(a), if no notice of
disagreement with respect thereto is delivered pursuant to Section 2.8(b) or
(ii) if such a notice of disagreement is delivered, (A) as agreed by the parties
pursuant to Section 2.8(c) or (B) in the absence of such agreement, as shown in
the Accounting Referee's calculation delivered pursuant to Section 2.8(c);
provided that Final Net Fixed Assets shall not in any event be more than
Seller's calculation of Closing Net Fixed Assets delivered pursuant to Section
2.8(a) nor less than Buyer's calculation of Closing Net Fixed Assets delivered
pursuant to Section 2.8(b).
"Final Trade Working Capital" means Closing Trade Working Capital (i) as
shown in Seller's calculation delivered pursuant to Section 2.8(a) if no notice
of disagreement with respect thereto is delivered pursuant to Section 2.8(b) or
(ii) if such a notice of disagreement is delivered, (A) as agreed by the parties
pursuant to Section 2.8(c) or (B) in the absence of such agreement, as shown in
the Accounting Referee's calculation delivered pursuant to Section 2.8(c);
provided that Final Trade Working Capital shall not in any event be more than
Seller's calculation of Closing Trade Working Capital delivered pursuant to
Section 2.8(a) nor less than Buyer's calculation of Closing Trade Working
Capital delivered pursuant to Section 2.8(b).
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, consistently applied.
"Hazardous Substances" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics, regulated under Environmental
Laws.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property Right" means any trademark, service mark, trade
name, service name, invention, patent, trade secret, know-how, copyright,
(including any registration or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property right,
in each case which is owned or licensed by Seller or any Affiliate of Seller and
used or held for use primarily in the Business.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"LLC Agreement" means the Limited Liability Company Agreement of Buyer.
"Madera" means the Madera Glass Company, a California corporation.
"Madera Balance Sheet" means the audited balance sheet of Madera as of
December 31, 1994, together with the notes thereto.
"Madera Base Net Fixed Assets" means $19,835,000, which amount represents
property, plant, equipment and other fixed assets at cost, less accumulated
depreciation of Madera, in each case as of December 31, 1994.
"Madera Base Trade Working Capital" shall be calculated by the parties to
their reasonable satisfaction in accordance with Annex III.
"Madera Closing Balance Sheet" means an audited balance sheet of Madera as
of the close of business on the Closing Date, together with the notes thereto.
"Madera Closing Net Fixed Assets" means property, plant, equipment and
other fixed assets at cost, less accumulated depreciation of Madera, in each
case as reflected on the Madera Closing Balance Sheet; provided that none of
such property, plant and equipment or other fixed assets shall have been
re-valued since the Madera Balance Sheet Date.
"Madera Closing Trade Working Capital" means current assets, less current
liabilities, in each case as reflected on the Madera Closing Balance Sheet,
except as modified by Annex III.
"Madera Final Net Fixed Assets" means Madera Closing Net Fixed Assets (i)
as shown in Seller's calculation delivered pursuant to Section 2.8(a) if no
notice of disagreement with respect thereto is delivered pursuant to Section
2.8(b) or (ii) if such a notice of disagreement is delivered, (A) as agreed by
the parties pursuant to Section 2.8(c) or (B) in the absence of such agreement,
as shown in the Accounting Referee's calculation delivered pursuant to Section
2.8(c); provided that Madera Final Net Fixed Assets shall not in any event be
more than Seller's calculation of Madera Closing Net Fixed Assets delivered
pursuant to Section 2.8(a) nor less than Buyer's calculation of Madera Closing
Net Fixed Assets delivered pursuant to Section 2.8(b).
"Madera Final Trade Working Capital" means Madera Closing Trade Working
Capital (i) as shown in Seller's calculation delivered pursuant to Section
2.8(a) if no notice of disagreement is delivered pursuant to Section 2.8(b) or
(ii) if such a notice of disagreement is delivered, (A) as agreed by the parties
pursuant to Section 2.8(c) or (B) in the absence of such agreement, as shown in
the Accounting Referee's calculation delivered pursuant to Section 2.8(c);
provided that Madera Final Trade Working Capital shall not in any event be more
than Seller's calculation of Madera Closing Trade Working Capital delivered
pursuant to Section 2.8(a) nor less than Buyer's calculation of Madera Closing
Trade Working Capital delivered pursuant to Section 2.8(b).
"Material Adverse Effect" means a material adverse effect on the business,
assets, condition (financial or otherwise) or result of operations of the
Business taken as a whole.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Net Financial Indebtedness" means, as of any date with respect to any
Person, all financial indebtedness (including capitalized lease obligations) of
such Person outstanding on such date, minus cash and cash equivalents of such
Person on such date.
"Noncompetition and Cash Settlement Agreement" means the Agreement in
substantially the form attached as Exhibit B hereto.
"Person" means an individual, corporation, partnership, association,
trust, limited liability company or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Reference Balance Sheet" means the balance sheet attached hereto as Annex
I.
"Reference Madera Balance Sheet" means the balance sheet attached hereto
as Annex II.
"Regulated Activity" means any generation, treatment, storage, recycling,
transportation or Release of any Hazardous Substance.
"Release" means any discharge, emission or release, including a Release as
defined in CERCLA at 42 U.S.C. ' 9601(22). The term "Released" has a
corresponding meaning.
"SGC" means Saint-Gobain Corporation.
"Subsidiary" means, with respect to any Person, any 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 directly or indirectly owned by such Person.
"Technology Licensing Agreements" means one or more license agreements, in
form and substance satisfactory to the parties, to be entered into between Buyer
and Seller or its Affiliates.
"Transition Services Agreement" means the Transition Services Agreement,
in form and substance satisfactory to the parties, to be entered into between
Buyer and Seller or its Affiliates.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Allocation 2.6
Apportioned Obligations 7.3
Assets 2.1
Assumed Liabilities 2.3
Business Recitals
Business Employees 8.4
Closing 2.7
Code 7.1
Contracts 2.1
Defined Contributions Plan 8.9
ERISA 8.1
ERISA Affiliate 8.1
Excluded Assets 2.2
Excluded Liabilities 2.4
Hourly Employees 8.4
Indemnified Party 10.3
Indemnifying Party 10.3
Loss 10.2
Madera Property 3.9
Madera Securities 3.10
Madera Shares 3.10
Multiemployer Plan 8.1
National Priorities List 3.23
New Defined Contribution Plan 8.9
Permits 3.16
Permitted Liens 3.9
Petty Cash 2.1
Plans 8.1
Post-Closing Tax Period 7.3
Pre-Closing Tax Period 7.1
Principal Properties 3.9
Purchase Price 2.6
Real Property 3.9
Required Consent 3.5
Salaried Employees 8.4
Seller's Pension Plans 8.7
Tax 7.1
Transferred Business Employees 8.4
Transferred Hourly Employees 8.4
Transferred Salaried Employees 8.4
WARN Act 6.5
ARTICLE 2
PURCHASE AND SALE
SECTION 2.1 Purchase and Sale. Except as otherwise provided below, upon
the terms and subject to the conditions of this Agreement, Buyer agrees to
purchase from Seller and Seller agrees, and Ball agrees to cause Seller, to
sell, convey, transfer, assign and deliver, or cause to be sold, conveyed,
transferred, assigned and delivered, to Buyer at Closing, all of Seller's right,
title and interest in, to and under the assets, properties and business, of
every kind and description, wherever located, whether real, personal or mixed,
tangible or intangible, owned, held or used primarily in the conduct of the
Business by Seller as the same shall exist on the Closing Date, including all
assets shown on the Balance Sheet and not disposed of in the ordinary course of
business, and all assets of the Business thereafter acquired by Seller other
than the Excluded Assets (the "Assets"), including without limitation all right,
title and interest of Seller in, to and under:
(a) all owned real property and leases of, and other interests in, real
property used or held for use in the conduct of the Business, in each case
together with all buildings, fixtures and improvements erected thereon and all
easements, rights and interests appurtenant thereto, including without
limitation the items listed on Schedule 3.9(a);
(b) all personal property and interests therein, including machinery,
equipment, furniture, office equipment, communications equipment, vehicles,
rolling stocks, storage tanks, spare and replacement parts, fuel and other
tangible property, including without limitation the manufacturing equipment
located at the facilities in Asheville, North Carolina and Okmulgee, Oklahoma
identified pursuant to Section 2.2(c) and the items listed on Schedule 3.9(b);
(c) all raw materials, work-in-process, merchandise, finished goods,
supplies and other inventories;
(d) all rights under all contracts, agreements, leases, subleases,
commitments, sales and purchase orders and other instruments, including without
limitation the items listed on Schedule 3.15 (collectively, the "Contracts");
(e) all of the outstanding shares of capital stock of, or other ownership
interests in (including without limitation any options or other rights to
acquire any shares of capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable for any shares
of capital stock, voting securities or other ownership interests in) any Person
which are owned by Seller or any of its Affiliates with respect to the Business,
including without limitation the Madera Shares but excluding the shares of
capital stock of the Ball Members;
(f) all accounts, notes and other receivables of Seller relating to the
Business existing on the Closing Date, other than any accounts, notes and other
receivables to be paid to Seller from Ball or any Affiliate of Ball;
(g) all petty cash located at operating facilities of the Business ("Petty
Cash");
(h) all of Seller's rights, claims, credits, causes of action or rights of
set-off against third parties relating to the Assets, including without
limitation unliquidated rights under manufacturers' and vendors warranties;
(i) all Intellectual Property Rights, processes, proprietary data,
formulae, research and development data, computer software programs and other
intangible property and any applications for the same, in each case owned or
licensed by Seller or any of its Affiliates and used or held or held for use
primarily in the Business, including without limitation the items listed on
Schedule 3.19 (but excluding those trademarks and tradenames incorporating the
"Ball" name and related logos, except to the extent otherwise agreed by the
parties pursuant to Section 5.3);
(j) all transferable licenses, permits or other governmental
authorizations affecting, or relating to, the Business, including without
limitation the items listed on Schedule 3.16 and Schedule 3.23;
(k) all books, records, files and papers, whether in hard copy or computer
format, used primarily in the Business, including without limitation engineering
information, sales and promotional literature, manuals and data, sales and
purchase correspondence, lists of present and former suppliers, lists of present
and former customers, shipping records, invoices, personnel and employment
records, and any information relating to Taxes imposed on the Assets; and
(l) all goodwill associated with the Business or the Assets, together with
the right to represent to third parties that Buyer is the successor to the
Business.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL WARRANTIES (WHETHER WRITTEN
OR ORAL, EXPRESS OR IMPLIED) IN REGARD TO MERCHANTABILITY, FITNESS FOR A
PARTICULAR USE, CONDITION, DESIGN, OPERATION, MAINTENANCE, VALUE OR OTHERWISE
WITH RESPECT TO THE ASSETS ARE EXPRESSLY EXCLUDED.
SECTION 2.2 Excluded Assets. (a) Buyer expressly understands and agrees
that the following assets and properties of Seller (the "Excluded Assets") shall
be excluded from the Assets and shall be retained by Seller:
(i) all of Seller's cash and cash equivalents on hand and in banks
except for Petty Cash;
(ii) insurance policies;
(iii)land, buildings, structures, fixtures and improvements thereon in
Asheville, North Carolina and Okmulgee, Oklahoma; provided that Buyer may
provide written notice within 45 days or, in the case of Asheville, 15 days,
after the date of this Agreement identifying the items of manufacturing
equipment in the Asheville and Okmulgee buildings and structures that Buyer
wishes to acquire and such equipment shall be part of the Assets and not part
of the Excluded Assets and the net book value of such equipment shall be
included in Final Net Fixed Assets; and provided further that Buyer shall pay
all costs associated with the removal of such equipment;
(iv) any Assets sold or otherwise disposed of in the ordinary course
of business and not in violation of any provisions of this Agreement during
the period from the date hereof until the Closing Date;
(v) any books and records relating primarily to the Excluded Assets or
Excluded Liabilities;
(vi) the real property consisting of the facility located at 1509
South Macadonia Avenue, Muncie, Indiana and consisting of building nos. 09,
21, 22, 23, 24 and 25 referred to on Exhibit 1 to Schedule 3.9(a);
(vii)refunds of income, property and similar Taxes relating to
Pre-Closing Tax Periods;
(viii) the assets of Seller's Pension Plans; and
(ix) the capital stock of the Ball Members.
(b) Notwithstanding anything herein to the contrary, and for purposes of
clarification, the parties hereto agree that the assets set forth on Schedule
2.2(b), which assets are not owned by Seller, shall not constitute part of the
Assets.
SECTION 2.3 Assumed Liabilities. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees, effective at the time of Closing, to
assume and shall thereafter pay, perform and discharge all liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, of Seller as of the Closing Date
primarily arising out of or relating to the Business, except for the Excluded
Liabilities (the "Assumed Liabilities"), including without limitation the
liabilities reflected on the Closing Balance Sheet.
SECTION 2.4 Excluded Liabilities. The following liabilities and
obligations shall be retained by and remain obligations and liabilities of
Seller (all such liabilities and obligations not being assumed being herein
referred to as the "Excluded Liabilities"), and, notwithstanding anything to the
contrary in this Article 2, none of the following shall be Assumed Liabilities
for the purpose of this Agreement:
(a) any obligation or liability for any income, property, and similar
Taxes arising from or with respect to (i) the Assets or the operations of the
Business which is incurred in or attributable to a Pre-Closing Tax Period,
except any obligation or liability for Tax arising from or with respect to the
assets or operation of Madera or (ii) Seller or any of its Affiliates (other
than Madera), including without limitation any Taxes arising from or in
connection with any of the transactions contemplated by this Agreement or any of
the Ancillary Agreements;
(b) any obligation or liability (i) arising in connection with or
attributable to Seller Pension Plans or (ii) with respect to any Business
Employee that is retained by Seller pursuant to Section 8.5 hereof;
(c) any Excluded Environmental Liability;
(d) any obligation or liability identified as an excluded liability on
Schedule 2.4;
(e) any obligation or liability of Seller arising in connection with or
attributable to a violation of any applicable antitrust law occurring in or
attributable to any period prior to the Closing Date; and
(f) any obligation or liability relating to an Excluded Asset.
SECTION 2.5 Assignment of Contracts and Rights. Anything in this Agreement
to the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third party, would constitute a breach or other contravention
thereof or in any way adversely affect the rights of Buyer or Seller thereunder.
Seller will use its reasonable best efforts (but without any payment of money by
Seller or Buyer) to obtain the consent of the other parties to any such Asset or
any claim or right or any benefit arising thereunder for the assignment thereof
to Buyer as Buyer may request and Buyer shall cooperate with Seller to obtain
Seller's release thereunder (but without the payment of money by Buyer or
Seller). If such consent is not obtained, or if an attempted assignment thereof
would be ineffective or would adversely affect the rights of Seller thereunder
so that Buyer would not in fact receive all such rights or Seller would not be
released of its obligations thereunder, Seller and Buyer will cooperate in a
mutually agreeable arrangement under which Buyer would obtain the benefits and
assume the obligations thereunder in accordance with this Agreement, including
sub- contracting, sub-licensing, or sub-leasing to Buyer, or under which Seller
would enforce for the benefit of Buyer, with Buyer assuming Seller's
obligations, any and all rights of Seller against a third party. Seller will
promptly pay to Buyer when received all monies received by Seller with respect
to any Asset or any claim or right or any benefit arising thereunder, except to
the extent the same represents an Excluded Asset.
SECTION 2.6 Purchase Price; Allocation of Purchase Price. (a) The purchase
price for the Assets less Assumed Liabilities (the "Purchase Price") is $320
million in cash. The Purchase Price shall be paid as provided in Section 2.7.
(b) The Purchase Price (plus Assumed Liabilities and plus or minus any
adjustments pursuant to Section 2.9, each to the extent properly taken into
account under Section 1060 of the Code) shall be allocated among the Assets as
set forth in this Section 2.6(b). As soon as practicable after the Closing Date,
Buyer and Seller shall jointly retain a nationally recognized firm to appraise
the value of the Assets purchased hereunder. The costs, fees and expenses of
such firm shall be borne equally by Buyer and Seller. Buyer and Seller shall
agree on the allocation of the Purchase Price (plus Assumed Liabilities and plus
or minus any adjustments pursuant to Section 2.9) among the Assets based upon
such appraisal in accordance with Code Section 1060 and the regulations
promulgated thereunder (the "Allocation"). In the event that Buyer and Seller
are unable to agree on such allocation, such allocation shall be determined by
the Accounting Referee. The costs, fees and expenses of the Accounting Referee
shall be borne equally by Buyer and Seller.
(c) Ball, SGC, Seller and Buyer agree to (i) be bound by the Allocation,
(ii) act in accordance with the Allocation in the preparation of financial
statements and filing of all tax returns (including, without limitation filing
Form 8594 with its Federal income tax return for the taxable year that includes
the date of the Closing) and in the course of any tax audit, tax review or tax
litigation relating thereto and (iii) take no position and cause their
Affiliates to take no position inconsistent with the Allocation for federal and
state income tax purposes.
(d) Not later than 30 days prior to the filing of their respective Forms
8594 relating to this transaction, each party shall deliver to the other party a
copy of its Form 8594.
SECTION 2.7 Closing. The closing (the "Closing") of the purchase and sale
of the Assets and the assumption of the Assumed Liabilities hereunder shall take
place at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 as soon as possible, but in no event later than 10 Business Days, after
satisfaction of the conditions set forth in Article 9, or at such other time or
place as Buyer and Seller may agree. At the Closing, (a) Buyer shall deliver to
Seller an amount equal to the Purchase Price in immediately available funds by
wire transfer on the Closing Date to an account designated by Seller, by notice
given to Buyer no later than two Business Days prior to the Closing Date.
(b) Seller shall deliver to Buyer such limited or special warranty (or
local equivalent) deeds, bills of sale, endorsements, consents, assignments and
other good and sufficient instruments of conveyance and assignment as the
parties and their respective counsel shall deem reasonably necessary or
appropriate to transfer and warrant (by limited or special warranty, or local
equivalent) to Buyer all right, title and interest of Seller in, to and under
the Assets.
SECTION 2.8 Closing Balance Sheet; Madera Closing Balance Sheet. (a) As
promptly as practicable, but no later than 70 Days after the Closing Date,
Seller will cause each of the Closing Balance Sheet and the Madera Closing
Balance Sheet to be prepared and delivered to Buyer together with (i) an
unqualified report of Price Waterhouse, LLP thereon and (ii) a certificate based
on each of the Closing Balance Sheet and the Madera Closing Balance Sheet
setting forth Seller's calculations of Closing Trade Working Capital and Madera
Closing Trade Working Capital (in each case calculated in accordance with Annex
III), Closing Net Fixed Assets and Madera Closing Net Fixed Assets. Each of the
Closing Balance Sheet and the Madera Closing Balance Sheet shall (i) fairly
present the Assets and Assumed Liabilities (excluding Madera) and Madera,
respectively, as of the close of business on the Closing Date in accordance with
GAAP, (ii) include line items and notes substantially consistent with those in
the Balance Sheet and the Madera Balance Sheet and (iii) be prepared in
accordance with accounting policies and practices consistent with those used in
the preparation of the Balance Sheet and the Madera Balance Sheet, respectively.
(b) If Buyer disagrees with Seller's calculation of Closing Trade Working
Capital, Madera Closing Trade Working Capital, Closing Net Fixed Assets or
Madera Closing Net Fixed Assets delivered pursuant to Section 2.8(a) on the
basis that any such calculation was not made in accordance with GAAP
consistently applied, Buyer may, within 30 days after delivery of the documents
referred to in Section 2.8(a), deliver a notice to Seller disagreeing with such
calculation and setting forth Buyer's calculation of such amount or amounts. Any
such notice of disagreement shall specify those items or amounts as to which
Buyer disagrees, and Buyer shall be deemed to have agreed with all other items
and amounts contained in the Closing Balance Sheet and the Madera Closing
Balance Sheet and the calculation of Closing Trade Working Capital, Madera
Closing Trade Working Capital, Closing Net Fixed Assets or Madera Closing Net
Fixed Assets delivered pursuant to Section 2.8(a).
(c) If a notice of disagreement shall be duly delivered pursuant to
Section 2.8(b), Seller and Buyer shall, during the 15 days following such
delivery, use their reasonable best efforts to reach agreement on the disputed
items or amounts in order to determine, as may be required, the amounts of
Closing Trade Working Capital, Madera Closing Trade Working Capital, Closing Net
Fixed Assets or Madera Closing Net Fixed Assets. If during such period, Seller
and Buyer are unable to reach such agreement, they shall promptly thereafter
cause the Accounting Referee promptly to review this Agreement and the disputed
items or amounts for the purpose of calculating those items of Closing Trade
Working Capital, Madera Closing Trade Working Capital, Closing Net Fixed Assets
and Madera Closing Net Fixed Assets which are in dispute. In making such
calculation, the Accounting Referee shall consider only those items or amounts
in the Closing Balance Sheet and the Madera Closing Balance Sheet and Seller's
calculation of Closing Trade Working Capital, Madera Closing Trade Working
Capital, Closing Net Fixed Assets and Madera Closing Net Fixed Assets as to
which Buyer has disagreed. The Accounting Referee shall deliver to Buyer and
Seller, as promptly as practicable, a report setting forth such calculation.
Such report shall be final and binding upon the parties hereto. The cost of such
review and report shall be borne equally by Seller and Buyer.
(d) Buyer and Seller agree that they will, and agree to cause their
respective independent accountants to, cooperate and assist in the preparation
of the Closing Balance Sheet and the Madera Closing Balance Sheet and the
calculation of Closing Trade Working Capital, Madera Closing Trade Working
Capital, Closing Net Fixed Assets and Madera Closing Net Fixed Assets and in the
conduct of the audits and reviews referred to in this Section 2.8, including
without limitation the making available to the extent necessary of books,
records, work papers and personnel. In such regard, Buyer and its
representatives may be present for audit meetings during the preparation of the
Closing Balance Sheet and the Madera Closing Balance Sheet and the calculation
of Closing Trade Working Capital, Madera Closing Trade Working Capital, Closing
Net Fixed Assets and Madera Closing Net Fixed Assets.
SECTION 2.9 Adjustment Payments. Adjustment payments shall be made by the
parties as follows:
(a) (i) If Base Trade Working Capital exceeds Final Trade Working Capital,
Seller shall pay to Buyer, in the manner and with interest as provided in
Section 2.9(e), the amount of such excess; and
(ii) If Final Trade Working Capital exceeds Base Trade Working
Capital, Buyer shall pay to Seller, in the manner and with interest as
provided in Section 2.9(e), the amount of such excess.
(b) (i) If Base Net Fixed Assets exceeds Final Net Fixed Assets, Seller
shall pay to Buyer, in the manner and with interest as provided in Section
2.9(e), the amount of such excess; and
(ii) If Final Net Fixed Assets exceeds Base Net Fixed Assets, Buyer
shall pay to Seller, in the manner and with interest as provided in Section
2.9(e), the amount of such excess.
(c) (i) If Madera Base Trade Working Capital exceeds Madera Final Trade
Working Capital, Seller shall pay to Buyer, in the manner and with interest as
provided in Section 2.9(e), an amount equal to fifty-one percent (51%) of such
excess; and
(ii) If Madera Final Trade Working Capital exceeds Madera Base Trade
Working Capital, Buyer shall pay to Seller, in the manner and with interest as
provided in Section 2.9(e), an amount equal to fifty-one percent (51%) of such
excess.
(d) (i) If Madera Base Net Fixed Assets exceeds Madera Final Net Fixed
Assets, Seller shall pay to Buyer, in the manner and with interest as provided
in Section 2.9(e), an amount equal to fifty-one percent (51%) of such excess;
and
(ii) If Madera Final Net Fixed Assets exceeds Madera Base Net Fixed
Assets, Buyer shall pay to Seller, in the manner and with interest as provided
in Section 2.9(e), an amount equal to fifty-one percent (51%) of such excess.
(e) Method of Payment. Any payments pursuant to this Section 2.9 shall be
made at a mutually convenient time within 10 days after the last to be
determined of Final Trade Working Capital, Madera Final Trade Working Capital,
Final Net Fixed Assets and Madera Final Net Fixed Assets pursuant to Section
2.8, by delivery by Buyer or Seller, as the case may be, of immediately
available funds to the other party by wire transfer to an account of such
other party designated by such other party. The amount of any payment to be
made pursuant to this Section 2.9 shall bear interest from and including the
Closing Date to but excluding the date of payment at a rate per annum equal to
the rate publicly announced from time to time by Citibank N.A., or any
successor thereto, in New York City as its prime rate in effect from time to
time during the period from the Closing Date to the date of payment. Such
interest shall be payable at the same time as the payment to which it relates
and shall be calculated daily on the basis of a year of 365 days and the
actual number of days elapsed.
SECTION 2.10 Balance Sheet; Madera Balance Sheet. As promptly as
practicable, but no later than 25 Business Days after the date hereof, Seller
will cause each of the Balance Sheet and the Madera Balance Sheet to be prepared
and delivered to Buyer together with an unqualified report of Price Waterhouse,
LLP thereon. Each of the Balance Sheet and the Madera Balance Sheet shall (i)
fairly present the Assets and Assumed Liabilities (excluding Madera) and Madera,
respectively, as of the close of business on the Balance Sheet Date in
accordance with GAAP and (ii) include line items substantially consistent with
those in the Reference Balance Sheet and the Reference Madera Balance Sheet,
respectively, (iii) be prepared in accordance with accounting policies and
practices consistent with those used in the preparation of the Reference Balance
Sheet and the Reference Madera Balance Sheet, respectively. Neither the Balance
Sheet nor the Madera Balance Sheet shall contain any difference or adjustment
from the Reference Balance Sheet or the Reference Madera Balance Sheet,
respectively, other than immaterial adjustments made in connection with the
audit.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER AND BALL
Seller and Ball, on a joint and several basis, represent and warrant to
Buyer as of the date hereof and (except with respect to Section 3.13(c), which
shall be made only as of the date of this Agreement,) as of the Closing Date
that:
SECTION 3.1 Corporate Existence and Power. Each of Seller and Ball is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all corporate powers and
all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, except where the failure to
have such governmental licenses, authorizations, permits, consents and approvals
do not have a Material Adverse Effect or a material adverse effect on the
ability of Ball to enter into this Agreement or the Ancillary Agreements or to
consummate the transactions contemplated hereby or thereby. Seller is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where Seller's ownership, use or possession of the Assets or
the operation of the Business so requires, except for those jurisdictions in
which the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect. Each of Seller and Ball has
heretofore delivered to Buyer true and complete copies of its certificate of
incorporation and bylaws as currently in effect.
SECTION 3.2 Corporate Authorization. The execution, delivery and
performance by Seller and Ball of this Agreement and each of the Ancillary
Agreements to which Seller or Ball is a party are within their respective
corporate powers and have been duly authorized by all necessary corporate and
stockholder action on the part of Seller or Ball, as applicable. This Agreement
constitutes, and when executed and delivered, each of the Ancillary Agreements
to which Seller or Ball is a party will constitute, a valid and binding
agreement of Seller and Ball, respectively (assuming due authorization and
execution by Buyer) enforceable in accordance with its terms, except as (i) the
enforceability hereof and thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
SECTION 3.3 Governmental Authorization. The execution, delivery and
performance by Seller and Ball of this Agreement and each of the Ancillary
Agreements to which Seller or Ball is a party require no action by or in respect
of, or filing with, any governmental body, agency or official other than (i)
compliance with any applicable requirements of the Exchange Act and the HSR Act,
(ii) where the failure to take such action or make such filing would not prevent
Ball or Seller from performing any of their obligations under this Agreement or
the Ancillary Agreements and would not have a Material Adverse Effect, (iii) as
disclosed in Schedule 3.23 and (iv) as may be necessary as a result of any facts
or circumstances relating solely to Buyer.
SECTION 3.4 Non-Contravention. Except as may result from any facts or
circumstances relating solely to Buyer, the execution, delivery and performance
by Seller and Ball of this Agreement and each of the Ancillary Agreements to
which Seller or Ball is or will be a party do not and will not (i) violate the
certificate of incorporation or bylaws of Seller or Ball, (ii) assuming
compliance with the matters referred to in Section 3.3, violate any applicable
law, rule, regulation, judgment, injunction, order or decree, (iii) assuming all
Required Consents and consents set forth on Schedule 3.4 are obtained,
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Buyer or to a loss of
any benefit relating to the Business to which Seller or Ball is entitled under
any Permit or any provision of any agreement, contract or other instrument
binding upon Seller or Ball or by which any of the Assets is or may be bound or
(iv) result in the creation or imposition of any Lien on any Asset, other than
Permitted Liens, except, in the case of clauses (ii) through (iv), as would not,
individually or in the aggregate, have a Material Adverse Effect or prevent
Seller or Ball from performing any of their obligations hereunder or under the
Ancillary Agreements.
SECTION 3.5 Required Consents. Schedule 3.5 sets forth each agreement,
contract or other instrument with respect to the Business binding upon Seller or
Ball and each Permit requiring a consent as a result of the execution, delivery
and performance of this Agreement and each of the Ancillary Agreements to which
Seller or Ball is or will be a party and the consummation of the transactions
contemplated hereby and thereby, except consents to assignments of leased Real
Property that is not Principal Property and such consents as would not have a
Material Adverse Effect if not received by the Closing Date (each such consent,
a "Required Consent" and collectively, the "Required Consents").
SECTION 3.6 Financial Statements. The Balance Sheet and the related
audited statement of operations, when delivered pursuant to Section 2.10, shall
fairly present, in conformity with GAAP, the financial position of the Business
(excluding the Excluded Assets and Excluded Liabilities) taken as a whole as of
the date thereof and its results of operations for the period then ended. The
unaudited balance sheet of the Business as of March 31, 1995 and the related
unaudited statement of operations of the Business taken as a whole for the three
month period then ended have been prepared in the ordinary course of the
Business using GAAP consistently applied with prior comparable periods.
SECTION 3.7 Madera Financial Statements. The Madera Balance Sheet, when
delivered pursuant to Section 2.10, shall fairly present, in conformity with
GAAP, the financial position of Madera as of the date thereof. The unaudited
balance sheet of Madera as of March 31, 1995 has been prepared in the ordinary
course of the Business using GAAP consistently applied with prior comparable
periods.
SECTION 3.8 Absence of Certain Changes. Except as set forth in Schedule
3.8, since the Balance Sheet Date, the Business has been conducted in the
ordinary course consistent with past practice, and there has not been:
(a) any event, occurrence, development or state of circumstances or facts
which, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect;
(b) except for cash management procedures in the ordinary course of
business consistent with past practice, any incurrence, assumption or guarantee
by Seller of any indebtedness for borrowed money with respect to the Business
other than in the ordinary course of business and in amounts and on terms
consistent with past practice, but in any event not exceeding $1,000,000;
(c) any creation or other incurrence of any Lien (other than any Permitted
Lien) on any material Asset other than in the ordinary course of business
consistent with past practice;
(d) any damage, destruction or other casualty loss (whether or not covered
by insurance) affecting the Business or any Asset which materially detracts from
the value of any material Asset or which materially interferes with any present
use of any material Asset;
(e) any transaction or commitment made, or any contract or agreement
entered into, by Seller or Ball relating to the Business or any Asset (including
the acquisition or disposition of any assets) or any relinquishment by Seller or
Ball of any contract or other right, in either case, material to the Business
taken as a whole, other than transactions and commitments in the ordinary course
of business consistent with past practice and those contemplated by this
Agreement;
(f) any material change in any method of accounting or accounting practice
by Seller with respect to the Business;
(g) any (w) grant of any severance or termination pay to any employee of
the Business, (x) entering into any written employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any employee of the Business, (y) increase in benefits payable under existing
severance or termination pay policies or employment agreements or (z) increase
in compensation, bonus or other benefits payable to employees of the Business,
other than, in the case of clauses (y) and (z), in the ordinary course of
business consistent with past practice;
(h) the making by Seller of any loan, advance or capital contribution to
or investment in any Person (other than Madera or any Affiliate of Seller) in
excess of $100,000;
(i) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of the Business, which employees were not subject to a collective
bargaining agreement at the Balance Sheet Date, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to such
employees; or
(j) any capital expenditure, or commitment for a capital expenditure, for
additions or improvements to property, plant and equipment of the Business in
excess of an aggregate amount of $2,000,000, other than capital expenditures
made in the ordinary course of business and reflected in the financial
projections previously delivered to Buyer.
SECTION 3.9 Properties. (a) Schedule 3.9(a) correctly describes all real
property used in the Business included in the Assets (the "Real Property"),
which Seller owns, leases or subleases, and which Madera owns, leases or
subleases (the "Madera Property"), any title insurance policies and surveys with
respect thereto held by Seller or, to the knowledge of Seller, Madera, and any
leases or subleases relating thereto held by Seller or, to the knowledge of
Seller, Madera as lessee or sublessee or subleases to third parties, specifying
in the case of leases or subleases, the name of the lessor or sublessor, the
name of the lessee or sublessee, all amendments thereof, the lease term and, in
all material respects, the basic annual rent, provided that within 60 days after
the date hereof, Seller may add minor leased or subleased sales offices and
warehouses (which are not individually or in the aggregate material) to Schedule
3.9(a). To the knowledge of Seller, the acreages and square footages on Exhibit
1 to Schedule 3.9(a) are materially correct.
(b) Schedule 3.9(b) correctly describes substantially all items of
personal property having a book value in excess of $5,000 used in the Business
included in the Assets, including but not limited to machinery, equipment,
furniture, vehicles, storage tanks, spare and replacement parts, fuel and other
trade fixtures and fixed assets, which Seller owns, leases or subleases,
specifying in the case of leases or subleases, the name of the lessor or
sublessor, the lease term and basic annual rent.
(c) (i) All leases and subleases of leased Real Property at Dunkirk, IN;
Washington, PA; Fairfield, CA and Seattle, WA held by Seller and leases and
subleases of leased personal property held by Seller having an annual basic
rent of greater than $250,000 are in good standing and are valid, binding and
enforceable in accordance with their respective terms, subject to (A)
applicable bankruptcy, insolvency moratorium and other similar laws affecting
the enforcement of rights generally and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity, at law or otherwise. Seller is not in default under any such lease or
sublease and Seller has not received or given any notice of default under any
such lease or sublease which has not been cured and to Seller's knowledge
there does not currently exist any event which with notice or lapse of time or
both would constitute a default under any such lease or sublease.
(ii) The plants, buildings, structures and equipment located on (x)
all of the owned Real Properties, (y) the leased Real Properties located at
Dunkirk, IN; Washington, PA, Fairfield, CA and Seattle, WA and (z) the Madera
Property (the "Principal Properties") are in normal operating condition and
repair (giving due account to the age and length of use of same, ordinary wear
and tear excepted) and are suitable in all material respects for their present
uses.
(iii)Each Principal Property currently has (x) access to public roads
directly or by valid and subsisting easements over private property for
ingress to and egress from such Principal Property as is reasonably necessary
for the conduct of the Business as presently conducted and (y) water supply,
storm and sanitary sewer facilities, telephone, gas and electrical
connections, drainage and other public utilities as are reasonably necessary
for the conduct of the Business as presently conducted at such Principal
Property, all of which enter such Principal Property in question through
public roads or valid and subsisting easements over private property.
(iv) None of the plants, buildings or other structures located on a
Principal Property encroaches in a material respect upon any real property
owned by another Person or upon any easement affecting such Principal Property
to the extent that any such encroachment would have a Material Adverse Effect
or materially interfere with any present use of any such Principal Property;
no structure or any real property owned by another Person encroaches in a
material respect upon any Principal Property to the extent that any such
encroachment would have a Material Adverse Effect or materially interfere with
any present use of any such Principal Property.
(d) No Principal Property or other material Asset (excluding the Real
Property) is subject to any Lien, except:
(i) Liens disclosed on Schedule 3.9(d) which would not materially
detract from the value of the Asset subject to such Lien or materially
interfere with any present use of the Asset subject to such Lien;
(ii) Liens disclosed on the Balance Sheet or, as of the Closing Date,
on the Closing Balance Sheet;
(iii)Liens for Taxes, assessments, and other governmental charges (x)
not yet payable or (y) being contested in good faith and for which adequate
accruals or reserves have been established on the Balance Sheet or the Closing
Balance Sheet, as the case may be;
(iv) Mechanics', materialmen's and other similar Liens arising in the
ordinary course of the Business on any owned Real Property or leased Real
Property for construction in progress on such owned Real Property or leased
Real Property (x) for amounts not yet payable or (y) being contested in good
faith and for which adequate accruals or reserves have been established on the
Balance Sheet or the Closing Balance Sheet, as the case may be;
(v) Inchoate repairmen's, warehousemen's and carriers' liens arising
in the ordinary course of business; and
(vi) Imperfections of title, claims and Liens (other than Liens securing
debt or other monetary obligations), including without limitation easements,
rights of way, servitudes, covenants, restrictions and other similar charges
and encumbrances, with respect to any Principal Property or other material
Asset (excluding the Real Property) which individually and in the aggregate do
not materially detract from the value of such Asset or materially interfere
with any present use of such Asset (clauses (i) through (vi) are,
collectively, the "Permitted Liens").
SECTION 3.10 Madera Joint Venture. (a) Madera is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California, and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except where the failure to have such governmental
licenses, authorizations, permits, consents and approvals do not have a Material
Adverse Effect. Madera is duly qualified to do business as a foreign corporation
in each jurisdiction where such qualification is necessary. Seller has
heretofore delivered to Buyer true and complete copies of the certificate of
incorporation and bylaws of Madera as currently in effect.
(b) The authorized capital stock of Madera consists of 1,000 shares of
preferred stock, 1,000 shares of Class A Common Stock and 1,000 shares of Class
B Common Stock. There are issued and outstanding 510 shares of Class A Common
Stock of Madera and 10 shares of Series A Preferred Stock, all of which (the
"Madera Shares") are owned by Seller, and 490 shares of Class B Common Stock,
all of which are owned by Heublein Inc.
(c) The Madera Shares are, subject to the Madera Shareholders' Agreement,
owned by Seller free and clear of all Liens and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of the Madera Shares (other than those imposed by federal and state
securities laws). There are no outstanding (i) securities of Madera or any
Affiliate of Madera convertible into or exchangeable for shares of capital stock
or other voting securities or ownership interests in Madera or (ii) options or
other rights to acquire from Madera or any Affiliate of Madera any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, Madera (the items in clauses (i) and (ii) being referred
to collectively as the "Madera Securities"). There are no outstanding
obligations to repurchase, redeem or otherwise acquire any outstanding Madera
Securities.
SECTION 3.11 Subsidiaries. Seller has no Subsidiaries other than Madera
and the Ball Members. Since their respective dates of incorporation, neither of
the Ball Members has engaged in any activities other than in connection with or
as contemplated by the LLC Agreement.
SECTION 3.12 Sufficiency of and Title to the Assets. (a) The Assets
constitute, and on the Closing Date will constitute, substantially all of the
assets, properties or rights used or held for use in the Business and, together
with the services to be provided pursuant to the Transition Services Agreement,
are all of the Assets necessary and sufficient to operate the Business as
presently conducted.
(b) Seller has, and, subject to obtaining the consents set forth in
Schedule 3.5, upon consummation of the transactions contemplated hereby Buyer
will have acquired, (i) good, indefeasible fee simple title to all owned Real
Property, including such access as is reasonably necessary for the conduct of
the Business (A) to public streets or roads directly or by valid and subsisting
easements and (B) to water, storm and sanitary sewer, telephone, gas, electric,
drainage and other utilities directly from public streets or roads or by valid
and subsisting easements) and (ii) good title to, or in the case of other leased
material Assets valid and subsisting leasehold interests in, all other material
Assets, in the case of each of clauses (i) and (ii) free and clear of all Liens,
except for Permitted Liens.
SECTION 3.13 No Undisclosed Liabilities. There are no liabilities of the
Business of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, other than:
(a) liabilities reflected on the Balance Sheet (or, as of the Closing
Date, on the Closing Balance Sheet) or disclosed in the notes thereto;
(b) liabilities disclosed on Schedule 3.13;
(c) liabilities incurred in the ordinary course of business and consistent
with past practice since the date of the Balance Sheet; and
(d) contractual liabilities and obligations with respect to executory
contracts not required to be disclosed in financial statements prepared in
accordance with GAAP to the extent such contracts, if required to be disclosed
pursuant to Section 3.15, have been set forth on Schedule 3.15.
SECTION 3.14 Litigation. (a) Schedule 3.14(a) sets forth a list of all
claims, actions, proceedings and investigations pending against, or to the
knowledge of Seller or Ball threatened against or affecting, Seller or Ball with
respect to the Business or any Asset before any court, arbitrator or
administrative, governmental or regulatory body or authority.
(b) There is no action, suit, investigation or proceeding pending against,
or to the knowledge of Seller or Ball, threatened against or affecting, Seller
or Ball with respect to the Business or any Asset before any court or arbitrator
or any governmental body, agency or official which, if determined or resolved
adversely in accordance with the plaintiff's demands, would reasonably be
expected to have a Material Adverse Effect or which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated hereby or by the Ancillary Agreements.
SECTION 3.15 Material Contracts. (a) Except for the Contracts disclosed in
Schedule 3.15, with respect to the Business, neither Ball nor Seller is a party
to or bound by:
(i) any lease (whether of real or personal property) providing for
rentals of more than $200,000 per annum or $1,000,000 in the aggregate;
(ii) any agreement for the purchase of materials, supplies, goods,
services, equipment or other assets providing for either (A) annual payments
by Seller or Ball of $500,000 or more or (B) aggregate payments by Seller or
Ball of $500,000 or more;
(iii)any sales, distribution or other similar agreement providing for
the sale by Seller or Ball of materials, supplies, goods, services, equipment
or other assets that provides for either (A) annual payments to Seller or Ball
of $5,000,000 or more or (B) aggregate payments to Seller or Ball of
$10,000,000 or more;
(iv) any partnership, joint venture or other similar agreement or
arrangement;
(v) any agreement relating to indebtedness for borrowed money or the
deferred purchase price of property (in either case, whether incurred,
assumed, guaranteed or secured by any asset), except any such agreement (A)
entered into in the ordinary course of business with an aggregate outstanding
principal amount not exceeding $500,000 or (B) entered into subsequent to the
date of this Agreement as permitted by Section 3.8(b);
(vi) any material option, license, franchise or similar agreement;
(vii)any material agency, dealer, sales representative, marketing or
other similar agreement;
(viii) any agreement that limits the freedom of Seller or Ball with
respect to the Business to compete in any material respect in any line of
business or with any Person or in any area or Ball or Seller to own, operate,
sell, transfer, pledge or otherwise dispose of or encumber any Asset or which
would so limit the freedom of Buyer after the Closing Date;
(ix) any written agreement with or for the benefit of any stockholder,
officer, director, employee or Affiliate of Seller or Ball other than advances
to employees in the ordinary course of business consistent with past practice;
or
(x) any other agreement, commitment, arrangement or plan not made in
the ordinary course of business which is material to the Business taken as a
whole.
(b) Each Contract required to be disclosed pursuant to this Section is a
valid and binding agreement of Seller and is in full force and effect, and
neither Seller nor, to the knowledge of Seller or Ball, any other party
thereto is in default or breach under the terms of any such Contract, nor, to
the knowledge of Seller or Ball, has any event or circumstance occurred that,
with notice or lapse of time or both, would constitute an event of default
thereunder. True and complete copies of each such Contract have been delivered
to Buyer.
SECTION 3.16 Licenses and Permits. Schedule 3.16 correctly describes each
license, franchise, permit or other similar authorization that is required to
enable Seller to own or use the Assets and to carry on the Business as currently
conducted, except for such licenses, franchises, permits or authorizations as
would not, if not obtained, have a Material Adverse Effect, including without
limitation those relating to planning, building and similar matters
(collectively, the "Permits"), together with the name of the government agency
or entity issuing such Permit. Such Permits are valid and in full force and
effect and, assuming the related Required Consents have been obtained prior to
the Closing Date, except as set forth on Schedule 3.16, are transferable by
Seller, and, except as set forth on Schedule 3.16, none of the Permits will,
assuming the related Required Consents have been obtained prior to the Closing
Date, be terminated or impaired or become terminable as a result of the
transactions contemplated hereby or by the Ancillary Agreements. Upon
consummation of such transactions, Buyer will, assuming the related Required
Consents have been obtained prior to the Closing Date, have all of the right,
title and interest in all the Permits, except as set forth on Schedule 3.16.
SECTION 3.17 Insurance Coverage. All material properties and risks of
Seller in respect of the Business are covered by valid and currently effective
insurance policies or binders of insurance or programs of self-insurance in such
types and amounts as are consistent with customary practices and standards of
companies engaged in businesses and operations similar (including without
limitation in size) to the Business. Seller has given Buyer access to true and
complete copies of, all insurance policies, fidelity bonds and documents with
respect to self-insurance programs relating to the Assets, the business and
operations of the Business and its employees. There is no material claim by
Seller or Ball pending under any of such policies or bonds as to which coverage
has been questioned, denied or disputed by the underwriters of such policies or
bonds or in respect of which such underwriters have reserved their rights. All
premiums payable under all such policies and bonds have been timely paid and
Seller and Ball have otherwise complied in all material respects with the terms
and conditions of all such policies and bonds. After the Closing, Seller or
Ball, as the case may be, shall continue to have coverage under such policies
and bonds with respect to events occurring prior to Closing.
SECTION 3.18 Compliance with Laws and Court Orders. Neither Ball nor
Seller is in violation of, or since January 1, 1994, has been charged with or
given notice of any violation of, or to the knowledge of Seller or Ball, is
under investigation with respect to, any law, rule, regulation, ordinance,
judgment, injunction, order or decree applicable to the Assets or the conduct of
the Business, except (i) as set forth on Schedule 3.18, (ii) for violations
which do not relate to the Business or the Assets and (iii) for violations or
investigations, the existence of which would not reasonably be expected to have
a Material Adverse Effect or in the case of violations relating to any Principal
Property, materially detract from the value thereof or materially interfere with
any present use thereof.
SECTION 3.19 Intellectual Property. (a) Schedule 3.19 sets forth a list of
all Intellectual Property Rights (including any licenses or sublicenses thereof
as to which Seller or any of its Affiliates is a party).
(b) (i) Seller has not been named as a defendant in any pending action,
suit, investigation or proceeding relating to, or otherwise has been notified in
writing of, any alleged claim of material infringement of any patents,
trademarks, trade names, service marks, service names, or copyrights, and
neither Seller nor Ball has any knowledge of any other claim of infringement by
Seller and (ii) neither Seller nor Ball has any knowledge of any continuing
infringement by any other Person of any Intellectual Property Right. No
Intellectual Property Right is subject to any outstanding judgment, injunction,
order or decree restricting the use thereof by Seller with respect to the
Business or restricting the licensing thereof by Seller or Ball to any Person.
SECTION 3.20 Employees. Schedule 3.20 sets forth a true and complete list
of (i) the names and titles of all employees of the Business whose annual base
salary exceeds $50,000 and (ii) the wage rates for non-salaried employees of the
Business (by classification). The annual salaries and other compensation of all
employees of the Business referred to in clause (i) above have been previously
furnished in writing to Buyer.
SECTION 3.21 Products. To the knowledge of Seller, each of the products
produced or sold by Seller in connection with the Business is, and at all times
up to and including the sale thereof has been, in compliance in all material
respects with all applicable federal, state, local and foreign laws and
regulations.
SECTION 3.22 Finders' Fees. Except for Lehman Brothers Inc., whose fees
will be paid by Seller, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Seller or Ball who might be entitled to any fee or commission in connection with
the transactions contemplated by this Agreement or the Ancillary Agreements.
SECTION 3.23 Environmental Matters. (a) To the knowledge of Seller or Ball
and except as would not, individually or in the aggregate, have a Material
Adverse Effect, (i) Seller is in compliance with all applicable Environmental
Laws; (ii) Seller holds all Environmental Permits and is in compliance
therewith, and (iii) there are no Environmental Liabilities.
(b) Except as disclosed in Schedule 3.23, Seller has not received any
written request for information, or been notified that it is a potentially
responsible party, under CERCLA, or any similar state, local or foreign law with
respect to any Real Property or any other property now or previously owned,
leased or operated by Seller.
(c) Except as disclosed in Schedule 3.23, Seller has not entered into or
agreed to any consent decree or order and is not subject to any judgment, decree
or judicial order relating to compliance with or the cleanup of Hazardous
Substances under any applicable Environmental Law.
(d) Except as disclosed in Schedule 3.23, none of the Real Property or any
other property now or, to the knowledge of Seller or Ball, previously owned,
leased or operated by Seller is listed or, to the knowledge of Seller or Ball,
proposed for listing on the "National Priorities List" under CERCLA, or on the
Comprehensive Environmental Response, Compensation and Liability Information
System maintained by the United States Environmental Protection Agency, as
updated through the date hereof, or any similar state list of sites requiring
investigation or cleanup.
(e) Except as disclosed in Schedule 3.23, to the knowledge of Seller or
Ball and except as would not, individually or in the aggregate, have a Material
Adverse Effect, no reportable quantity of a Hazardous Substance has been
Released at, on or under any of the Real Property or any other property now or
previously owned, leased or operated by Seller.
(f) Except as disclosed in Schedule 3.23, in connection with or relating
to the Assets, Business, Real Property or any other property now or, to the
knowledge of Seller or Ball previously owned, leased or operated by Seller, no
written notice, demand, citation, summons or order has been received or, to the
knowledge of Seller or Ball, issued which has not been cured, no complaint has
been served and remains pending, no penalty has been assessed which remains
pending and no investigation or review is pending, or to the knowledge of Seller
or Ball, threatened by any governmental entity or third party with respect to
any (i) alleged violation of any Environmental Law, (ii) alleged failure to have
any Environmental Permit, or (iii) Release of Hazardous Substances.
(g) There are no Liens under Environmental Laws on any of the Real
Property or the Assets and no governmental actions have been taken or, to the
knowledge of Seller or Ball, are in process which could subject any of such Real
Property or Assets to such Liens. No notices or restrictions relating to
Hazardous Substances have been or are required to be placed in any deed to any
Real Property.
(h) Except as disclosed in Schedule 3.23, there are no Environmental
Permits that are nontransferable or cannot remain in full force and effect
following the consummation of the transactions contemplated hereby.
(i) Except as disclosed in Schedule 3.23, neither the execution of this
Agreement nor the consummation of the transaction that is the subject of this
Agreement will require any site investigation or cleanup, or notification to or
consent of governmental agencies or third parties pursuant to any Environmental
Law.
(j) Seller has provided Buyer with any environmental investigation, study
or audit conducted in the past five years in relation to any Asset or Real
Property that is in the possession of Seller.
(k) For the purposes of this Section, the term "Seller" shall include any
entity which is, in whole or in part, a predecessor of Seller.
SECTION 3.24 Representations as to Madera. The representations and
warranties made by Seller and Ball in Sections 3.5, 3.8 and 3.12 through 3.23
are made as to Madera to the same extent as they are made as to Seller or the
Business.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and Ball as of the date hereof and
as of the Closing Date that:
SECTION 4.1 Organization and Existence. Buyer is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware and has all powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
SECTION 4.2 Authorization. The execution, delivery and performance by
Buyer of this Agreement and each Ancillary Agreement to which Buyer is a party
are within the powers of Buyer and have been duly authorized by all necessary
action on the part of Buyer. This Agreement constitutes and, when executed and
delivered, each Ancillary Agreement to which Buyer is a party will constitute, a
valid and binding agreement of Buyer (assuming due authorization and execution
by the other parties thereto), enforceable in accordance with its terms, except
as (i) the enforceability hereof and thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
SECTION 4.3 Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and each Ancillary Agreement to which
Buyer is a party require no action by or in respect of, or filing with, any
governmental body, agency or official other than (i) compliance with any
applicable requirements of the HSR Act and (ii) any such action or filing as to
which the failure to make or obtain would not, individually or in the aggregate,
have a Material Adverse Effect.
SECTION 4.4 Non-Contravention. The execution, delivery and performance by
Buyer of this Agreement and each Ancillary Agreement to which Buyer is a party
do not and will not (i) violate the constituent documents of Buyer or (ii)
assuming compliance with the matters referred to in Section 4.3, violate any
applicable law, rule, regulation, judgment, injunction, order or decree or (iii)
constitute a default under any right or obligation of Buyer or any provision of
any agreement, contract or other instrument binding upon Buyer except, in the
case of clauses (ii) and (iii), as would not, individually or in the aggregate,
have a Material Adverse Effect or prevent Buyer from performing any of its
obligations hereunder or under the Ancillary Agreements.
SECTION 4.5 Finders' Fees. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of Buyer who might be entitled to any fee or commission from Seller or
any of Seller's Affiliates upon consummation of the transactions contemplated by
this Agreement.
SECTION 4.6 Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of Buyer threatened against or
affecting, Buyer before any court or arbitrator or any governmental body, agency
or official which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated hereby or by the Ancillary
Agreements or materially adversely affect or restrict Buyer's ability to
consummate the transactions contemplated hereby or by the Ancillary Agreements.
ARTICLE 5
COVENANTS OF SELLER AND BALL
Seller and Ball, on a joint and several basis, agree that:
SECTION 5.1 Conduct of the Business. From the date hereof until the
Closing Date, Seller shall, and Ball shall cause Seller to, conduct the Business
in the ordinary course consistent with past practice and use its reasonable best
efforts to preserve intact the business organizations and relationships with
third parties and keep available the services of the present employees of the
Business. Without limiting the generality of the foregoing, from the date hereof
until the Closing Date, except as set forth in Schedule 5.1, Seller will not,
and Ball will cause Seller not to:
(a) acquire assets from any other Person other than in the ordinary course
consistent with past practice;
(b) sell, lease, license or otherwise dispose of any Assets except (i)
pursuant to existing contracts or commitments and (ii) in the ordinary course
consistent with past practice;
(c) permit Madera to (i) make any payment of any dividend or other
distribution, other than regular cash dividends in amounts consistent with past
practice, in respect of any outstanding equity security of Madera in cash,
securities or any other property, (ii) repurchase, redeem or otherwise acquire
any outstanding equity security of Madera or (iii) issue any additional equity
security of Madera.
(d) enter into any agreement or contract with respect to the Business
which is not assignable (or which requires the consent of a third party to
assign) to Buyer; or
(e) agree or commit to do any of the foregoing.
SECTION 5.2 Access to Information; Confidentiality. (a) From the date
hereof until the Closing Date, Seller will, and Ball will cause Seller to (i)
give Buyer, its counsel, financial advisors, auditors and other authorized
representatives full access to the offices, properties, books, records and
personnel of Seller and Ball relating to the Business, (ii) furnish to Buyer,
its counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information relating to the Business
as such Persons may reasonably request and (iii) instruct the employees, counsel
and financial advisors of Seller and Ball to cooperate with Buyer in its
investigation of the Business. Any investigation pursuant to this Section shall
be conducted in such manner as not to interfere unreasonably with the conduct of
the business of Seller or Ball.
(b) After the Closing, Seller and Ball will hold, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors, agents and Affiliates to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
Business or the Assets, except to the extent that such information can be shown
to have been (i) in the public domain through no fault of Seller or Ball or (ii)
later lawfully acquired by Seller or Ball from sources other than those related
to Seller's prior ownership of the Business. The obligation of Seller, Ball and
their respective Affiliates to hold any such information in confidence shall be
satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar
information.
SECTION 5.3 Trademarks; Tradenames. On or prior to the Closing Date,
Buyer, Ball and Seller shall enter into mutually satisfactory arrangements with
respect to the use by Buyer of the "Ball" tradename and any related trademarks
and tradenames used in connection with the Business.
SECTION 5.4 Notices of Certain Events. Seller and Ball shall promptly
notify Buyer of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements;
(b) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements;
(c) any actions, suits, claims, investigations or proceedings commenced
or, to their knowledge threatened against, relating to or involving or otherwise
affecting (i) Seller, (ii) Ball, to the extent related to the Business or (iii)
the Business that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 3.14 or that relate to the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements; and
(d) the damage or destruction by fire or other casualty of any Asset or
part thereof or in the event that any Asset or part thereof becomes the subject
of any proceeding or, to the knowledge of Seller or Ball, threatened proceeding
for the taking thereof or any part thereof or of any right relating thereto by
condemnation, eminent domain or other similar governmental action.
ARTICLE 6
COVENANTS OF THE PARTIES
The parties hereto agree that:
SECTION 6.1 Confidentiality. The Confidentiality Agreements, as modified
by Section 6.4 hereof, shall remain in full force and effect prior to the
Closing Date and after any termination of this Agreement.
SECTION 6.2 Reasonable Best Efforts; Further Assurances. (a) Subject to
the terms and conditions of this Agreement, the parties hereto will use their
reasonable best efforts (but without the payment of money) to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements. Each party agrees
to execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonably necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and the Ancillary Agreements and to vest in Buyer
good title to the Assets.
(b) Seller hereby constitutes and appoints, effective as of the Closing
Date, Buyer and its successors and assigns as the true and lawful attorney of
Seller with full power of substitution in the name of Buyer or in the name of
Seller, but for the benefit of Buyer (i) to collect for the account of Buyer any
Assets and (ii) to institute and prosecute all proceedings which Buyer may in
its sole discretion deem proper in order to assert or enforce any right, title
or interest in, to or under the Assets, and to defend or compromise any and all
actions, suits or proceedings in respect of the Assets. Buyer shall be entitled
to retain for its own account any amounts collected pursuant to the foregoing
powers, including any amounts payable as interest in respect thereof.
SECTION 6.3 Resolution of Claims. In order to facilitate the resolution of
any claims made by or against or incurred by any party, after the Closing, upon
reasonable notice, each other party shall, to the extent, and only to the
extent, necessary to permit such party to facilitate the resolution of any such
claim, (i) afford the officers, employees and authorized agents and
representatives of such party reasonable access, during normal business hours,
to the offices, properties, books and records of such other party with respect
to the Assets, the Assumed Liabilities and the Business and (ii) furnish to the
officers, employees and authorized agents and representatives of such party such
additional financial and other information regarding the Assets, the Assumed
Liabilities and the Business as such party may from time to time reasonably
request. In order to facilitate the resolution of any claims made by a third
party against Seller or Buyer, each party shall make available to the other
party the employees of such party whose assistance, testimony or presence is
necessary to assist such other party in evaluating and defending any such
claims, including the presence of such persons as witnesses in hearings or
trials for such purposes; provided that such investigation shall not
unreasonably interfere with the business or operations of the providing party or
any of its Affiliates.
SECTION 6.4 Public Announcements. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement, the Ancillary Agreements or the consummation of the
transactions contemplated hereby and thereby and, except as may be required by
applicable law or any listing agreement with any national securities exchange,
will not issue any such press release or make any such public statement without
the prior written consent of all of the parties hereto.
SECTION 6.5 WARN Act. The parties agree to cooperate in good faith to
determine whether any notification may be required under the Worker Adjustment
and Retraining Notification Act (the "WARN Act") as a result of the transactions
contemplated by this Agreement. Seller will cooperate with Buyer prior to the
Closing in providing any notification that may be required under the WARN Act
with respect to any Transferred Employees. Seller will be responsible for
providing any notification that may be required under the WARN Act with respect
to any employees of the Business that are not Transferred Employees.
SECTION 6.6 Undertaking. From the date hereof until the earlier of the
Closing Date or any termination of this Agreement, SGC hereby covenants and
undertakes to cause Buyer to comply with each of its representations,
warranties, covenants, agreements and obligations under this Agreement to the
same extent as if such representations, warranties, covenants, agreements and
obligations were binding upon SGC and to guaranty the obligation of Buyer to pay
the Purchase Price subject to the terms and conditions set forth herein.
SECTION 6.7 Regulatory and Other Authorizations; Consents. The parties
hereto will use their reasonable best efforts (but without the payment of money)
to obtain all authorizations, consents, orders and approvals of Federal, state
and local regulatory bodies and officials and third parties that may be or
become necessary for the execution and delivery of, and the performance of their
obligations pursuant to, this Agreement and the Ancillary Agreements. Each party
hereto agrees (i) to make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act with respect to the transactions contemplated
hereby promptly following the date hereof and to supply promptly any additional
information and documentary material that may be requested pursuant to the HSR
Act and (ii) to cooperate with one another (x) in determining whether any action
by or in respect of, or filing with, any governmental body, agency, official or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any contracts, in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements and (y) in taking such actions or making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such actions, consents, approvals or waivers.
ARTICLE 7
TAX MATTERS
SECTION 7.1 Tax Definitions. The following terms, as used herein, have the
following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Pre-Closing Tax Period" means (i) any Tax period ending on or before the
Closing Date and (ii) with respect to a Tax period that commences before but
ends after the Closing Date, the portion of such period up to and including the
Closing Date.
"Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up
capital, profits, greenmail, license, withholding (on amounts paid by or to the
relevant Person), payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty or other
tax, governmental fee or other like assessment or charge or any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any governmental authority (domestic or foreign) responsible for the
imposition of any such tax.
SECTION 7.2 Tax Matters. Seller and Ball, on a joint and several basis,
hereby represent and warrant to Buyer on the date hereof and on the Closing Date
that:
(a) Seller has timely filed all material returns required to be filed with
respect to Taxes pertaining to the Assets or the Business and all Taxes shown
thereon as due have been paid. Seller has timely paid or caused to be paid all
material Taxes for all Pre-Closing Tax Periods which will have been required to
be paid on or prior to the Closing Date, the non-payment of which would result
in an encumbrance on any Asset, would otherwise adversely affect the Business or
would result in Buyer or any equity owner of Buyer becoming liable or
responsible therefor.
(b) Except as disclosed in Schedule 7.2, Seller has not received from any
governmental or regulatory authority any written notice of a proposed material
adjustment, deficiency or underpayment of any Taxes pertaining to the Assets or
the Business, which notice has not been satisfied by payment or been withdrawn.
(c) Schedule 7.2 contains a complete list of states in which Seller has
filed a Tax return relating to the Business or the Assets since 1993.
(d) Except as disclosed in Schedule 7.2, Seller is not under any
obligation to pay the Tax obligation of, or indemnify, any other Person with
respect to any Tax.
SECTION 7.3 Tax Cooperation: Allocation of Taxes. (a) Buyer and Seller
agree to furnish or cause to be furnished to each other, upon request, as
promptly as practicable, such information and assistance relating to the Assets
and the Business (including, without limitation, access to books and records) as
is reasonably necessary for the filing of all Tax returns, and making of any
election related to Taxes, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim, suit or proceeding
relating to any Tax return. Buyer and Seller shall retain all books and records
with respect to Taxes pertaining to the Assets for a period of at least six
years following the Closing Date. At the end of such period, each party shall
provide the other with at least ten days prior written notice before destroying
any such books and records, during which period the party receiving such notice
can elect to take possession, at its own expense, of such books and records.
Seller and Buyer shall cooperate with each other in the conduct of any audit or
other proceeding related to Taxes involving the Business and each shall execute
and deliver such powers of attorney and other documents as are necessary to
carry out the intent of this paragraph (a) of Section 7.3.
(b) All real property taxes, personal property taxes and similar ad
valorem obligations levied with respect to the Assets (other than such taxes or
obligations arising from or with respect to the assets or operations of Madera
to the extent reflected as a liability on the Madera Closing Balance Sheet) for
a taxable period which includes (but does not end on) the Closing Date
(collectively, the "Apportioned Obligations") shall be apportioned between
Seller and Buyer as of the Closing Date based on the number of days of such
taxable period included in the Pre-Closing Tax Period and the number of days of
such taxable period after the Closing Date (with respect to any such taxable
period, the "Post-Closing Tax Period"). Seller shall be liable for the
proportionate amount of such taxes that is attributable to the Pre-Closing Tax
Period, and Buyer shall be liable for the proportionate amount of such taxes
that is attributable to the Post-Closing Tax Period. Upon receipt of any bill
for real or personal property taxes relating to the Assets, each of Seller and
Buyer shall present a statement to the other setting forth the amount of
reimbursement to which each is entitled under this Section 7.3(b) together with
such supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other
within 10 days after delivery of such statement. In the event that either Seller
or Buyer shall make any other payment for which it is entitled to reimbursement
under this Section 7.3(b), the other party shall make such reimbursement
promptly but in no event later than 10 days after the presentation of a
statement setting forth the amount of reimbursement to which the presenting
party is entitled along with such supporting evidence as is reasonably necessary
to calculate the amount of reimbursement. Any payment required under this
Section and not made within 10 days of delivery of the relevant statement shall
bear interest at the rate per annum determined in Section 2.9(e), for each day
until paid.
(c) Buyer shall provide Seller with resale exemption certificates as
appropriate. Subject to Section 12.8 but notwithstanding Section 2.4(a), any
transfer, documentary, sales, use, value-added, gain, excise or other similar
Taxes (including real property transfer taxes) arising out of or in connection
with the transactions contemplated by this Agreement and the Ancillary
Agreements and any recording or filing fees with respect thereto or the
instruments transferring the Assets to Buyer, shall be shared equally by Buyer
and Seller; provided, however, that Seller shall be responsible for any and all
such transfer Taxes (including gross receipt and real estate transfer taxes)
imposed by the State of Indiana or any political subdivision thereof to the
extent such Tax is creditable for Indiana income Tax purposes.
ARTICLE 8
EMPLOYEE BENEFITS
SECTION 8.1 Employee Benefits Definitions. The following terms, as used
herein, having the following meanings:
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of any entity means any other entity which, together
with such entity, would be treated as a single employer under Section 414 of the
Code.
"Multiemployer Plan" means each Plan that is a multiemployer plan, as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"Plans" means the plans referred to in the first sentence of Section 8.2.
SECTION 8.2 ERISA Representations. (a) Schedule 8.2(a) lists (i) all
employee benefit plans as defined in Section 3(3) of ERISA, (ii) all bonus,
stock option, stock purchase, restricted stock appreciation or other similar
incentive plans, retirement programs or arrangements, (iii) all employment,
severance or compensation agreements, or policies and (iv) each plan or
arrangement providing for medical or dental benefits, insurance coverage
(including any self-insured arrangements), worker's compensation, disability
benefits, vacation or unemployment benefits as each of the foregoing were
entered into, maintained, or contributed to, by Seller, or any member of its
ERISA Group for, or with respect to, the Business Employees, as hereinafter
defined, (collectively, the "Plans"). Each Plan is in writing and Seller has
made available to Buyer a complete and accurate copy of each Plan document or
agreement and, if applicable, the summary plan description, any summary of
material modifications, the most recently filed Form 5500 and the most recently
received IRS determination letter for each such Plan, where applicable. Seller
has provided Buyer with, or has caused to be provided to Buyer complete
actuarial data (including age, salary, service and related data) as of the most
recent practicable date for Business Employees.
(b) Each Plan has been operated in substantial compliance with its terms
and the material requirements of applicable law, where a failure to do so would
be reasonably expected to have a Material Adverse Effect. No legal action, suit
or claim is pending or, to the knowledge of Seller, threatened, with respect to
any Plan (other than claims for benefits in the ordinary course), and to the
knowledge of Seller, no fact or event exists that could reasonably be expected
to give rise to any such action, suit or claim, in each case, where such action,
suit or claim would reasonably be expected to have a Material Adverse Effect.
(c) Except as disclosed in Schedule 8.2(c), none of the Plans is a
multiemployer plan, within the meaning of Section 3(37) or 4001(a)(3) of ERISA
(a "Multiemployer Plan"). If Seller or any ERISA Affiliate of Seller were to
incur a complete or partial withdrawal from any of Seller's Multiemployer Plans
on or before the Closing Date, neither Seller nor any ERISA Affiliate of Seller
would incur any withdrawal liability under Title IV of ERISA. No Multiemployer
Plan is or is reasonably expected to become "insolvent" or in "reorganization",
as such terms are defined for purposes of Title IV or ERISA.
(d) Neither Seller nor any of Seller's Affiliates has incurred or will
incur prior to the Closing any Liability under Title IV of ERISA arising in
connection with the termination of, or withdrawal from, any plan covered or
previously covered by Title IV of ERISA that could become, after the Closing
Date, an obligation of Buyer or any of its Affiliates.
(e) Except as disclosed in Schedule 8.2(e), each Plan which is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service that it is so qualified,
and each trust forming a part thereof is exempt from tax pursuant to Section
501(a) of the Code and, to Seller's knowledge, no event has occurred since the
date of such determination letter to adversely affect the qualified status of
such Plan or the exempt status of such trust.
(f) Except as disclosed in Schedule 8.2(f), with respect to the Business
Employees there are no employee post-retirement medical or health plans in
effect.
(g) Except as disclosed in writing to Buyer prior to the date hereof,
there has been no amendment to, written interpretation of or announcement
(whether written or not written) by Seller or any of its Affiliates relating to,
or change in employee participation or coverage under, any Plan which would
increase materially the expense of maintaining such Plan above the level of the
expense incurred in respect thereof for the most recent fiscal year.
(h) The Assets are not now nor will they after the passage of time be
subject to any lien imposed under Code Section 412(n) by reason of the failure
of Seller or its Affiliates to make timely installments or other payments
required by Code Section 412.
(i) Except as disclosed in Schedule 8.2(i), as of December 31, 1994 the
fair market value of the assets of each Seller Plan (excluding for these
purposes any accrued but unpaid contributions) exceeded the accumulated benefit
obligations (as that term is defined in SFAS #87) under such Seller Plan
determined in accordance with the actuarial assumptions utilized by Seller in
its financial statements as of December 31, 1994.
(j) No "reportable event", within the meaning of Section 4043(c)(8), (9)
or (12) of ERISA, has occurred in connection with any Seller Plan.
(k) Except as disclosed in Schedule 8.2(k), and except as severance is
otherwise contemplated by Section 8.4(a) or due to a breach by Buyer of its
obligations under Section 8.4(b), no Transferred Business Employee will become
entitled to any retirement, severance or similar benefit solely as a result of
the transactions contemplated hereby.
SECTION 8.3 Labor Matters. Except as set forth in Schedule 8.3, (i) there
are no controversies pending or, to the knowledge of Seller, threatened, between
Seller and any Business Employees, which controversies have had or are
reasonably likely to have a Material Adverse Effect; (ii) Seller is not a party
to any collective bargaining agreement or other labor union contract applicable
to Business Employees; (iii) there are no grievances outstanding against Seller
under any such agreement or contract which are reasonably likely to have a
Material Adverse Effect; (iv) there are no unfair labor practice charges or
complaints pending against Seller before the National Labor Relations Board or
any similar state agency which are reasonably likely to have a Material Adverse
Effect; and (v) there are no strikes, slowdowns, work stoppages, lockouts, union
organizational campaigns or other protected concerted activity under the
National Labor Relations Act or, to Seller's knowledge, threats thereof, by or
with respect to any employees of Seller which are reasonably likely to have a
Material Adverse Effect.
SECTION 8.4 Offer of Employment. (a) Salaried Employees. With respect to
those employees of Seller in the Business who are employed by Seller as salaried
employees immediately prior to the Closing Date and with respect to the
employees listed on Schedule 8.4(a) (both groups being hereinafter referred to
as the "Salaried Employees"), Buyer shall offer employment to those employees
whom it elects to employ after the Closing Date at least 10 days prior to the
Closing Date, and those accepting such offer prior to the Closing Date shall
become employees of Buyer as of the Closing Date (the "Transferred Salaried
Employees"). In the event that any of such Salaried Employees of Seller decline
such offer of employment, they will be deemed to have voluntarily resigned from
employment with Seller. In the event Buyer does not make an offer of employment
to a Salaried Employee, or in the event that Buyer makes such offer, the offer
is accepted by a Salaried Employee and Buyer terminates the employment of such
Transferred Salaried Employee without good cause within 365 days following the
Closing Date, Buyer shall pay severance (including cost of benefits) in
accordance with the applicable Seller's severance plan as disclosed in Schedule
8.2; provided that severance benefits for any Transferred Salaried Employee
whose employment is terminated by Buyer more than 365 days following the Closing
Date shall be determined in accordance with the severance policy of Buyer then
in effect. Seller agrees to give Buyer reasonable access to files and records
needed by Buyer and relevant to Buyer's decision regarding making offers of
employment to the Salaried Employees referred to above.
(b) Hourly Employees. With respect to those employees of Seller in the
Business who are employed by Seller as hourly employees and who are listed on
the "Seniority List" maintained by Seller immediately prior to the Closing Date
(the "Hourly Employees"), Buyer shall offer employment to all such employees at
least 10 days prior to the Closing Date, and those accepting such offers prior
to the Closing Date shall become employees of Buyer as of the Closing Date (the
"Transferred Hourly Employees"). In the event that such Transferred Hourly
Employees of Seller decline such offer of employment, they will be deemed to
have voluntarily resigned in all circumstances, and shall not be deemed eligible
for severance benefits and other benefit eligibility will be determined
accordingly.
(c) Business Employees; Transferred Employees. For purposes of this
Article 8, the term "Business Employees" shall be deemed to refer to Salaried
Employees and Hourly Employees in the aggregate. The term "Transferred Business
Employee" shall be deemed to refer to those Business Employees who accept
employment with Buyer.
SECTION 8.5 Compensation and Benefit Arrangements. (a) Assumption of
Liabilities. As of the Closing Date, Seller shall retain (i) all
employee-related liabilities for all employees who have retired from Seller on
or prior to the Closing Date (and are not employed by Buyer or its Affiliates
after the Closing Date), and for any of their dependents, beneficiaries or joint
annuitants; (ii) all liabilities with respect to long-term disability benefits
for all Business Employees (who are receiving long-term disability benefits as
of the Closing Date) and retirees accrued through such date as any such Business
Employee or retiree returns to full- time employment with Buyer or its
Affiliates; (iii) liabilities with respect to deferred incentive compensation to
the extent accrued as of December 31, 1994; and (iv) all liabilities with
respect to Seller Pension Plans provided pursuant to Sections 8.7 and 8.8 of
this Agreement, and any agreements entered into pursuant thereto. As of the
Closing Date, Buyer shall assume all other employee-related liabilities for all
Transferred Business Employees and any of their dependents, beneficiaries or
joint annuitants, without regard to when such liabilities arose, which
liabilities shall include without limitation unless expressly provided below,
salaries, wages, incentive pay, benefits under all severance and similar
programs, vacation benefits (including earned, banked or otherwise accrued
vacation benefits), medical benefits, disability benefits (other than long-term
disability benefits), life insurance benefits, retirement benefits (other than
benefits under Seller Pension Plans (except as otherwise provided pursuant to
Sections 8.7 and 8.8 of this Agreement, and any agreements entered into pursuant
thereto)), retiree medical and life insurance benefits, workers' compensation
benefits and all other benefits accrued as of the Closing Date.
(b) Continuation of Benefits. For a period of not less than one year
following the Closing Date, Buyer shall (or shall cause the Business or any
other appropriate subsidiary or Affiliate of Buyer to) provide the Transferred
Business Employees with benefits (including, without limitation, welfare
benefits and severance benefits) that are no less favorable, taken as a whole,
to the benefits provided under the Plans, other than any stock option, stock
appreciation right or other employer stock-based plan (which for purposes of
this sentence shall not include Seller's 401(k) plan merely because of the ESOP
maintained in connection therewith) as in effect on the Closing Date. Buyer
agrees to cause the waiver of any waiting periods and pre-existing conditions
applicable to its welfare plan benefits after the Closing Date, insofar as such
limitations will otherwise apply to Transferred Business Employees after the
Closing Date and agrees to recognize any credit toward the satisfaction of
deductibles or similar out-of-pocket expense limits that a Transferred Business
Employee has accumulated as of the Closing Date for purposes of the relevant
welfare benefit arrangements following the Closing Date.
(c) Service Credit for Salaried Employees. To the extent that service is
relevant for purposes of eligibility or vesting under any employee benefit plan,
program or arrangement (including any retiree medical program) established or
maintained by Buyer for the benefit of Transferred Salaried Employees, such
plan, program or arrangement shall credit such Transferred Salaried Employees or
former Transferred Salaried Employees for service on or prior to the Closing
with Seller, or any Affiliate thereof including the Business.
(d) Service Credit for Hourly Employees. To the extent that service is
relevant for purposes of eligibility or vesting under any employee benefit plan,
program or arrangement (including any retiree medical program) established or
maintained by Buyer for the benefit of Transferred Hourly Employees, such plan,
program or arrangement shall credit such Transferred Hourly Employees or former
Transferred Hourly Employees for service on or prior to the Closing with Seller,
or any Affiliate thereof including the Business.
SECTION 8.6 Collective Bargaining Agreements. Buyer agrees subject to the
rights of any affected Hourly Employees covered by a collective bargaining
agreement, to continue to recognize the unions listed in Schedule 8.3 as the
collective bargaining agents for such affected Hourly Employees and shall assume
the collective bargaining agreements listed in Schedule 8.3 in their entirety.
SECTION 8.7 Seller Pension Plans. (a) Seller shall retain liability for
all benefits accrued as of the Closing Date for all Business Employees and
former Business Employees who are participants under any Plan that is a defined
benefit pension plan (the "Seller's Pension Plans") and shall retain all
liability for all benefits under such Plans, whether accrued before or after the
Closing Date, for all Business Employees, including Transferred Business
Employees. Seller shall vest all such Transferred Business Employees in their
accrued benefits under Seller's Pension Plans as of the Closing Date to the
extent required by the provisions of Seller's Pension Plans.
(b) Effective as of the Closing Date, Buyer shall establish or provide
Transferred Business Employees covered by one or more of Seller's Pension Plans
with an employee retirement plan or plans which will provide such Transferred
Business Employees with a substantially comparable level of benefits to that
provided to such employees by Seller's Pension Plans immediately prior to the
Closing Date. To the extent that service is relevant for participation and
vesting (but not for purposes of benefit calculation, including the calculation
of early retirement subsidies) under any plan provided or established by Buyer
pursuant to the next preceding sentence, Buyer shall credit Transferred Business
Employees under such plan for service on or before the Closing Date to the
extent that such service would have been credited to them under the terms of
Seller's Pension Plans as they existed immediately prior to the Closing Date.
Any such pension plan established pursuant to this Section 8.7 for Transferred
Hourly Employees who are subject to any collective bargaining agreement with
Seller which is assumed by Buyer hereunder shall bear all costs attributable to
benefit increases negotiated in subsequent collective bargaining agreements
covering such Transferred Hourly Employees, including benefit increases
attributable to years of service prior to the Closing Date.
SECTION 8.8 Seller Hourly Pension Plans -- Further Discussions.
Notwithstanding Section 8.7(a) and other provisions of this Article 8, Buyer and
Seller may hereafter agree that Buyer shall assume the plan sponsorship of
Seller's pension plans for hourly employees governed by the collective
bargaining agreements listed on Schedule 8.3, and may agree to revise certain
provisions hereof relating to Seller's and Buyer's pension plans following the
Closing, including without limitation crediting service for early retirement
subsidies, on terms to be mutually agreed between Buyer and Seller.
SECTION 8.9 Defined Contribution Plan. Effective as of the Closing Date,
the Transferred Business Employees shall no longer participate in the defined
contribution savings (401(k)) plans of Seller (the "Defined Contributions
Plans") and Buyer shall establish a replacement defined contribution plan or
plans (the "New Defined Contribution Plan") intended to be qualified under
Sections 401(a) and 401(k) of the Code, and a related trust intended to be
exempt from taxation under Section 501(a) of the Code for the benefit of the
Transferred Business Employees, the terms of which plan and trust shall be no
less favorable to participants than the terms of the Defined Contribution Plan
and its associated trust in effect as of the Closing Date; provided, however,
that the New Defined Contribution Plan need not constitute an employer match
feature as an ESOP. Buyer agrees as soon as practicable after the Closing Date
to apply for, and to take all actions necessary to secure, a determination
letter from the Internal Revenue Service to the effect that the New Defined
Contribution Plan is qualified under the applicable provisions of the Code.
Buyer shall recognize the Transferred Business Employees' service with Seller or
any Affiliate of Seller prior to the Closing Date for all purposes under the New
Defined Contribution Plan. As soon as practicable and administratively feasible
following the Closing Date, Seller shall cause to be transferred, from the
Defined Contribution Plans to the New Defined Contribution Plan and related
trust, assets in the form of cash or marketable securities equal to the
finalized account balances of the Transferred Business Employees who
participated in the Defined Contribution Plans, adjusted to reflect earnings
thereon from the Closing Date to the date of transfer, and fully vested. Such
transfer shall be effected in accordance with applicable law and regulations and
Buyer shall make or cause to be made, and Seller shall make or cause to be made,
any required filings in connection therewith. Buyer and Seller, or their
respective Affiliates may each require, as a condition to any such transfer,
satisfactory evidence of the qualified status of the Defined Contribution Plans
involved. In consideration of such transfer, Buyer or one of its Affiliates
shall assume all Liabilities to Transferred Business Employees under the Defined
Contribution Plans. Each of the parties hereto shall pay its own expenses in
connection with such transfer. Neither Buyer nor any of its Affiliates shall
assume any other Liabilities arising under or attributable to the Defined
Contribution Plans, the same to be retained or assumed by Seller. Buyer shall
indemnify Seller and hold Seller harmless from, any and all liability, claims,
costs and expenses (including reasonable attorney's fees) incurred by Seller by
reason of Buyer's failure to qualify the New Defined Contribution Plan and
related trust pursuant to the relevant provisions of the Code. Seller shall
indemnify Buyer with respect to, and hold Buyer harmless from, any and all
liability, claims, costs and expenses (including reasonable attorney's fees)
incurred by Buyer by reason of the failure of the Defined Contribution Plans and
related trusts to be properly qualified pursuant to the relevant provisions of
the Code.
SECTION 8.10 Multiemployer Plans. Buyer shall assume Seller's obligation
to contribute to each of Seller's Multiemployer Plans applicable to the
Business. With respect to those Multiemployer Plans applicable to Transferred
Hourly Employees, (a) Buyer shall contribute substantially the same number of
contribution base units for which the Business had an obligation to contribute
with respect to the Transferred Hourly Employees under the applicable collective
bargaining agreement immediately prior to the Closing, (b) Buyer shall furnish
bonds and/or escrows, or shall obtain a waiver of any requirements to furnish
bonds and/or escrows or shall comply with alternatives acceptable to any
Seller's Multiemployer Plans, in order to ensure compliance with the terms of
Section 4204 of ERISA and the regulations thereunder, (c) in the event Buyer
incurs a complete or partial withdrawal (as defined in Sections 4203 and 4205 of
ERISA) with respect to any of Seller's Multiemployer Plans, Buyer shall cause
any resulting withdrawal liability to be timely paid and if such withdrawal
occurs within the first five plan years following the Closing Date, and Buyer
shall fail to pay such withdrawal liability in a timely manner to the relevant
Multiemployer Plan, Seller agrees it will be secondarily liable for such payment
as required by Section 4204 of ERISA and (d) Buyer shall notify each of Seller's
Multiemployer Plans of this transaction and, if applicable, satisfy such plan
that this transaction complies with the terms of Section 4204 of ERISA.
SECTION 8.11 WARN Act. In the event Buyer does not continue all the
operations of the Business and/or does not employ all employees of Seller after
the Closing Date, Buyer shall be liable and responsible for any notification
required to be provided under the Worker Adjusted and Retraining Notification
Act, and Buyer shall indemnify Seller for any claims arising out of any breach
of this covenant. Seller agrees to cooperate with Buyer in complying with any
WARN requirement that must be satisfied prior to the Closing Date.
SECTION 8.12 Transition Services. Seller and Buyer agree that for a period
of approximately twelve months after the Closing Date, certain transition
services will be needed by Buyer relating to testing, accounting, payroll,
benefit plan administration and other matters in order for Buyer to effectively
operate the Business. Seller agrees to make available its employees to provide
such services on an interim basis for a fee, pursuant to a separate Transition
Services Agreement which will be executed by Seller and Buyer before the Closing
Date and which will contain terms to be mutually agreed upon.
SECTION 8.13 No Third Party Beneficiaries. No provision of this Article
shall create any third party beneficiary or other rights in any employee or
former employee (including any beneficiary or dependent thereof) of Seller or of
any of its Affiliates in respect of continued employment (or resumed employment)
with either Buyer or the Business and no provision of this Article shall create
any such rights in any such persons in respect of any benefits that may be
provided, directly or indirectly, under any Plan or arrangement which may be
established by Buyer or any of its Affiliates.
ARTICLE 9
CONDITIONS TO CLOSING
SECTION 9.1 Conditions to Obligations of Each Party. The obligations of
each party to consummate the Closing are subject to the satisfaction of the
following conditions:
(a) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been terminated.
(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall (i) prohibit the consummation of the Closing
or (ii) restrain, prohibit or otherwise interfere with the effective operation
or enjoyment by Buyer of all or any material portion of the Business or the
Assets.
(c) The closing of the transactions contemplated by the ANC Purchase
Agreement and the LLC Agreement (including without limitation delivery of the
Parent Sideletter (as defined in the LLC Agreement)) shall have occurred
simultaneously and such agreements shall be in full force and effect.
SECTION 9.2 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a) (i) Seller and Ball shall have performed in all material respects all
of their obligations hereunder required to be performed by them on or prior to
the Closing Date, (ii) the representations and warranties of Seller and Ball
contained in this Agreement and in any certificate or other writing delivered by
Seller or Ball pursuant hereto, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, shall be
true in all material respects at and as of the Closing Date, as if made at and
as of such date (other than the representation and warranty set forth in Section
3.13(c), which shall only be made as of the date of this Agreement) and (iii)
Buyer shall have received a certificate signed by the President of each of
Seller and Ball to the foregoing effect.
(b) Buyer shall have received an opinion of Skadden, Arps, Slate, Meagher
& Flom, counsel to Seller and Ball, dated the Closing Date, in form and
substance reasonably satisfactory to Buyer. In rendering such opinion, such
counsel may rely (i) upon certificates of public officers, (ii) as to matters
governed by the laws of jurisdictions other than the State of New York, the
General Corporation Law of the State of Delaware or the federal laws of the
United States of America, upon opinions of counsel reasonably satisfactory to
Buyer, copies of which shall be contemporaneously delivered to Buyer, and (iii)
as to matters of fact, upon certificates of officers of Seller and Ball.
(c) Each of the Ancillary Agreements shall have been executed and
delivered by the parties thereto other than Buyer and assuming due execution and
delivery by Buyer, each such Ancillary Agreement shall be in full force and
effect.
(d) Seller shall have received all Required Consents and all consents,
authorizations or approvals from the governmental agencies referred to in
Section 3.3, in each case in form and substance reasonably satisfactory to
Buyer, and no such consent, authorization or approval shall have been revoked.
(e) Buyer shall have obtained at its election and its sole cost an ALTA
extended coverage form of owner's title insurance policy, or in the case of
leased, plant Real Property a leasehold owner's title insurance policy, or the
local equivalent in the jurisdiction where such Real Property is located, or a
binder to issue the same, dated the Closing Date, insuring or committing to
insure, at ordinary premium rates, title to the Real Property in question and
the easements appurtenant thereto and necessary for the use thereof, in each
case free and clear of Liens except the Permitted Liens, such policy or binder
to be issued by a responsible title insurance company selected by Buyer, to be
in an amount reasonably satisfactory to Buyer, to be in form and substance and
include such endorsements and affirmative coverages (including without
limitation coverage over general exceptions, survey coverage, contiguity
endorsement (if applicable), location endorsement, subdivision endorsement,
zoning endorsement, tie-in endorsement and an endorsement that Real Estate Tax
assessments do not include other properties, in each case to the extent
available in the applicable jurisdiction) reasonably satisfactory to Buyer, and
to be reinsured by reinsurers, in which amounts and under reinsurance agreements
reasonably satisfactory to Buyer. The cost of any such policy, binder or
equivalent and any surveys, opinions, searches or other materials, information
or title "proofs" necessary to obtain the same shall be borne solely by Buyer.
In addition, the election of Buyer not to obtain any such policy, binder or
equivalent or the failure by Buyer to obtain the same due to Buyer's election or
failure to bear the cost of any such surveys, opinions, searches or other
materials, information or title "proofs" (which are not in Seller's possession
or control and made available to Buyer) shall not constitute an unfulfilled
condition to Buyer's obligation to consummate the Closing. Seller shall provide
Buyer and its title insurance company with surveys, opinions, searches,
abstracts, materials, information and other "proofs" which are currently in its
possession or control and without incurring any expense charged by a third party
that is not borne by Buyer. In addition, Seller shall provide Buyer's title
insurance company such title "proofs", affidavits, "gap" and other reasonable
indemnities as may be reasonably requested by such title insurance company and
which are reasonably acceptable to Seller and contain such qualifications,
limitations, conditions and exclusions therein as are reasonably acceptable to
Seller.
(f) The Net Financial Indebtedness of the Business (excluding Madera)
shall be zero and the Net Financial Indebtedness of Madera shall be zero.
(g) Since the Balance Sheet Date there shall not have been any event,
change or development involving the Business which has had, or which is
reasonably likely to have, a Material Adverse Effect.
(h) No proceeding challenging this Agreement or seeking to restrain or
prohibit the ownership or operation by Buyer or any of its Affiliates of all or
any material portion of the Assets or the Business or to compel Buyer or any of
its Affiliates to dispose of all or any material portion of the Business or
Assets shall have been instituted by any Person and be pending before any court,
arbitrator or governmental body, agency or official.
(i) All receivables, liabilities and loans owing between Seller, on the
one hand, and any of its Affiliates (including without limitation Madera), on
the other hand, shall have been settled and repaid, other than any differences
between estimates of such amounts as of the Closing Date and actual amounts
reflected on the Final Balance Sheet or the Madera Final Balance Sheet, which
differences will be settled pursuant to Section 2.9.
(j) Buyer shall have received all documents it may reasonably request
relating to the existence of Seller and Ball and the authority of Seller and
Ball for entering into and the validity of, this Agreement and the Ancillary
Agreements, and any other matters relevant hereto or thereto, all in form and
substance reasonably satisfactory to Buyer.
SECTION 9.3 Conditions to Obligations of Seller and Ball. The obligations
of Seller and Ball to consummate the Closing are subject to the satisfaction of
the following further conditions:
(a) (i) Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the Closing
Date, (ii) the representations and warranties of Buyer contained in this
Agreement and in any certificate or other writing delivered by Buyer pursuant
hereto, disregarding all qualifications and exceptions contained therein
relating to materiality, shall be true in all material respects at and as of the
Closing Date, as if made at and as of such date and (iii) Seller shall have
received a certificate signed by the Chief Executive Officer of Buyer to the
foregoing effect.
(b) Each of the Ancillary Agreements shall have been executed and
delivered by the parties thereto other than Seller or Ball and, assuming due
execution and delivery thereof by Seller and Ball, each such Ancillary Agreement
shall be in full force and effect.
(c) Seller and Ball shall have received all documents they may reasonably
request relating to the existence of Buyer and the authority of Buyer for
entering into and the validity of this Agreement and the Ancillary Agreements
and any other matters relevant hereto or thereto, all in form and substance
reasonably satisfactory to Seller and Ball.
ARTICLE 10
SURVIVAL; INDEMNIFICATION
SECTION 10.1 Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing
until the second anniversary of the Closing Date or (i) in the case of the
representations and warranties contained in Article 7, until expiration of the
applicable statutory period of limitations (giving effect to any waiver,
mitigation or extension thereof), (ii) in the case of Section 3.23, until the
eighth anniversary of the Closing Date and (iii) in the case of Section 3.12,
indefinitely. The covenants and agreements to be performed hereunder (including
without limitation those set forth in Article 2) shall remain in full force and
effect in accordance with their terms (or, if no survival period is specified,
indefinitely); provided that the indemnification obligation of Seller and Ball
pursuant to Section 10.2(a)(iv) shall survive the Closing until the eighth
anniversary of the Closing Date. Notwithstanding the preceding two sentences,
any representation, warranty, covenant or agreement in respect of which
indemnity may be sought under this Agreement shall survive the time at which it
would otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy thereof giving rise to such right to indemnity shall have been given
to the party against whom such indemnity may be sought prior to such time.
SECTION 10.2 Indemnification. (a) Seller and Ball, on a joint and several
basis, hereby indemnify Buyer and its Affiliates against and agree to hold each
of them harmless from any and all damage, loss, liability and expense (including
without limitation reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding,
including any expenses incurred in connection with the enforcement of rights of
any party pursuant to this Agreement) (collectively, "Loss") incurred or
suffered by Buyer or any of its Affiliates arising out of:
(i) any misrepresentation or breach of warranty made by Seller or Ball
pursuant to this Agreement, disregarding all qualifications and exceptions
contained therein relating to knowledge (except as used in Section 3.14),
materiality or Material Adverse Effect;
(ii) any breach of any covenant or agreement to be performed by Seller
or Ball pursuant to this Agreement;
(iii)the failure of Seller or Ball to perform their obligations with
respect to any Excluded Liability; and
(iv) any Environmental Liabilities;
provided that Seller and Ball shall not be liable (i) under this Section 10.2(a)
with respect to any individual item of Loss, unless such item exceeds $50,000
and (ii) under Section 10.2(a)(i) (other than in connection with a
misrepresentation or breach of Section 7.2) or 10.2(a)(iv) unless the aggregate
amount of Loss with respect to all matters referred to in Section 10.2(a)(i) or
10.2(a)(iv) exceeds $3,000,000 and then only the extent of such excess. Buyer
and its Affiliates shall not be entitled to indemnification pursuant to this
Section 10.2(a) with respect to any Loss to the extent that such Loss has been
reimbursed pursuant to Section 2.9. Buyer and its Affiliates shall not be
entitled to indemnification pursuant to Section 10.2(a)(iv) with respect to any
Loss to the extent that Buyer and its Affiliates have been indemnified for such
Loss pursuant to Section 10.2(a)(i).
(b) Buyer hereby indemnifies Seller, Ball and their respective Affiliates
against and agrees to hold each of them harmless from any and all Loss incurred
or suffered by Seller, Ball or any of such Affiliates arising out of:
(i) any misrepresentation or breach of warranty made by Buyer pursuant
to this Agreement, disregarding all qualifications and exceptions contained
therein relating to knowledge, materiality or Material Adverse Effect;
(ii) any breach of covenant or agreement to be performed by Buyer
pursuant to this Agreement;
(iii)the failure of Buyer to perform its obligations with respect to
any Assumed Liability; and
(iv) the conduct of the Business by Buyer following the Closing;
provided that Buyer shall not be liable (i) under this Section 10.2(b) with
respect to any individual item of Loss, unless such item exceeds $50,000 and
(ii) under Section 10.2(b)(i) unless the aggregate amount of Loss with respect
to all matters referred to in Section 10.2(b)(i) exceeds $3,000,000 and then
only the extent of such excess.
SECTION 10.3 Procedures; Exclusivity. (a) The party seeking
indemnification under Section 10.2 (the "Indemnified Party") shall give prompt
written notice to the party against whom indemnity is sought (the "Indemnifying
Party") of any claim, assertion, event or proceeding of which such Indemnified
Party has knowledge concerning any Loss as to which such Indemnified Party may
request indemnification under such Section or any Loss as to which the
$3,000,000 amount referred to in the provisos to Sections 10.2(a) and 10.2(b)
may be applied; provided that the failure to give such notice shall not relieve
the Indemnifying Party from any liability under Section 10.2, except to the
extent that the Indemnifying Party has been prejudiced by such failure. With
respect to any such claim or proceeding by or in respect of a third party, the
Indemnifying Party shall have the right to direct, through counsel of its own
choosing, reasonably satisfactory to the Indemnified Party, the defense or
settlement thereof at its own expense. If the Indemnifying Party elects to
assume the defense of any such claim or proceeding, the Indemnifying Party
thereby waives, except to the extent such right is expressly reserved by the
Indemnifying Party, its right to contest its obligation to indemnify the
Indemnified Party pursuant to this Section with respect to such claim or
proceeding and the Indemnified Party may participate in such defense, but in
such case the expenses of the Indemnified Party shall be paid by the Indemnified
Party; provided that the fees and expenses of such Indemnified Party's counsel
shall be borne by the Indemnifying Party if representation of both parties would
be inappropriate due to actual or potential differing interests between them.
The Indemnified Party shall provide the Indemnifying Party with reasonable
access to its records and personnel relating to any such claim, assertion, event
or proceeding during normal business hours and shall otherwise cooperate with
the Indemnifying Party in the defense or settlement thereof, and the
Indemnifying Party shall reimburse the Indemnified Party for all of its
reasonable out-of-pocket expenses in connection therewith. Upon assumption of
the defense of any such claim or proceeding by the Indemnifying Party, the
Indemnified Party shall not pay, or permit to be paid, any part of any claim or
demand arising from such asserted liability for so long as the Indemnifying
Party is diligently defending such claim or demand and has posted any required
appeal bonds in connection therewith, unless the Indemnifying Party consents in
writing to such payment or unless a final judgment from which no appeal may be
taken by or on behalf of the Indemnifying Party is entered against the
Indemnified Party for such liability. No such third party claim may be settled
by the Indemnified Party without the written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. Any such settlement shall
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release of the Indemnified Party from
all liability in respect of such claim. If the Indemnifying Party shall fail to
promptly defend or fail to promptly prosecute or withdraws from such defense,
the Indemnified Party shall have the right to undertake the defense or
settlement thereof, at the Indemnifying Party's expense. If the Indemnified
Party assumes the defense of any such claim or proceeding pursuant to this
Section and proposes to settle such claim or proceeding prior to a final
judgment thereon or to forego any appeal with respect thereto, then the
Indemnified Party shall give the Indemnifying Party prompt written notice
thereof and the Indemnifying Party shall have the right to participate in the
settlement or assume or reassume the defense of such claim or proceeding.
Payments pursuant to Section 10.2 shall be limited to the amount of any
liability or damage that remains after deducting therefrom any net Tax benefit
to the Indemnified Party arising from the insurance proceeds and any incidence
or payment of the liability or damage and any indemnity, contribution or other
similar payment recovered by the Indemnified Party from any third party with
respect thereto. A Tax benefit will be considered to be recognized by the
Indemnified Party for purposes of this Section if the Indemnified Party is
entitled to a current deduction (for Tax purposes) with respect to an item
arising from the incidence or payment of the liability or damage and shall be
deemed to be recognized in the tax period in which the indemnity payment occurs,
and the amount of the Tax benefit shall be determined by applying the then
applicable effective tax rate of the Indemnified Party after any deductions or
other allowances reportable with respect to a payment hereunder.
(b) After the Closing, Section 10.2 will provide the exclusive remedy for
any claim relating to the subject matter of this Agreement (other than any claim
for fraud), except as otherwise provided in Section 12.9.
ARTICLE 11
TERMINATION
SECTION 11.1 Grounds for Termination. This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual written agreement of Seller and Buyer;
(b) by either Seller or Buyer if the Closing shall not have been
consummated on or before December 31, 1995;
(c) by either Seller or Buyer if there shall be any law or regulation that
makes the consummation of the transactions contemplated hereby illegal or
otherwise prohibited or if consummation of the transactions contemplated hereby
would violate any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction; or
(d) by either Seller or Buyer if the ANC Asset Purchase Agreement is
terminated.
The party desiring to terminate this Agreement pursuant to clauses (b) or
(c) shall give notice of such termination to the other parties.
SECTION 11.2 Effect of Termination. If this Agreement is terminated as
permitted by Section 11.1, such termination shall be without liability of any
party (or any stockholder, director, officer, employee, agent, member,
consultant or representative of such party) to the other parties to this
Agreement; provided that if such termination shall result from the willful and
deliberate failure of any party to fulfill a condition to the performance of the
obligations of any other party, or the willful and deliberate failure to perform
a covenant of this Agreement or willful and deliberate breach by any party to
this Agreement of any representation or warranty or agreement contained herein,
such party shall be fully liable for any and all Losses incurred or suffered by
the other parties as a result of such failure or breach. The provisions of
Section 6.1 shall survive any termination hereof pursuant to Section 11.1.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Buyer, to:
Foster Ball, L.L.C.
c/o Saint-Gobain Corporation
750 E. Swedesford Road
P.O. Box 860
Valley Forge, PA 19487-7087
Telecopy: (610) 341-7728
with copies to:
William L. Rosoff
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
Thomas A. Decker
Saint-Gobain Corporation
750 E. Swedesford Road
P.O. Box 860
Valley Forge, PA 19487-7087
Telecopy: (610) 341-7728
if to Seller or Ball, to:
R. David Hoover
Ball Corporation
Corporate Headquarters
345 South High Street
P.O. Box 2407
Muncie, Indiana 47305
Telecopy: (317) 747-6813
with a copy to:
Charles W. Mulaney, Jr.
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
Telecopy: (312) 407-0411
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is any day (a "working day") other than a
Saturday, Sunday or other day on which commercial banking institutions in the
place of receipt are authorized to close. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding working day in the place of receipt.
SECTION 12.2 Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement, or
in the case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
SECTION 12.3 Records. (a) Buyer shall retain for such period as may be
prescribed by law, but, except as otherwise provided herein, in any event not
less than three years from the Closing, the books and records of Seller
delivered to Buyer at the Closing.
(b) Seller shall retain for such period as may be prescribed by law, but,
except as otherwise provided herein, in any event not less than three years from
the Closing, the originals of all books, records and other documents of which
Seller turned over to Buyer copies at the Closing and, before disposing of any
such original documents, shall give Buyer reasonable written notice that it
proposes to dispose of such documents; and if Buyer so elects, upon receipt of
such notice, Seller will deliver such original documents to Buyer.
SECTION 12.4 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
SECTION 12.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state.
SECTION 12.6 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 12.7 Entire Agreement; Third Party Beneficiaries. This Agreement,
together with the Ancillary Agreements and the Confidentiality Agreements,
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement. Neither this Agreement nor any provision hereof is intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
SECTION 12.8 Bulk Sales Laws. Each party hereto hereby waives compliance
by Seller with the provisions of the "bulk sales", "bulk transfer" or similar
laws of any state. Seller and Ball agree, on a joint and several basis, to
indemnify and hold Buyer harmless against any and all claims, losses, damages,
liabilities (including Tax liabilities), costs and expenses incurred by Buyer or
any of its Affiliates as a result of any failure to comply with any such "bulk
sales", "bulk transfer" or similar laws.
SECTION 12.9 Specific Performance. Each party acknowledges and agrees that
remedies at law for a breach or threatened breach of any of the provisions of
this Agreement would be inadequate and, in recognition of this fact, the parties
agree that, in the event of such a breach or threatened breach, in addition to
any remedies at law, each party, without posting any bond, shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available.
SECTION 12.10 Disputes; Submission to Jurisdiction. (a) If any dispute or
controversy shall arise among the parties as to any matter arising out of or in
connection with the transactions contemplated by this Agreement or the Ancillary
Agreements, the parties shall attempt in good faith to resolve such controversy
by mutual agreement. If such dispute or controversy cannot be so resolved, it
shall be resolved solely by adjudication in accordance with the provisions of
Section 12.10(b).
(b) Any proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, the transactions contemplated by
this Agreement or the Ancillary Agreements shall be brought only in the United
States District Court for the Southern District of New York, or the courts of
the State of New York, and each of the parties hereto hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom
in any such proceeding) and irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding in any such court or that any such proceeding which
is brought in any such court has been brought in an inconvenient forum. Subject
to applicable law, process in any such proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing and subject to applicable law, each party
agrees that service of process on such party as provided in Section 12.1 shall
be deemed effective service of process on such party. Nothing herein shall
affect the right of any party to serve legal process in any other manner
permitted by law or at equity. WITH RESPECT TO ANY SUCH PROCEEDING IN ANY SUCH
COURT, EACH OF THE PARTIES IRREVOCABLY WAIVES AND RELEASES TO THE OTHER ITS
RIGHT TO A TRIAL BY JURY, AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN
ANY SUCH PROCEEDING.
SECTION 12.11 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BALL GLASS CONTAINER CORPORATION
By: /s/ R. David Hoover
Name:R. David Hoover
Title: Vice President
BALL CORPORATION
By: /s/ George A. Sissel
Name:George A. Sissel
Title: President and Chief Executive
Officer
By: /s/ R. David Hoover
Name:R. David Hoover
Title: Senior Vice President and Chief
Financial Officer
FOSTER BALL, L.L.C.
By: /s/ Claude Picot
Name:Claude Picot
Title: Chairman
The undersigned is executing and
delivering this Agreement solely for
the purpose of agreeing to the
provisions of Sections 2.6(c) and 6.6.
SAINT-GOBAIN CORPORATION
By: /s/ Thomas A. Decker
Name: Thomas A. Decker
Title: Executive Vice
President
Exhibit 2.2
FOSTER BALL, L.L.C.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
dated as of
June 26, 1995
among
SAINT-GOBAIN HOLDINGS I CORP.
BG HOLDINGS I, INC.
and
BG HOLDINGS II, INC.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions........................................ 1
ARTICLE 2
FORMATION AND PURPOSES OF THE COMPANY
SECTION 2.1. Formation of the Company........................... 17
SECTION 2.2. Name of the Company................................ 17
SECTION 2.3. Purpose of the Company............................. 17
SECTION 2.4. Office; Registered Agent........................... 17
SECTION 2.5. Term............................................... 17
SECTION 2.6. Title to Company Property.......................... 18
SECTION 2.7. Filing of Certificates............................. 18
ARTICLE 3
CAPITAL CONTRIBUTIONS
SECTION 3.1. General............................................ 18
SECTION 3.2. Capital Contributions.............................. 18
SECTION 3.3. Preferred Interests................................ 20
SECTION 3.4. No Return of or Income on Capital Contributions.... 22
ARTICLE 4
CAPITAL ACCOUNTS;
PREFERRED INTEREST ACCOUNTS AND ALLOCATIONS
SECTION 4.1. Capital Accounts; Preferred Interest Accounts;
Allocations........................................ 23
SECTION 4.2. Tax Allocations.................................... 24
ARTICLE 5
DISTRIBUTIONS
SECTION 5.1. Distributions...................................... 25
SECTION 5.2. Amounts Withheld................................... 27
SECTION 5.3. Distributions upon Dissolution..................... 27
ARTICLE 6
GOVERNANCE AND MANAGEMENT OF THE COMPANY
SECTION 6.1. Management by the Members.......................... 28
SECTION 6.2. Forum for Meetings; Composition of the Members
Committee; Voting Agents; Holding of Meetings...... 28
SECTION 6.3. Quorum; Manner of Acting; Adjournments............. 30
SECTION 6.4. Action by Written Consent.......................... 30
SECTION 6.5. Telephonic Meetings................................ 30
SECTION 6.6. Company Minutes.................................... 30
SECTION 6.7. Conflicts of Interest.............................. 31
SECTION 6.8. Officers and Employees............................. 31
SECTION 6.9. Actions Requiring Consent of Parties............... 32
SECTION 6.10. Budgets............................................ 34
SECTION 6.11. Authorization to Enter into Transaction Documents;
Ratification........................................35
SECTION 6.12. Certain Agreements of Members Committee............ 35
ARTICLE 7
FINANCIAL MATTERS; INFORMATION
SECTION 7.1. Provision of Financial Information................. 35
SECTION 7.2. Fiscal Year........................................ 35
SECTION 7.3. Books of Account................................... 36
SECTION 7.4. Financial Statements............................... 36
SECTION 7.5. Inspection Rights of Members....................... 37
ARTICLE 8
TAX MATTERS
SECTION 8.1. Partnership for Tax Purposes....................... 38
SECTION 8.2. Tax Returns........................................ 38
SECTION 8.3. Tax Elections...................................... 38
SECTION 8.4. Tax Matters Partner................................ 39
ARTICLE 9
CERTAIN COVENANTS OF THE MEMBERS
SECTION 9.1. Confidentiality.................................... 39
SECTION 9.2. Noncompetition..................................... 40
SECTION 9.3. SG Guaranty........................................ 41
SECTION 9.4. Certain Activities................................. 42
ARTICLE 10
TRANSFER OF INTERESTS; EXIT RIGHTS
SECTION 10.1. General Restrictions on Transfer................... 42
SECTION 10.2. Certain Permitted Transfers........................ 42
SECTION 10.3. Right of First Refusal with Respect to SG Interests 42
SECTION 10.4. Tag-along Rights................................... 44
SECTION 10.5. Saint-Gobain Purchase Rights....................... 46
SECTION 10.6. Ball Sale Rights................................... 47
SECTION 10.7. Adjustment Payment................................. 48
SECTION 10.8. Calculation of Purchase Price...................... 48
SECTION 10.9. Approvals.......................................... 49
SECTION 10.10. Recognition of Transfer of Member Interests........ 50
ARTICLE 11
REGISTRATION RIGHTS
SECTION 11.1. Definitions........................................ 51
SECTION 11.2. Demand Registration................................ 51
SECTION 11.3. Price Range........................................ 52
SECTION 11.4. Purchase of Ball's Interests....................... 53
SECTION 11.5. Termination of Provisions.......................... 53
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
SECTION 12.1. Representations and Warranties of the SG Members... 54
SECTION 12.2. Representations and Warranties of the Ball Members. 55
ARTICLE 13
CLOSING; CLOSING CONDITIONS
SECTION 13.1. Closing............................................ 56
SECTION 13.2. Conditions to the Obligation of Each Member........ 56
SECTION 13.3. Conditions to the Obligation of Each SG Member..... 57
SECTION 13.4. Conditions to the Obligation of Each Ball Member... 57
ARTICLE 14
LIABILITY; EXCULPATION; INDEMNIFICATION
SECTION 14.1. Liability for Debts of the Company; Limited
Liability.......................................... 58
SECTION 14.2. Exculpation........................................ 58
SECTION 14.3. Indemnification.................................... 59
SECTION 14.4. Procedures......................................... 59
SECTION 14.5. Non-Exclusive Remedy............................... 61
SECTION 14.6. Continuing Provisions.............................. 61
ARTICLE 15
DISSOLUTION AND WINDING UP; RESIGNATION OF A MEMBER
SECTION 15.1. Dissolution Events................................. 61
SECTION 15.2. Winding Up......................................... 62
SECTION 15.3. Distribution Upon Dissolution of the Company....... 62
SECTION 15.4. Claims of the Members.............................. 63
SECTION 15.5. No Resignations by Members......................... 63
ARTICLE 16
MISCELLANEOUS
SECTION 16.1. Notices............................................ 63
SECTION 16.2. Amendments and Waivers............................. 65
SECTION 16.3. Status of Parents.................................. 65
SECTION 16.4. Successors and Assigns............................. 65
SECTION 16.5. Governing Law; Severability........................ 66
SECTION 16.6. Disputes; Submission to Jurisdiction............... 66
SECTION 16.7. Counterparts....................................... 67
SECTION 16.8. Further Assurances................................. 67
SECTION 16.9. Entire Agreement................................... 67
SECTION 16.10. Headings........................................... 68
ANNEXES
ANNEX 3.2(c) Closing Capital Contributions
ANNEX 3.3(f) Conversion Procedures
<PAGE>
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
FOSTER BALL, L.L.C.
AMENDED AND RESTATED AGREEMENT dated as of June 26, 1995 among
Saint-Gobain Holdings I Corp., a Delaware corporation ("SGH"), BG Holdings I,
Inc., a Delaware corporation ("BGHI"), and BG Holdings, II, Inc., a Delaware
corporation, ("BGHII"), each in its respective capacity as a Member (as
hereinafter defined).
W I T N E S S E T H
WHEREAS, Foster Ball, L.L.C. (the "Company"), Ball Parent and Ball
Glass Container Corporation will enter into an Asset Purchase Agreement (the
"Ball Purchase Agreement") pursuant to which the Company will purchase
substantially all of the glass bottle and jar business of Ball Glass Container
Corporation;
WHEREAS, the Company and American National Can Company ("ANC") will
enter into an Asset Purchase Agreement (the "ANC Purchase Agreement") pursuant
to which the Company will purchase substantially all of the glass bottle and jar
business of the Foster Forbes division of ANC; and
WHEREAS, in connection with the consummation of the transactions
contemplated by the Ball Purchase Agreement and the ANC Purchase Agreement, the
parties wish to associate themselves as members of the Company and to form the
Company as a limited liability company under the laws of the State of Delaware
and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. (a) As used herein, the following terms
have the following meanings:
"Actual Value" means, if the Tropicana Call Right is exercised in
2003, or if Tropicana is terminated on or prior to January 25, 2003, the actual
exit value of the Company's ownership interest in Tropicana, which actual value
shall be calculated at the time of such exercise or termination, as the case may
be, on the basis of the aggregate amounts paid or payable to the Company in
connection with such exercise or termination plus the amount of dividends and
distributions actually received by or credited to the Company from Tropicana
following the date of the purchase of the interests pursuant to Article 10 to
the date of termination or exercise.
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person; provided
that, for purposes of this Agreement, (i) the Company shall not be treated as an
Affiliate of any Member or such Member's Affiliates and (ii) no Member or its
Affiliates shall be treated as an Affiliate of the Company or as an Affiliate of
any other Member or such other Member's Affiliates solely by reason of its
ownership interest in the Company. For the purpose of this definition, the term
"control" (including its correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Limited Liability
Company Agreement of the Company, as amended, modified, supplemented or restated
from time to time.
"Applicable Price Range" means the Initial Price Range, or, if a
Price Adjustment has occurred, the Adjusted Price Range.
"Average Working Capital Amount" means the sum of (i) the average
trade working capital (calculated consistent with the calculation of Base Trade
Working Capital and Madera Base Trade Working Capital under the Ball Purchase
Agreement) of the business acquired pursuant to the Ball Purchase Agreement for
the twelve full months ending immediately prior to the Closing Date, (ii) the
working capital of the business acquired pursuant to the ANC Purchase Agreement
as reflected on the final audited financial statements of such business as of
December 31, 1994 (as determined by the parties hereto to their mutual
satisfaction) and (iii) $12 million.
"Ball Members" means BGHI and BGHII and each other Member which is a
direct or indirect Subsidiary of Ball Parent.
"Ball Parent" means Ball Corporation.
"Benchmark Amount" means, at any time, the dollar amount equal to
the product of (i) the aggregate Ownership Percentage of the Ball Members at
such time and (ii) (A) the aggregate Capital Account balances and Preferred
Interest Account balances of all of the Members immediately following any
distribution or Capital Contribution contemplated by Section 5.1(c) or 3.2(d),
respectively, plus (B) the aggregate amount of all other Capital Contributions
and Preferred Contributions made by the Members, minus (C) amounts paid in
redemption of Preferred Interests pursuant to Section 3.3.
"Business" means the business of designing, developing,
manufacturing, marketing and selling glass bottles and jars (excluding perfume
and pharmaceutical bottles).
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banking institutions in New York City, New York are
authorized to close.
"Call Cycle" means, together, each First Call Period and the
successive Second Call Periods which immediately follow such First Call Period.
"Call Price" means, as of any date, the sum of (1) the product of
(A) the aggregate Ownership Percentage of the Ball Members on such date times
(B) (u) 50% of 7.4 times EBITA of the Company for the most recent fiscal year
for which audited financial statements of the Company are available, plus (v)
50% of 5 times EBITDA of the Company for the most recent fiscal year for which
audited financial statements of the Company are available, plus (w) the
aggregate purchase price paid (including the fair market value of all non-cash
consideration and the aggregate principal amount plus accrued interest of all
indebtedness assumed) in connection with any Recent Acquisition, minus (x) the
sum of (A) the average Net Financial Indebtedness (excluding Recent Acquisition
Indebtedness) of the Company outstanding during the 90-day period prior to the
receipt of the applicable Call Notice and (B) Recent Acquisition Indebtedness,
minus (y) the aggregate Preferred Interest Amount of all Members, plus (z) the
value of any ownership interest of the Company or any Subsidiary in any Person
that is not a consolidated Subsidiary determined by applying the Call Price
formula to such Person (substituting, for "(A) the aggregate Ownership
Percentage of the Ball Members on such date", "(A) the ownership percentage of
the Company or such Subsidiary in such Person"), plus (2) the aggregate
Preferred Interest Amounts of the Ball Members.
"Capital Contribution" means, with respect to any Member, the
aggregate amount of money contributed by such Member to the Company, including
without limitation any Preferred Contribution pursuant to Article 3 that has not
previously been redeemed.
"Capitalized Lease Obligations" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is or is required to be
classified and accounted as a capital lease obligation under GAAP, and, for the
purposes of this Agreement, the amount of such obligation at any date shall be
the capitalized amount thereof at such date, determined in accordance with GAAP.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to specific provisions of the Code include references to
corresponding provisions of successor law.
"Company" has the meaning set forth in the recitals hereto.
"Consolidated Interest Expense" of any Person means, for any period,
the aggregate interest expense in respect of Indebtedness (including
amortization of original issue discount and non-cash interest payments or
accruals) and amounts paid or credited as distributions on preferred stock or
preferred interests of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person for any period means the net
income (loss), after minority interests of third parties, of such Person and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (to the extent included in
calculating net income (loss)) (i) Extraordinary Charges and Credits, (ii) the
cumulative effect of a change in accounting principle, (iii) amounts paid as
dividends in cash on preferred stock of such Person and (iv) net income (loss)
of such Person and its Subsidiaries for such period in respect of any Person or
assets that constitutes a Recent Acquisition. For purposes of clauses (i)
through (iv), to the extent related to a Person less than 100% owned by the
Company, each amount excluded from Consolidated Net Income pursuant to the
foregoing definition shall be excluded only to the extent of such amount times
the Company's ownership percentage of such Person.
"Consolidated Net Worth" means at any date the consolidated members
equity of the Company and its Subsidiaries at such date.
"Debt Service Amounts" means all cash disbursements required or
permitted to be made by the Company for repayment of principal and payment of
interest and all other amounts payable under or in respect of (i) the Financing
Facilities or (ii) any other Indebtedness of the Company.
"Designated Date" means, with respect to any year, the later to
occur of (i) March 30 of such year and (ii) thirty days following the delivery
of the audited financial statements of the Company for the prior year.
"Drawdown" means a drawdown of cash contributions from Members
pursuant to a Drawdown Notice in accordance with Article 3.
"EBITA" means, with respect to any Person for any period,
Consolidated Net Income of such Person for such period (excluding that portion
of such Consolidated Net Income attributed to investments of such Person
accounted for using the equity or cost basis method), plus, in each case to the
extent deducted in determining such Consolidated Net Income of such Person for
such period (without duplication), (i) Consolidated Interest Expense of such
Person for such period, (ii) provisions for taxes based on or measured by net
income or capital of such Person or any Subsidiary of such Person with respect
to such period, determined on a consolidated basis for such Person and its
Subsidiaries, and (iii) amortization expense for such period, determined on a
consolidated basis for such Person and its Subsidiaries. For purposes of clauses
(i), (ii) and (iii), to the extent related to a Person less than 100% owned by
the Company, each amount added to Consolidated Net Income pursuant to the
foregoing definition shall be added only to the extent of such amount times the
Company's ownership percentage of such Person. "EBITA" shall be calculated on a
"molds expensed" basis (to the extent that molds expensed during such fiscal
year does not exceed 115% of molds expensed for the immediately preceding fiscal
year) and (y) amortization expense shall not be added to Consolidated Net Income
pursuant to clause (iii) above until such amortization expense exceeds $6
million, and then only to the extent of such excess.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period (excluding that portion
of such Consolidated Net Income attributed to investments of such Person
accounted for using the equity or cost basis method), plus, in each case to the
extent deducted in determining such Consolidated Net Income of such Person for
such period (without duplication), (i) Consolidated Interest Expense of such
Person for such period, (ii) provisions for taxes based on or measured by net
income or capital of such Person or any Subsidiary of such Person with respect
to such period, determined on a consolidated basis for such Person and its
Subsidiaries, and (iii) depreciation and amortization expense for such period,
determined on a consolidated basis for such Person and its Subsidiaries. For
purposes of clauses (i), (ii) and (iii), to the extent related to a Person less
than 100% owned by the Company, each amount added to Consolidated Net Income
pursuant to the foregoing definition shall be added only to the extent of such
amount times the Company's ownership percentage of such Person. "EBITDA" shall
be calculated on a "molds expensed" basis (to the extent that molds expensed
during such fiscal year does not exceed 115% of molds expensed for the
immediately preceding fiscal year).
"Escrow Agreement" means the Escrow Agreement, in form and substance
satisfactory to the parties, to be entered into between the Ball Members and the
SG Members in the absence of an election by the Ball Members to provide a Letter
of Credit pursuant to clause (ii) of Section 10.8(d), which Escrow Agreement, if
entered into, shall provide that (i) the funds deposited into escrow pursuant to
Section 10.8 shall not be released from escrow to the Ball Members prior to
January 25, 2003 and (ii) any amount so released shall be reduced by the amount
of any Adjustment Payment payable by the Ball Members to the SG Members pursuant
to Section 10.7.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Extraordinary Charges and Credits" means, with respect to any
Person for any period any individual, significant, unusual and non-recurring
charge or credit of such Person for such period that are not representative of
ordinary course operating earnings of such Person including without limitation
but by way of example, plant closings, business restructurings, litigation
settlements, casualty losses and dispositions of a business segment or product
line; provided that, with respect to any product liability or workers
compensation claim, no charge shall be deemed an "Extraordinary Charge" unless
such charge is in an amount in excess of $1,500,000, net of any insurance
recovery in respect thereof, in which case the full amount of such charge shall
be deemed an "Extraordinary Charge".
"Financing Facilities" means the bank and/or other debt financing
facilities, loans, leases and other arrangements entered into or to be entered
into by the Company in connection with obtaining financing for the operation of
the Company, including without limitation (i) one or more Loan Agreements to be
entered into between the Company and SG Parent or one or more of its
Subsidiaries, in form and substance satisfactory to each of the Members, and
(ii) instruments, notes, certificates, security documents, financing statements
and other documents entered into in connection with, or evidencing any
Indebtedness (or Lien securing payment of any Indebtedness) outstanding in
respect of, the Financing Facilities, including any amendments thereto and
modifications, restatements, waivers, extensions and renewals thereof and any
loan or other agreement extending the maturity of, providing additional
facilities under, increasing, refinancing or otherwise restructuring or
replacing all or any portion of such Indebtedness and other obligations or
facilities under any such agreements, instruments or other documents, in each
case entered into from time to time in accordance with the provisions of this
Agreement; provided that the Financing Facilities shall not include any loan or
other agreement or facility relating to Indebtedness between the Company and any
Subsidiary of the Company or between Subsidiaries of the Company.
"First Call Period" means the 180-day period commencing on the
Designated Date in 2001 and each 180-day period commencing on the Designated
Date each succeeding sixth year after 2001; provided that if a First Call Period
is scheduled to commence during the pendency of any Put Period (other than any
Put Period ending on a Designated Date on which such First Call Period is
scheduled to commence), such First Call Period shall instead commence in the
year following such Put Period.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time or, for purposes of determining the Put Price or
Call Price pursuant to Article 10, as in effect on the date hereof.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indebtedness" of any Person means (i) all indebtedness of such
Person for borrowed money, (ii) all indebtedness of such Person evidenced by
notes, bonds, debentures or other similar instruments and (iii) all Capitalized
Lease Obligations of such Person.
"Indemnified Losses" means any and all Losses incurred or suffered
by any Indemnified Person as a result of or arising from any Specified
Proceeding; provided that Indemnified Losses shall not include (x) any Specified
Losses or (y) any loss of profit or return on any Indemnified Person's direct or
indirect investment in the Company (including any diminution in the value
thereof).
"Indemnified Person" means each Member, each Affiliate and
Representative of such Member and each employee, officer, director, agent or
authorized representative of such Affiliate or Member.
"Interest" means, with respect to any Member, such Member's Ordinary
Interest and such Member's Preferred Interest, if any.
"Joint Venture Transactions" means the transactions contemplated by
the Transaction Documents.
"Leverage Ratio" means, for any year, the ratio of Net Financial
Indebtedness as of December 31 of such year to Consolidated Net Worth as of
December 31 of such year.
"License Agreement" means, collectively, one or more license or
sublicense agreements that may be entered into between the Company and Ball
Parent or its Affiliates, in form and substance satisfactory to the parties
hereto.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, or encumbrance in respect of such
property or asset. For the purposes of this Agreement, a Person shall be deemed
to own subject to a Lien any property or asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
property or asset.
"Losses" means any and all losses, claims, expenses, damages, costs
or liabilities arising from or in connection with or related to any Transaction
Documents or the Company's business or affairs.
"Member" means each Person that continues or is admitted as a member
of the Company on the date hereof as provided in Section 2.1, and each Person
that is admitted as a member of the Company after the date hereof in accordance
with the provisions of this Agreement, in each case in such Person's capacity as
a member of the Company. For purposes of the Delaware Act, the Members shall
constitute one class or group of members.
"Net Adjustment Amount" means the sum of (i) the amount of any
purchase price adjustment finally determined to be payable pursuant to Section
2.07 of the ANC Purchase Agreement, plus (ii) the amount of any adjustment
payment finally determined to be payable pursuant to Section 2.9 of the Ball
Purchase Agreement; provided that the amount of any adjustment referred to in
clause (i) above which results in an increase to the purchase price payable
under the ANC Purchase Agreement shall be a positive number for purposes hereof
and the amount of any such adjustment which result in a decrease to such
purchase price shall be a negative number for purposes hereof; and provided
further that the amount of any adjustment referred to in clause (ii) above
payable by the Company shall be a positive number for purposes hereof and the
amount of any such adjustment payable to the Company shall be a negative number
for purposes hereof.
"Net Financial Indebtedness" of any Person as of any date means (A)
for purposes of determining the Put Price or the Call Price pursuant to Article
10 and for purposes of Section 3.3(f), the (i) Indebtedness of such Person
outstanding at such date, plus (with respect to any charge) and minus (with
respect to any credit) (ii) the net present value using a discount rate of 9% of
the estimated future after-tax cash flows related to any reserve or asset
recorded in connection with an Extraordinary Charge or Credit of such Person,
minus (iii) cash and cash equivalents of such Person at such date or (B) for all
other purposes hereunder, (i) the Indebtedness of such Person outstanding at
such date, minus (ii) cash and cash equivalents of such Person at such date.
"Ordinary Interest" means, with respect to any Member, such Member's
limited liability company interest in the Company, other than any such interest
that is a Preferred Interest.
"Ownership Percentage" means, with respect to any Member at any
time, the percentage derived by dividing the aggregate amount of Capital
Contributions (excluding Preferred Contributions until such time as any
corresponding Preferred Interest is converted to an Ordinary Interest pursuant
to Section 3.3(e)) made by such Member as of such time by the aggregate amount
of Capital Contributions (excluding Preferred Contributions until such time as
any corresponding Preferred Interest is converted to an Ordinary Interest
pursuant to Section 3.3(e)) made by all Members as of such time, as such
Ownership Percentage may be adjusted from time to time pursuant to Section
3.3(f).
"Parent" means, except as provided in Section 10, SG Parent and Ball
Parent.
"Parent Sideletter" means, collectively, each of the Guaranties
executed by Compagnie de Saint-Gobain, SG Parent and Ball Parent as of the date
hereof.
"Person" means an individual, corporation, partnership, association,
trust, limited liability company or any other entity or organization, including
a government or political subdivision or an agency, unit or instrumentality
thereof.
"Preferred Interest" means, with respect to any Member, the limited
liability company interest in the Company to be received by such Member pursuant
to Section 3.2(e), with respect to which such Member is entitled to the
preferential and other rights specified in Section 3.3.
"Preferred Interest Amount" means the aggregate Preferred Interest
Accounts (plus any accrued Preferred Return that has not had a corresponding
allocation pursuant to Section 4.1(b)(i) or (ii)).
"Preferred Return" means a preferential return on Preferred
Interests equal to (i) in the case of an issuance of Preferred Interests
(including any Preferred Interests to be issued on a Delayed Contribution Date)
to the Ball Members, on the one hand, and the SG Members, on the other hand, pro
rata in accordance with their Ownership Percentages, a rate agreed to by the
Ball Members and the SG Members at the time of issuance or (ii) in the case of
any other issuance of Preferred Interests, the lowest compounded rate which
would be applicable in connection with an arms-length issuance by the Company to
third parties of a convertible debt security with a two-year maturity, assuming
that such indebtedness is not guaranteed by Compagnie de Saint-Gobain but the
outstanding indebtedness of the Company is provided, made available or
guaranteed by Compagnie de Saint-Gobain up to $645 million. Notwithstanding the
foregoing, if the Ball Members default on their obligation to purchase Preferred
Interests on a Delayed Contribution Date pursuant to the terms of Section 3.2,
at the election of the SG Members, such Preferred Interests (together with all
other Preferred Interests issued on the same date as such Preferred Interests)
may bear the Preferred Return set forth in clause (ii) above, which Preferred
Return shall be deemed to have accrued from the date such Preferred Interests
were issued.
"Prime Rate" means the rate of interest publicly announced from time
to time by Citibank, N.A. as its prime rate.
"Proceeding" means any suit, proceeding, action, arbitration,
investigation or claim by, in or before any court, arbitrator, administrative
tribunal, governmental body or agency or other forum.
"Public Offering" means any underwritten public offering of equity
securities (or securities convertible into equity securities) of SGH (or any
successor) pursuant to an effective registration statement under the Securities
Act other than pursuant to a registration statement on Form S-4 or Form S-8 or
any successor or similar form.
"Public Offering Call Price" means (i) in the event that the Ball
Members have requested, pursuant to Article 11, that SGH issue in a Public
Offering a number of securities the net proceeds of which are sufficient to
purchase all of the Interests then held by the Ball Members pursuant to Article
11, the product of (x) the number of such securities and (y) the price per share
equal to the mid-point of the Initial Price Range or, if a Price Adjustment has
occurred, at a price per share equal to 25% higher than the bottom of the
Adjusted Price Range or (ii) in the event that the Ball Members have requested,
pursuant to Article 11, that SGH issue in a Public Offering a number of
securities the proceeds of which are not sufficient to purchase pursuant to
Article 11 all of the Interests then held by the Ball Members (or in the event
that, following a request to have a number of securities the proceeds of which
are sufficient to purchase all of the Interests of the Ball Members be so
included, the size of the offering is reduced) the sum of "A" plus "B", where
"A" equals the product of (i) the number of securities of SGH included in such
Public Offering and (ii) the price per share equal to the bottom of the
Applicable Price Range and "B" equals an amount equal to the Put Price; provided
that for purposes of calculating the Put Price pursuant to this definition, the
Ownership Percentage of the Ball Members shall be equal to the percentage of all
outstanding Ordinary Interests which are not purchased for cash pursuant to
Article 11.
"Put Commencement Year" means 1998 and each succeeding sixth year
thereafter; provided that if a Put Commencement Year is scheduled to occur
during the pendency of any Call Cycle, such Put Commencement Year instead shall
be the year following the year in which such Call Cycle ends.
"Put Period" means the period commencing on the Designated Date in
each Put Commencement Year and ending on the Designated Date in the year three
years following such Put Commencement Year.
"Put Price" means, as of any date, the sum of (1) the product of (A)
the aggregate Ownership Percentage of the Ball Members on such date times (B)
(u) 50% of 7 times EBITA of the Company for the most recent fiscal year for
which audited financial statements of the Company are available, plus (v) 50% of
4.5 times EBITDA of the Company for the most recent fiscal year for which
audited financial statements of the Company are available, plus (w) the
aggregate purchase price paid (including the fair market value of all non-cash
consideration and the aggregate principal amount plus accrued interest of all
indebtedness assumed) in connection with any Recent Acquisition, minus (x) the
sum of (A) the average Net Financial Indebtedness (excluding Recent Acquisition
Indebtedness) of the Company, outstanding during the 90-day period prior to
receipt of the applicable Put Notice and (B) Recent Acquisition Indebtedness,
minus (y) the aggregate Preferred Interest Amounts of all Members, plus (z) the
value of any ownership interest of the Company or any Subsidiary in any Person
that is not a consolidated Subsidiary determined by applying the Put Price
formula to such Person (substituting, for "(A) the aggregate Ownership
Percentage of the Ball Members on such date", "(A) by the ownership percentage
of the Company or such Subsidiary in such Person"), plus (2) the aggregate
Preferred Interest Amount of the Ball Members. For purposes of this definition,
audited financial statements for any fiscal year shall not be deemed to be
available until at least 45 days following the end of such fiscal year.
"Recent Acquisition" means, as of any date or with respect to any
date of determination, the acquisition (by merger or otherwise) of any Person or
assets constituting all or substantially all of a business or operating unit
acquired by the Company (by merger or otherwise) during the period commencing on
the first day of the most recent fiscal year for which audited financial
statements are available and ending on such date.
"Recent Acquisition Indebtedness" means, (i) with respect to any
calculation of the Put Price or the Call Price, Indebtedness incurred or assumed
during the 90-day period prior to the receipt of the applicable Put Notice or
Call Notice, as the case may be, in respect of a Recent Acquisition that is
consummated during the 90-day period prior to the receipt of the applicable Put
Notice or Call Notice, as the case may be, and (ii) for purposes of Section
3.3(f), as of any date, Indebtedness incurred or assumed during the 90-day
period prior to such date in respect of a Recent Acquisition that is consummated
during the 90-day period prior to such date.
"Regulations" means the Treasury Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are in effect from
time to time. References to specific provisions of the Regulations include
references to corresponding provisions of successor regulations.
"Regulatory Approvals" means, with respect to any proposed
transaction, all United States and foreign governmental and regulatory
authorizations, approvals, consents and clearances required by applicable law to
be obtained in connection with such transaction.
"Representative" means, with respect to any Member at any time, each
individual who has been appointed by such Member as of such time to serve as one
of such Member's representatives on the Members Committee.
"Second Call Period" means (i) the 180-day period commencing on the
Designated Date in 2002 and each 180-day period commencing on the Designated
Date in each succeeding sixth year after 2002; provided that, with respect to
each such period, either (x) a Call Blocking Notice was delivered during the
First Call Period immediately preceding such period or (y) a Call Notice was not
delivered during the First Call Period immediately preceding such period or (ii)
the 180-day period commencing on the Designated Date in each year immediately
following a year in which a Call Blocking Notice was delivered during the Second
Call Period in such year.
"Securities Act" means the Securities Act of 1933, as amended.
"Services Agreement" means the Services Agreement to be entered into
between the Company and Ball Parent or its Affiliates, in form and substance
satisfactory to the parties hereto.
"SG Members" means SGH and each other Member which is a direct or
indirect Subsidiary of SG Parent.
"SG Parent" means Saint-Gobain Corporation.
"Specified Losses" means, with respect to any Losses incurred by an
Indemnified Person, all such Losses arising from, in respect of or in connection
with any criminal conduct, intentional tortious conduct, willful misconduct,
gross negligence, fraud, violation of public policy or any material breach of
any of the terms of the Transaction Documents, in each case on the part of such
Indemnified Person or its Affiliates or any of their respective employees,
officers, directors, employers, agents or authorized representatives.
"Specified Proceeding" means a Proceeding conducted, brought or
threatened by a Person other than the Company or any Indemnified Person.
"Subsidiary" means, with respect to any Person, any 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 by such Person; provided that for
purposes of this Agreement (i) Tropicana, Madera Glass Company and Heye-America,
L.P. shall be deemed Subsidiaries of the Company and (ii) the Company shall not
be deemed a Subsidiary of any Member or its Affiliates.
"Taxable Income or Taxable Loss" means the taxable income or loss of
the Company for federal income tax purposes, determined in accordance with
Section 703(a) of the Code (and for this purpose, all items of income, gain,
loss or deduction required to be stated separately pursuant to Section 703(a)(1)
of the Code shall be included in taxable income or loss), increased by the
income and gain exempt from tax, and decreased by expenditures of the Company
described in Section 705(a)(2)(B) of the Code (including expenditures treated as
described in Section 705(a)(2)(B) of the Code under Treasury Regulation Section
1.704-1(b)(2)(iv)(i)). To the extent consistent with the foregoing, Taxable
Income and Taxable Loss shall be determined under the accrual method of
accounting and in accordance with GAAP.
"Third Party" means any Person other than (i) the Company, (ii) any
Member or any Affiliate of such Member, and (iii) any beneficial owner of 5% or
more of the capital stock of any Member or Affiliate of such Member.
"Transaction Documents" means this Agreement, the Escrow Agreement,
the License Agreement, the Services Agreement, the Parent Sideletter and the
Financing Facilities.
"Transfer" means any direct or indirect sale, transfer, exchange,
pledge, hypothecation, or other disposition, by operation of law or otherwise,
(i) by any Member to any Person (including an Affiliate of such Member but
excluding a wholly owned Subsidiary of such Member) of all or any portion of
such Member's Interest in the Company or (ii) by any Parent to any Person (other
than a wholly owned Subsidiary of such Parent) of all or any portion of such
Parent's direct or indirect ownership interest in a Member, and "Transfer", used
as a verb, has a corresponding meaning.
"Tropicana" means Tropicana Industrial Glass Company, a Delaware
general partnership.
"Tropicana Call Right" means the call right of the Tropicana Partner
in year 2003 pursuant to the terms of the Joint Venture Agreement between ANC
and Tropicana Partner.
"Tropicana Partner" means Tropicana Products, Inc.
"Tropicana Value" means that portion of the Put Price or the Call
Price, as the case may be, that is attributable to Tropicana based upon the
application of the formula used in calculating such price to Tropicana on a
stand-alone basis.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
<TABLE>
<CAPTION>
Term Section
- ------------------------------------------------ ----------
<S> <C>
AAA 16.6
Accounting Firm 10.8
Adjusted Price Range 11.3
Adjustment Payment 10.7
ANC Recitals
ANC Purchase Agreement Recitals
Annual Tax Amount 5.1
Ball Preferred Contribution 3.2
Ball Purchase Agreement Recitals
Call Blocking Notice 10.5
Call Notice 10.5
Capital Account 4.1
CEO 6.8
Closing 13.1
Closing Capital Contributions 3.2
Company Recitals
Competing Business 9.2
Delaware Act 2.1
Delayed Contribution Date 3.2
Delayed Payment Amount 3.2
Delivering Party 10.8
Determination Date 10.5
Disputing Parties 16.6
Dissolution Event 15.1
Distributable Amount 5.1
Drawdown Date 3.2
Drawdown Notice 3.2
Election Notice 3.2
federal tax rate 5.1
Foster Ball, L.L.C. 2.2
Information 9.1
Initial Price Range 11.3
local tax rate 5.1
Members Committee 6.2
Notice of Exercise 10.3
Offer 9.2
Offer Notice 10.3
Offer Price 10.3
Offered Interest 10.3
Offering Member 9.2
Original Drawdown Date 3.2
Preferred Contribution 3.2
Preferred Income Amount 5.1
Preferred Interest Account 4.1
Preferred Tax Amount 5.1
Price Adjustment 11.3
Proposed Offering 10.5
Put Notice 10.6
Receiving Party 10.8
Redemption Date 3.3
Redemption Price 3.3
Sale Date 10.4
Secretary 6.3
state tax rate 5.1
Tag-along Notice 10.4
Tag-along Notice Date 10.4
Tag-along Notice Period 10.4
Tag-along Offer 10.4
Tag-along Offer Notice 10.4
Tag-along Offer Price 10.4
Tag-along Offer Terms 10.4
Tag-along Purchaser 10.4
Tag-along Ratio 10.4
Tax Matters Partner 8.4
Third Party Offer Terms 10.3
transferee 10.10
transferor 10.10
Voting Agent 6.2
working day 16.1
</TABLE>
<PAGE>
(c) Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, and all accounting determinations hereunder shall
be made, in accordance with GAAP.
ARTICLE 2
FORMATION AND PURPOSES OF THE COMPANY
SECTION 2.1. Formation of the Company. Upon the execution of this
Agreement or a counterpart hereof by each of the parties hereto and the filing
of a Certificate of Formation with the State of Delaware, SGH and the Ball
Members hereby form and establish the Company under this Agreement and the
provisions of the Delaware Limited Liability Company Act, 6 Del. C. Section
Section 18-101 et seq. (as amended, and any successor to such statute, the
"Delaware Act"). Effective upon the execution hereof, the rights, duties and
liabilities of the Members shall be as provided in this Agreement and, except as
herein otherwise expressly provided, in the Delaware Act.
SECTION 2.2. Name of the Company. The name of the Company shall be
"Foster Ball, L.L.C.". The business of the Company shall be conducted under such
name or such other names (upon notice to all the Members) as the Members may
from time to time determine.
SECTION 2.3. Purpose of the Company. The Company is formed for the
object and purpose of, and the nature of the business to be conducted and
promoted by the Company is engaging in, any lawful act or activity for which
limited liability companies may be formed under the Delaware Act and engaging in
any and all activities necessary or incidental to the foregoing. In furtherance
of its purpose, (a) the Company shall have and may exercise all of the powers
now or hereafter conferred by Delaware law on limited liability companies formed
under the Delaware Act and (b) the Company shall have the power to do any and
all acts necessary, appropriate, proper, advisable, incidental or convenient to
or for the protection and benefit of the Company.
SECTION 2.4. Office; Registered Agent. (a) The Company's registered
agent and office in the State of Delaware shall be The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801.
(b) The business address of the Company will be such address as may
be designated by action of the Members.
SECTION 2.5. Term. The term of this Agreement shall commence on the
date hereof and the Company shall have a perpetual existence unless earlier
dissolved in accordance with the provisions of Article 15.
SECTION 2.6. Title to Company Property. All property of the Company,
whether real or personal, tangible or intangible, shall be owned by the Company
as an entity, and no Member, individually, shall have any direct ownership
interest in such property.
SECTION 2.7. Filing of Certificates. SGH is hereby designated as an
authorized person, within the meaning of the Delaware Act, to execute, deliver
and file, or to cause the execution, delivery and filing of, any amendments or
restatements of the certificate of formation of the Company and any other
certificates, notices, statements or other instruments (and any amendments or
restatements thereof) necessary or advisable for the formation of the Company or
the operation of the Company in all jurisdictions where the Company may elect to
do business.
ARTICLE 3
CAPITAL CONTRIBUTIONS
SECTION 3.1. General. The aggregate amount of Capital Contributions
made by any Member as of any time shall not be reduced by the aggregate amount
theretofore distributed (as a return of capital or otherwise) to such Member,
and amounts so distributed to such Member shall not be available for any future
Drawdown from such Member.
SECTION 3.2. Capital Contributions. (a) Each Member agrees to make
its Capital Contributions to the Company from time to time as hereinafter set
forth. The Company shall, as and when required pursuant to Section 3.2(d) (but
subject to Section 6.9 (j)) or 3.2(e), deliver to each Member a notice (a
"Drawdown Notice") setting forth the Capital Contribution required or permitted
to be made by such Member and the other Members at such time in accordance with
Section 3.2(d) or (e), as the case may be. Each Member shall make Capital
Contributions in such amounts and at such times as the Company shall specify in
the Drawdown Notices so delivered from time to time to such Member. All Capital
Contributions shall be paid to the Company in immediately available funds in
United States Dollars, by wire transfer to an account designated by the Company
prior to the close of business (New York City time) on the date (the "Drawdown
Date") specified in the applicable Drawdown Notice (which date shall not be less
than five Business Days following delivery of the Drawdown Notice) or, in the
case of Capital Contributions made pursuant to Section 3.2(c), on the Closing
Date.
(b) Immediately following the execution hereof, the Capital
Contributions and Ownership Percentages of the Members shall be as follows:
Capital Ownership
Member Contribution Percentage
SGH $580 58%
BGHI $210 21%
BGHII $210 21%
(c) At the Closing, SGH and the Ball Members shall make additional
capital contributions ("Closing Capital Contributions") in the amounts set forth
on Annex 3.2(c). Immediately following the making of the Closing Capital
Contributions, the aggregate Capital Contributions and Ownership Percentages of
the Members shall be as follows:
Capital Ownership
Member Contribution Percentage
SGH $249,400,000 58%
BGHI $ 90,300,000 21%
BGHII $ 90,300,000 21%
(d) Within five Business Days following the determination of the Net
Adjustment Amount, the Company shall deliver to each Member a Drawdown Notice
setting forth any additional Capital Contribution required to be made by such
Member pursuant to this Section 3.2(d). If the Net Adjustment Amount is a
positive number, (i) that portion of the Net Adjustment Amount representing a
net adjustment payment in excess of the Average Working Capital Amount resulting
from an increase in working capital shall be funded by the Company by borrowing
under the Financing Facility, and (ii) with respect to the remaining portion of
such Net Adjustment Amount (including that portion resulting from an increase in
working capital of less than or equal to the Average Working Capital Amount and
that portion representing a net adjustment payment other than in respect of
increases in working capital), the Members shall be required to make additional
Capital Contributions (which shall not be Preferred Contributions) in proportion
to their Ownership Percentages.
(e) If for any four consecutive fiscal quarters of the Company, the
Net Financial Indebtedness of the Company exceeds $620 million, the SG Members
shall have the right to cause the Company to deliver a Drawdown Notice to each
Member calling for additional Capital Contributions (each, a "Preferred
Contribution") to be made to the Company in an aggregate amount equal to the
excess of the average Net Financial Indebtedness for such four fiscal quarters
over $620 million in exchange for the issuance of Preferred Interests to the
contributing Members; provided that a Drawdown Notice may not be delivered
pursuant to this paragraph (e) more than once during any period of two
consecutive fiscal quarters. Except as otherwise provided below, any such
Preferred Contributions shall be made by the SG Members and, at the option of
the Ball Members exercisable by written notice (the "Election Notice") to the SG
Members delivered no later than two Business Days prior to the applicable
Drawdown Date, by the Ball Members pro rata (or in such lesser amount as the
Ball Members shall specify in such notice) with the SG Members in proportion to
their respective Ownership Percentages. If the Ball Members so elect to make a
Preferred Contribution pursuant to the foregoing sentence, such Preferred
Contribution (the "Ball Preferred Contribution") may be made on the Drawdown
Date or at the election of the Ball Members on a date (the "Delayed Contribution
Date") no later than six months following the Drawdown Date otherwise applicable
to such Preferred Contribution (the "Original Drawdown Date"), which Delayed
Contribution Date shall be set forth in the applicable Election Notice. If the
Ball Members elect to make a Ball Preferred Contribution on the Delayed
Contribution Date, the amount of Preferred Contribution to be made by the SG
Members on the Original Drawdown Date shall be increased by the amount of the
Ball Preferred Contribution, and the amount of Preferred Interests issued to the
SG Members shall be increased accordingly. On the Delayed Contribution Date, the
SG Members shall transfer to the Ball Members the portion of the Preferred
Interests representing the Ball Preferred Contribution plus any accrued
Preferred Return thereon in consideration for a payment by the Ball Members to
the SG Members of an amount in cash equal to the Ball Preferred Contribution,
together with interest thereon from the date of issuance of such Preferred
Interests to the Delayed Contribution Date at a rate that is equal to the sum of
(x) the rate set forth in clause (ii) of the definition of "Preferred Return" in
this Agreement and (y) 1%. On the Delayed Contribution Date, the portion of the
positive balance of the Preferred Interest Accounts of the SG Members
representing the Preferred Interests to be transferred to the Ball Members on
such date shall be deemed transferred, in respect of such Preferred Interests,
to the Preferred Interest Accounts of the Ball Members.
SECTION 3.3. Preferred Interests. (a) Each Member holding a
Preferred Interest shall be entitled to receive the Preferred Return with
respect thereto.
(b) The Preferred Return will accrue cumulatively on a daily basis
and be compounded annually from the date of issuance until the earlier to occur
of the Redemption Date or the conversion of the Preferred Interest to an
Ordinary Interest pursuant to Section 3.3(e).
(c) If, for two consecutive fiscal quarters of the Company, Net
Financial Indebtedness of the Company has been less than $620 million, the
Company shall make distributions to the Members in proportion to their
respective Preferred Interest Account balances (plus any accrued Preferred
Return that has not had a corresponding allocation pursuant to Section 4.1(b)(i)
or (ii)) of the Distributable Amount, if any, which distributions shall be
applied to the redemption of all or any portion of the Preferred Interests then
outstanding; provided that if more than one tranche of Preferred Interests has
been issued and remains outstanding (pursuant to multiple Drawdown Notices
delivered from time to time pursuant to Section 3.2(c)), the earliest issued
tranche of Preferred Interests shall be redeemed first. The redemption price
(the "Redemption Price") for such Preferred Interests (or portion thereof) shall
be equal to the amount of the Preferred Contribution made in connection with the
issuance of such Preferred Interests (or portion thereof) in cash, together with
the accrued Preferred Return (less any distributions with respect to the
Preferred Interests) thereon to such Redemption Date, without interest. If only
a portion of the Preferred Interests are redeemed pursuant to this Section 3.3,
the Company shall redeem all or part of the remaining Preferred Interests as
soon as the Company may effect such redemption consistent with the provisions of
this Section 3.3. The Company shall effect any redemption pursuant to Section
3.3 of only a portion of any tranche of the then outstanding Preferred Interests
pro rata according to the then outstanding amounts of the Preferred
Contributions made with respect to such tranche by each Member holding Preferred
Interests of such tranche.
(d) In the event the Company shall redeem the Preferred Interests,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 5 days prior to the redemption date (the "Redemption Date")
to each Member holding a Preferred Interest at such Member's address as the same
appears on the books of the Company; provided that neither the failure to give
such notice nor any defect therein shall affect the validity of the giving of
notice for the redemption of the Preferred Interests to be redeemed except as to
the Member holding a Preferred Interest to whom the Company has failed to give
said notice or except as to any Member whose notice was defective. Each such
notice shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii)
the portion of the Preferred Interests to be redeemed; and (iv) that the
Preferred Return on the Preferred Interests to be redeemed will cease to accrue
on such Redemption Date.
(e) Notwithstanding anything herein to the contrary, if the Company
has not delivered to the Members the notice of redemption of the Preferred
Interests referred to in Section 3.3(d) within twenty-four months following the
date of issuance of such Preferred Interests, either the SG Members or the Ball
Members may elect to cause the Company to convert all, but not less than all, of
such Preferred Interests outstanding for more than twenty-four months (including
such Preferred Interests held by all other Members) to Ordinary Interests;
provided that the electing Members hold Preferred Interests at the time of such
election. Any such election shall be made by delivery of written notice to the
Company and the other Members within 15 Business Days following such twenty-four
month anniversary. Such conversion shall be deemed to have been effected as of
the close of business on the date of such notice and the Member or Members
holding such Preferred Interests shall be deemed to have become the holders of
the Ordinary Interests represented thereby. At the time of such conversion, the
positive balance of the Preferred Interest Account of each Member holding a
Preferred Interest to be converted shall be deemed transferred, in respect of
the Preferred Interest so converted, to the Capital Account of such Member. The
Capital Accounts of the Members shall be adjusted at such time and in the manner
provided in Section 4.1(c).
(f) Upon any conversion of Preferred Interests pursuant to this
Section 3.3, the Ownership Percentage of each Member shall be adjusted in the
manner set forth on Annexes 3.3(f)-1 and 3.3(f)-2.
SECTION 3.4. No Return of or Income on Capital Contributions. (a)
Except as otherwise provided in this Agreement, no Member shall be permitted to
borrow, make an early withdrawal of, or demand or receive a return of any
portion of its Capital Contributions. Under circumstances requiring a return of
any Capital Contributions, no Member shall have the right to receive property
other than cash except as may be specifically provided herein.
(b) No Member shall receive any interest, salary or drawing with
respect to its Capital Contributions or its Capital Account or Preferred
Interest Account or for services rendered on behalf of the Company or otherwise
in its capacity as a Member, except as otherwise contemplated by the Transaction
Documents (including without limitation the Services Agreement).
ARTICLE 4
CAPITAL ACCOUNTS;
PREFERRED INTEREST ACCOUNTS AND ALLOCATIONS
SECTION 4.1. Capital Accounts; Preferred Interest Accounts;
Allocations. (a) A capital account (a "Capital Account") shall be established
for each Member on the books and records of the Company. The initial balance of
each Member's Capital Account shall give effect to the Capital Contributions
(other than Preferred Contributions) made by such Member as of the date hereof.
Each Member's Capital Account shall be increased by any allocations of Taxable
Income to the Capital Account of such Member pursuant to Section 4.1(b) to, and
by any additional Capital Contributions (other than Preferred Contributions)
hereunder by, that Member and to reflect any conversions of Preferred Interests
pursuant to Section 3.3(e), and shall be reduced by any allocations of Taxable
Loss and by any distributions (other than any distributions in respect of
Preferred Interest Accounts) to that Member. In addition to each Member's
Capital Account, the Company shall establish another account (the "Preferred
Interest Account") for each Member, which shall be increased by any Preferred
Contributions by that Member, by any Preferred Interests transferred to such
Member pursuant to Section 3.2(e) and by any allocations to the Preferred
Interest Account of such Member of Taxable Income pursuant to Section 4.1(b)(i)
and (ii) to that Member. The Preferred Interest Account shall be reduced by any
distributions made pursuant to Section 3.3(c) or 15.3(b) (in each case, other
than distributions with respect to the accrued Preferred Return that has not had
a corresponding allocation to the Preferred Interest Account pursuant to Section
4.1(b)(i) or (ii)), any transfers of Preferred Interests by such Member to any
other Member pursuant to Section 3.2(e) or any conversion of Preferred Interests
pursuant to Section 3.3(e).
(b) Except as otherwise provided herein, Taxable Income of the
Company for any year shall be allocated as follows: (i) first, to the Preferred
Interest Account (or Capital Account, in the case of any Member that has
converted all or a portion of its Preferred Interest to an Ordinary Interest
pursuant to Section 3.3(e) or has had all or a portion of its Preferred Interest
redeemed pursuant to Section 3.3(c)) of each Member in an amount equal to the
excess, if any, of the Preferred Return that has accrued with respect to such
Member's Preferred Interest (prior to any corresponding conversion or
redemption) for prior years (earliest years first) over the amount of Taxable
Income that previously has been allocated to such Member's Preferred Interest
Account (or Capital Account, as the case may be) with respect to such Preferred
Return under clause (i) or (ii) of this Section 4.1(b), (ii) second, any Taxable
Income for the year not allocated under clause (i) shall be allocated to the
Preferred Interest Account (or Capital Account, in the case of any Member that
converted all or a portion of its Preferred Interest to an Ordinary Interest
during such year or had all or a portion of its Preferred Interest redeemed
during such year) of each Member in an amount equal to the Preferred Return that
has accrued with respect to such Member's Preferred Interest (prior to any
corresponding conversion or redemption) for such year and (iii) third, any
remaining Taxable Income of the Company for the year not allocated under clause
(i) or (ii), or any Taxable Loss of the Company for the year, shall be allocated
to the Capital Accounts of the Members in proportion to their Ownership
Percentages.
(c) The Capital Accounts of each Member shall be adjusted, as
provided in this Section 4.1(c), immediately prior to the conversion of any
Preferred Interest pursuant to Section 3.3(e). Each Member's Capital Account
will be adjusted to be equal to (immediately prior to any such conversion):
(P x A) - B
WHERE
P = The Current Value, as defined in Step 1 of Annex 3.3(f)-1.
A = Such Member's Ownership Percentage in effect immediately
prior to such conversion.
B = In the case of any Member that has previously converted any
Preferred Interest to an Ordinary Interest pursuant to Section
3.3(e) or has previously had any Preferred Interest redeemed
pursuant to Section 3.3(c), an amount equal to the excess, if
any, of the Preferred Return that had accrued with respect to
such previously converted or redeemed Preferred Interest over
the Taxable Income that previously has been allocated to such
Member's Preferred Interest Account or Capital Account with
respect to such Preferred Interest pursuant to Section
4.1(b)(i) or (ii); and in the case of any other Member, zero.
SECTION 4.2. Tax Allocations. Except as otherwise provided herein or
required by the Code or the Regulations or applicable state law, Taxable Income,
Taxable Loss and any other items of the Company shall be allocated among the
Members for federal and state income tax purposes in the same proportions as
they share the corresponding items pursuant to Section 4.1.
ARTICLE 5
DISTRIBUTIONS
SECTION 5.1. Distributions. (a) If the Company shall have any
Taxable Income with respect to any fiscal year in which no Preferred Interests
were outstanding, the Company shall distribute to the Members in proportion to
their Ownership Percentages an amount (the "Annual Tax Amount") equal to the sum
of (A) the product of the Taxable Income of the Company and the highest marginal
local income tax rate for such fiscal year that would be imposed on the Company
if the Company were a corporation (the "local tax rate"), (B) the product of the
Taxable Income of the Company (which shall be reduced by any hypothetical
deduction available to the Company with respect to the local income tax deemed
to be imposed on the Company under clause (A)) and the highest marginal state
income tax rate for such fiscal year that would be imposed on the Company if the
Company were a corporation (the "state tax rate"), (C) the product of the
Taxable Income of the Company (which shall be reduced by the sum of the amounts
calculated in clauses (A) and (B)) and the highest marginal federal income tax
rate (or, if the taxable income of the Company is computed with reference to
alternative minimum taxable income, the highest alternative minimum tax rate)
for such fiscal year imposed on a domestic corporation (the "federal tax rate"),
and (D) the amount of any positive or negative adjustment to the sum of (A), (B)
and (C) then required under the last sentence of this Section 5.1(a). With
respect to fiscal years during which Preferred Interests were outstanding at any
time, solely for purposes of calculating the Annual Tax Amount, the Taxable
Income of the Company shall be reduced (but not below zero) by the aggregate
allocation of Taxable Income pursuant to Section 4.1(b)(i) and (ii) during such
year (the "Preferred Income Amount"), and the Company shall distribute to the
Members, in proportion to the amount of the Member's allocation of Taxable
Income pursuant to Section 4.1(b)(i) and (ii) for the year over the total of all
of the Member's allocation of Taxable Income pursuant to Section 4.1(b)(i) and
(ii), an amount (the "Preferred Tax Amount") equal to the sum of (E) the product
of the Preferred Income Amount and the local tax rate, (F) the product of the
Preferred Income Amount and the state tax rate, and (G) the product of the
Preferred Income Amount and the federal tax rate. The Company shall make a good
faith estimate of the Annual Tax Amount and Preferred Tax Amount with respect to
each year, and cash distributions shall be made to the Members in an amount
equal to 25% of such estimate on April 14, June 14, September 14 and December 14
of such year. To the extent that the Company has made any cash distribution
under Section 5.1(b) during a fiscal year, the Annual Tax Amount and Preferred
Tax Amount for such year shall be reduced by such distribution. Notwithstanding
the foregoing provisions of this Section 5.1(a), a distribution of cash
otherwise required by this Section 5.1(a), (i) shall not be made to the extent
that, after giving effect to such distribution, taking into account the
Company's expected cash flow, the Company would have insufficient financial
resources to satisfy its operating requirements, to make any payments of Debt
Service Amounts and to make any capital expenditures that it is then legally
obligated to make and (ii) shall be subject to any restrictions then applicable
under the Financing Facilities or then applicable to any other Indebtedness of
the Company or any of its Subsidiaries incurred in accordance with this
Agreement. In the event that the Annual Tax Amount or Preferred Tax Amount for
any fiscal year exceeds (by reason of clause (i) or (ii) of the preceding
sentence or an underestimate of the Annual Tax Amount for such year) or is less
than the aggregate amount of the quarterly distributions made by the Company
under this Section 5.1(a) with respect to such fiscal year, the Company shall,
subject to clauses (i) and (ii) of the preceding sentence and the second
preceding sentence, make appropriate adjustment to the amount of cash
distributions otherwise to be made under this Section 5.1(a) in subsequent
fiscal years in order to give effect to the net cumulative amount of such excess
or deficiency, as the case may be, as promptly as possible.
(b) Subject to any restrictions contained in the Financing
Facilities or applicable to any other Indebtedness of the Company or its
Subsidiaries incurred in accordance with this Agreement, the Company, no later
than June 30 of each year, shall distribute to the Members in proportion to
their respective positive Capital Account balances as of the end of the prior
year the percentage of the Company's Consolidated Net Income (the "Distributable
Amount") for the prior year determined to be so available, after giving effect
to any payments made pursuant to Section 5.1(a), set forth opposite the
applicable Leverage Ratio for such year as set forth below:
<TABLE>
Leverage Ratio Percent of
For Any Fiscal Year Consolidated Net Income
<S> <C>
less than 0.5:1 at least 75%; provided that any such
distribution shall be made only to the
extent that such distribution would not
cause the Leverage Ratio to be equal to
or greater than 0.5:1.
greater than 0.5:1 and less than at least 50%; provided that any such
or equal to 1:1 distribution shall be made only to the
extent that such distribution would not
cause the Leverage Ratio to be greater
than 1:1.
greater than 1:1 and less than at least 25%; provided that any such
or equal to 1.2:1 distribution shall be made only to the
extent that such distribution would not
cause the Leverage Ratio to be greater
than 1.2:1.
greater than 1.2:1 No obligation to distribute Consolidated
Net Income.
</TABLE>
Notwithstanding the foregoing and the requirements of Section 3.3(c), the
Company shall first make any distributions pursuant to this Section 5.1(b) in
respect of any Preferred Interests then outstanding until such Preferred
Interests are redeemed in full and then to the Members in proportion to their
respective Capital Account Balances as set forth above.
(c) If the Net Adjustment Amount is a negative number, the Company
shall distribute to the Members in proportion to their Ownership Percentages,
within 10 Business Days following the determination of the Net Adjustment
Amount, an aggregate amount in cash equal to the Net Adjustment Amount.
(d) Notwithstanding any provision of this Agreement to the contrary,
the Company shall not make any distributions pursuant to this Agreement except
to the extent permitted under the Delaware Act and other applicable law.
SECTION 5.2. Amounts Withheld. Promptly upon learning of any
requirement under any provision of the Code or any other applicable law
requiring the Company to withhold any sum from a distribution to a Member or to
make any payment to any taxing authority in respect of such Member, the Company
shall give written notice to such Member of such requirement and, if
practicable, shall cooperate with such Member in all lawful respects to minimize
or to eliminate any such withholding or payment. The Company is authorized to
withhold from distributions to the Members and to pay over to any taxing
authority any amounts which it reasonably determines are required to be so
withheld pursuant to the Code or any provisions of any other applicable law. All
amounts withheld pursuant to the Code or any provision of any other applicable
law with respect to any distribution to any Member shall be treated as amounts
distributed to such Member pursuant to this Article 5 for all purposes under
this Agreement.
SECTION 5.3. Distributions upon Dissolution. Upon dissolution and
winding up of the Company, the Company shall make distributions in accordance
with Section 15.3.
ARTICLE 6
GOVERNANCE AND MANAGEMENT OF THE COMPANY
SECTION 6.1. Management by the Members. (a) The Company shall be
managed by the Members.
(b) Subject to Section 6.9, each Member shall be entitled to vote on
or approve or consent to any action permitted or required to be taken or any
determination required to be made by the Company or the Members under this
Agreement or the Delaware Act. With respect to any action to be taken by the
Members on any matter submitted to the Members at any time, each Member shall be
entitled to the number of votes equal to (i) such Member's Ownership Percentage
at such time times (ii) 100.
(c) Any vote or consent of the Members under this Agreement shall be
taken at meetings of the Members Committee held pursuant to Section 6.2 or by
written consent pursuant to Section 6.4. No management or voting power hereunder
shall be vested in the Members Committee or in any of the Representatives, and
all management and voting power hereunder shall be vested in and reserved to the
Members as provided herein.
SECTION 6.2. Forum for Meetings; Composition of the Members
Committee; Voting Agents; Holding of Meetings. (a) The forum for meetings of the
Members shall be a committee consisting of the Members (the "Members
Committee"). Each Member shall be represented at Members Committee meetings by
its Representatives and each Member shall appoint and authorize one of its
Representatives as its Voting Agent. The total number of Representatives of the
Members that shall initially be entitled to attend Members Committee meetings
shall be five, of which three initially shall be designated by SGH and one each
initially shall be designated by BGHI and BGHII. Each Member will also be
entitled to appoint one or more alternates who may serve in the absence of such
Members' Representatives. In the event of any change in the respective Ownership
Percentages of the Members in the aggregate, the total number of Representatives
permitted to attend Members Committee meetings shall, if necessary, be increased
or decreased effective as of such time in order that attendance at Members
Committee meetings by Representatives will be in proportion, as nearly as
practicable, to the respective Ownership Percentages of the Members, with BGHI
and BGHII having the right, at all times that such Person is a Member, to
designate at least one Representative. Any Representative or alternate appointed
by a Member may be replaced at any time by such Member (with or without cause),
but such Representative or alternate may not be replaced or removed by any other
Member. Any appointment or replacement (with or without cause) of a
Representative or an alternate by a Member shall be effective upon written
notice of such appointment or replacement given to the Company and the other
Members. Each Representative or alternate shall serve for indefinite terms at
the pleasure of the appointing Member.
(b) Each Member shall appoint and authorize one of its
Representatives (a "Voting Agent"), or successive alternates in the event such
Voting Agent is not in attendance at a meeting of the Members Committee, to act
for such Member, as directed by such Member, for purposes of casting such
Member's votes, acting by consent, taking any other actions pursuant to this
Article 6 and making any election or decision to be made by such Member pursuant
to this Agreement. The appointment and authorization of a Voting Agent by a
Member hereunder shall be revocable by such Member at any time in its
discretion; provided that any appointment or revocation of a Voting Agent
hereunder shall be effective upon written notice of such appointment or
revocation given to the Company and the other Members. To the fullest extent
permitted by law, a Voting Agent shall be deemed the agent of the Member that so
appointed such Representative as Voting Agent, and such Voting Agent shall not
be deemed an agent or subagent of the Company or the other Members, shall have
no independent authority. Each Member, by execution of this Agreement, agrees
and consents to the actions and decisions of such Voting Agents within the scope
of such Voting Agents' authority as provided herein as if such actions or
decisions had been taken or made by the Member appointing such Voting Agents.
(c) The Members Committee shall meet quarterly at such place and
time as shall be determined by mutual agreement of the Members. Special meetings
of the Members Committee, to be held at the offices of the Company as above
provided (or such other place as shall be determined by mutual agreement of the
Members), shall be called at the direction of any Member, and for reasonable
cause shown, upon not less than 10 Business Days' written notice given by the
CEO or the Secretary of the Company to all Members (which officer shall give
such notice if properly directed so to do as aforesaid). Emergency meetings of
the Members Committee may be held at the offices of the Company as above
provided (or such other place as shall be determined by the Members upon not
less than forty-eight (48) hours' telephone notice to all Members specifying in
reasonable detail the nature of such emergency (to be confirmed promptly by
written telecopier notice) by any Member or the CEO or Secretary of the Company.
(d) With respect to quarterly meetings, not later than seven
Business Days before each such meeting and, with respect to non-quarterly
non-emergency meetings, together with the notice of each such meeting, the
Secretary of the Company (or such other Person who is giving such notice) shall
deliver to each Member an agenda specifying in reasonable detail the topics to
be discussed at the applicable Members Committee meeting. Any Member that wishes
to have any additional matter discussed at any such meeting for which notice has
been given shall use reasonable efforts to give notice to the Secretary of the
Company and each other Member, not later than two Business Days prior to any
such meeting, of each matter it so wishes to discuss; provided that the failure
to give such notice shall not preclude any Member from requesting during any
meeting that such additional matters be addressed at such meeting.
SECTION 6.3. Quorum; Manner of Acting; Adjournments. Except as
otherwise provided in Section 6.9, the presence, in person or by proxy, of one
or more Members with a majority of the total number of votes of the Members
shall constitute a quorum for the transaction of business. Except as otherwise
provided in Section 6.9, the affirmative vote of one or more Members with a
majority of the total number of votes held by the Members present in person or
by proxy at a meeting at which a quorum exists, shall control the actions of the
Members. When a meeting is adjourned to another time or place (whether or not a
quorum is present), notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the Members may transact any business which
might have been transacted at the original meeting. If a quorum shall not be
present at any meeting of the Members Committee, the Members present thereat may
adjourn the meeting, from time to time, without notice other than announcement
at the meeting, until a quorum shall be present. At each meeting of the Members
Committee, an individual chosen by Members with a majority of the total votes
held by the Members present thereat shall act as chairman of the meeting and
preside thereat. The secretary of the Company (the "Secretary") or, in the case
of his absence, any person whom the chairman shall appoint, shall act as
secretary of such meeting and keep the minutes thereof.
SECTION 6.4. Action by Written Consent. Any action required or
permitted to be taken by the Members at a meeting may be taken without a meeting
if all of the Members unanimously consent thereto in writing and the writing or
writings are filed with the minutes of proceedings of the Representatives.
SECTION 6.5. Telephonic Meetings. Representatives may participate in
a meeting of the Members Committee by means of conference telephone or similar
communications equipment through which all persons participating in the meeting
can hear each other, and such participation in a meeting shall constitute
presence in person at such meeting.
SECTION 6.6. Company Minutes. The decisions and resolutions of the
Members Committee will be reported in the minutes, which will state the date,
time and place of the meeting (or the date of the written consent in lieu of a
meeting), the Representatives present at a meeting, the resolutions put to a
vote (or the subject of a written consent) and the results of such voting (or
written consent). The minutes will be entered in a minute book kept at the
principal office of the Company and a copy of the minutes will be provided to
each Representative.
SECTION 6.7. Conflicts of Interest. Except as otherwise provided in
this Agreement or the other Transaction Documents, with respect to any action to
be taken by the Representatives as to which any Member appointing such
Representative has a conflict of interest of which such Representative is aware,
such Representative shall disclose such conflict and the nature thereof to each
other Representative prior to the taking of any action thereon by the
Representatives.
SECTION 6.8. Officers and Employees. (a) The principal officers of
the Company shall be a chief executive officer ("CEO"), who shall, subject to
Section 6.9 and any action taken by the Members, be responsible for the
day-to-day operations of the Company, a chief financial officer, a controller, a
director of operations and a Secretary, who shall have the duty, among other
things, to record the proceedings of the meetings of the Members Committee in a
book kept for that purpose, and such other persons as the Members may in their
discretion determine. One person may hold the offices and perform the duties of
any two or more of said offices, except that no one person shall hold the
offices and perform the duties of CEO and Secretary. It is understood that the
Members may at any time act, as contemplated by Section 6.2, to override any
determination or decision made by the CEO or other officers of the Company at or
prior to the effectiveness of such determination or decision (or, in the case of
any matter other than a transaction with a Third Party entered into in
accordance with Section 6.9, at or prior to such time). No officer or employee
of the Company (or Representative or Member) shall be or be designated, or be
deemed to be or be designated, a manager of the Company within the meaning of
the Delaware Act.
(b) Except as otherwise provided herein, the principal officers of
the Company shall be employees of the Company. Each such officer shall hold
office until his successor is appointed, or until his earlier death, resignation
or removal. The remuneration of all principal officers shall be fixed by the
Members Committee.
(c) In addition to the principal officers contemplated by Section
6.8(a), the Company may have such other subordinate officers as the Members
Committee may deem necessary. Subject to the supervision and review of the
Members Committee, the CEO shall have the authority to appoint any such
subordinate officers (and to fix compensation for) and to remove such officers.
(d) In addition to the authority granted to the CEO pursuant to
Section 6.8(c), any officer may be removed, with or without cause, at any time,
by the Members Committee.
(e) Any officer may resign at any time by giving written notice to
the Secretary. The resignation of any officer shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice; and
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
(f) Except as otherwise provided herein and at all times subject to
the supervision and direction of the Members Committee, each of the principal
officers of the Company shall have such powers as would be incident to the
comparable officer of a Delaware corporation and such other powers and perform
such other duties as may from time to time be conferred upon or assigned to such
officer by or pursuant to authority delegated by the Members Committee.
SECTION 6.9. Actions Requiring Consent of Parties. Except as may be
specifically contemplated pursuant to this Agreement or any other Transaction
Document, the Company shall not, and shall not permit any of its Subsidiaries
to, take any of the following actions without the written consent of each
Member, which consent shall not unreasonably be withheld:
(a) Certificate of Formation. Alter, repeal, amend or adopt any
provision of the certificate of formation or other constituent documents of the
Company or any Subsidiary of the Company;
(b) Indebtedness. (i) Incur, assume, or at any time be liable with
respect to, any Indebtedness or (ii) refinance, replace, amend, extend or renew
any Indebtedness, including, without limitation, the Financing Facilities;
(c) Other Business. Engage in any business or activity other than
the Business or activities incidental thereto; or engage in any business outside
of the United States of America, other than in connection with the exportation
of products manufactured by the Company;
(d) Accounting; Tax. (i) Make any change in the tax or financial
accounting principles of the Company or its Subsidiaries from those in effect on
the date hereof, except for changes required by generally accepted accounting
principles or applicable law or regulation or (ii) remove or appoint the
independent auditors of the Company or its Subsidiaries;
(e) Business Combination. Effect any merger, sale, consolidation or
any other similar business combination, of the Company or any Subsidiary of the
Company with another Person or amend or waive any provision of the ANC Purchase
Agreement;
(f) Purchase or Sale of Assets. Purchase or acquire, sell, assign,
lease, exchange, transfer or dispose of assets of the Company or its
Subsidiaries, in one transaction or a series of transactions, having a fair
market value in excess of $10 million, other than (w) sales of inventory or
purchases of inventory or supplies in the ordinary course of business, (x) as
may be specified in an annual capital expenditure budget approved pursuant to
Section 6.9(l), (y) as contemplated by the ANC Purchase Agreement or (z) as may
be permitted pursuant to Section 6.10;
(g) Dissolution. (i) Dissolve or liquidate, or adopt any plan of
dissolution or liquidation, (ii) consent to or commence any suit, proceeding or
other action or file a petition or consent to a petition (A) under any existing
or future law of any jurisdiction relating to bankruptcy, insolvency,
reorganization of relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding up, liquidation,
dissolution, composition or other relief with respect to it, or (B) seeking
appointment of a receiver, liquidator, assignee, trustee, custodian or other
similar official for it or all or any substantial part of its assets, (iii) make
any assignment for the benefit of creditors, (iv) admit in writing its inability
to pay its debts generally as they become due, (v) voluntarily dissolve itself
or (vi) take any corporate action in furtherance of any such action;
(h) Transactions with Affiliates. Except as expressly contemplated
by the Transaction Documents or the ancillary agreements entered into in
connection with the ANC Purchase Agreement or the Ball Purchase Agreement,
directly or indirectly do any of the following: lease, sell or transfer any
property or services to or lease or purchase any property or services from, make
any investment in, make any loan or advance to, or receive any loan, advance or
investment from, incur or suffer any Lien, liability, or obligation to, or
guaranty, extend credit for, or suffer any liability for any obligation of, or
modify the terms of any existing transaction or arrangement with, or engage in
any other transaction or arrangement with, or commit to such a transaction or
arrangement with, any Member, any Affiliate of the Company or any Member, or any
director or executive officer of any Member; provided that the foregoing
provisions of this Section 6.9(h) shall not prohibit (i) the Company or any
Subsidiary of the Company from declaring or paying any lawful distribution
permitted hereunder, (ii) any transaction or arrangement specifically permitted
by the certificate of formation of the Company in effect on the date hereof,
(iii) any transaction or arrangement between the Company and any wholly-owned
Subsidiary of the Company or (iv) any transaction or arrangement of a class and
to the extent previously approved as a class of transactions pursuant to this
Section 6.9;
(i) Certain Officers. Appoint the CEO, Chief Financial Officer,
Controller or Director of Operations of the Company;
(j) Equity Issuance and Repurchase. Issue (other than an issuance of
Preferred Interests pursuant to Section 3.2(e) or any conversion thereof
pursuant to Section 3.3), sell, dividend, distribute, redeem (other than a
redemption of Preferred Interests pursuant to Section 3.3), convert, exchange,
repurchase, cancel, retire or otherwise dispose of equity interests, phantom
equity or similar rights or interests or any warrants, options or other rights
to purchase, substitute for or acquire equity interests, phantom equity or
similar rights or interests or securities convertible into or exchangeable for
any equity interests, phantom equity or similar rights or interests of the
Company or any of its Subsidiaries;
(k) Litigation; Tax Claims. Settle any Proceeding or any tax claim
or audit adjustment, or series of related Proceedings, claims or adjustments,
with any Person for an amount in excess of $500,000;
(l) Budgets. Subject to Section 6.10, adopt any annual capital
expenditure budget;
(m) Registration. Except as provided pursuant to Article 11 or in
connection with a transaction specifically approved pursuant to this Section
6.9, file any registration statement under the Securities Act;
(n) Employee Benefits. Implement, adopt, amend or alter any (i)
severance or termination policy covering any Representative, officer or employee
of the Company or any Subsidiary of the Company, (ii) employment, deferred
compensation, severance, termination or other similar agreement with any
Representative, officer or employee of the Company or any Subsidiary of the
Company and (iii) compensation, bonus or other benefit plan (including without
limitation any welfare, pension, profit-sharing, retirement or other plan or
commitment) of the Company or any Subsidiary of the Company;
(o) Other Transactions. Enter into any other agreement, arrangement
or transaction which is either out of the ordinary course of business of the
Company and its Subsidiaries or which creates a commitment on the part of the
Company or any of its Subsidiaries for a period in excess of one year, other
than agreements, arrangements or transactions which (i) pursuant to the terms
hereof are specifically permitted without prior approval pursuant to this
Section 6.9 or (ii) previously have been approved pursuant to this Section 6.9.
SECTION 6.10. Budgets. If a proposed annual capital expenditure
budget for a given fiscal year is submitted for approval pursuant to Section
6.9(l) and is not approved by the Members, the annual capital expenditure budget
most recently approved by the Members pursuant to Section 6.9(l) shall remain in
effect as the annual capital expenditure budget for such fiscal year; provided
that for (i) each of the 1995 and 1996 fiscal years of the Company, aggregate
capital expenditures may be made in an amount not to exceed 120% of the
forecasted depreciation and amortization expense set forth in the business
operating budget referred to in Section 7.1 for such fiscal year, (ii) each of
the 1996 and 1997 fiscal years of the Company, aggregate capital expenditures
may be made in an amount not to exceed 120% of depreciation and amortization
expense of the Company for the prior fiscal year and, with respect to the annual
capital expenditure budget for each fiscal year commencing with the 1998 fiscal
year, aggregate capital expenditures may be made in an amount not to exceed 110%
of the actual depreciation and, to the extent such amortization expense relates
to a prior capital expenditure, amortization expense of the Company for the
prior fiscal year. For purposes of this Section 6.10, all calculations of
amortization expense shall exclude amortization of purchase accounting
intangibles.
SECTION 6.11. Authorization to Enter into Transaction Documents;
Ratification. Notwithstanding any other provision of this Agreement to the
contrary, each of the Company and the CEO on behalf of the Company is hereby
authorized to enter into, and execute, deliver, acknowledge and perform, each
Transaction Document to which the Company is a party, all without any further
act, approval or vote of the Members.
SECTION 6.12. Certain Agreements of Members Committee. The Members
Committee shall attempt in good faith to maintain a level of Indebtedness of the
Company outstanding at any time which is at least 30% of the sum of (x)
outstanding Indebtedness of the Company at such time and (y) the aggregate
Capital Account balances and Preferred Interest Account Balances of the Members
at such time.
ARTICLE 7
FINANCIAL MATTERS; INFORMATION
SECTION 7.1. Provision of Financial Information. For each fiscal
year during the term of this Agreement, the Company shall present annually to
the Members Committee, with respect to the Company and each of its Subsidiaries
(presented separately and on a consolidated basis), (i) a business operating
budget and, subject to approval pursuant to Section 6.10, a capital expenditure
budget for the then immediately succeeding fiscal year and (ii) a business plan
for the then next succeeding three-year period.
SECTION 7.2. Fiscal Year. The fiscal year of the Company shall end
on December 31 in each year.
SECTION 7.3. Books of Account. At all times during the continuance
of the Company, the Company shall maintain separate books of account for the
Company that shall show a true and accurate record of all costs and expenses
incurred, all charges made, all credits made and received and all income derived
in connection with the operation of the Business in accordance with GAAP
consistently applied, including without limitation the accounting principles,
which principles may be amended or modified from time to time subject to the
provisions of Section 6.9. As soon as practicable following the date hereof, but
in any event prior to the Closing, the parties shall use their reasonable best
efforts to agree on a list of certain fundamental accounting principles (in each
case in accordance with GAAP) to be used initially by the Company, which
principles may be amended or modified from time to time subject to the
provisions of Section 6.9. Such books of account, together with a copy of this
Agreement and of the Certificate of Formation of the Company, shall at all times
be maintained at the business address of the Company. The books of account and
the records of the Company shall be examined by and reported upon as of the end
of each fiscal year by Price Waterhouse unless and until another firm of
independent public accountants is selected by the Members in accordance with
Section 6.9. Any Member shall have the right to have a private audit of the
Company books and records conducted at reasonable times and after reasonable
advance notice to the Company for any purpose reasonably related to such
Member's Interest in the Company, but any such private audit shall be at the
expense of the Member desiring it, and shall not be paid for out of Company
funds.
SECTION 7.4. Financial Statements. (a) With respect to each fiscal
year, the Company shall use its commercially reasonable efforts to cause to be
prepared and submitted to each Member no later than 45 (or, in the case of the
Company's first fiscal year, 60) calendar days after the end of such fiscal
year, the following financial statements, accompanied by the report thereon of
the independent accountants for the Company:
(i) a consolidated balance sheet of the Company as at the end
of such fiscal year;
(ii) consolidated statements of income, members' equity and
cash flows for such fiscal year; and
(iii) a statement of the Members' respective Capital Accounts
and Preferred Interest Accounts and changes therein for such fiscal year.
(b) With respect to each fiscal quarter, the Company shall use its
commercially reasonable efforts to cause to be prepared and submitted to each
Member within 15 (or, in the case of fiscal quarters ending during the Company's
first fiscal year, 20) Business Days of the end of such fiscal quarter, the
following financial statements, prepared in accordance with GAAP consistent with
past practice:
(i) a consolidated balance sheet of the Company as at the end
of such fiscal quarter;
(ii) consolidated statements of income, members' equity and
cash flows for such fiscal quarter; and
(iii) a statement of the Members' respective Capital Accounts
and Preferred Interest Accounts and changes therein for such fiscal
quarter.
(c) With respect to each month of December (such month being the
last month of the Company's fiscal year), the Company shall use its commercially
reasonable efforts to cause to be prepared and submitted to each Member, within
20 (or, in the case of December of 1995, 25) Business Days of the end of such
month, the following financial statements, prepared in accordance with GAAP
consistent with past practice:
(i) a consolidated balance sheet of the Company as at the end
of such month;
(ii) consolidated statements of income, members' equity and
cash flows for such month; and
(iii) a statement of the Members' respective Capital Accounts
and Preferred Interest Accounts and changes therein for such month.
(d) With respect to each month other than December, the Company
shall use its commercially reasonable efforts to cause to be prepared and
submitted to each Member the following financial statements within the times
indicated:
(i) consolidated balance sheet and consolidated statement of
cash flows for such month, within 10 (or, in the case of the Company's
first fiscal year, 15) Business Days of the end of such month; and
(ii) consolidated statements of income and members' equity
for such month, within 5 (or, in the case of the Company's first fiscal
year, 10) Business Days of the end of such month.
SECTION 7.5. Inspection Rights of Members. Any Member, and any
accountants, attorneys, financial advisers and other representatives of such
Member and its Affiliates, may, from time to time at such Member's sole expense,
for any reasonable purpose visit and inspect the properties of the Company,
examine (and make copies and extracts of) the Company's books, records and
documents of every kind, and discuss the Company's affairs with its officers,
employees and independent accountants, all at such reasonable times as such
Member may request on reasonable notice.
ARTICLE 8
TAX MATTERS
SECTION 8.1. Partnership for Tax Purposes. The Members agree that it
is their intention that the Company shall be treated as a partnership for
purposes of United States Federal, state and local income tax laws, and further
agree not to take any position or make any election, in a tax return or
otherwise, inconsistent herewith. In furtherance of the foregoing, the Company
will file as a partnership for United States federal income tax purposes. If a
change in applicable law (including a revenue ruling, revenue procedure or other
administrative pronouncement) would cause the Company not to be treated as a
partnership for United States federal income tax purposes, the Members shall
endeavor in good faith to reach an agreement on restructuring the Company so
that it will be so treated (which may, subject to the following proviso, entail
a merger of the Company into an entity treated as a partnership for federal
income tax purposes); provided that no Member shall be required to agree to any
restructuring that it reasonably determines would have an adverse effect on the
assets, properties, business or condition, or otherwise would be adverse to the
interests of or cause the incurrence of any material expenditure by, such Member
or any Affiliate of such Member.
SECTION 8.2. Tax Returns. Subject to Section 6.9, all matters
relating to all tax returns (including amended returns) filed by the Company,
including tax audits and related matters and controversies, shall be determined
and conducted by the Tax Matters Partner after consultation with the other
Members. The Tax Matters Partner shall prepare and file or cause to be prepared
and filed all tax returns (including amended returns) filed by the Company.
Copies of all federal income tax returns and all other material tax returns
shall be provided to each of the Members at least 30 days prior to filing. As
promptly as practicable, and in any event in sufficient time to permit timely
preparation and filing by each Member of its respective state and Federal tax
returns, the Company shall deliver to each Member a copy of each state and
Federal tax return or tax report filed by the Company.
SECTION 8.3. Tax Elections. Subject to Section 6.9, elections for
Federal income tax purposes (and corresponding elections for state, local and
foreign purposes), except as stated in Section 8.1, required or permitted to be
made by the Company, and all material decisions with respect to the calculation
of its income or loss for tax purposes, shall be made in such manner as the Tax
Matters Partner shall determine after consultation with the other Members.
SECTION 8.4. Tax Matters Partner. SGH is hereby designated as the
Company's "Tax Matters Partner" for such taxable year under Section 6231(a)(7)
of the Code (and shall be the tax matters partner under all other applicable
laws). SGH is specifically directed and authorized to take whatever steps it, in
its discretion, deems necessary or desirable to perfect such designation,
including filing any forms or documents with the Internal Revenue Service and
taking such other action as may from time to time be required under Treasury
regulations.
ARTICLE 9
CERTAIN COVENANTS OF THE MEMBERS
SECTION 9.1. Confidentiality. Each Member shall keep confidential
and not reveal, and shall cause its Affiliates and the officers, directors,
employees, agents and Representatives of such Member and its Affiliates, to keep
confidential and not reveal, to any other Person (other than to the Company or
its officers and employees, to any Affiliate or any officer, director, employee,
agent or Representative of such Member or its Affiliates (each of whom shall be
subject to the confidentiality obligations set forth herein), or to any other
Member or such other Member's Affiliates), from the date hereof through the
third anniversary of the first date on which such Member is no longer a member
of the Company, any and all confidential documents, trade secrets, secret
processes or methods and other confidential information concerning, relating to
or in connection with the Company, the Business, the Joint Venture Transactions,
the manufacture or sale of products by the Company, or the processes and designs
owned by the Company, that come to the knowledge of such Member or its
Affiliates or their respective representatives or agents by reason of the
relationship of such Member or Affiliate with the Company ("Information"),
except for such Information that (a) is generally available to the public (other
than as a result of a disclosure by such Member or its Affiliates), (b) is
available to such Person on a non-confidential basis from a source that is not
prohibited from disclosing such Information to such Person or (c) after notice
and an opportunity to contest, such Person is required to disclose under any
applicable law, subpoena or other legal process or pursuant to any agreement
with a national securities exchange; provided that nothing in this Section 9.1
shall preclude any Member or its Affiliates from using any Information in any
manner reasonably connected to its investment in the Company or as contemplated
by the Transaction Documents.
SECTION 9.2. Noncompetition. (a) Each Member agrees that, commencing
on the Closing Date and during the term of this Agreement, neither it nor any of
its Affiliates shall:
(i) engage, either directly or indirectly, as a principal or
for its own account or solely or jointly with others, or as stockholders
or equity owners in any corporation or other entity, in any business
(whether such business was established by such Member or any of its
Affiliates or was acquired as an existing business) that designs, develops
or manufactures glass bottles and jars other than perfume and
pharmaceutical bottles (the "Competing Business") in the United States;
provided that nothing herein shall prohibit the acquisition by any Member
or any of its Affiliates of a diversified company having not more than 10%
of its sales (based on its latest published annual audited financial
statements) attributable to any business engaged in the Competing
Business; or
(ii) solicit for employment any employee of the Company.
(b) From and after the Closing Date, if any Member or any of its
Affiliates proposes to establish any new glass bottle or jar manufacturing
facility located in Mexico or Canada which, when constructed, would sell
products in a manner that would compete with the Business in the United States,
then such Member (the "Offering Member") or Affiliate shall first offer to the
Company the opportunity for the Company or any of its Subsidiaries to establish,
in lieu of the Offering Member and its Affiliates, such facility (the "Offer"),
which Offer shall be made in writing and shall set forth in reasonable detail
the nature and scope of the activity proposed to be engaged in, including all
material terms thereof. The Company, for itself and any of its Subsidiaries,
shall have thirty (30) days from receipt of the Offer to accept or reject it. If
the Company does not accept (for itself or any of its Subsidiaries) the Offer
within such thirty (30) day period, it shall be deemed to have rejected the
Offer, and the Offering Member or its Affiliates shall be permitted to establish
such facility on terms no more favorable to such Offering Member or its
Affiliates than those described in the Offer. If the Company, for itself or any
of its Subsidiaries, accepts the Offer, the Offering Member and its Affiliates
shall not pursue such opportunity to establish such facility; provided that if
the Company or such Subsidiary, as applicable, does not within a commercially
reasonable period of time after such acceptance take reasonable steps to pursue
such opportunity, other than as a result of a violation of this Agreement or
wrongful acts or bad faith on the part of the Offering Member or its Affiliates,
then the Offering Member or its Affiliates shall be permitted to pursue such
opportunity on terms no more favorable to the Offering Member than those terms
described in the Offer. If the Offering Member or its Affiliates do not take
reasonable steps to pursue such opportunity contemplated by the Offer within a
reasonable period of time after acquiring the right to do so in accordance with
the foregoing provisions of this Section, then they shall lose their right to
pursue such opportunity and thereafter be required to reoffer the opportunity to
do so to the Company in accordance with, and shall otherwise comply with, this
Section.
(c) From and after the Closing Date, if any Member or any of its
Affiliates acquires a majority ownership interest in any company or business in
Mexico or Canada which is engaged in (in whole or in part) the manufacture of
glass bottles or jars and sells such products in a manner that would compete
with the Business in the United States, such Person will use reasonable good
faith efforts to enter into an arrangement if reasonably feasible pursuant to
which the other Members would receive, directly or indirectly through the
Company, a percentage interest in the portion of the acquired business or assets
consisting of the Competing Business equal to the Ownership Percentage of such
Member. Any such arrangement shall be entered into subject to applicable law and
on terms and conditions to be agreed by the parties.
(d) If any provision contained in this Section shall for any reason
be held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Section, but this Section shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. It is the intention of
the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater than those
contained herein) as shall be valid and enforceable under such applicable law.
Each Member acknowledges that the Company would be irreparably harmed by any
breach of this Section and that there would be no adequate remedy at law or in
damages to compensate the Company for any such breach. Each Member agrees that
the Company shall be entitled to injunctive relief requiring specific
performance by any Member of this Section, and each Member consents to the entry
thereof.
SECTION 9.3. SG Guaranty. For so long as any one or more SG Members
collectively retain an Ownership Percentage in excess of 50%, Compagnie de
Saint-Gobain or one of its Subsidiaries reasonably acceptable to the Ball
Members shall guarantee, provide or otherwise make available to the Company a
Financing Facility providing for Indebtedness of the Company of up to $645
million.
SECTION 9.4. Certain Activities. Each Member hereby agrees that it
shall not hold any assets, or engage in any activities or business, or take any
actions, other than in connection with its Interests in the Company and the
transactions contemplated hereby or by the other Transaction Documents.
ARTICLE 10
TRANSFER OF INTERESTS; EXIT RIGHTS
SECTION 10.1. General Restrictions on Transfer. (a) No Transfer may
be made by any Ball Member unless such Transfer is expressly permitted by, and
is otherwise in accordance with, the provisions of this Article 10 or Article
11.
(b) Each SG Member may make Transfers; provided that each such
Transfer is made in accordance with the provisions of this Article 10.
SECTION 10.2. Certain Permitted Transfers. Subject to Sections 10.9
and 10.10 hereof and notwithstanding anything herein to the contrary, any Member
may at any time make Transfers to another wholly owned direct or indirect
Subsidiary of the Parent of such Member.
SECTION 10.3. Right of First Refusal with Respect to SG Interests.
(a) Except as provided in Section 10.3(g), if an SG Member or any of its
Affiliates shall receive from or otherwise negotiate with a Third Party a bona
fide offer to sell to such Third Party all or any portion of such SG Member's
Interest, either directly or indirectly through the sale of the equity interests
in such Member (the "Offered Interest"), and such SG Member, or the applicable
Affiliate thereof, intends to pursue the sale, directly or indirectly, of the
Offered Interest to such Third Party, then such SG Member will provide the Ball
Members with written notice of such offer (an "Offer Notice"), setting forth the
type of Transfer, the type of Interest being Transferred (preferred or
ordinary), the identity of the Third Party, the consideration proposed to be
paid by such Third Party for the Offered Interest (the "Offer Price") and all
the other material terms and conditions of such offer (the "Third Party Offer
Terms").
(b) Upon receipt of an Offer Notice from such SG Member, the Ball
Members shall then have the right, subject to Section 10.3(d), to purchase from
such SG Member all, but not less than all, of the Offered Interest at the Offer
Price, payable in cash and otherwise on the Third Party Offer Terms. To the
extent the Offer Price includes non-cash consideration, the value of such
non-cash consideration will be determined by agreement of such SG Member and the
Ball Members or, if they are unable to agree, by an independent investment
banking firm selected by such SG Member and the Ball Members. The right of the
Ball Members pursuant to this Section 10.3(b) will be exercisable by the
delivery of notice to such SG Member (the "Notice of Exercise"), within 10
Business Days after the date of receipt of the Offer Notice. The right of the
Ball Members pursuant to this Section 10.3(b) will terminate if not exercised
within 10 Business Days after the date the Offer Notice is received. In no event
will the sale of any Offered Interest be consummated sooner than 20 Business
Days following the date of the Offer Notice
(c) In the event that the Ball Members exercise their rights to
purchase the Offered Interest in accordance with Section 10.3(b), then such SG
Member will Transfer the Offered Interest to the Ball Members, in such amounts
and as among such Ball Members as the Ball Members shall designate in writing to
such SG Member, as promptly as practicable after the date of delivery of the
Notice of Exercise received by such SG Member at the Offer Price and otherwise
on the Third Party Offer Terms.
(d) At the closing of any purchase and sale pursuant to this Section
10.3, such SG Member shall deliver its Offered Interest, free and clear of all
Liens (other than any Lien created under the Financing Facilities), together
with duly executed written instruments of transfer with respect thereto, in form
and substance reasonably satisfactory to the purchasers of the Offered Interest,
against delivery by such purchasers of the Offer Price for such Offered Interest
by wire transfer, in immediately available funds, to the account of such SG
Member which is designated for such purpose at least two Business Days prior to
the closing date of such purchase and sale.
(e) If such SG Member has complied with the provisions of Section
10.3(a) and the Ball Members have determined not to exercise their rights to
purchase the Offered Interest, then such SG Member shall have the right for a
period of 90 days from the earlier of (i) the expiration of the period specified
in Section 10.3(b) or (ii) the date on which such SG Member receives notice from
the Ball Members that they will not exercise their rights under this Section
10.3, to complete the Transfer of the Offered Interest to the Third Party
specified in the Offer Notice at a price not less than the Offer Price and
otherwise on terms and conditions no less favorable to such SG Member than the
Third Party Offer Terms; provided that (i) such Transfer will be consummated in
accordance with Sections 10.9 and 10.10 and (ii) such Transfer will not violate
any applicable laws.
(f) In the event that the Ball Members do not exercise their rights
to purchase the Offered Interest in accordance with this Section 10.3, and such
SG Member shall not have Transferred the Offered Interest in accordance with
Section 10.3(e) before the expiration of the 90-day period described in Section
10.3(e), then such SG Member and its Affiliates may not Transfer the Offered
Interest without again complying with this Section 10.3.
(g) The provisions of this Section 10.3 will not apply to any
Transfer pursuant to Section 10.2.
SECTION 10.4. Tag-along Rights. (a) Except as provided in Section
10.4(e), if any SG Member proposes to Transfer, either directly or indirectly
through the sale of the equity interests in such Member, all or any portion of
its Interest to any Third-Party (a "Tag-along Purchaser") pursuant to a bona
fide offer to purchase, in one transaction or series of similar transactions (a
"Tag-along Offer"), such SG Member shall provide written notice (the "Tag-along
Offer Notice") of such Tag-along Offer to the Ball Members (the effective date
of such notice being the "Tag-along Notice Date") in the manner set forth in
this Section 10.4. The Tag-along Offer Notice shall identify the type of
Transfer, the type of Interest being Transferred (preferred or ordinary), the
Tag-along Purchaser, the portion of the Interest proposed to be Transferred, the
consideration for the Interest being Transferred (the "Tag-along Offer Price")
and other material terms and conditions of the Tag-along Offer (the "Tag-along
Offer Terms") and, in the case of a Tag-along Offer in which the Tag-along Offer
Price consists in part or in whole of consideration other than cash, such
information relating to such consideration as the Ball Members may reasonably
request as being necessary for the Ball Members to evaluate such non-cash
consideration, it being understood that such request shall not obligate such SG
Member to deliver any information to the Ball Members not provided to such SG
Member by the Tag-along Purchaser.
The Ball Members shall have the right, exercisable as set forth
below, to accept the Tag-along Offer, for up to the portion of their aggregate
Interests determined pursuant to Section 10.4(b), at the proportion of the
Tag-along Offer Price for the Interests being transferred by the Ball Members
and on the Tag-along Offer Terms. If one or more Ball Members desire to accept
the Tag-along Offer, such Ball Members shall provide such SG Member with written
notice (a "Tag-along Notice") (specifying the type and portion of their
Interests which such Ball Members desire to Transfer) within 10 Business Days
after the Tag-along Notice Date (the "Tag-along Notice Period"). The Tag-along
Notice shall be irrevocable and binding, and shall constitute an irrevocable
acceptance of the Tag-along Offer, at the proportion of the Tag-along Offer
Price for the Interests being transferred by the Ball Members and on the
Tag-along Offer Terms by such Ball Members for the portion of their Interests
specified therein.
As soon as practicable after the expiration of the Tag-along Notice
Period, such SG Member shall notify the accepting Ball Members of the portion of
the Interest such Ball Members are obligated to Transfer pursuant to the
Tag-along Offer and Section 10.4(b). Such SG Member shall notify the Ball
Members of the proposed date of any sale ("Sale Date") pursuant to this Section
10.4 no less than 10 Business Days prior to the Sale Date, and the accepting
Ball Members shall deliver to such SG Member a limited power-of-attorney
authorizing such SG Member to Transfer such Interest pursuant to the terms of
the Tag-along Offer and all other documents required to Transfer the Interests
pursuant to the Tag-along Offer or to be executed in connection with Tag-along
Offer, no less than two days prior to the Sale Date.
(b) (i) The Ball Members shall have the right to Transfer, pursuant
to the Tag-along Offer, with respect to each type of Interest (preferred
and ordinary) held by them, a portion of such type of Interests up to the
product (the "Tag-along Ratio") of the total Interest of such type offered
to be Transferred by such SG Member or offered to be purchased by the
Tag-along Purchaser as set forth in such Tag-along Offer multiplied by the
percentage of all outstanding Interests of such type owned by the Ball
Members.
(ii) In no event may the Ball Members Transfer pursuant to any
given Tag-along Offer more than the portion of their Interest specified in
the Tag-along Notice applicable to such Tag-along Offer. If at the
termination of the Tag-along Notice Period the Ball Members shall not have
accepted the Tag-along Offer, the Ball Members will be deemed to have
waived any and all of their rights under this Section 10.4 with respect to
the Transfer of any portion of their Interests pursuant to such Tag-along
Offer.
(c) Such SG Member shall have 90 days from the termination of the
Tag-along Notice Period (assuming that the Ball Members shall not have accepted
the Tag-along Offer) in which to consummate the Transfer contemplated by the
Tag-along Offer to the Tag-along Purchaser at the Tag-along Offer Price and on
the Tag-along Offer Terms. If, at the end of such 90-day period, such SG Member
has not completed the Transfer contemplated by the Tag-along Offer Notice, all
of the restrictions on Transfer contained in this Agreement with respect to the
Interest owned by the SG Member shall again be in effect.
(d) Promptly after the consummation of the Transfer of the Interests
pursuant to the Tag-along Offer, such SG Member shall notify each participating
Ball Member thereof, shall remit to such Ball Member the total sales price of
the Interest of such Ball Member Transferred pursuant thereto, and shall furnish
such other evidence of such Transfer (including the time of completion) and the
terms thereof as may be reasonably requested by such Ball Member.
(e) The provisions of this Section 10.4 shall not apply to any
proposed Transfer of the Interests by an SG Member pursuant to Section 10.2.
(f) Notwithstanding anything contained in this Section 10.4, there
shall be no liability on the part of any SG Member to any Ball Member if the
Transfer of Interests pursuant to Section 10.4(c) is not consummated for
whatever reason. Whether to effect a Transfer of Interests pursuant to this
Section 10.4 by an SG Member is in the sole and absolute discretion of such SG
Member.
(g) Each Ball Member shall be required to bear its proportionate
share up to but in no event in excess of the net proceeds received by such Ball
Member for the Interest Transferred by it pursuant to such Tag-along Offer, of
any escrows, holdbacks or adjustments in purchase price under the terms of the
purchase agreement relating to such Tag-along Offer.
SECTION 10.5. Saint-Gobain Purchase Rights. (a) The SG Members shall
have the right, exercisable by written notice (a "Call Notice") to the Ball
Members during any First Call Period to purchase (or to cause any of their
Affiliates to purchase) all, but not less than all, of the Interests held by the
Ball Members for an aggregate amount in cash equal to the Call Price (subject to
Section 10.8(d)) on the date of such Call Notice; provided that the Ball Members
may block any such purchase by delivering to the SG Members, within 10 Business
Days following receipt of such Call Notice, a written notice (a "Call Blocking
Notice") stating that the Ball Members are exercising their right to block such
purchase pursuant to this Section 10.5.
(b) The SG Members shall have the right, exercisable by delivery of
a Call Notice to the Ball Members delivered during any Second Call Period, to
purchase (or to cause any of their Affiliates to purchase) all, but not less
than all, of the Interests held by the Ball Members for an aggregate amount in
cash equal to the Put Price on the date of such Call Notice; provided that if
the Put Price is less than the Benchmark Amount, the Ball Members shall have the
right, by delivery of a Call Blocking Notice, to block the exercise of the
Second Call Right unless the SG Members agree to purchase the Interest of the
Ball Members pursuant to this Section 10.5 for a purchase price equal to the
Benchmark Amount, in which case the Ball Members shall be obligated to Transfer
their Interest to the SG Members for the Benchmark Amount.
(c) The SG Members shall have the right, exercisable by written
notice delivered to the Ball Members within the 2 Business Day period (i) prior
to the commencement of any "road show" relating to a Public Offering being
effected at the request of the Ball Members pursuant to Article 11 (a "Proposed
Offering"), (ii) following any reduction (for any reason) in the size of a
Proposed Offering once such "road show" has commenced or (iii) following any
Price Adjustment, to purchase (or to cause any of its Affiliates to purchase)
all, but not less than all, of the Interests held by the Ball Members for an
amount in cash equal to the Public Offering Call Price (subject to Section
10.8(d)) on the date of such notice.
(d) If the registration statement with respect to the Proposed
Offering has not been declared effective within the 180-day period following the
filing thereof or if the Proposed Offering is otherwise terminated at the
election or direction of any Ball Member, the SG Members shall have the right,
by written notice delivered to the Ball Members within 90 days following such
180-day period or such termination, as the case may be, to purchase (or to cause
any of their Affiliates to purchase) all, but not less than all, of the
Interests held by the Ball Members for an amount in cash equal to the Put Price
on the date of such notice.
(e) Any purchase by the SG Members of the Interests of the Ball
Members pursuant to this Section 10.5 shall be, as among such SG Members, in
such amounts and as among such SG Members as the SG Members shall designate in
writing to the Ball Members. Any closing of the purchase of Interests held by
the Ball Members pursuant to this Section 10.5 shall be consummated by the later
of (i) 10 Business Days following final determination of the purchase price (the
"Determination Date") applicable to such purchase pursuant to this Section 10.5
or (ii) 10 Business Days following receipt of all required consents and
approvals, but in any event not later than the 100th day following the
Determination Date.
(f) Any purchase of Interests of the Ball Members pursuant to this
Section 10.5 on or prior to January 25, 2003 is subject to the making of an
Adjustment Payment to the extent that the purchase price of such purchase is
determined by reference to the Put Price or the Call Price.
(g) Notwithstanding anything herein to the contrary, any purchase of
Interests by the SG Members (or any of its Affiliates) pursuant to this Section
10.5 may, at the election of the SG Members, instead be structured as a
redemption of such Interests by the Company.
SECTION 10.6. Ball Sale Rights. (a) The Ball Members shall have the
right, exercisable by written notice (the "Put Notice") to the SG Members during
any Put Period, to cause the SG Members (or Affiliates of the SG Members
designated by the SG Members) to purchase all, but not less than all, of the
Interests held by the Ball Members for an aggregate amount in cash equal to the
Put Price (subject to Section 10.8(d)) on the date of such Put Notice.
(b) Any purchase by SG Members of the Interests of the Ball Members
pursuant to this Section 10.6 shall be, as among such SG Members, in such
amounts and as among such SG Members as the SG Members shall designate in
writing to the Ball Members. Any closing of the purchase of the Interests held
by the Ball Members pursuant to this Section 10.6 shall be consummated by the
later of (i) 10 Business Days following the Determination Date or (ii) 10
Business Days following receipt of all required consents and approvals, but in
any event not later than the 100th day following the Determination Date.
(c) Any purchase of Interests of the Ball Members pursuant to this
Section 10.6 on or prior to January 25, 2003 is subject to the making of an
Adjustment Payment.
(d) Notwithstanding anything herein to the contrary, any purchase of
Interests by the SG Members pursuant to this Section 10.6 may, at the election
of the SG Members, instead be structured as a redemption of such Interests by
the Company.
SECTION 10.7. Adjustment Payment. (a) Following any purchase on or
prior to January 25, 2003 by the SG Members (or any of their Affiliates) of the
Interests of the Ball Members pursuant to Section 10.5 or 10.6 or Article 11 in
which the purchase price for such Interests was equal to (or was calculated on
the basis of) the Call Price or the Put Price, as the case may be, and if the
Tropicana Call Right is exercised in 2003 or if Tropicana is terminated on or
before January 25, 2003, a payment (an "Adjustment Payment") will be made in an
amount equal to the difference between the (i) Tropicana Value used in the
calculation of such Put Price or Call Price, as the case may be, and (ii) Actual
Value. The amount of any Adjustment Payment shall bear interest from and
including the date of payment of the Put Price or Call Price, as the case may
be, to but excluding the date of payment at a rate per annum equal to the Prime
Rate during the period from the Closing Date to the date of payment. Such
interest shall be payable at the same time as the Adjustment Payment to which it
relates and shall be calculated daily on the basis of a year of 365 days and the
actual number of days elapsed.
(b) Any Adjustment Payment shall be made by the SG Members to the
Ball Members to the extent that the Actual Value exceeds the Tropicana Value and
by the Ball Members to the SG Members to the extent that the Tropicana Value
exceeds the Actual Value.
(c) Any Adjustment Payment shall be made as promptly as practicable
following January 25, 2003 by wire transfer of immediately available funds to an
account designated by the SG Members or the Ball Members, as the case may be, by
written notice to the other.
SECTION 10.8. Calculation of Purchase Price. (a) If the (i) Ball
Members disagree with the SG Members' calculation of the Call Price, Put Price
or Public Offering Call Price as set forth in any Call Notice or other written
notice required to be delivered by the SG Members to the Ball Members pursuant
to Section 10.5 or (ii) SG Members disagree with the Ball Members' calculation
of the Put Price as set forth in the Put Notice delivered pursuant to Section
10.6 (in either case, the Members receiving such Call Notice, Put Notice or
other required written notice are sometimes hereinafter referred to as the
"Receiving Party" and the Members delivering such Call Notice, Put Notice or
other required written notice are sometimes hereinafter referred to as the
"Delivering Party"), then the Receiving Party may, within 10 days after delivery
of such Call Notice, Put Notice or other required written notice, deliver a
notice to the Delivering Party disagreeing with such calculation and setting
forth the Receiving Party's calculation. Any such notice of disagreement shall
specify those items or amounts as to which the Receiving Party disagrees, and
the Receiving Party shall be deemed to have agreed with all other items and
amounts contained in such Call Notice, Put Notice or other required written
notice.
(b) If a notice of disagreement is duly delivered pursuant to
Section 10.8(a), the Receiving Party and the Delivering Party shall, during the
15 days following such delivery, use their best efforts to reach agreement on
the disputed items or amounts in order to determine, as may be required, the
Call Price, Put Price or Public Offering Call Price. If, during such period, the
Receiving Party and the Delivering Party are unable to reach such agreement,
they shall promptly thereafter cause Arthur Andersen & Co. (the "Accounting
Firm") promptly to review this Agreement and the disputed items or amounts for
the purpose of calculating, as may be required, the Call Price, Put Price or
Public Offering Call Price. In making such calculation, the Accounting Firm
shall consider only those items or amounts in respect of the calculation as to
which the Receiving Party has disagreed. The Accounting Firm shall deliver to
the Receiving Party and the Delivering Party, as promptly as practicable, a
report setting forth such calculation. Such report shall be final and binding
upon the Receiving Party and the Delivering Party. The cost of such review and
report shall be borne equally by the Receiving Party and the Delivering Party.
(c) The Ball Members and the SG Members agree that they will, and
agree to cause their respective independent accountants to, cooperate and assist
in the conduct of the review by the Accounting Firm referred to in this Section
10.8, including without limitation the making available to the extent necessary
of books, records and personnel.
(d) Notwithstanding anything herein to the contrary, immediately
following receipt of the Put Price, the Call Price or the Public Offering Call
Price, as the case may be, the Ball Members shall, at their election, either (i)
deposit in escrow an amount equal to 20% of the applicable Tropicana Value
pursuant to the terms of the Escrow Agreement or (ii) provide a letter of credit
in an amount equal to 20% of the applicable Tropicana Value reasonably
satisfactory to the SG Members.
SECTION 10.9. Approvals. Notwithstanding any other provision of this
Article 10, no Transfer will occur unless and until any and all necessary
Regulatory Approvals and third-party approvals have been obtained, including,
without limitation, any required approvals under the HSR Act. The Members agree
to cooperate and to cause their Affiliates to cooperate in the preparation and
filing of any and all reports or other submissions required in connection with
obtaining such Regulatory Approvals and in obtaining any necessary third-party
approvals.
SECTION 10.10. Recognition of Transfer of Member Interests.
Notwithstanding anything to the contrary in this Agreement, no Transfer or
attempted Transfer of all or any portion of an Interest (other than pursuant to
Article 11) will be valid and no purchaser, assignee, transferee or other
recipient (a "transferee") of an Interest will be admitted as a Member of the
Company unless (a) such Transfer is in accordance with this Article 10, (b) such
transferee shall have executed and delivered to each Member (other than the
Member proposing to transfer its Interest (the "transferor")) a counterpart of
this Agreement and such other documents or agreements as shall be reasonably
requested by each such Member to confirm such transferee's admission as a Member
and its agreement to be bound by the terms of this Agreement and any other
Transaction Document under which the transferor has any rights or obligations,
(c) to the extent applicable, any Person that ultimately controls such
transferee (which Person shall be a "Parent" for purposes of this Agreement)
will have executed such documents or agreements, in form and substance
satisfactory to each such Member, as will be necessary to confirm such Person's
agreement to be bound by the provisions of the Transaction Documents applicable
to the Parent of the transferor and to effectuate the assumption by such Person
of the rights and obligations of such Parent under the Transaction Documents,
(d) all necessary Regulatory Approvals shall have been obtained in respect of
such Transfer, (e) such Transfer would not, in the opinion of counsel to the
Company, jeopardize the status of the Company as a partnership for United States
federal income tax purposes and (f) in the case of a Transfer by SGH, such
transferee shall agree to sell the Interests so transferred back to SGH in
connection with and immediately prior to any Public Offering effected at the
request of the Ball Members pursuant to Article 11, for a number of shares of
newly issued common stock of SGH which, after giving effect to such issuance,
represents the percentage of all outstanding shares of common stock of SGH equal
to the percentage of outstanding interests of the Company owned by such
transferee immediately prior to the purchase of Interests. Upon the satisfaction
of the foregoing conditions, such transferee will be admitted to the Company as
a Member and will be listed in the books and records of the Company as a Member,
and the newly admitted Member will succeed to the rights and obligations of the
transferor Member under the Transaction Documents. Immediately following such
admission, the transferor will cease to be a Member of the Company, and the
Members are hereby authorized to continue the business of the Company without
dissolution, except as otherwise provided in Section 15.1. The provisions of
this Section 10.10 shall not apply to any Transfer pursuant to Article 11.
ARTICLE 11
REGISTRATION RIGHTS
SECTION 11.1. Definitions. The following terms, as used in this
Article 11, have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Maximum Percentage" means, at any time, a percentage equal to the
aggregate Ownership Percentage of the Ball Members.
"Registration Expenses" means all (i) registration, qualification
and filing fees, (ii) fees and expenses of compliance with securities or
blue sky laws, (iii) printing expenses and escrow fees, (iv) fees and
disbursements of counsel for SGH, (v) customary fees and expenses for
independent certified public accountants retained by SGH (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort
letters), (vi) fees and expenses of any special experts retained by SGH in
connection with such registration, (vii) fees and expenses of listing the
securities on a securities exchange and (viii) underwriting fees or
discounts or commissions attributable to the sale of the securities.
"Section 11.4 Percentage" means the percentage of outstanding shares
of common stock of SGH issued in connection with the Public Offering,
determined on a pro forma basis after giving effect to the consummation of
the Public Offering and the issuance of the Section 11.4 Share
Consideration to the Ball Members pursuant to this Article 11 and the
issuance of any shares of common stock pursuant to Section 10.10(f).
"Section 11.4 Share Consideration" means a number of shares of newly
issued common stock of SGH which, after giving effect to such issuance,
represents the percentage of all outstanding shares of common stock of SGH
equal to the Ownership Percentage of the Ball Members immediately prior to
the purchase of Interests pursuant to Section 11.4(b), after giving effect
to the purchases pursuant to Section 11.4(a).
SECTION 11.2. Demand Registration. (a) Registration on Request of
the Ball Members. Subject to Section 10.5, the Ball Members may make one written
request, during any Put Period, that SGH effect the registration and sale under
the Securities Act and any applicable state securities laws of newly issued
securities of SGH representing not less than 21%, and not more than the Maximum
Percentage, of the equity securities of SGH outstanding immediately following
such offering, determined on a pro forma basis after giving effect to the
issuance of Section 11.4 Share Consideration pursuant to this Article 11 and the
issuance of any shares of common stock pursuant to Section 10.10(f). SGH will
use its best efforts (including entering into such customary underwriting
agreements and arrangements and participating in such selling efforts, in each
case as is customary for an initial public offering of common stock of a
corporation comparable to SGH) to effect, as promptly as practicable, the
registration and sale under the Securities Act and any applicable state
securities laws of the securities which SGH has been so requested to register,
provided that:
(x) SGH shall in no event be obligated to effect pursuant to this
Section 11.2 more than one registration;
(y) the lead managing underwriter of the Public Offering shall be
selected by the Ball Members, subject to the approval of SGH, which shall
not unreasonably be withheld; provided that the Public Offering may be
co-managed by an underwriter designated by SGH, subject to the approval of
the Ball Members, which shall not unreasonably be withheld; and
(z) any underwriting agreement entered into in connection with the
registration shall provide that the underwriters shall not knowingly sell
any securities to any person or group (as defined in Rule 13d-3 of the
Exchange Act) which beneficially owns or as a result of such acquisition
would beneficially own 5% or more of SGH's outstanding voting securities.
SGH shall not be liable under this Article 11 for the failure of any such
registration to become effective, or the failure to successfully sell all of the
securities so requested to be sold, if SGH uses its best efforts to effect such
registration and sale as provided herein.
(b) Expenses. The Ball Members promptly shall reimburse SGH for
all Registration Expenses in connection with the registration requested pursuant
to this Section 11.2.
SECTION 11.3. Price Range. SGH hereby agrees that the range of the
initial Public Offering price per share set forth on the cover of the
preliminary prospectus, less applicable underwriting discounts and commissions
(the "Initial Price Range") shall not exceed 10%; provided that SGH upon advice
of the lead managing underwriter and the request of the Ball Members, shall
adjust (a "Price Adjustment") the Initial Price Range to a range not to exceed
20% (as so adjusted, the "Adjusted Price Range"). In no event may SGH sell its
securities at a Public Offering price per share less than the Applicable Price
Range.
SECTION 11.4. Purchase of Ball's Interests. (a) Promptly following
consummation of the Public Offering referred to in Section 11.2, SGH shall
purchase from the Ball Members a portion of the aggregate Interests held by the
Ball Members equal to the Section 11.4 Percentage for an aggregate purchase
price in cash equal to the net proceeds of such Public Offering received by SGH;
provided that any such purchase shall be made first from BGHI until all of the
Interests of BGHI are so purchased and, to the extent that all of the Interests
of BGHI are so purchased, from BGHII.
(b) To the extent that less than all of the Interests of the Ball
Members are purchased pursuant to Section 11.4(a), SGH, concurrently with the
consummation of the purchase pursuant to Section 11.4(a), shall purchase all of
such remaining Interests in exchange for the Section 11.4 Share Consideration
(which Section 11.4 Share Consideration shall not be registered under the
Securities Act). The parties shall use their reasonable best efforts to cause
any such purchase to qualify as a reorganization within the meaning of Section
368 of the Code, unless the amount of cash received by Ball Members precludes
such treatment. The Ball Members agree not to sell, transfer or otherwise
dispose of any of the Section 11.4 Share Consideration other than in accordance
with applicable securities laws. In such event, SGH and the Ball Members will
enter into a registration rights agreement, in form and substance reasonably
satisfactory to each of them, providing for one demand registration right and an
unlimited number of piggyback registration rights with respect to the Section
11.4 Share Consideration. Such registration rights agreement shall provide,
among other things, that (i) the Ball Members shall reimburse SGH for all
expenses incurred in connection with such demand registration and (ii) any
underwriting agreement shall provide that the underwriters shall not knowingly
sell any shares to any person or group (as defined in Rule 13d-3 of the Exchange
Act) which beneficially owns or as a result of such acquisition would
beneficially own 5% or more of SGH's outstanding voting securities.
SECTION 11.5. Termination of Provisions. Notwithstanding anything
herein to the contrary, upon the effectiveness of the Public Offering requested
by the Ball Members pursuant to this Article 11, all rights of the Members under
Articles 6, 7, 10 and 11 shall terminate and such Articles shall be of no
further force or effect.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
SECTION 12.1. Representations and Warranties of the SG Members. Each
SG Member represents and warrants, on a joint and several basis together with
each other SG Member, to the Ball Members on the date hereof and on the Closing
Date that:
(a) Corporate Existence and Power. Such SG Member is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to execute and deliver this Agreement and each of the other Transaction
Documents to which such SG Member is a party and to perform its obligations
contemplated hereunder and thereunder. This Agreement constitutes, and when
executed and delivered, each other Transaction Document to which such SG Member
is a party will constitute, a valid and binding agreement of such SG Member
enforceable against such Member in accordance with its terms, except as (i) the
enforceability hereof may be limited by bankruptcy, insolvency, fraudulent
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability. Such SG Member is a wholly
owned Subsidiary of SG Parent.
(b) Corporate and Governmental Authorization; Non- Contravention.
The execution, delivery and performance by such SG Member of this Agreement and
of each other Transaction Document to which it is a party are within its
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official (other than (i) compliance with any applicable requirements
of the HSR Act and (ii) such actions which have been taken or made or the
failure of which to take or make would not in the aggregate have a material
adverse effect on the transactions contemplated hereby) and do not contravene,
or constitute a default under, any provision of applicable law, rule or
regulation or of the certificate of incorporation or by-laws of such SG Member
or of any material agreement, judgment, injunction, order, decree or other
instrument binding upon such SG Member, except for such contraventions or
defaults which would not in the aggregate have a material adverse effect on the
transactions contemplated hereby and by the other Transaction Documents to which
such SG Member is a party.
(c) Litigation. There is no action, suit or proceeding pending
against or, to the knowledge of such SG Member, threatened against or affecting
any SG Member or any of its Affiliates before any court or arbitrator or any
governmental body, agency or official which in any manner (i) draws into
question the validity of any Transaction Document or the ability of such SG
Member to perform its obligations thereunder or (ii) challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated
thereby.
(d) No Brokers or Finders. No person retained by or authorized to
act for the SG Members has, or as a result of the transactions contemplated by
the Transaction Documents will have, any right or valid claim against the Ball
Members or the Company for any commission, fee or other compensation as an
investment banker, financial advisor, finder or broker, or in any similar
capacity.
SECTION 12.2. Representations and Warranties of the Ball Members.
Each Ball Member represents and warrants, on a joint and several basis together
with the other Ball Members, to the SG Members on the date hereof and on the
Closing Date that:
(a) Corporate Existence and Power. Such Ball Member is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to execute and deliver this Agreement and each of the other Transaction
Documents to which such Ball Member is a party and to perform its obligations
contemplated hereunder and thereunder. This Agreement constitutes, and when
executed and delivered, each other Transaction Document to which such Ball
Member is a party will constitute a valid and binding agreement of such Ball
Member enforceable against such Member in accordance with its terms, except as
(i) the enforceability hereof may be limited by bankruptcy, insolvency,
fraudulent transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability. Such Ball Member is
an indirect wholly owned Subsidiary of Ball Parent.
(b) Corporate and Governmental Authorization; Non- Contravention.
The execution, delivery and performance by such Ball Member of this Agreement
and of each other Transaction Document to which it is a party are within its
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official (other than (i) compliance with any applicable requirements
of the HSR Act and (ii) such actions which have been taken or made or the
failure of which to take or make would not in the aggregate have a material
adverse effect on the transactions contemplated hereby) and do not contravene,
or constitute a default under, any provision of applicable law, rule or
regulation or of the certificate of incorporation or by-laws of such Ball Member
or of any material agreement, contract, judgment, injunction, order, decree or
other instrument binding upon such Ball Member, except for such contraventions
or defaults which would not in the aggregate have a material adverse effect on
the transactions contemplated hereby and by each other Transaction Document to
which such Ball Member is a party.
(c) Litigation. There is no action, suit, investigation or
proceeding pending against or, to the knowledge of such Ball Member, threatened
against or affecting any Ball Member or any of its Affiliates before any court
or arbitrator or any governmental body, agency or official which in any manner
(i) draws into question the validity of any Transaction Document or the ability
of such Ball Member to perform its obligations thereunder or (ii) challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated thereby.
(d) No Brokers or Finders. No person retained by or authorized to
act for the Ball Members has, or as a result of the transactions contemplated by
the Transaction Documents will have, any right or valid claim against the SG
Members or the Company for any commission, fee or other compensation as an
investment banker, financial advisor, finder or broker, or in any similar
capacity.
ARTICLE 13
CLOSING; CLOSING CONDITIONS
SECTION 13.1. Closing. The Closing Capital Contributions shall be
made at a closing (the "Closing") which shall take place at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York concurrently with the
closing of the transactions contemplated by the Ball Purchase Agreement and the
ANC Purchase Agreement, but in no event prior to the satisfaction of the
conditions set forth in this Article 13, or at such other time or place as the
Members may agree.
SECTION 13.2. Conditions to the Obligation of Each Member. The
obligation of each Member to consummate the Closing is subject to the
satisfaction of the following conditions:
(a) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall (i) prohibit the consummation of the
Closing or (ii) restrain, prohibit or otherwise interfere with the transactions
contemplated by the Transaction Documents or the effective operation of the
Business in accordance with the provisions of this Agreement.
(b) All actions by or in respect of or filings with any governmental
body, agency, official or authority required to permit the consummation of the
Closing, and all material third party consents necessary in connection with the
consummation of the Closing, shall have been obtained.
(c) The closing of the transactions contemplated by the Ball
Purchase Agreement and the ANC Purchase Agreement shall occur simultaneously
with the Closing.
SECTION 13.3. Conditions to the Obligation of Each SG Member. The
obligation of each SG Member to consummate the Closing is subject to the
satisfaction of the following further conditions:
(a) The representations and warranties made by the Ball Members in
Article 12, disregarding all qualifications and exceptions contained herein
relating to materiality or material adverse effect, shall be true and correct in
all material respects on and as of the Closing Date as if made on and as of such
date.
(b) The Ball Members shall have complied with and performed in all
material respects all of their obligations under the Transaction Documents
required to be performed by the Ball Members on or prior to the Closing Date.
(c) Each of the Transaction Documents (other than the Escrow
Agreement) shall have been executed and delivered by the parties thereto other
than such SG Member, its Affiliates or the Company and, assuming due execution
and delivery by such SG Member, its Affiliates and the Company, each such
Transaction Document shall be in full force and effect.
(d) Such SG Member shall have received all documents it may
reasonably request relating to the existence of the Ball Members and the
authority of the Ball Members to enter into the Transaction Documents to which
they are parties, all in form and substance reasonably satisfactory to such SG
Member.
(e) Ball Parent shall have delivered to such SG Member a certificate
dated the date of the Closing signed by its President certifying to the
satisfaction of the conditions specified in paragraphs (a) and (b) of this
Section 13.3.
SECTION 13.4. Conditions to the Obligation of Each Ball Member. The
obligation of each Ball Member to consummate the Closing is subject to the
satisfaction of the following further conditions:
(a) The representations and warranties made by the SG Members in
Article 12, disregarding all qualifications and exceptions contained herein
relating to materiality or material adverse effect, shall be true and correct in
all material respects on and as of the Closing Date as if made on and as of such
date.
(b) The SG Members shall have complied with and performed in all
material respects all of their obligations under the Transaction Documents
required to be performed by the SG Members on or prior to the Closing Date.
(c) Each of the Transaction Documents (other than the Escrow
Agreement) shall have been executed and delivered by the parties thereto other
than such Ball Member, its Affiliates or the Company and, assuming due execution
and delivery by such Ball Member, its Affiliates and the Company, each such
Transaction Document shall be in full force and effect.
(d) Such Ball Member shall have received all documents it may
reasonably request relating to the existence of the SG Members and the authority
of the SG Members to enter into the Transaction Documents to which they are
parties, all in form and substance reasonably satisfactory to such Ball Member.
(e) SG Parent shall have delivered to the Ball Members a certificate
dated the date of the Closing signed by an executive officer of SG Parent
reasonably satisfactory to the Ball Members certifying to the satisfaction of
the conditions specified in paragraphs (a) and (b) of this Section 13.4.
ARTICLE 14
LIABILITY; EXCULPATION; INDEMNIFICATION
SECTION 14.1. Liability for Debts of the Company; Limited Liability.
(a) Except as otherwise provided in the Delaware Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Member shall be obligated personally for any such debt, obligation or liability
of the Company solely by reason of being a Member.
(b) Except as otherwise expressly required by law, a Member, in its
capacity as such, shall have no liability to the Company, any other Member or to
the creditors of the Company in excess of such Member's obligation to make
Capital Contributions (to the extent such Capital Contributions have not yet
been made) and other payments required to be made by such Member under this
Agreement.
SECTION 14.2. Exculpation. To the fullest extent permitted by
applicable law (including Section 18-1101(c) of the Delaware Act), no individual
Representative (in such Person's capacity as a Representative) shall have any
liability to any Member (or Affiliate of such Member) that is not an Affiliate
of such Person, with respect to or in connection with such Person's actions or
omissions with respect to the Company based on any claim of breach of fiduciary
duty to the extent that such Person acted in good faith and in a manner such
Person reasonably believed to be in or not opposed to the best interests of the
Company. Except as otherwise expressly provided in this Agreement, no Member
shall be liable to another Member for actions taken consistent with the duty of
loyalty and care applicable to a member of the board of directors of a Delaware
corporation, in good faith and not for the purposes of adversely affecting the
rights and benefits of the other Members under this Agreement. Without limiting
the foregoing, to the fullest extent permitted by applicable law (including
Section 18-1101(c) of the Delaware Act), and except as otherwise provided in
Section 9.2, the doctrine of corporate opportunity, or any other analogous
doctrine, shall not apply with respect to the Company, and no Affiliate of a
Member shall have any obligation to refrain from (i) engaging in the same or
similar activities or lines of business as the Company or developing or
marketing any products or services that compete, directly or indirectly, with
those of the Company, (ii) investing or owning any interest publicly or
privately in, or developing a business relationship with, any Person engaged in
the same or similar activities or lines of business as, or otherwise in
competition with, the Company, (iii) doing business with any client or customer
of the Company or (iv) employing or otherwise engaging a former officer or
employee of the Company; and except as otherwise expressly provided herein,
neither the Company nor any Member (or Affiliate of such Member) shall have any
right by virtue of this Agreement in or to, or to be offered any opportunity to
participate or invest in, any venture engaged or to be engaged in by any
Affiliate of any other Member or any right by virtue of this Agreement in or to
any income or profits derived therefrom.
SECTION 14.3. Indemnification. (a) The Company shall, to the fullest
extent permitted by applicable law, indemnify and hold harmless each Indemnified
Person against any and all Indemnified Losses. Without limiting the foregoing,
this indemnification provision shall include any Indemnified Losses (x) relating
to the costs of prosecuting a claim under this Section, (y) resulting from any
injury to Persons or damage to property, and (z) irrespective of whether such
Indemnified Losses are caused or alleged to be caused by a failure to act by the
Indemnified Person or as a result of the Indemnified Person's strict liability.
(b) Subject to Section 14.4, the Company will periodically reimburse
each Indemnified Person for all Indemnified Losses (including fees and expenses
of counsel) as such Indemnified Losses are incurred in connection with
investigating, preparing, pursuing or defending any Specified Proceeding arising
from or in connection with or related to any Transaction Documents or the
Company's business or affairs; provided that such Indemnified Person shall
promptly repay to the Company the amount of any such reimbursed expenses paid to
it if it shall be judicially determined by judgment or order not subject to
further appeal or discretionary review that such Indemnified Person is not
entitled to be indemnified by the Company in connection with such matter.
SECTION 14.4. Procedures. (a) In the event that any Specified
Proceeding shall be instituted or asserted or any Indemnified Losses shall arise
in respect of which indemnity may be sought by an Indemnified Person pursuant to
Section 14.3, such Indemnified Person shall promptly notify the Company thereof
in writing. Failure to provide notice shall not affect the Company's obligations
hereunder except to the extent the Company is actually prejudiced thereby.
(b) The Company shall have the right to participate in and control
the defense of any such Specified Proceeding and, in connection therewith, to
retain counsel reasonably satisfactory to each Indemnified Person, at the
Company's expense, to represent each Indemnified Person and any others the
Company may designate in such Specified Proceeding. The Company shall keep the
Indemnified Person advised of the status of such Specified Proceeding and the
defense thereof and shall consider in good faith recommendations made by the
Indemnified Person with respect thereto.
(c) In any such Specified Proceeding, any Indemnified Person shall
have the right to retain its own counsel at its own expense; provided that the
fees and expenses of such Indemnified Person's counsel shall be at the expense
of the Company if (i) the Company and such Indemnified Person shall have
mutually agreed to the retention of such counsel, (ii) the Company has failed,
within a reasonable time after having been notified of the existence of an
indemnified claim, to assume the defense of such indemnified claim or (iii) the
named parties to any such Specified Proceeding (including any impleaded parties)
include both the Company and such Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Company shall not,
in respect of the legal expenses of any Indemnified Person in connection with
any Specified Proceeding or related Specified Proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such Indemnified Persons and that all
such fees and expenses shall be reimbursed as they are incurred.
(d) The Company shall not be liable for any settlement of any
Specified Proceeding effected without its written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent or if
there be a final judgment for the plaintiff, the Company agrees to indemnify
each Indemnified Person, to the extent provided in Section 14.3, from and
against all Indemnified Losses by reason of such settlement or judgment. The
Company shall not effect any settlement of any pending or threatened Specified
Proceeding in respect of which any Indemnified Person is seeking indemnification
hereunder without the prior written consent of each such Indemnified Person
(which consent shall not be unreasonably withheld or delayed by any such
Indemnified Person), unless such settlement includes an unconditional release of
each such Indemnified Person from all liability and claims that are the subject
matter of such Specified Proceeding.
(e) As necessary or useful to the defending party in effecting the
foregoing procedures, the parties shall cooperate in the execution and delivery
of agreements, instruments and other documents and in the provision of access to
witnesses, documents and property (including access to perform interviews,
physical investigations or other activities).
SECTION 14.5. Non-Exclusive Remedy. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article 14
shall not be deemed exclusive of, and shall not limit, any other rights or
remedies to which any Indemnified Person may be entitled or which may otherwise
be available to any Indemnified Person at law or in equity.
SECTION 14.6. Continuing Provisions. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article 14
shall continue as to a Person notwithstanding that such Person has ceased to be
an Indemnified Person.
ARTICLE 15
DISSOLUTION AND WINDING UP; RESIGNATION OF A MEMBER
SECTION 15.1. Dissolution Events. The Company shall dissolve and
commence winding up upon the first to occur of any of the following events (each
a "Dissolution Event"):
(a) the expulsion, withdrawal, resignation, retirement, bankruptcy
or dissolution of a Member or the occurrence of any other event which terminates
the continued membership of a Member in the Company; provided that the Company
shall not be dissolved or required to be wound up in connection with any of the
events specified in this clause (a) if at the time of the occurrence of such
event the Company is continued by the consent of remaining Members representing
not less than a majority of the profits interests in the Company, Ownership
Percentages and Capital Account balances of all remaining Members;
(b) the sale of all or substantially all of the Company's assets;
(c) the unanimous vote of the Members to dissolve, wind up and
liquidate the Company;
(d) the failure of the Closing to occur prior to December 31, 1995;
and
(e) the entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Delaware Act.
SECTION 15.2. Winding Up. Upon the occurrence of a Dissolution
Event, the Company shall continue solely for the purposes of winding up its
affairs in an orderly manner, liquidating its assets, and satisfying or making
reasonable provision for the satisfaction of the claims of its creditors and
Members, and no Member shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Company's business and
affairs; provided that all covenants contained in this Agreement and obligations
provided for in this Agreement (other than those contained in Sections 10.5,
10.6 and Article 11) shall continue to be fully binding upon the Members until
such time as the assets or property or the proceeds from the sale thereof have
been distributed pursuant to this Article 15 and the existence of the Company
has been terminated by the filing of a Certificate of Cancellation of the
Certificate of Formation of the Company with the Secretary of State of the State
of Delaware. The Members shall be responsible for overseeing the winding up and
dissolution of the Company. The Members shall take full account of the Company's
assets and liabilities, and the Company's affairs shall be wound up in an
orderly manner in accordance with the following procedures:
(a) each Member (and its Affiliates) shall pay to the Company all
amounts then owing by it (and them) to the Company;
(b) to the extent that the Members determine that any or all of the
assets of the Company shall be sold, such assets shall be sold as promptly as
possible, but in a business-like and commercially reasonable manner;
(c) any property or assets of the Company to be distributed in kind
to the Members pursuant to Section 15.3(b) will be distributed in such a manner
that each Member will receive its proportionate interest in each of the assets
available for such distribution; that is to say, each Member will receive an
undivided interest, corresponding to the proportion to which it is entitled
under Section 15.3(b), in all interests in real estate and leaseholds and other
indivisible properties, and as nearly as practicable, of each divisible asset;
and
(d) the Capital Account of each Member shall be adjusted to take
into account the profit and loss resulting from the sale or exchange of the
Company's assets and all other transactions in connection with the winding up of
the Company. For this purpose, the distribution of any of the Company's assets
to a Member shall be deemed to be a sale of such asset for fair market value.
SECTION 15.3. Distribution Upon Dissolution of the Company. The
Company's assets or the proceeds from the sale thereof pursuant to this Article
15 to the extent sufficient therefor shall be applied and distributed to the
maximum extent permitted by law, in the following order:
(a) first, to the satisfaction (whether by payment or by the making
of reasonable provision for payment) of all of the Company's debts and
liabilities to creditors, including the expenses of liquidation and including,
to the fullest extent permitted by law, any Member or any of its Affiliates that
is a creditor of the Company;
(b) second, to the Members, in an amount equal to the aggregate of
the positive balances, if any, of their Preferred Interest Accounts (plus any
accrued Preferred Return that has not had a corresponding allocation pursuant to
Section 4.1(b)(i) or (ii)) in proportion to the respective positive balances of
their Preferred Interest Accounts (determined after giving effect to all
contributions, distributions, and allocations for all periods); and
(c) the balance, if any, to the Members, in proportion to the
respective positive balances of their Capital Accounts (determined after giving
effect to all contributions, distributions, and allocations for all periods).
SECTION 15.4. Claims of the Members. The Members will look solely to
the Company's assets for the return of their Capital Account balances, and if
the assets of the Company remaining after payment of or due provision for all
debts, liabilities and obligations of the Company are insufficient to return
such Capital Account and Preferred Interest Account balances, the Members will
have no recourse against the Company or any other Member or any other Person. No
Member with a negative balance in such Member's Capital Account or Preferred
Interest Account will have any obligation to the Company or to the other Members
or to any creditor or other Person to restore such negative balance upon
dissolution or termination of the Company or otherwise.
SECTION 15.5. No Resignations by Members. Except in connection with
a Transfer of all of its Interest pursuant to Article 10, no Member shall resign
from the Company prior to the dissolution and winding up of the Company in
accordance with this Agreement.
ARTICLE 16
MISCELLANEOUS
SECTION 16.1. Notices. All notices, requests and other
communications to any party or to the Company hereunder shall be in writing
(including telecopy or similar writing) and shall be given,
if to the Company, to such address determined pursuant to Section
2.4, with a copy to each of the Members;
if to SGH, to:
Saint-Gobain Holdings I Corp.
c/o Thomas A. Decker
Saint-Gobain Corporation
750 E. Swedesford Road
P.O. Box 860
Valley Forge, PA 19482-7087
with copies to:
Thomas A. Decker
Saint-Gobain Corporation
750 E. Swedesford Road
P.O. Box 860
Valley Forge, PA 19482-7087
William L. Rosoff
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
if to the BGHI or BGHII, to:
BG Holdings I, Inc.
BG Holdings II, Inc.
c/o Ball Corporation
Corporate Headquarters
345 South High Street
P.O. Box 2407
Muncie, IN 47305-2326
with a copy to:
Charles W. Mulaney, Jr.
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Chicago, Illinois 60606
or to such other address or telecopier number as such party or the Company may
hereafter specify for the purpose by notice to the other parties and the Company
in the manner provided in this Section 16.1. All such notices, requests and
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 p.m. in the place of receipt and such
day is any day (a "working day") other than a Saturday, Sunday or other day on
which commercial banking institutions in the place of receipt are authorized to
close. Otherwise, any such notice, request or communication shall be deemed not
to have been received until the next succeeding working day in the place of
receipt.
SECTION 16.2. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment by all parties hereto, or in
the case of a waiver, by the party or parties against whom the waiver is to be
effective; provided that this Agreement shall be deemed amended from time to
time to reflect the admission of a new Member, the withdrawal or resignation of
a Member and the adjustment of the Interests of the Members resulting from any
sale, transfer or other disposition of an Interest, in each case that is made in
accordance with the provisions hereof.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 16.3. Status of Parents. Notwithstanding the fact that the
Parents have executed one or more of the Transaction Documents (and may have
certain rights and obligations referred to in this Agreement), (i) none of the
Parents is, and none shall be deemed to be, a "member" or a "manager" of the
Company within the meaning of the Delaware Act, (ii) this Agreement does not
constitute a partnership between any Parent and the Company or between any
Parent and any Member and (iii) the provisions herein related to any Parent are
included herein rather than in a separate agreement for convenience only;
provided that this Section 16.3 shall not alter or relieve any Parent of its
obligations under any Transaction Document to which such Parent is a party.
SECTION 16.4. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns. Notwithstanding anything
herein to the contrary, the SG Members may at any time assign their rights
hereunder to purchase Interests of the Ball Members to SG Parent or to a direct
or indirect wholly owned Subsidiary of SG Parent; provided that the obligations
of such other Subsidiary shall be guaranteed pursuant to the Parent Sideletter
of such Parent. This Agreement is for the sole benefit of the parties hereto
and, except as otherwise contemplated herein, nothing herein expressed or
implied shall give or be construed to give any Person, other than the parties
hereto, any legal or equitable rights hereunder.
SECTION 16.5. Governing Law; Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.
In particular, it shall be construed to the maximum extent possible to comply
with all of the terms and conditions of the Delaware Act. If it shall be
determined by court order not subject to appeal or discretionary review that any
provision or wording of this Agreement shall be invalid or unenforceable under
the Delaware Act or other applicable law, such invalidity or unenforceability
shall not invalidate the entire Agreement and shall be construed so as to limit
any term or provision so as to make it enforceable or valid within the
requirements of applicable law, and, in the event such term or provision cannot
be so limited, this Agreement shall be construed to omit such invalid or
unenforceable provisions.
SECTION 16.6. Disputes; Submission to Jurisdiction. (a) If any
dispute or controversy shall arise among the parties, or any of them, as to any
matter arising out of or in connection with the Transaction Documents or the
Joint Venture Transactions, the parties shall attempt in good faith to resolve
such controversy by mutual agreement. If such dispute or controversy cannot be
so resolved, it shall be resolved solely in accordance with the provisions of
Section 16.6(b).
(b) Any dispute, controversy or claim between or among the parties
hereto (the "Disputing Parties"), including without limitation disputes,
controversies and claims arising out of or related to this Agreement, or the
breach thereof, and the subject matter hereof (except with respect to the
calculation of the Put Price, Call Price or Public Offering Call Price, which
shall be resolved in accordance with Section 10.8), shall, except as provided
below, be settled by a single arbitrator by arbitration in New York, New York in
accordance with the Rules for Commercial Arbitration of the American Arbitration
Association ("AAA") as amended from time to time and as modified by this
Agreement.
The arbitrator shall be selected by the Disputing Parties within 15
days after demand for arbitration is made by a Disputing Party. If the Disputing
Parties are unable to agree on an arbitrator within such period, then each
Disputing Party shall select one arbitrator, and each such arbitrator shall
select a third arbitrator and the dispute shall be settled by the panel
consisting of such three arbitrators. The arbitrator shall possess substantive
legal experiences in the principal issues in dispute.
Except as may otherwise be agreed in writing by the Disputing
Parties or as ordered by the arbitrator upon substantial justification, the
hearings of the dispute shall be held and concluded within 90 days of submission
of the dispute to arbitration. The arbitrator shall render its final award
within 30 days following conclusion of the hearing. The arbitrator shall state
the factual and legal basis for the award. The decision of the arbitrator shall
be final and binding except as provided in the Federal Arbitration Act, 9 U.S.C.
Section 1, et. seq., and except for errors of law based on findings of fact.
Final judgment may be entered upon such an award in any court of competent
jurisdiction, but entry of such judgment shall not be required to make such
award effective.
Nothing in this Section 16.6(b) shall limit any right that any
Member may otherwise have to seek (on its own behalf or in the right of the
Company) to obtain preliminary injunctive relief in order to preserve the status
quo pending the disposition of any such arbitration proceeding.
Each of the parties hereto hereby consents to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York, the United States District Court for the District of Delaware and the
Chancery Court of the State of Delaware (and of the appropriate appellate courts
therefrom) and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue in any such
court or that any such proceeding which is brought in any such court has been
brought in an inconvenient forum. Subject to applicable law, process in any such
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing and
subject to applicable law, each party agrees that service of process on such
party as provided in Section 16.1 shall be deemed effective service of process
on such party. Nothing herein shall affect the right of any party to serve legal
process in any other manner permitted by law or at equity. WITH RESPECT TO A
PROCEEDING IN ANY SUCH COURT, EACH OF THE PARTIES IRREVOCABLY WAIVES AND
RELEASES TO THE OTHER ITS RIGHT TO A TRIAL BY JURY, AND AGREES THAT IT WILL NOT
SEEK A TRIAL BY JURY IN ANY SUCH PROCEEDING.
SECTION 16.7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 16.8. Further Assurances. The Members will execute and
deliver such further instruments and do such further acts and things as may be
required to carry out the intent and purpose of this Agreement.
SECTION 16.9. Entire Agreement. This Agreement and the other
Transaction Documents, including any exhibits or schedules hereto or thereto, or
any other instruments, agreements or documents referenced herein or therein,
constitute the entire agreement among the parties hereto and thereto with
respect to the subject matter hereof and thereof, and supersede all other prior
agreements or undertakings with respect thereto, both written and oral.
SECTION 16.10. Headings. Headings are for ease of reference only and
shall not form a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this
Limited Liability Company Agreement or have caused this Amended and Restated
Agreement to be duly executed by their respective authorized officers, in each
case as of the day and year first above written.
SAINT-GOBAIN HOLDINGS I CORP.
By:
Name: Thomas A. Decker
Title: Vice President
BG HOLDINGS I, INC.
By:
Name: R. David Hoover
Title: Vice President and Secretary
BG HOLDINGS II, INC.
By:
Name: R. David Hoover
Title: Vice President and Secretary
Member admitted after the date hereof in
accordance with Article 10:
Name of Member:
By:
Name:
Title:
Date of Admission:
ANNEX 3.2(c)
Closing Capital Contributions
<TABLE>
<S> <C>
Member Capital Contributions
- ------------------------------ -----------------------
SGH $249,399,410
BGHI 90,299,790
BGHII 90,299,790
</TABLE>
Exhibit 99.1
Contacts: Ball Corporation Group Saint-Gobain
Harold Sohn Nicole Grisoni-Bachelier
317/747-6483 (Paris, France)
47-62-30-52
New Glass Container Company Formed
MUNCIE, Ind., Sept. 18, 1995 -- Ball-Foster Glass Container Co.,
L.L.C., a joint venture of Ball Corporation and Paris-based Saint-Gobain, has
officially begun operations. The company manufactures glass containers for the
food and beverage industry for customers throughout the United States.
The new company is now the second largest U.S. glass container
manufacturer. It is owned 58 percent by Saint-Gobain and 42 percent by Ball and
combines the assets of Ball Glass Container Corporation (a Ball subsidiary) with
the assets of American National Can's Foster-Forbes glass container business.
Headquartered in Muncie, Ind., Ball-Foster Glass Container Co.,
L.L.C., has 22 manufacturing facilities in 15 states and has approximately 8,500
employees. It is estimated that the company's 1995 sales will be approximately
$1.5 billion.
Herbert H. Thompson, previously a senior vice president of American
National Can, is president and chief executive officer of the new venture. Says
Thompson, "I'm extremely enthusiastic about being part of this operation. Ball,
Foster-Forbes and Saint-Gobain each have special strengths, and Ball -Foster
will benefit from all three."
George A. Sissel, Ball's president and CEO, says, "The new company
will have considerable resources and an enhanced ability to focus on meeting the
needs of the glass customers. The creation of Ball-Foster presents the
marketplace with a new, strong supplier, whose background includes many years of
providing quality glass containers and top-notch customer service."
According to Claude Picot, president of Saint-Gobain's Containers
Division, "Creation of the new Ball-Foster company is a major opportunity for
Saint-Gobain in North America and represents a milestone in our overall goal to
grow in this very important market."
Ball Corporation is a manufacturer of rigid packaging products, and
supplies aerospace and other technology products and services to government and
commercial customers. The company had sales of nearly $2.6 billion in 1994.
Saint-Gobain, one of the top 100 industrial corporations in the world,
is a leading producer of flat glass, containers, fiber reinforcements,
insulation, building materials, piping, abrasives and industrial ceramics. With
its investment in Ball-Foster and completion of its first American perfume
bottle plant in Georgia next year, Saint-Gobain will become the world's leading
glass container company. The company's 1994 sales totaled $13.6 billion.
- end -
