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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 10, 1998
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(Date of earliest event reported)
BALL CORPORATION
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(Exact name of Registrant as specified in its charter)
Indiana 1-7349 35-0160610
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(State of (Commission file No.) (IRS Employer
Incorporation) Identification No.)
10 Longs Peak Drive, Broomfield, CO 80021-2510
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(Address of principal executive offices, including zip code)
(303) 469-5511
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Page 1 of 8
Exhibit Index is located at Page 7
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 10, 1998, Ball Corporation (the "Company") and its Ball
Metal Beverage Container Corp. subsidiary ("BMBC") completed the acquisition
(the "Acquisition") of substantially all the assets of the North American
beverage can business (the "Acquired Business") of Reynolds Metals Company, a
Virginia corporation ("RMC"), and was determined based upon arms length
negotiations between the parties. The purchase price was approximately
$745.4 million, subject to certain adjustments. The Acquisition was pursuant
to the terms of an Asset Purchase Agreement, dated as of April 22, 1998, as
amended (the "Asset Purchase Agreement"), among the Company, BMBC and RMC,
which is attached hereto as Exhibit 2.1. The Company intends to continue to
use the plants, equipment and other physical property obtained in the
Acquisition to produce beverage containers.
In connection with the Acquisition, on August 10, 1998, BMBC and RMC
entered into several ancillary agreements, including the Ball and Reynolds
Supply Program Agreement (the "Supply Agreement") and an incentive loan
agreement (the "Incentive Loan Agreement"). The Supply Agreement provides that,
subject to the terms and conditions contained therein, BMBC will purchase from
RMC a substantial portion of the can stock required for the operation of the
plants purchased from RMC under the Asset Purchase Agreement through December
31, 2000 (which date BMBC may, at its option, extend for three months). Under
the Incentive Loan Agreement, the Company advanced $39.0 million to RMC at a
fixed interest rate to help fund RMC's working capital in connection with
satisfying its obligations under the Supply Agreement. If the amount of can
stock that BMBC purchases in 1998, 1999, 2000 and 2001, if extended, under the
Supply Agreement exceeds certain thresholds, RMC will make specified principal
and interest payments on the loan up to a maximum of $43.75 million. After
deducting these payments, any amounts still owed on the loan will be cancelled.
At the time the Acquisition was consummated, the Company also
refinanced approximately $521.9 million principal amount of its existing
indebtedness (the "Refinancing"). As a result of the Refinancing, the
Company paid and will record a charge in the third quarter of 1998 of
approximately $18.2 million specifically related to debt prepayment. The
Acquisition, including certain transaction costs paid at the closing of the
Acquisition, the funding of the loan to RMC under the Incentive Loan
Agreement and the Refinancing, including related costs, were financed by the
placement of $300.0 million principal amount of 7 3/4% Senior Notes due 2006
and $250.0 million principal amount of 8 1/4% Senior Subordinated Notes due
2008, pursuant to Rule 144A and Regulation S under the Securities Exchange
Act of 1934, as amended, and a new $1,200.0 million senior credit facility
(including term
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and revolving portions) (the "Senior Credit Facility") with The First
National Bank of Chicago, as administrative agent, Bank of America National
Trust and Savings Association, as syndication agent, Lehman Commercial Paper,
Inc., as documentation agent, and certain other lenders, of which $795.2
million was utilized. The Senior Credit Facility is more fully described
below. The purchase agreement, registration rights agreements and indentures
relating to the Senior Notes and the Senior Subordinated Notes are attached
hereto as Exhibits 1.1, 4.1(a), 4.1(b), 4.2(a) and 4.2(b), respectively.
The Senior Credit Facility is comprised of three separate
facilities: two term loans totaling $550.0 million and one facility
consisting of a revolving credit facility and a letter of credit sub-facility
(such latter facility is referred to herein as "Facility D"). Facility D
provides the Company with up to $650.0 million, of which $150.0 million is
available under a 364-day facility, which may be extended under certain
circumstances, and the remainder is comprised of letters of credit with an
expiration date of up to one year and revolving loans with a maturity date of
six years from the closing date of the Senior Credit Facility. All amounts
outstanding under the Senior Credit Facility are secured by (i) a pledge of
100% of the stock of certain of the Company's direct and indirect
majority-owned domestic subsidiaries and (ii) a pledge of 65% of the stock of
the Company's material foreign subsidiaries. The credit agreements relating
to the Senior Credit Facility are attached hereto as Exhibits 10.1(a) and
10.1(b), respectively.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) FINANCIAL STATEMENTS OF THE ACQUIRED BUSINESS.
Attached as Exhibit 99.1 to this Current Report on Form 8-K are
audited combined balance sheets of the Acquired Business as of December 31, 1997
and 1996, and the related combined statements of income and cash flows for each
of the three years in the period ended December 31, 1997. Also attached as
Exhibit 99.2 are the unaudited combined balance sheets of the Acquired Business
as of March 31, 1998 and December 31, 1997 and the related combined statements
of income and cash flows for the quarters ended March 31, 1998 and March 31,
1997. It is impracticable at this time to provide more recent interim
historical financial statements of the Acquired Business required by Regulation
S-X. They will be filed as soon as practicable but no later than 60 days after
this report is required to be filed.
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(b) PRO FORMA FINANCIAL INFORMATION.
Attached as Exhibit 99.3 to this Current Report on Form 8-K are the
unaudited pro forma condensed consolidated statements of income for the
period ended December 31, 1997, the three-month period ended March 29, 1998
and the twelve-month period ended March 29, 1998 and the unaudited pro forma
condensed combined balance sheet as of March 29, 1998. It is impracticable
at this time to provide more recent interim pro forma financial statements
required by Regulation S-X. They will be filed as soon as practicable but no
later than 60 days after this report is required to be filed.
(c) OTHER EXHIBITS
EX 1.1 Purchase Agreement, dated as of August 5, 1998, among the
Company, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, BancAmerica Robertson Stephens, First Chicago
Capital Markets, Inc. and certain subsidiary guarantors of the
Company.
EX 2.1 Asset Purchase Agreement, dated as of April 22, 1998, as
amended, among the Company, BMBC and RMC (conformed copy).
EX 4.1(a) Senior Registration Rights Agreement, dated as of August 10,
1998, among the Company, Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, BancAmerica Robertson
Stephens, First Chicago Capital Markets, Inc. and certain
subsidiary guarantors of the Company.
EX 4.1(b) Senior Subordinated Registration Rights Agreement, dated as of
August 10, 1998, among the Company, Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, BancAmerica Robertson
Stephens, First Chicago Capital Markets, Inc. and certain
subsidiary guarantors of the Company.
EX 4.2(a) Senior Note Indenture, dated as of August 10, 1998, among the
Company, certain subsidiary guarantors of the Company and The
Bank of New York, as Senior Note Trustee.
EX 4.2(b) Senior Subordinated Note Indenture, dated as of August 10, 1998,
among the Company, certain subsidiary guarantors of the Company
and The Bank of New York, as Senior Subordinated Note Trustee.
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EX 10.1(a) Short-Term Credit Agreement, dated as of August 10, 1998, among
the Company, The First National Bank of Chicago, as
administrative agent, Bank of America National Trust and Savings
Association, as syndication agent, Lehman Commercial Paper, Inc.,
as documentation agent, and certain lenders named therein.
EX 10.1(b) Long-Term Credit Agreement, dated as of August 10, 1998 among the
Company, The First National Bank of Chicago, as administrative
agent, Bank of America National Trust and Savings Association, as
syndication agent, Lehman Commercial Paper, Inc., as
documentation agent, and certain lenders named therein.
EX 15.1 Acknowledgment Letter of Ernst & Young LLP, Independent
Accountants.
EX 23.1 Consent of Ernst & Young LLP, Independent Auditors.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
By: /s/ R. David Hoover
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Name: R. David Hoover
Title: Vice Chairman and
Chief Financial Officer
Dated: August 25, 1998
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EXHIBIT INDEX
DESCRIPTION EXHIBIT
- ----------- -------
Purchase Agreement, dated as of August 5, 1998, among the EX 1.1
Company, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, BancAmerica Robertson Stephens, First Chicago
Capital Markets, Inc. and certain subsidiary guarantors of the
Company.
Asset Purchase Agreement, dated as of April 22, 1998, as EX 2.1
amended, among the Company, BMBC and RMC (conformed copy).
Senior Registration Rights Agreement, dated as of August 10, EX 4.1(a)
1998, among the Company, Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, BancAmerica Robertson
Stephens, First Chicago Capital Markets, Inc. and certain
subsidiary guarantors of the Company.
Senior Subordinated Registration Rights Agreement, dated as of EX 4.1(b)
August 10, 1998, among the Company, Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, BancAmerica Robertson
Stephens, First Chicago Capital Markets, Inc. and certain
subsidiary guarantors of the Company.
Senior Note Indenture, dated as of August 10, 1998, among the EX 4.2(a)
Company, certain subsidiary guarantors of the Company and The
Bank of New York, as Senior Note Trustee.
Senior Subordinated Note Indenture, dated as of August 10, 1998, EX 4.2(b)
among the Company, certain subsidiary guarantors of the Company
and The Bank of New York, as Senior Subordinated Note Trustee.
Short-Term Credit Agreement, dated as of August 10, 1998, among EX 10.1(a)
the Company, The First National Bank of Chicago, as
administrative agent, Bank of America National Trust and Savings
Association, as syndication agent, Lehman Commercial Paper, Inc.,
as documentation agent, and certain lenders named therein.
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Long-Term Credit Agreement, dated as of August 10, 1998 among the EX 10.1(b)
Company, The First National Bank of Chicago, as administrative
agent, Bank of America National Trust and Savings Association, as
syndication agent, Lehman Commercial Paper, Inc., as
documentation agent, and certain lenders named therein.
Acknowledgment Letter of Ernst & Young LLP, Independent EX 15.1
Accountants.
Consent of Ernst & Young LLP, Independent Auditors. EX 23.1
Audited combined balance sheets of the Acquired Business as of EX 99.1
December 31, 1997 and 1996, and the related combined statements
of income and cash flows for each of the three years in the
period ended December 31, 1997.
Unaudited combined balance sheets of the Acquired Business as of EX 99.2
March 31, 1998 and December 31, 1997 and the related combined
statements of income and cash flows for the quarters ended March
31, 1998 and March 31, 1997.
Unaudited pro forma condensed consolidated statements of income EX 99.3
for the period ended December 31, 1997, the three-month period
ended March 29, 1998 and the twelve-month period ended
March 29, 1998 and the unaudited pro forma condensed combined
balance sheet as of March 29, 1998.
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[Execution Copy]
$550,000,000
Ball Corporation
$300,000,000 7 3/4% SENIOR NOTES DUE 2006
$250,000,000 8 1/4% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
August 5, 1998
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
FIRST CHICAGO CAPITAL MARKETS, INC.
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Ball Corporation, an Indiana corporation (the "COMPANY"), proposes
to issue and sell to you (the "INITIAL PURCHASERS"), $300.0 million in
aggregate principal amount at maturity of its 7 3/4% Senior Notes due 2006
(the "SERIES A SENIOR NOTES") and $250.0 million in aggregate principal
amount at maturity of its 8 1/4% Senior Subordinated Notes due 2008 (the
"SERIES A SENIOR SUBORDINATED NOTES" and together with the Series A Senior
Notes, the "SERIES A NOTES"). The payment of principal, premium and interest
on the Series A Senior Notes and the Company's 7 3/4% Series B Senior Notes
due 2006 (the "SERIES B SENIOR NOTES") to be issued in the Exchange Offer
referred to below will be unconditionally guaranteed (the "SENIOR NOTE
SUBSIDIARY GUARANTEES") on a senior basis by each of Ball Aerospace and
Technologies Corp., Ball Asia Pacific Limited, Ball Glass Container
Corporation, Ball Holdings Corp., Ball Metal Beverage Container Corp., Ball
Metal Food Container Corp., Ball Metal Packaging Sales Corp., Ball Packaging
Corp., Ball Plastic Container Corp., Ball Technologies Holdings Corp., Ball
Technology Services Corporation, BG Holdings I, Inc., BG Holdings II, Inc.
and Efratom Holding, Inc. (collectively, the "GUARANTORS"), which are all of
the Company's current domestic Restricted Subsidiaries (the "SUBSIDIARIES").
The payment of principal, premium and interest on the Series A Senior
Subordinated Notes and the Company's 8 1/4% Series B Senior Subordinated Notes
due 2008 (the "SERIES B SUBORDINATED NOTES" and together with the Series B
Senior Notes, the "SERIES B NOTES;" the Series B Notes together with the
Series A Notes, the "NOTES") to be issued in the Exchange Offer referred to
below will be unconditionally guaranteed (the "SUBORDINATED NOTE SUBSIDIARY
GUARANTEES" and together with the Senior Note Subsidiary Guarantees, the
"SUBSIDIARY GUARANTEES") on a senior subordinated basis by the Guarantors.
The Series A Senior Notes are to be issued pursuant to the terms of an
Indenture (the "SENIOR NOTE INDENTURE") between the Company and The Bank of
New York, as trustee (the "SENIOR NOTE TRUSTEE") and the Series A Senior
Subordinated Notes are to be issued pursuant to the terms of an Indenture
(the "SUBORDINATED NOTE INDENTURE" and together with the Senior Note
Indenture, the "INDENTURES") between the Company and The Bank of New York, as
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trustee (the "SUBORDINATED NOTE TRUSTEE" and together with the Senior Note
Trustee, the "TRUSTEES"). Unless otherwise indicated, capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Indentures.
The Company, Ball Metal Beverage Container Corp. and Reynolds Metals
Company ("RMC") have entered into an Asset Purchase Agreement, dated as of April
22, 1998 (the "ASSET PURCHASE AGREEMENT"), pursuant to which the Company will
purchase the North American aluminum beverage can and can end manufacturing
business of RMC (such business referred to herein as "REYNOLDS"), for
approximately $746.0 million, subject to a working capital adjustment.
Concurrent with the closing of the Acquisition, the Company is lending RMC $39.0
million pursuant to the terms of the Incentive Loan Agreement (as such term is
defined in the Asset Purchase Agreement). The Company is also entering into the
Long-Term Credit Agreement, the Short-Term Credit Agreement and the Canadian
Revolving Credit Agreement (collectively, the "CREDIT FACILITIES") pursuant to
which it will borrow up to $800 million to fund a portion of the purchase price
for Reynolds and the loan under the Incentive Loan Agreement. The issue and
sale of the Series A Notes, the acquisition of Reynolds and the consummation of
the Credit Facilities will take place concurrently and are each conditioned on
such other events occurring.
Each tranche of the Series A Notes will be offered and sold to you
pursuant to exemptions from the registration requirements under the Securities
Act of 1933, as amended (the "SECURITIES ACT"). The Company has prepared a
preliminary offering memorandum, dated July 22, 1998 (the "PRELIMINARY OFFERING
MEMORANDUM"), and a final offering memorandum (the "OFFERING MEMORANDUM"), dated
August 5, 1998, relating to the Company and each tranche of the Series A Notes.
It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Securities Act, each tranche of the Series A Notes (and all
securities issued in exchange therefor or in substitution thereof) shall bear
the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
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COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE."
You have represented and warranted to the Company that you will make
offers (the "EXEMPT RESALES") of each tranche of the Series A Notes purchased by
you hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom you reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Securities Act
("QIBS"), and (ii) to persons other than U.S. persons in offshore transactions
meeting the requirements of Rule 903 or 904 of Regulation S (such persons
specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE
PURCHASERS"). As used herein, the terms "OFFSHORE TRANSACTION" and "U.S.
PERSON" have the respective meanings given to them in Regulation S. You will
offer each tranche of the Series A Notes to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof. Such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Series A Senior
Notes will have the registration rights set forth in the registration rights
agreement (the "SENIOR REGISTRATION RIGHTS AGREEMENT"), to be dated August 10,
1998 (the "CLOSING DATE"), for so long as such Series A Senior Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Senior Registration Rights
Agreement). Holders (including subsequent transferees) of the Series A Senior
Subordinated Notes will have the registration rights set forth in the
registration rights agreement (the "SUBORDINATED REGISTRATION RIGHTS AGREEMENT"
and, together with the Senior Registration Rights Agreement, the "REGISTRATION
RIGHTS AGREEMENTS"), to be dated the Closing Date, for so long as such Series A
Senior Subordinated Notes constitute "TRANSFER RESTRICTED SECURITIES" (as
defined in the Subordinated Registration Rights Agreement). Pursuant to the
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Registration Rights Agreements, the Company will agree to file with the
Securities and Exchange Commission (the "COMMISSION") under the circumstances
set forth therein, (i) a registration statement under the Securities Act (the
"EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's Series B
Senior Notes and its Series B Senior Subordinated Notes to be offered in
exchange for each tranche of the Series A Notes (such offer to exchange being
referred to collectively as the "EXCHANGE OFFER") and (ii) a shelf registration
statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION
STATEMENT," and together with the Exchange Offer Registration Statement, the
"REGISTRATION STATEMENTS") relating to the resale of each tranche of the Series
A Notes by certain holders of such Notes, and to use its reasonable best efforts
to cause such Registration Statements to be declared effective. This Agreement,
the Indentures and the Registration Rights Agreements are hereinafter referred
to collectively as the "OPERATIVE DOCUMENTS." This is to confirm the agreement
concerning the purchase of each tranche of the Series A Notes from the Company
by the Initial Purchasers.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
GUARANTORS. The Company and each of the Guarantors (as of the date hereof and
the Closing Date) represent, warrant and agree as follows (and all of such
representations and warranties shall be deemed to include Reynolds, and all
references to the Company in this Section shall assume that the Company has
acquired Reynolds as of the date hereof):
a. The Preliminary Offering Memorandum and Offering
Memorandum have been prepared by the Company for use by the Initial
Purchasers in connection with the Exempt Resales. No order or decree
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the
Securities Act, has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company, is
contemplated.
b. The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates did not, and the Offering
Memorandum as of the Closing Date will not, contain an untrue statement
of a material fact or omit to state a material fact necessary, in order
to make the statements contained therein, in light of the circumstances
under which they were made, not misleading, PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial
Purchasers expressly for use therein.
c. The market-related and industry data included in the
Preliminary Offering Memorandum and the Offering Memorandum are based
upon estimates by the Company derived from sources which the Company
believes to be reliable and accurate in all material respects.
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d. The Company is a corporation duly incorporated and validly
existing and in good standing under the laws of Indiana with all
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Preliminary
Offering Memorandum and the Offering Memorandum, and is duly qualified to
conduct its business and is in good standing as a foreign corporation in
each jurisdiction or place where the nature of its properties or the
conduct of its business requires such qualification, except where the
failure to qualify or to be in good standing would not reasonably be
expected to have a material adverse effect on the financial condition,
business, prospects, properties or results of operations of the Company
and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
e. Each Guarantor is a corporation duly incorporated and
validly existing and in good standing under the laws of its state of
organization with full corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted, and is duly qualified to conduct its business and is in good
standing as a foreign corporation in each jurisdiction where the nature
of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify or to be in good
standing does not have a Material Adverse Effect.
f. The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Indentures, the Registration Rights Agreements and each
tranche of the Notes
g. Each Guarantor has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Indentures, the Registration Rights Agreements and the
Subsidiary Guarantees.
h. This Agreement has been duly authorized, executed and
delivered by the Company and each Guarantor and, assuming due
authorization, execution and delivery by the Initial Purchasers,
constitutes the legally valid and binding agreement of the Company and
each Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights generally,
(ii) general equitable principles (whether considered in a proceeding in
equity or at law), (iii) an implied covenant of good faith and fair
dealing and (iv) except as rights to indemnity and contribution hereunder
may be limited by Federal or state securities laws or principles of
public policy.
i. The Senior Registration Rights Agreement has been duly
authorized by the Company and each Guarantor and, upon its execution and
delivery by the Company and each Guarantor and, assuming due
authorization, execution and delivery by the Initial Purchasers, will
constitute the legally valid and binding agreement of the Company and
each Guarantor, enforceable against the Company and each Guarantor in
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accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in
equity or at law), (iii) an implied covenant of good faith and fair
dealing and (iv) except as rights to indemnity and contribution hereunder
may be limited by Federal or state securities laws or principles of
public policy.
j. The Subordinated Registration Rights Agreement has been
duly authorized by the Company and each Guarantor and, upon its execution
and delivery by the Company and each Guarantor and, assuming due
authorization, execution and delivery by the Initial Purchasers, will
constitute the legally valid and binding agreement of the Company and
each Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in
equity or at law), (iii) an implied covenant of good faith and fair
dealing and (iv) except as rights to indemnity and contribution hereunder
may be limited by Federal or state securities laws or principles of
public policy.
k. The Senior Note Indenture has been duly authorized by the
Company and each Guarantor, and upon its execution and delivery by the
Company and each Guarantor and, assuming due authorization, execution and
delivery by the Senior Note Trustee, will constitute the legally valid
and binding agreement of the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its terms,
subject to (i) the effects of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally, (ii) general equitable principles
(whether considered in a proceeding in equity or at law) and (iii) an
implied covenant of good faith and fair dealing; no qualification of the
Senior Note Indenture under the Trust Indenture Act of 1939, as amended
("TIA") is required in connection with the offer and sale of the Series A
Senior Notes contemplated hereby or in connection with the Exempt Resales
other than in connection with the performance of the Company's
obligations under the Senior Registration Rights Agreement.
l. The Subordinated Note Indenture has been duly authorized
by the Company and each Guarantor, and upon its execution and delivery by
the Company and each Guarantor and, assuming due authorization, execution
and delivery by the Subordinated Note Trustee, will constitute the
legally valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its
terms, subject to (i) the effects of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally, (ii) general
equitable principles (whether considered
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in a proceeding in equity or at law) and (iii) an implied covenant of
good faith and fair dealing; no qualification of the Subordinated Note
Indenture under the TIA is required in connection with the offer and sale
of the Series A Senior Subordinated Notes contemplated hereby or in
connection with the Exempt Resales other than in connection with the
performance of the Company's obligations under the Subordinated
Registration Rights Agreement.
m. The Series A Senior Notes have been duly authorized by the
Company and when duly executed by the Company in accordance with the
terms of the Senior Note Indenture and, assuming due authentication of
the Series A Senior Notes by the Senior Note Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance with the
terms hereof, will have been validly issued and delivered, and will
constitute legally valid and binding obligations of the Company entitled
to the benefits of the Senior Note Indenture, enforceable against the
Company in accordance with their terms, subject to (i) the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a
proceeding in equity or at law) and (iii) an implied covenant of good
faith and fair dealing.
n. The Series A Senior Subordinated Notes have been duly
authorized by the Company and when duly executed by the Company in
accordance with the terms of the Subordinated Note Indenture and,
assuming due authentication of the Series A Senior Subordinated Notes by
the Subordinated Notes Trustee, upon delivery to the Initial Purchasers
against payment therefor in accordance with the terms hereof, will have
been validly issued and delivered, and will constitute legally valid and
binding obligations of the Company entitled to the benefits of the
Subordinated Note Indenture, enforceable against the Company in
accordance with their terms, subject to (i) the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether enforcement is considered in a
proceeding in equity or at law) and (iii) an implied covenant of good
faith and fair dealing.
o. The Senior Note Subsidiary Guarantees to be endorsed on
the Series A Senior Notes have been duly and validly authorized by each
Guarantor and when duly executed by each Guarantor in accordance with the
terms of the Senior Note Indenture and, assuming due authentication of
the Series A Senior Notes by the Senior Note Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance with the
terms hereof, will have been validly issued and delivered, and will
constitute valid and binding obligations of each of the Guarantors,
entitled to the benefits of the Senior Note Indenture, enforceable
against each of the Guarantors in accordance with their terms, subject to
(i) the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
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creditors' rights generally, (ii) general equitable principles (whether
enforcement is considered in a proceeding in equity or at law) and (iii)
an implied covenant of good faith and fair dealing.
p. The Subordinated Note Subsidiary Guarantees to be endorsed
on the Series A Senior Subordinated Notes have been duly and validly
authorized by each Guarantor and when duly executed by each Guarantor in
accordance with the terms of the Subordinated Note Indenture and,
assuming due authentication of the Series A Senior Subordinated Notes by
the Subordinated Note Trustee, upon delivery to the Initial Purchasers
against payment therefor in accordance with the terms hereof, will have
been validly issued and delivered, and will constitute valid and binding
obligations of each of the Guarantors, entitled to the benefits of the
Subordinated Note Indenture, enforceable against each of the Guarantors
in accordance with their terms, subject to (i) the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether enforcement is considered in a
proceeding in equity or at law) and (iii) an implied covenant of good
faith and fair dealing.
q. The Series B Senior Notes will have been duly authorized
by the Company on or before the Closing Date and, if and when duly issued
and authenticated in accordance with the terms of the Senior Note
Indenture and delivered in accordance with the Exchange Offer provided
for in the Senior Registration Rights Agreement, will constitute legally
valid and binding obligations of the Company entitled to the benefits of
the Senior Note Indenture, enforceable against the Company in accordance
with their terms, subject to (i) the effects of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally, (ii) general
equitable principles (whether enforcement is considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing.
r. The Series B Subordinated Notes will have been duly
authorized by the Company on or before the Closing Date and, if and when
duly issued and authenticated in accordance with the terms of the
Subordinated Note Indenture and delivered in accordance with the Exchange
Offer provided for in the Subordinated Registration Rights Agreement,
will constitute legally valid and binding obligations of the Company
entitled to the benefits of the Subordinated Note Indenture enforceable
against the Company in accordance with their terms, subject to (i) the
effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors'
rights generally, (ii) general equitable principles (whether enforcement
is considered in a proceeding in equity or at law) and (iii) an implied
covenant of good faith and fair dealing.
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s. The Senior Note Subsidiary Guarantees to be endorsed on
the Series B Senior Notes will have been duly authorized by each
Guarantor on or before the Closing Date and, if and when executed and
delivered by the Guarantors, if and when the Series B Senior Notes are
issued and authenticated in accordance with the terms of the Senior
Registration Rights Agreement and the Senior Note Indenture, the Senior
Note Subsidiary Guarantees to be endorsed on the Series B Senior Notes
will be the legally valid and binding obligation of each Guarantor,
enforceable against each Guarantor in accordance with their terms,
subject to (i) the effects of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally, (ii) general equitable principles
(whether enforcement is considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing.
t. The Subordinated Note Subsidiary Guarantees to be endorsed
on the Series B Senior Subordinated Notes will have been duly authorized
by the Guarantors on or before the Closing Date and, if and when executed
and delivered by each Guarantor, if and when the Series B Senior
Subordinated Notes are issued and authenticated in accordance with the
terms of the Subordinated Registration Rights Agreement and the
Subordinated Note Indenture, the Subordinated Note Subsidiary Guarantees
to be endorsed on the Series B Senior Subordinated Notes will be the
legally valid and binding obligation of each Guarantor, enforceable
against each Guarantor in accordance with their terms, subject to (i)
the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
enforcement is considered in a proceeding in equity or at law) and (iii)
an implied covenant of good faith and fair dealing.
u. The Company has all requisite corporate power and
authority to enter into the Credit Facilities and any and all other
agreements and instruments ancillary to or entered into in connection
with the transactions contemplated by the Credit Facilities
(collectively, the "CREDIT DOCUMENTS").
v. Each of the Credit Documents was duly and validly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes the valid and binding agreement of the Company, enforceable
against the Company in accordance with its respective terms, subject to
(i) the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
enforcement is considered in a proceeding in equity or at law) and (iii)
an implied covenant of good faith and fair dealing.
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w. Each of the Company and Ball Metal Beverage Container
Corp. has all requisite corporate power and authority to enter into the
Asset Purchase Agreement (the "TRANSACTION AGREEMENT"), dated as of April
22, 1998, by and among Ball Corporation, Ball Metal Beverage Container
Corp. and Reynolds Metals Company and (ii) any and all other agreements,
side letters and instruments ancillary to or entered into in connection
with the transactions contemplated by the Transaction Agreement.
x. The Transaction Agreement has been duly and validly
authorized, executed and delivered by the Company and Ball Metal Beverage
Container Corp. and, assuming due authorization, execution and delivery
by the other party thereto, constitutes the valid and binding agreement
of each of the Company and Ball Metal Beverage Container Corp.,
enforceable against each of the Company and Ball Metal Beverage Container
Corp. in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether enforcement is
considered in a proceeding in equity or at law) and (iii) an implied
covenant of good faith and fair dealing.
y. All the shares of capital stock, partnership, membership
or other equity interest of the Company outstanding prior to the issuance
of each tranche of the Series A Notes have been duly authorized and
validly issued and are fully paid and nonassessable.
z. Other than as disclosed in the Offering Memorandum, the
Company does not own capital stock or other equity interests of any
corporation or entity which would be required by the Senior Note
Indenture or the Senior Subordinated Note Indenture to be a Guarantor
thereunder. All of the Company's Domestic Subsidiaries, excluding any
Unrestricted Subsidiaries and any Excluded Subsidiaries, that have any
assets or are guarantors of any other Indebtedness of the Company or any
of its Subsidiaries are Guarantors hereunder.
aa. There are no legal or governmental proceedings pending or,
to the knowledge of the Company or any of the Guarantors, expressly
contemplated by, or threatened, against the Company or any of the
Guarantors or to which any of its properties are subject, that are not
disclosed in the Offering Memorandum and are reasonably likely to have a
Material Adverse Effect or to materially and adversely affect the
issuance of each tranche of the Notes or the consummation of the other
transactions contemplated by the Operative Documents. Except as disclosed
in the Offering Memorandum, neither the Company nor any of the Guarantors
is involved in any strike, job action or labor dispute with any group of
employees that is reasonably likely to have a Material Adverse Effect
and, to the knowledge of the Company and each of the Guarantors, no such
action or dispute is threatened.
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bb. No material relationship, direct or indirect, exists
between or among the Company or any of the Guarantors on the one hand,
and the directors, officers, shareholders, members, partners, customers
or suppliers of the Company on the other hand, that would be required to
be described in the Offering Memorandum pursuant to Regulation S-K of the
Securities Act if Regulation S-K were applicable to the Offering
Memorandum, which is not so described in the Offering Memorandum.
cc. Neither the Company nor any of its Subsidiaries (i) is in
violation of its certificate of incorporation, bylaws or other
organizational documents, (ii) is in default in any material respect in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, or
other agreement or instrument to which any of them is a party or by which
any of them is bound or to which any of their respective properties or
assets is subject that is material to the Company's consolidated
financial condition or prospects (collectively, the "MATERIAL
AGREEMENTS") or (iii) is in violation in any material respect of any law,
statute or ordinance or any rule, regulation, injunction or decree of any
court or governmental agency to which their respective property or assets
may be subject or has failed to obtain any material license, permit,
certificate, franchise, or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except in the case of (i), (ii) or (iii), as would not,
individually or in the aggregate, have a Material Adverse Effect.
dd. Except (i) as has been obtained or completed or (ii) to
the extent the failure to obtain any such consent, approval,
authorization or order or to make any such filing or registration would
not, individually or in the aggregate, have a Material Adverse Effect,
none of (A) the issuance, offer or sale of each tranche of the Series A
Notes and each tranche of the Series B Notes, the execution, delivery, or
performance by the Company or any of its Subsidiaries of this Agreement,
the Subsidiary Guarantees or the other Operative Documents, compliance by
the Company and its Subsidiaries with the provisions hereof or thereof or
the consummation by the Company or such Subsidiaries of the transactions
contemplated hereby or thereby; (B) the execution, delivery or
performance by the Company of the Credit Facilities or the other Credit
Documents, compliance by the Company with the provisions thereof or
consummation by the Company of the transactions contemplated thereby; and
(C) the execution, delivery or performance by the Company and Ball Metal
Beverage Container Corp. of the Transaction Agreement, compliance by each
of the Company and Ball Metal Beverage Container Corp. with the
provisions thereof, or consummation by the Company and Ball Metal
Beverage Container Corp. of the transactions contemplated thereby (1)
requires any consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency, or other governmental body, agency or official (except as such as
may be required in connection with the registration under the Securities
Act of the Series B Notes in accordance with the Registration Rights
Agreements, under the TIA for the issuance of each tranche of the Series
B Notes, in
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connection with the trading of the Notes on PORTAL, under the securities
or "blue sky" laws of various jurisdictions in connection with the sale
of each tranche of the Series A Notes and each tranche of the Series B
Notes and as required under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended), or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
charter or bylaws, or other organizational documents, of the Company or
any of its Subsidiaries or (2) conflicts or will conflict with or
constitutes or will constitute a breach or violation of any of the terms
or provisions of, or (including with the giving of notice or the lapse of
time or both) constitute a default under any Material Agreement or (3)
violates in any material respect any law, statute or ordinance, or any
rule, regulation, injunction or decree of any court or governmental
agency to which the Company or any of its Subsidiaries or their property
or assets may be subject or results in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
(except for liens arising under the Credit Documents) pursuant to the
terms of any agreement or instrument to which it is a party or by which
it may be bound or to which any of its property or assets is subject.
ee. The accountants, PricewaterhouseCoopers, LLP and Ernst &
Young LLP who have certified certain of the financial statements included
as part of the Offering Memorandum, are independent public accountants
under Rule 101 of the AICPA's Code of Professional Conduct, and its
interpretation and rulings during the period covered by the financial
statements on which they reported contained in the Offering Memorandum.
ff. The consolidated and combined historical financial
statements, and PRO FORMA financial information, together with the
related notes thereto, set forth in the Offering Memorandum comply as
to form in all material respects with the requirements of Regulation S-X
under the Securities Act applicable to registration statements on Form
S-3 under the Securities Act. Such historical financial statements
fairly present in all material respects the financial position of the
Company at the respective dates indicated and the results of operations
and cash flows for the respective periods indicated, subject, in the case
of unaudited combined financial statements, to year-end audit
adjustments, in each case in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout such
periods. Such PRO FORMA financial information has been prepared on a
basis consistent with the historical and proposed transactions
contemplated by the Offering Memorandum and this Agreement. The other
financial information and data included in the Offering Memorandum,
historical and PRO FORMA, are, in all material respects, accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
gg. Except as disclosed in or specifically contemplated by the
Offering Memorandum, subsequent to the date as of which such information
was given, (i) neither
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<PAGE>
the Company nor any Guarantor has incurred any liability or obligation,
direct or contingent, or entered into any transaction, in each case not
in the ordinary course of business, that is material to the Company or
such Guarantor, (ii) there has been no Material Adverse Effect and, (iii)
except as disclosed in or contemplated by the Offering Memorandum, since
the date of the latest audited combined financial statements of the
Company included in the Offering Memorandum, there has been no (A)
dividend or distribution of any kind declared, paid or made by the
Company or such Guarantor on any class of its capital stock (other than
the payment of regular quarterly cash dividends), (B) issuance of
securities (other than pursuant to the Company's or such Guarantor's
employee benefit plans and agreements and the issuance of the Series A
Notes offered hereby) or (C) material increase in short-term or long-term
debt of the Company or such Guarantor.
hh. The Company and each Guarantor will, on or prior to the
Closing Date, have good and marketable title to all property owned by it,
free and clear of all liens, claims, security interests or other
encumbrances and defects except such as are described in the Offering
Memorandum, granted pursuant to the Credit Facilities, or such as do not
materially affect the value of such property by the Company or any
Guarantor or would not reasonably be expected to have a Material Adverse
Effect; and all material real property and buildings held under lease by
the Company or any Guarantor is held under valid, subsisting and
enforceable leases, with such exceptions as would not have a Material
Adverse Effect.
ii. The Company and each Guarantor owns or has the right to
use, free and clear of all Liens (other than Permitted Liens), defects,
restrictions or equities of any kind whatsoever (other than Liens,
defects, restrictions and equities which would not result in a Material
Adverse Effect), all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"INTELLECTUAL PROPERTY") presently employed by it in connection with its
respective business now operated by it, except where the failure to own
or have the right to use such Intellectual Property would not, singly or
in the aggregate, result in a Material Adverse Effect. The use of such
Intellectual Property in connection with the business and operations of
the Company and the Guarantors does not, to the Company's knowledge,
infringe on the rights or claimed rights of any person. Neither the
Company nor any of the Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property which, singly or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
jj. The Company and each Guarantor will, on or prior to the
Closing Date, have such permits, licenses, franchises, certificates,
consents, orders and other approvals or authorizations of any
governmental or regulatory authority ("PERMITS") as are necessary under
applicable law to own its properties and to conduct its businesses in
13
<PAGE>
the manner described in the Offering Memorandum, except to the extent
that the failure to have such Permits would not reasonably be expected to
have a Material Adverse Effect. The Company and each Guarantor is in
compliance in all material respects with all its material obligations
with respect to the Permits, and, to the knowledge of the Company, no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit, subject in
each case to such qualification as may be set forth in the Offering
Memorandum and except to the extent that any such revocation or
termination would not reasonably be expected to have a Material Adverse
Effect.
kk. The Company is not currently and will not be, upon sale of
each tranche of the Series A Notes in accordance herewith and the
application of the net proceeds therefrom as described in the Offering
Memorandum under the caption "Use of Proceeds," an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
ll. Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D ("REGULATION D") under the Securities Act) of the
Company has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or could be
integrated with the offering and sale of each tranche of the Notes in a
manner that would require the registration of each tranche of the Series
A Notes under the Securities Act or (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D,
including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising) in connection with the offering of each tranche of the
Series A Notes. No securities of the same class as each tranche of the
Series A Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
mm. Except as permitted by the Securities Act, the Company has
not distributed and, prior to the Closing Date will not distribute, any
offering material in connection with the offering and sale of each
tranche of the Series A Notes other than the Preliminary Offering
Memorandum and Offering Memorandum.
nn. When each tranche of the Series A Notes is issued and
delivered pursuant to this Agreement, neither tranche of such Series A
Notes will be of the same class (within the meaning of Rule 144A under
the Securities Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") or that are quoted
in a United States automated inter-dealer quotation system.
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<PAGE>
oo. Assuming (i) that each tranche of the Series A Notes is
issued, sold and delivered under the circumstances contemplated by the
Offering Memorandum and this Agreement, (ii) that your representations
and warranties in Section 2 are true, (iii) compliance by you with your
covenants set forth in Section 2 and (iv) that each of the Eligible
Purchasers is either (A) an entity that you reasonably believe to be a
QIB or (B) a person who is not a "U.S. person" and who acquires the
Series A Notes outside the United States in an "offshore transaction"
(within the meaning of Regulation S), the purchase of each tranche of the
Series A Notes by you pursuant hereto and the initial resale of each
tranche of the Series A Notes pursuant to the Exempt Resales are not
required to be registered under the Securities Act.
pp. Except as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect: the Company is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred
and does not reasonably expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations
thereunder (the "CODE"). Each "pension plan" for which the Company would
have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification, except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
qq. To the knowledge of the Company, the execution and
delivery of this Agreement, the other Operative Documents and the sale of
each tranche of the Series A Notes to be purchased by the Eligible
Purchasers will not involve any prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code. The representation
made by the Company in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the representations
and covenants made or deemed made by the Eligible Purchasers as set forth
in the Offering Memorandum under the section entitled "Notice to
Investors."
rr. Except as described in the Offering Memorandum, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
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registered pursuant to the Registration Statements or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
ss. The Company and each of its Subsidiaries maintain
insurance covering their properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are
reasonably adequate in accordance with customary industry practice to
protect the Company and its Subsidiaries and their businesses.
tt. The Company has filed all Federal, state and local income
and franchise tax returns required to be filed through the date hereof
(other than those the nonfiling of which would not have a Material
Adverse Effect) and have paid all taxes due thereon, other than those
being contested in good faith and for which reserves have been provided
in accordance with GAAP, currently payable without penalty or interest,
or the nonpayment of which would not have a Material Adverse Effect. No
tax deficiency has been determined adversely to the Company nor does the
Company have any knowledge of any tax deficiency which, if determined
adversely to the Company, would have a Material Adverse Effect.
uu. Except as set forth in the Offering Memorandum, there has
been no storage, disposal, generation, transportation, handling or
treatment of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company (or, to the knowledge of the Company, any of
their predecessors in interest) at, upon or from any of the property now
or previously owned or leased by the Company in violation of any
applicable law, ordinance, rule, regulation or order, or which would
require remedial action under any applicable law, ordinance, rule,
regulation or order, except for any violation or remedial action which
would not be reasonably likely to have, singularly or in the aggregate, a
Material Adverse Effect; except as set forth in, or specifically
contemplated by, the Offering Memorandum there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the environment surrounding such
property of any toxic wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or with respect to which the
Company has knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not be
reasonably likely to have, singularly or in the aggregate, a Material
Adverse Effect; and the terms "hazardous wastes," "medical wastes,"
"toxic wastes," and "hazardous substances" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
vv. None of the Company or any of its affiliates or any person
acting on its or their behalf has engaged or will engage during the
applicable restricted period in any directed selling efforts within the
meaning of Rule 902(b) of Regulation S with respect to each tranche of
the Notes, and the Company and its affiliates and all persons
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<PAGE>
acting on its or their behalf have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with any
offering of each tranche of the Notes outside of the United States;
PROVIDED, that no representation is made by the Company or the Guarantors
as to the Initial Purchasers or any person acting on their behalf.
ww. The sale of each tranche of the Series A Notes pursuant to
Regulation S are "offshore transactions" and are not part of a plan or
scheme to evade the registration provisions of the Securities Act.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE INITIAL
PURCHASERS. The Initial Purchasers represent and warrant that:
a. Each of the Initial Purchasers is a QIB with such
knowledge and experience in financial and business matters as is
necessary in order to evaluate the merits and risks of an investment
in each tranche of the Series A Notes.
b. Each of the Initial Purchasers (i) is not acquiring each
tranche of the Series A Notes with a view to any distribution thereof or
with any present intention of offering or selling any of either tranche
of the Series A Notes in a transaction that would violate the Securities
Act or the securities laws of any State of the United States or any other
applicable jurisdiction; (ii) in connection with the Exempt Resales, will
solicit offers to buy the Notes only from, and will offer to sell either
tranche of the Notes only to, the Eligible Purchasers in accordance with
this Agreement and on the terms contemplated by the Offering Memorandum;
and (iii) will not offer or sell either tranche of the Notes pursuant to,
nor has it offered or sold either tranche of the Notes by, or otherwise
engaged in, any form of general solicitation or general advertising
(within the meaning of Regulation D; including, but not limited to,
advertisements, articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising) in connection with the
offering of each tranche of the Series A Notes.
c. Each of the Initial Purchasers understands that neither
tranche of the Series A Notes has been and will not be registered under
the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons pursuant to
an exemption from the registration requirements of the Securities Act or
outside the U.S. or to, or for the account or benefit of non-U.S. persons
in accordance with Regulation S. Each of the Initial Purchasers
represents that it has not offered, sold or delivered either tranche of
the Series A Notes, and will not offer, sell or deliver either tranche of
the Series A Notes (i) as part of its distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date or such longer period as may then be
applicable under Regulation S (such
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period, the "RESTRICTED PERIOD"), within the United States or to, or for
the account or benefit of U.S. persons, except in accordance with Rule
144A under the Securities Act or another applicable exemption.
Accordingly, each of the Initial Purchasers represents and agrees that
neither it, its affiliates nor any persons acting on its or their behalf
has engaged or will engage in any directed selling efforts within the
meaning of Rule 902(b) of Regulation S with respect to either tranche of
the Series A Notes, and it, its affiliates and all persons acting on its
behalf have complied and will comply with the offering restriction
requirements of Regulation S.
d. Each of the Initial Purchasers agrees that at or prior to
confirmation of all sales of each tranche of the Series A Notes pursuant
to Regulation S, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Series A Notes from it during the Restricted Period a confirmation or
notice substantially to the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering or the closing date, except in either
case in accordance with Rule 144A if available under the Securities
Act. Terms used above have the meanings assigned to them in
Regulation S."
Each of the Initial Purchasers further agrees that it has not entered and
will not enter into any contractual arrangement with respect to the
distribution or delivery of either tranche of the Notes, except with its
affiliates or with the prior written consent of the Company.
e. Each of the Initial Purchasers agrees not to cause any
advertisement of either tranche of the Notes to be published in any
newspaper or periodical or posted in any public place and not to issue
any circular relating to each tranche of the Notes, except such
advertisements as may be permitted by Regulation S.
f. The sale of each tranche of the Series A Notes pursuant to
Regulation S are "offshore transactions" and are not part of a plan or
scheme to evade the registration provisions of the Securities Act.
g. Each of the Initial Purchasers understands that the
Company and, for purposes of the opinions to be delivered to you pursuant
to Section 7 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and you hereby consent to such reliance.
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The terms used in this Section 2 that have meanings assigned to
them in Regulation S are used herein as so defined.
3. PURCHASE OF THE NOTES BY THE INITIAL PURCHASERS. On the basis
of the representations and warranties contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to sell $300.0 million
in aggregate principal amount of Series A Senior Notes to the Initial
Purchasers and the Initial Purchasers will purchase such aggregate principal
amount of Series A Senior Notes at an aggregate purchase price equal to
97.75% of the principal amount thereof (the "SENIOR NOTES PURCHASE PRICE")
and the Company agrees to sell $250.0 million in aggregate principal amount
of Series A Senior Subordinated Notes to the Initial Purchasers and the
Initial Purchasers will purchase such aggregate principal amount of Series A
Senior Subordinated Notes at an aggregate purchase price equal to 97.5% of
the principal amount thereof (the "SUBORDINATED NOTES PURCHASE PRICE").
The Company shall not be obligated to deliver any of the Series A
Notes to be delivered, except upon payment for all of each tranche of the
Series A Notes to be purchased on such Closing Date as provided herein.
4. DELIVERY AND PAYMENT.
a. Delivery to the Initial Purchasers of and payment for each
tranche of the Series A Notes shall be made at 10:00 a.m., Chicago time,
on the Closing Date at the offices of Skadden, Arps, Slate, Meagher &
Flom, 333 W. Wacker Drive, Suite 2100, Chicago, IL 60606, or such other
place or time as you and the Company shall designate.
b. One or more of each tranche of Series A Notes in
definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Initial
Purchasers may request upon at least one business days' notice to the
Company, having an aggregate principal amount at maturity corresponding
to the aggregate principal amount of each tranche of the Series A Notes
sold pursuant to Exempt Resales (collectively, the "GLOBAL NOTES"), shall
be delivered by the Company to the Initial Purchasers, against payment by
the Initial Purchasers of the purchase price thereof by wire transfer of
immediately available funds as the Company may direct by written notice
delivered to you one business day prior to the Closing Date. The Global
Notes in definitive form shall be made available to you for inspection
not later than 10:00 a.m. on the day immediately preceding the Closing
Date.
c. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of the Initial Purchasers hereunder.
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5. FURTHER AGREEMENTS OF THE COMPANY AND THE GUARANTORS. The
Company and each of the Guarantors agrees:
a. To advise you promptly and, if requested by you, to
confirm such advice in writing, of (i) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of each tranche of any Series A Notes for
offering or sale in any jurisdiction, or the initiation of any proceeding
for such purpose by the Commission or any state securities commission or
other regulatory authority, and (ii) the happening of any event that
makes any statement of a material fact made in the Offering Memorandum
untrue or that requires the making of any additions to or changes in the
Offering Memorandum in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Company and each Guarantor shall use its reasonable efforts to prevent
the issuance of any stop order or order suspending the qualification or
exemption of each tranche of the Series A Notes under any state
securities or Blue Sky laws and, if at any time any state securities
commission shall issue any stop order suspending the qualification or
exemption of each tranche of the Series A Notes under any state
securities or Blue Sky laws, the Company and each Guarantor shall use
reasonable efforts to obtain the withdrawal or lifting of such order at
the earliest possible time.
b. To furnish to you, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as you may reasonably request. The
Company and each Guarantor consents to the use of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments and
supplements thereto required pursuant to this Agreement, by you in
connection with the Exempt Resales that are in compliance with this
Agreement.
c. Not to amend or supplement the Offering Memorandum prior
to the Closing Date unless you shall previously have been advised of, and
shall not have reasonably objected to, such amendment or supplement
within a reasonable time, but in any event not longer than five days
after being furnished a copy of such amendment or supplement. The
Company shall reasonably promptly prepare, upon any reasonable request
by you, any amendment or supplement to the Offering Memorandum that may
be necessary or advisable in connection with Exempt Resales. If, in
connection with any Exempt Resales or market-making transactions after
the date of this Agreement and prior to the consummation of the Exchange
Offer, any event shall occur that, in the judgment of the Company or in
the judgment of counsel to you, makes any statement of a material fact in
the Offering Memorandum untrue or that requires the making of any
additions to or changes in the Offering Memorandum in order to make the
statements in the Offering Memorandum, in light of the circumstances at
the time that the Offering Memorandum is delivered to prospective
Eligible Purchasers, not misleading, or if it is necessary to amend or
supplement the Offering Memorandum to comply in all material respects
with
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any applicable laws, the Company shall promptly notify you of such event
and prepare an appropriate amendment or supplement to the Offering
Memorandum so that (i) the statements in the Offering Memorandum as
amended or supplemented will, in light of the circumstances at the time
that the Offering Memorandum is delivered to prospective Eligible
Purchasers, not be misleading and (ii) the Offering Memorandum will
comply in all material respects with applicable law.
d. To cooperate with you and your counsel in connection with
the qualification of each tranche of the Series A Notes for offer and
sale by you and by dealers under the state securities or Blue Sky laws
of such jurisdictions as you may reasonably request (PROVIDED, HOWEVER,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not now so qualified or
to take any action that would subject it to general consent to service
of process in any jurisdiction in which it is not now so subject or
subject itself to taxation in excess of a nominal amount in any such
jurisdiction where it is not then so subject). Subject to the provisions
in the first sentence of this Section 5(d), the Company shall continue
such qualification in effect so long as required by law for distribution
of each tranche of the Series A Notes.
e. Prior to the Closing Date, to furnish to you, as soon as
they have been prepared, any internal combined financial statements of
the Company that have been prepared by the Company for any period
subsequent to the period covered by the financial statements appearing
in the Offering Memorandum.
f. To use its reasonable efforts to do and perform all
things required to be done and performed under this Agreement by it
prior to or after the Closing Date and to satisfy all conditions
precedent on its part to the delivery of each tranche of the Series A
Notes.
g. Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Securities Act) that would be integrated with the sale of either tranche
of the Series A Notes in a manner that would require the registration
under the Securities Act of the sale to you or the Eligible Purchasers
of either tranche of Series A Notes.
h. For a period of 90 days from the date of the Offering
Memorandum, not to, directly or indirectly, sell, contract to sell,
grant any option to purchase, issue any instrument convertible into or
exchangeable for, or otherwise transfer or dispose of, any debt
securities of the Company in a public or private offering for cash
having a maturity of more than one year from the date of issue of such
securities, except (i) for each tranche of the Series B Notes in
connection with the Exchange Offer or (ii) with the prior consent of
each of the Initial Purchasers, which consent shall not be unreasonably
withheld.
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i. During any period that the Company is not subject to
Section 13 or Section 15(d) of the Exchange Act, for the period that is
two years after the Closing Date or for so long as necessary to comply
with Rule 144A in connection with resales by registered holders or
beneficial owners of each tranche of Series A Notes, whichever is
longer, to make available to such registered holder or beneficial owner
of each tranche of Series A Notes in connection with any sale thereof
and any prospective purchaser of each tranche of such Series A Notes
from such registered holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).
j. To comply with its agreements in the Registration Rights
Agreements, and all agreements set forth in the representation letters
of the Company to DTC relating to the approval of each tranche of the
Notes by DTC for "book-entry" transfer.
k. To use its reasonable efforts to effect the inclusion of
each tranche of the Notes in the National Association of Securities
Dealers, Inc. Automated Quotation System - PORTAL ("PORTAL").
l. To apply the net proceeds from the sale of each tranche
of the Series A Notes being sold by the Company as set forth in the
Offering Memorandum under the caption "Use of Proceeds."
m. During the period that is two years after the Closing
Date, to take such steps as shall be necessary to ensure that the
Company does not become an "investment company" within the meaning of
such term under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
6. EXPENSES. The Company agrees that, whether or not the
transactions contemplated by this Agreement are consummated or this Agreement
becomes effective or is terminated, to pay all costs, expenses, fees and
taxes incident to and in connection with: (i) the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial statements) and
all amendments and supplements thereto (but not, however, legal fees and
expenses of your counsel incurred in connection therewith), (ii) the
preparation, printing (including, without limitation, word processing and
duplication costs) and delivery of this Agreement, the Indentures, any Blue
Sky Memoranda and any other agreements, memoranda, correspondence and other
documents printed and delivered in connection herewith and with the Exempt
Resales (but not, however, legal fees and expenses of your counsel incurred
in connection with any of the foregoing other than reasonable fees of such
counsel plus reasonable disbursements incurred in connection with the
preparation, printing and delivery of such Blue Sky Memoranda), (iii) the
issuance and delivery by the Company of each tranche of the Notes, (iv) the
qualification of each tranche of the Notes
22
<PAGE>
for offer and sale under the securities or Blue Sky laws of the several
states (including, without limitation, the reasonable fees and disbursements
of your counsel relating to such registration or qualification), (v)
furnishing such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may be
reasonably requested by the Initial Purchasers for use in connection with the
initial Exempt Resales, (vi) the preparation of certificates for each tranche
of the Notes including, without limitation, printing and engraving, (vii) the
fees, disbursements and expenses of the Company's counsel and accountants,
(viii) all expenses and listing fees in connection with the application for
quotation of each tranche of the Series A Notes in PORTAL, (ix) all fees and
expenses (including fees and expenses of counsel) of the Company in
connection with approval of each tranche of the Notes by DTC for "book-entry"
transfer and (x) the performance by the Company of its other obligations
under this Agreement to the extent not provided for above.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and again on the Closing Date (as if made again on and as of such
date), of the representations and warranties of the Company contained herein,
to the performance by the Company of its obligations hereunder, and to each
of the following additional terms and conditions:
a. The Offering Memorandum shall have been printed and copies
made available to you not later than 6:00 p.m., Chicago time, on the
Business Day following the date of this Agreement, or at such later date
and time as you may approve in writing.
b. No Initial Purchaser shall have discovered and disclosed
to the Company on or prior to such Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Kirkland & Ellis, counsel
for the Initial Purchasers, is material or omits to state a fact which,
in the opinion of such counsel, is material and is necessary to make the
statements contained in the Offering Memorandum, in the light of the
circumstances under which they were made, not misleading.
c. All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the other
Operative Documents, the Offering Memorandum and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Initial Purchasers, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable
them to pass upon such matters.
d. Skadden, Arps, Slate, Meagher & Flom (Illinois), special
counsel to the Company and Donald C. Lewis, General Counsel of the
Company each shall have furnished to the Initial Purchasers, their
written opinions addressed to the Initial
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<PAGE>
Purchasers and dated as of the Closing Date, substantially in the form
of Exhibit A and Exhibit B hereto, respectively.
e. The Initial Purchasers shall have received from Kirkland &
Ellis, counsel for the Initial Purchasers, such opinion or opinions,
dated as of the Closing Date, with respect to the issuance and sale of
each tranche of the Series A Notes, the Offering Memorandum and other
related matters as the Initial Purchasers may reasonably require.
f. The Company shall have entered into the Senior Credit
Facilities and any Credit Documents and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof, and the Company
shall have borrowed such amounts thereunder as contemplated in the
Offering Memorandum.
g. The Company and the Senior Note Trustee shall have entered
into the Senior Note Indenture and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
h. The Company and the Subordinated Note Trustee shall have
entered into the Subordinated Note Indenture and the Initial Purchasers
shall have received counterparts, conformed as executed, thereof.
i. The Company and the Initial Purchasers shall have entered
into each of the Senior Registration Rights Agreement and the
Subordinated Registration Rights Agreement and the Initial Purchasers
shall have received counterparts, conformed as executed, thereof.
j. The Initial Purchasers shall have received from
PricewaterhouseCoopers, LLP, independent certified public accountants,
letters addressed to the Company and the Initial Purchasers,
substantially in the form heretofore approved by the Initial Purchasers,
and dated the date hereof and the Closing Date, (i) confirming that they
are independent accountants as required by the Securities Act and its
Rules and Regulations, (ii) stating, as of the date of each letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Offering Memorandum, as of a date not more than five Business Days
prior to the date of each letter), the conclusions and findings of such
firm with respect to the financial information and other matters covered
by the letter delivered concurrently with this Agreement and (iii) with
respect to the letter delivered on the Closing Date, confirming in all
material respects the conclusions and findings set forth in the letter
delivered concurrently with this Agreement.
k. The Initial Purchasers shall have received from Ernst &
Young LLP, independent certified public accountants, letters addressed to
the Initial Purchasers, substantially in the form heretofore approved by
the Initial Purchasers, and
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<PAGE>
dated the date hereof and the Closing Date, (i) confirming that they are
independent auditors as required by the Securities Act and its Rules and
Regulations, (ii) stating, as of the date of each letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Offering Memorandum, as of a date not more than five Business Days
prior to the date of each letter), the conclusions and findings of such
firm with respect to the financial information and other matters covered
by the letter delivered concurrently with this Agreement and (iii) with
respect to the letter delivered on the Closing Date, confirming in all
material respects the conclusions and findings set forth in the letter
delivered concurrently with this Agreement.
l. The Company shall have furnished to the Initial Purchasers
a certificate, dated as of the Closing Date, of a Vice President and its
Chief Financial Officer or Treasurer stating that the representations,
warranties and agreements of the Company (after giving effect to all
materiality qualifiers therein) and the Guarantors in Section 1 are true
and correct as of such Closing Date and giving effect to the consummation
of the transactions contemplated by the Transaction Agreement, the Credit
Documents and this Agreement; the Company and each Guarantor has complied
in all material respects with all its agreements contained herein; and
the conditions set forth in Sections 7(m) and 7(o) have been fulfilled.
m. The Company and each Guarantor shall not have sustained
since the date of the latest audited financial statements included in the
Offering Memorandum any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Offering
Memorandum or (ii) since such date there shall not have been any change
in the capital stock or long-term debt of the Company or any Material
Adverse Effect otherwise than as set forth or contemplated in the
Offering Memorandum, the effect of which, in any such case described in
clause (i) or (ii), is, in the reasonable, good faith judgment of the
Initial Purchasers, so material and adverse as to make it impracticable
or inadvisable to proceed with the payment for and delivery of the Notes
being delivered on such Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.
n. Kirkland & Ellis shall have been furnished with executed
copies, certified by the Assistant Corporate Secretary of the Company, of
the Transaction Agreement, the Credit Documents and such other documents
and opinions, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass
upon the matters referred to in this Agreement and in order to evidence
the accuracy, completeness or satisfaction in all material respects of
any of the representations, warranties or conditions herein contained.
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<PAGE>
o. Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities.
p. Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities
of the Company on any exchange or in the over-the-counter market, shall
have been suspended or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become directly engaged
in hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in
the judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the public offering or delivery of each tranche of the Notes
being delivered on such Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
8. INDEMNIFICATION AND CONTRIBUTION.
a. The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless the Initial Purchasers, their
officers and employees and each person, if any, who controls the Initial
Purchasers within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of either tranche of
Notes), to which the Initial Purchaser, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum or the
Offering Memorandum (in each case as amended or supplemented), or (ii)
the omission or alleged omission to state in any Preliminary Offering
Memorandum or the Offering
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Memorandum (in each case as amended or supplemented) any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and shall reimburse the
Initial Purchaser and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred
by that Initial Purchaser, officer, employee or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Memorandum or the Offering Memorandum
(in each case as amended or supplemented) in reliance upon and in
conformity with written information concerning the Initial Purchasers
furnished to the Company by or on behalf of the Initial Purchasers
specifically for inclusion therein; and PROVIDED FURTHER that with
respect to any such untrue statement or omission made in the Preliminary
Offering Memorandum, the foregoing indemnity shall not inure to the
benefit of an Initial Purchaser (or any person who controls the Initial
Purchaser or any officer or director thereof) from whom the person
asserting such loss, claim, damage, liability or action purchased the
Notes, to the extent that such sale was an initial resale by the Initial
Purchaser and any such loss, claim, damage, liability or action of the
Initial Purchasers is a result of the fact that both (i) to the extent
required by applicable law, a copy of the Offering Memorandum was not
sent or given to such person at or prior to the written confirmation of
the sale of such Securities to such person, and (ii) the untrue
statement or omission in the Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, in either case, such
failure to deliver the Offering Memorandum was a result of noncompliance
by the Company with section 5(c). The foregoing indemnity agreement is
in addition to any liability which the Company or any Guarantor may
otherwise have to the Initial Purchasers or to any officer, employee or
controlling person of any of the Initial Purchasers.
b. Each of the Initial Purchasers shall indemnify and hold
harmless the Company, the Guarantors, their officers and employees, each
of their respective directors, and each person, if any, who controls the
Company or any Guarantor within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such
Guarantor, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum or the Offering
Memorandum (in each case as amended or supplemented) or in any Blue Sky
application or (ii) the omission or alleged omission to state in any
Preliminary Offering Memorandum or the Offering Memorandum (in each case
as amended or supplemented) or in any Blue Sky application any material
fact necessary to make the statements
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<PAGE>
therein, in light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company by or on
behalf of the Initial Purchaser specifically for inclusion therein, and
shall reimburse the Company, the Guarantors, and any such director,
officer, employee or controlling person for any legal or other expenses
reasonably incurred by the Company, the Guarantors, or any such
director, officer or controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which the
any of the Initial Purchasers may otherwise have to the Company or any
such director, officer, employee or controlling person.
c. Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 8 except to the extent it has been materially prejudiced by
such failure and, PROVIDED, FURTHER, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 8. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation. Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the reasonable fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have failed
to assume the defense and employ counsel, (iii) counsel which has been
provided by the Company reasonably determines that its representation of
such indemnified person would present it with a conflict of interest or
(iv) the named parties to any such action (including any impleaded
parties) include both such indemnified party and the Company, and such
indemnified party shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from
or additional to those available to the Company (in which case the
Company shall not have the right to assume the defense of such action on
behalf of such indemnified party, it being understood, however, that the
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Company shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such indemnified
parties, which firm shall be designated in writing by Lehman Brothers
Inc. and that all such reasonable fees and expenses shall be reimbursed
as they are incurred). No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall
not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim,
action, suit or proceeding, or (ii) be liable for any settlement of any
such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment of the plaintiff in
any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
d. If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchasers on the other from the offering of
each tranche of the Series A Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchasers on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Initial Purchasers on the other with respect to
such offering shall be deemed to be in the same proportion as the total
net proceeds from the offering of each tranche of the Series A Notes
purchased under this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total discounts and commissions
received by the Initial Purchasers with respect to each tranche of the
Series A Notes purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of each tranche of the Series
A Notes under this Agreement, in each case as set forth in the table on
the cover page of the Offering Memorandum. The relative fault shall be
determined
29
<PAGE>
by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial
Purchasers, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to
this Section 8(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section shall be deemed to include, for purposes of this Section 8(d),
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8(d), the Initial
Purchasers shall not be required to contribute any amount in excess of
the amount by which the total price at which each tranche of the Series
A Notes purchased by it was resold to Eligible Purchasers exceeds the
amount of any damages which the Initial Purchasers have otherwise paid
or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 8(d)
are several in proportion to their respective underwriting obligations
and not joint.
e. Each of the Initial Purchasers confirms and the Company
acknowledges that the last paragraph on the cover page, the stabilization
legend on page iii and the information contained in the first, fifth,
sixth, seventh, ninth, tenth and thirteenth paragraphs of the section
entitled "Plan of Distribution" constitute the only information
concerning the Initial Purchasers furnished in writing to the Company by
or on behalf of the Initial Purchasers specifically for inclusion in the
Preliminary Offering Memorandum or the Offering Memorandum.
9. TERMINATION. The obligations of the Initial Purchasers
hereunder may be terminated by Lehman Brothers Inc. by notice given to the
Company prior to delivery of and payment for each tranche of the Series A
Notes if, prior to that time, any of the events described in Sections 7(m),
7(o) or 7(p) shall have occurred or if the Initial Purchasers shall decline
to purchase either tranche of the Series A Notes for any reason permitted
under this Agreement.
10. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If the Company
shall fail to tender either tranche of the Series A Notes for delivery to the
Initial Purchasers by reason of any failure, refusal or inability on the part
of the Company to perform any agreement on its part to be performed, or
because any other condition of the Initial Purchasers' obligations hereunder
required to be fulfilled by the Company is not fulfilled, the Company will
reimburse the Initial Purchasers for all reasonable out-of-pocket expenses
(including the reasonable fees
30
<PAGE>
and disbursements of its counsel) (accompanied by documentation)
incurred by the Initial Purchasers in connection with this Agreement and the
proposed purchase of each tranche of the Series A Notes, and upon demand the
Company shall pay the full amount thereof to the Initial Purchasers.
11. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
a. if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to Lehman Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 212-526-6588), with a copy to Kirkland & Ellis, 200 E.
Randolph Drive, Chicago, IL 60601, Attention: H. Kurt von Moltke (Fax:
312-861-2200); and
b. if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to Ball Corporation, Colorado Office
Center, 9300 West 108th Circle, Broomfield, CO 80021-3682, Attention:
General Counsel (Fax: 303-460-2691), with a copy to Skadden, Arps, Slate,
Meagher & Flom, 333 West Wacker Drive, Suite 2100, Chicago, IL 60606,
Attention: Brian W. Duwe (Fax: 312-407-0411).
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made by the Initial
Purchasers. Any notice of a change of address or facsimile transmission number
must be given by the Company or by the Initial Purchasers, as the case may be,
in writing, at least three days in advance of such change.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (i) the
representations, warranties, indemnities and agreements of the Company and the
Guarantors contained in this Agreement shall also be deemed to be for the
benefit of the persons, if any, who control the Initial Purchasers within the
meaning of Section 15 of the Securities Act and (ii) the representations,
warranties, indemnities and agreements of the Initial Purchasers contained in
this Agreement shall be deemed to be for the benefit of directors, officers and
employees of each of the Company and the Guarantors and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 12, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
13. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Initial Purchasers and the Company contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and
31
<PAGE>
payment for the Notes and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
14. DEFINITION OF THE TERMS "BUSINESS DAY." For purposes of this
Agreement, "BUSINESS DAY" means any day on which the New York Stock Exchange,
Inc. is open for trading.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[SIGNATURE PAGE(S) FOLLOW]
32
<PAGE>
If the foregoing correctly sets forth the agreement between the
Initial Purchasers and the Company, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
BALL CORPORATION
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Treasurer
BALL AEROSPACE AND TECHNOLOGIES CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL ASIA PACIFIC LIMITED
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL GLASS CONTAINER CORPORATION
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL HOLDINGS CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS I, INC.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS II, INC.,
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL BEVERAGE CONTAINER CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL FOOD CONTAINER CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL METAL PACKAGING SALES CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PACKAGING CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PLASTIC CONTAINER CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL TECHNOLOGIES HOLDINGS CORP.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL TECHNOLOGY SERVICES CORPORATION
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
EFRATOM HOLDING, INC.
By: /s/ Douglas E. Poling
--------------------------------------------
Name: Douglas E. Poling
Title: Vice President
Accepted:
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
FIRST CHICAGO CAPITAL MARKETS, INC.
By: LEHMAN BROTHERS INC.
By: /s/ Christoph E. Hodge
-----------------------------------
Name: Christoph E. Hodge
Title: Managing Director
<PAGE>
EXHIBIT A
FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM TO BE DELIVERED AS OF
THE CLOSING DATE
[DRAFT DELIVERED SEPARATELY]
<PAGE>
CONFORMED COPY AS AMENDED
THROUGH AUGUST 10, 1998
- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
by and among
Ball Corporation,
Ball Metal Beverage Container Corp.
and
Reynolds Metals Company
dated as of April 22, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
PURCHASE AND SALE OF ASSETS
<S> <C>
Section 1.1 Purchase and Sale of Assets. . . . . . . . . . . . . . . . . . . 2
Section 1.2 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.3 Assumption of Liabilities. . . . . . . . . . . . . . . . . . . . 9
Section 1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . .11
Section 1.5 Cash Purchase Price Adjustment . . . . . . . . . . . . . . . . .12
Section 1.6 Adjustment for Periodic Items. . . . . . . . . . . . . . . . . .14
Section 1.7 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 1.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . . .18
Section 1.9 Allocation of Purchase Price . . . . . . . . . . . . . . . . . .18
Section 1.10 Torrance, California Site. . . . . . . . . . . . . . . . . . . .19
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 2.1 Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . . .23
Section 2.2 Corporate Organization . . . . . . . . . . . . . . . . . . . . .23
Section 2.3 Operation of the Business. . . . . . . . . . . . . . . . . . . .24
Section 2.4 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . .24
Section 2.5 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . .24
Section 2.6 Consents and Approvals . . . . . . . . . . . . . . . . . . . . .25
Section 2.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . .25
Section 2.8 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . .26
Section 2.9 Inventory and Working Capital. . . . . . . . . . . . . . . . . .27
Section 2.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . .27
Section 2.11 Title to Properties; Encumbrances. . . . . . . . . . . . . . . .28
Section 2.12 Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 2.13 Intellectual Property Rights . . . . . . . . . . . . . . . . . .30
Section 2.14 Certain Contracts. . . . . . . . . . . . . . . . . . . . . . . .32
Section 2.15 Orders and Commitments . . . . . . . . . . . . . . . . . . . . .33
Section 2.16 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 2.17 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 2.18 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . .35
i
<PAGE>
Page
----
Section 2.19 Environmental Protection . . . . . . . . . . . . . . . . . . . .35
Section 2.20 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . .37
Section 2.21 Employee Benefit Matters . . . . . . . . . . . . . . . . . . . .38
Section 2.22 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . .40
Section 2.23 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . .40
Section 2.24 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 2.25 Capitalization of Subsidiaries.. . . . . . . . . . . . . . . . .41
Section 2.26 Latasa Agreements. . . . . . . . . . . . . . . . . . . . . . . .43
Section 2.27 Latasa Offering Statement. . . . . . . . . . . . . . . . . . . .43
Section 2.28 Latasa Financial Statements. . . . . . . . . . . . . . . . . . .44
Section 2.29 SVE Agreement. . . . . . . . . . . . . . . . . . . . . . . . . .44
Section 2.30 Seller's Exposure Estimates. . . . . . . . . . . . . . . . . . .44
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BALL AND BUYER
Section 3.1 Corporate Organization, etc. . . . . . . . . . . . . . . . . . .45
Section 3.2 Authorization, etc . . . . . . . . . . . . . . . . . . . . . . .45
Section 3.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 3.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 3.5 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 3.6 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . .46
Section 3.7 Authorization of Shares. . . . . . . . . . . . . . . . . . . . .46
Section 3.8 Consents and Approvals . . . . . . . . . . . . . . . . . . . . .47
Section 3.9 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . .47
ARTICLE IV
COVENANTS OF SELLER
Section 4.1 Conduct of the Business. . . . . . . . . . . . . . . . . . . . .48
Section 4.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 4.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 4.4 Title to Real Property . . . . . . . . . . . . . . . . . . . . .51
Section 4.5 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . .53
Section 4.6 Supplements to Disclosure Schedule . . . . . . . . . . . . . . .54
Section 4.7 Bulk Sales Laws. . . . . . . . . . . . . . . . . . . . . . . . .54
ii
<PAGE>
Page
----
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
Section 5.1 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . .54
Section 5.2 WARN Act . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Section 5.3 Regulatory and Other Authorizations; Consents. . . . . . . . . .55
Section 5.4 Employee Matters for Represented Employees . . . . . . . . . . .56
Section 5.5 General Employee Matters, Employee Matters for
Nonrepresented Employees and Welfare Benefit
Provisions for All Employees . . . . . . . . . . . . . . . . .68
Section 5.6 Special Employment and Transition Rules for
Salaried Employees . . . . . . . . . . . . . . . . . . . . . .81
Section 5.7 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . .85
Section 5.8 Non-Competition. . . . . . . . . . . . . . . . . . . . . . . . .90
Section 5.9 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . .92
Section 5.10 Materials Received After Closing . . . . . . . . . . . . . . . .93
Section 5.11 Access to Books and Records. . . . . . . . . . . . . . . . . . .93
Section 5.12 Actions by Ball. . . . . . . . . . . . . . . . . . . . . . . . .94
Section 5.13 Delivery of Financial Statements . . . . . . . . . . . . . . . .94
Section 5.14 Litigation Support . . . . . . . . . . . . . . . . . . . . . . .95
Section 5.15 Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . .95
Section 5.16 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . .95
Section 5.17 Inadvertently Retained Information . . . . . . . . . . . . . . .96
ARTICLE VI
SURVIVAL AND INDEMNIFICATION
Section 6.1 Survival of Representations, Warranties and Covenants. . . . . .96
Section 6.2 Indemnification by Ball and Buyer. . . . . . . . . . . . . . . .97
Section 6.3 Indemnification by Seller. . . . . . . . . . . . . . . . . . . .97
Section 6.4 Claims for Indemnification . . . . . . . . . . . . . . . . . . .98
Section 6.5 Environmental Indemnification. . . . . . . . . . . . . . . . . 101
iii
<PAGE>
Page
----
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATION
Section 7.1 Representations and Warranties True. . . . . . . . . . . . . . 102
Section 7.2 Performance. . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 7.3 No Injunction, Litigation, etc . . . . . . . . . . . . . . . . 102
Section 7.4 Stockholder's Agreement. . . . . . . . . . . . . . . . . . . . 103
Section 7.5 Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 7.6 HSR Act Waiting Periods. . . . . . . . . . . . . . . . . . . . 103
Section 7.7 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 7.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
ARTICLE VIII
CONDITIONS TO BUYER'S OBLIGATION
Section 8.1 Representations and Warranties True. . . . . . . . . . . . . . 103
Section 8.2 Performance. . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 8.3 No Injunction, Litigation, etc . . . . . . . . . . . . . . . . 104
Section 8.4 Governmental Filings and Consents; Third Party Consents. . . . 104
Section 8.5 Stockholder's Agreement. . . . . . . . . . . . . . . . . . . . 104
Section 8.6 HSR Act Waiting Periods. . . . . . . . . . . . . . . . . . . . 104
Section 8.7 No Material Adverse Change . . . . . . . . . . . . . . . . . . 105
Section 8.8 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 8.9 Financing Conditions . . . . . . . . . . . . . . . . . . . . . 105
Section 8.10 Actions by Seller. . . . . . . . . . . . . . . . . . . . . . . 105
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 Methods of Termination . . . . . . . . . . . . . . . . . . . . 105
Section 9.2 Procedure upon Termination . . . . . . . . . . . . . . . . . . 106
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment and Modification . . . . . . . . . . . . . . . . . . 107
iv
<PAGE>
Page
----
Section 10.2 Waiver of Compliance. . . . . . . . . . . . . . . . . . . . . 107
Section 10.3 Expenses, etc . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 10.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 10.5 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.9 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.10 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.11 Third Parties . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 10.12 Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . 110
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
ANNEXES
<S> <C>
A Defined Terms
1.1(a) Real Property
1.1(c) Intellectual Property Rights
1.1(e) Permits and Environmental Permits
1.1(q) Other Assets
1.1(aa) Seller's Equity Interests
1.2(f) Retained Contracts
1.2(g) Excluded Claims Against Third Parties
1.2(j) Headquarters Assets
1.2(m) Excluded Assets
1.2(s) Torrance Extrusion Plant
1.3(a)(vii) Other Assumed Liabilities
1.3(b)(iv) Other Excluded Liabilities
8.10 Actions by Seller
<CAPTION>
EXHIBITS
<S> <C>
A Stockholder's Agreement
1.2(t) Data Processing Services Agreement
1.7(b)(ii) Bill of Sale
1.7(b)(ix) Assignment and Assumption of Leases
1.7(c)(ii) Assignment and Assumption Agreement
1.7(c)(viii) Agreement Regarding Performance of Technical Services
1.7(d)(ii) Transitional Trademark License Agreement
1.7(d)(iii) Supply Program Agreement
1.7(d)(iv) Incentive Loan Agreement
1.7(d)(v) Transition Services Agreement
1.7(d)(vi) Payroll Services Agreement
1.7(d)(vii) [intentionally omitted]
1.7(d)(viii) Trademark License Agreement
1.7(d)(ix) Cross-License Agreement
1.7(d)(x) Transportation Services Agreement
1.7(d)(xi) Human Resources Services Agreement
1.9 Allocation of Purchase Price
1.10(a) Subdivision
1.10(b) Lease of Torrance Can Plant
vi
<PAGE>
4.4(b) Forms (Model Deed Certificate; Moultrie and Hayward
Easements)
5.4(f) Offset Procedure Examples
6.5 Environmental Indemnification Procedures
7.5 Opinion of Ball General Counsel
vii
<PAGE>
<CAPTION>
DISCLOSURE SCHEDULE
<S> <C>
2.3 Operation of Business
2.4 Authorization
2.5 Non-Contravention
2.6 Consents and Approvals
2.7 Financial Statements
2.8 Accounts Receivable
2.9 Inventory
2.10 Absence of Certain Changes
2.11 Title to Properties; Encumbrances
2.12 Equipment
2.13 Intellectual Property
2.13(e) Year 2000 Program
2.13(f) Excluded Trademarks
2.13(g) Non-Transferred Patents, Trademarks and Copyrights
2.14(a) Material Contracts
2.14(b) Other Material Contract Matters
2.15 Orders and Commitments
2.16 Taxes
2.17 Litigation
2.18 Non-Compliance with Laws
2.19 Environmental Matters
2.19(a) Environmental Permits
2.19(c) Final Environmental Studies
2.20 Labor Relations
2.20(a) Written Policies, Rules and Procedures
2.21(a) Employee Benefit Matters and Plans
2.22 Customers and Suppliers
2.25(a) Capitalization of Domestic Subsidiaries
2.25(b) Capitalization of RIB
2.25(c) Capitalization of Latasa and Latasa Subsidiaries
2.25(d) Other Subsidiary Issues
2.26(d) Latasa Agreements and Non-Contravention
2.27 Latasa Offering Statement
2.28 Latasa Financial Statements
2.30 Seller's Exposure Estimates
3.7 Ball Shares
3.8 Buyer and Ball Consents and Approvals
4.4(b) Title Commitments and Permitted Exceptions
vii
<PAGE>
5.5(a) Employee Benefits Data
5.5(c)(2) List of Headquarter Employees
5.6(a)(1) Reimbursement for Seconded Employee Expenses
5.6(c) Retained Seller Employees
7.8 Consents and Approvals that are a Condition
to Seller's Obligation to Close
8.4 Consents and Approvals that are a Condition
to Buyer's and Ball's Obligation to Close
</TABLE>
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of April 22, 1998 (the
"AGREEMENT"), is by and among Ball Corporation, an Indiana corporation ("BALL"),
Ball Metal Beverage Container Corp., a Colorado corporation and an indirect
wholly-owned subsidiary of Ball ("BUYER") and Reynolds Metals Company, a
Delaware corporation ("SELLER"). Capitalized terms not otherwise defined in the
text of this Agreement are used as defined in Annex A hereto.
W I T N E S S E T H:
WHEREAS, Seller and its majority-owned subsidiaries are engaged on a
global basis in the design, manufacture, distribution and sale of aluminum
beverage can bodies and ends (such business, as conducted throughout the world
directly by Seller and its majority-owned subsidiaries (including licensing,
directly or indirectly, of intellectual property and know-how used in the
manufacture and sale of aluminum can bodies and ends but excluding (i) Seller's
operations engaged in the manufacture and sale of aluminum can, end and tab
sheet, the recycling and reclamation of aluminum cans and the design,
manufacture and sale of printing cylinders, printing plates and color
separations that act as suppliers to, or customers of, Seller's global can
business, (ii) Seller's operations engaged in the design, manufacture,
distribution and sale of machinery, equipment and components and parts therefor
used in the manufacture of metal beverage can bodies and ends and certain can
filling operations (the "MACHINERY OPERATIONS") and (iii) "parent company"
finance and administration activities conducted at Seller's corporate
headquarters at 6601 West Broad Street, Richmond, Virginia) is hereinafter
referred to as the "BUSINESS"); and, in connection with the development of the
Business on a global basis, Seller and its majority-owned subsidiaries have
acquired, directly or indirectly, minority interests in, and entered into
technical services and/or management agreements with, Latas de Aluminio,
S.A.-LATASA ("LATASA") and its subsidiaries, Superenvases Envalic C.A. ("SVE")
and United Arab Can Manufacturing Company, Limited ("UAC");
WHEREAS, Seller's interest in Latasa is held by two indirect
subsidiaries, Reynolds International do Brasil Participacoes, Ltda, a Brazilian
corporation ("RIB"), and Reynolds International Latin America S.A., a Panamanian
corporation ("RILA");
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WHEREAS, Seller has reached agreement with Ball and Buyer to sell to
them or their Designees the Business (including Seller's interest in Seller's
wholly-owned subsidiaries, Latas de Aluminio Reynolds, Inc., a Delaware
corporation ("LAR") and RCAL Cans, Inc., a Delaware corporation ("RCAL"),
together with RCAL's wholly-owned subsidiary, RIND Cans, Inc., a Delaware
corporation ("RIND")) and Seller's interests in RIB and SVE and the equity
securities of Latasa held by RILA, all on the terms and conditions set forth in
this Agreement; and
WHEREAS, concurrently with the closing of the transactions
contemplated hereby, if Ball elects to issue Ball Shares to Seller pursuant to
the terms of this Agreement, Ball and Seller will enter into a stockholder's
agreement, substantially in the form of Exhibit A (the "STOCKHOLDER'S
AGREEMENT").
NOW, THEREFORE, in consideration of the mutual agreements and the
representations and warranties contained herein and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
Section 1.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "CLOSING"), Seller shall sell, transfer, convey, assign and
deliver, or cause to be sold, transferred, conveyed, assigned and delivered, to
Buyer, Ball or their Designees, as provided below, and Buyer, Ball or their
Designees shall purchase, acquire and accept from Seller and its majority-owned
subsidiaries, either directly or indirectly through the acquisition of all of
Seller's interests in LAR and RCAL, all assets, rights and interests in assets,
other than the Excluded Assets, which are held or owned by Seller or its
majority-owned subsidiaries as of the Closing and which are used or held for use
exclusively or primarily in the conduct of the Business, including, without
limitation, the following (collectively, the "BUSINESS ASSETS"):
(a) REAL PROPERTY: The owned real properties described in Annex
1.1(a), together with the plants, buildings, fixtures and improvements thereon
and all tenements, hereditaments and appurtenances thereto (the "OWNED REAL
PROPERTY"), as well as Seller's leasehold interests (or those of any Affiliate
of Seller) as
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lessee under the real property leases described in Annex 1.1(a) (the "REAL
PROPERTY LEASES" and the property covered thereby, together with Seller's (or
such Affiliate's) interests in all plants, buildings, fixtures and improvements
thereon, the "LEASED PREMISES"). The Owned Real Property and the Leased
Premises together are sometimes referred to herein as the "BUSINESS LOCATIONS."
(b) PERSONAL PROPERTY OTHER THAN INVENTORY: The furniture,
fixtures, machinery, equipment, equipment subassemblies, furnishings, vehicles,
tools, dies, jigs, printing plates, physical embodiments of label films and
color standards, service, spare and replacement parts, stores, packaging
materials, pallets, slip sheets and top frames, office and other supplies and
other tangible personal property (other than Inventory) that is either (i)
located at the Business Locations, (ii) reflected on the most recent balance
sheet included in the Audited Financial Statements (other than Excluded Assets
and any assets sold or disposed of in the ordinary course of business and
consistent with the terms of this Agreement since the date of such balance
sheet) or (iii) otherwise used or held for use exclusively or primarily in the
Business, whether or not such property is reflected as an asset on the books and
records of Seller (the "EQUIPMENT").
(c) INTELLECTUAL PROPERTY RIGHTS: Except as otherwise
specifically identified as excluded in Annex 1.1(c), (i) the Patents,
Trademarks, and Copyrights listed or described in Annex 1.1(c), (ii) Technology,
and (iii) all agreements (whether or not with related parties) under which
Seller or its majority-owned subsidiaries have granted, or have been granted,
the right to use Technology or the Patents, Trademarks and Copyrights listed or
described in Annex 1.1(c) (the Business Assets described in this Section 1.1(c),
collectively, the "INTELLECTUAL PROPERTY RIGHTS").
(d) BUSINESS INFORMATION: All books and records (i) customarily
located at the Business Locations (other than those exclusively related to
Excluded Assets or Excluded Liabilities) or (ii) customarily located at
locations other than the Business Locations which are used exclusively or
primarily in the Business, including, without limitation, files, computer disks
and tapes, telephone directories, invoices, credit and sales records, personnel
records (subject to applicable law), customer lists (including addresses and
phone numbers), supplier lists, manuals (including policy manuals), drawings,
accounting books and records, detailed fixed-asset ledgers and records, sales
literature, current price lists and discounts, promotional signs and literature,
marketing and sales programs, manufacturing and quality control records and
procedures and compliance policies and procedures; and access
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to and, if requested by Ball or Buyer, copies of such other books and records to
the extent relating to the Business or Business Assets or Assumed Liabilities
which are customarily located at locations other than the Business Locations;
provided that Seller may retain and provide Buyer with copies of any records
necessary for Seller's ongoing business or tax purposes or for performance of
obligations retained by Seller hereunder (collectively, "BUSINESS INFORMATION").
(e) GOVERNMENTAL PERMITS: To the extent assignable, (i) the
Permits and the Environmental Permits that relate exclusively to the Business,
as more particularly described in Annex 1.1(e) and (ii) any Business-related
portions of any Permits and Environmental Permits that are used in the Business
but do not relate exclusively to the Business (the Permits described in this
clause (ii), the "NON-EXCLUSIVE PERMITS").
(f) LEASES AND CONTRACTS: The rights of Seller and its
Affiliates in, to and under (i) all contracts, leases of personal property,
agreements, licenses, commitments and warranties related exclusively or
primarily to the Business, (ii) sales orders, purchase orders and quotations and
bids generated by the Business, and (iii) all material agreements to which
Seller or any of its Affiliates is a party, and which relate to the ownership,
management, governance and financing of, as well as technical assistance to,
Latasa and its subsidiaries (the "LATASA AGREEMENTS") and the contracts and
agreements relating to ownership, management and governance of, and provision of
know-how and technical assistance to SVE.
(g) INVENTORY: The inventories of raw materials, work-in-process
and finished products carried on the books of the Business (including any such
inventories that have been written off or written down on the books of the
Business), located at the Business Locations or related exclusively or primarily
to the Business (excluding the inventories described in Section 1.1(m), the
"INVENTORY").
(h) ACCOUNTS RECEIVABLE AND PREPAID EXPENSES: All notes and
accounts receivable on the books of or generated by the Business as of the
Closing (the "ACCOUNTS RECEIVABLE"), including, without limitation, all trade
notes and trade accounts receivable and receivables from employees of Seller who
are Transferred Employees, and all deposits and prepaid rents, license fees and
other expenses to the extent related to the Business or the Business Assets.
(i) COMPUTER SOFTWARE: All computer software related
exclusively to the Business, including all documentation and source codes with
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respect to such software (to the extent Seller or any Affiliate of Seller
possesses such documents or source codes) and, to the extent they relate
exclusively to the Business and they are legally assignable or transferable by
Seller, licenses and leases of software.
(j) NON-EXCLUSIVE CONTRACTS: Any Business-related portions of
any contract, claim, lease, sales/purchase order, quotation, bid, agreement,
license or contractual right to which Seller or any Affiliate of Seller is a
party with respect to operations or activities beyond those exclusively or
primarily related to the Business (each, a "NON-EXCLUSIVE CONTRACT"), to the
extent that such portions are legally assignable or transferable to Buyer.
(k) SINGLE LOCATION PLANS: All assets of any Single Location
Plans that are transferred to, or assumed by, Buyer under Section 5.4.
(l) PETTY CASH: All petty cash on hand at the Business
Locations.
(m) CONSIGNED INVENTORIES: Seller's rights to inventories of
supplies and raw materials at the Business Locations consigned as of the Closing
by (x) third parties or (y) other businesses of Seller or any Affiliate of
Seller that act as suppliers to the Business (to the extent such inventories
have not been included on the Closing Statement); provided that (i) Seller is
not hereby conveying to Buyer an ownership interest in such inventories, (ii)
such inventories shall not be deemed a part of the Inventory for purposes of
Section 1.5 or otherwise and (iii) the rights conveyed under clause (y) are only
Seller's rights as owner of the Business and not as owner of such business
acting as supplier.
(n) RESTRICTIONS ON COMPETITION AND CONFIDENTIALITY: To the
extent assignable, all rights of Seller or any Affiliate of Seller to enforce
restrictions on competition and obligations regarding confidentiality or limited
use of information imposed on third parties and present and former officers,
executives and employees of Seller and its Affiliates to the extent such
restrictions and obligations relate to the Business; provided, however, that
Seller shall retain the right to seek relief on behalf of itself and its
majority-owned subsidiaries for any damages suffered by any of them as a result
of any breach of any such restriction or obligation.
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(o) CLAIMS: All claims, causes of action, choses in action,
rights of recovery and rights of setoff of any kind (including, without
limitation, warranty rights against suppliers to the Business), known or
unknown, liquidated or unliquidated, to the extent they relate to or arise out
of the Business Assets, or the condition of the Business Assets, existing at the
Closing Date or the conduct of the Business prior to the Closing; provided that
any of the foregoing that arise from acts, omissions or conditions that gave
rise, or shall give rise, to an Excluded Liability shall, to the extent arising
from the Excluded Liability and Seller discharges such Excluded Liability,
accrue to the benefit of Seller.
(p) GOODWILL AND ASSOCIATED ASSETS: Any and all goodwill,
customer lists, going concern value and similar assets related exclusively or
primarily to, or used exclusively or primarily in, the Business.
(q) OTHER ASSETS: Such other assets as are specifically
identified in Annex 1.1(q).
In addition to the Business Assets, subject to the terms and
conditions of this Agreement, at Closing, Seller and its Affiliates shall sell,
transfer, convey, assign and deliver, or cause to be sold, transferred,
conveyed, assigned and delivered, to Buyer, Ball or its Designees, and Buyer,
Ball or its Designees shall purchase, acquire and accept from Seller and its
Affiliates, Seller's and its Affiliates' rights, title and interest in (x) any
equity securities of or other equity interests in SVE and RIB and (y) the equity
securities of Latasa held by RILA, all as listed in Annex 1.1(aa). Such equity
securities, together with the equity securities of LAR and RCAL being
transferred to Ball, Buyer or their Designees pursuant hereto, are sometimes
referred to herein as the "SHARES."
The parties agree that the Business Assets and Shares shall be
purchased by Ball, Buyer or their Designees as directed by Buyer in writing at
least five days prior to the Closing.
Section 1.2 EXCLUDED ASSETS. Notwithstanding the provisions of
Section 1.1, the following properties, assets and rights used in, or related to,
Seller's operation of the Business are excluded from the Business Assets (the
"EXCLUDED ASSETS"):
(a) The name "Reynolds" and all variations thereof;
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(b) Except as provided in Section 1.1(h) and (l), cash,
financial instruments and marketable securities on hand and in banks, cash
deposits with respect to workers' compensation and insurance, cash equivalents,
and investments;
(c) Accounts Receivable owed to Seller from any of its employees
who are not Transferred Employees;
(d) Aluminum can sheet inventory that is, consistent with past
practice and the terms of existing supply agreements, carried on the books of
Seller's Mill Products Division and not included on the Closing Statement,
whether or not located at a Business Location; provided that Buyer will receive
Seller's rights as a consignee of any such inventory that is located at a
Business Location as if Seller's Mill Products Division were a third party
supplier to the Business;
(e) Seller's checkbooks and canceled checks;
(f) Subject to Sections 1.1(j) and 1.7(e), all Non-Exclusive
Contracts and any agreements specifically identified in Annex 1.2(f) (the
"RETAINED CONTRACTS");
(g) All claims and litigation against third parties (and
benefits to the extent they arise therefrom) to the extent that such claims and
litigation relate in whole or in part to Excluded Liabilities or Excluded Assets
or are set forth in Annex 1.2(g);
(h) Seller's insurance policies and rights in connection
therewith;
(i) Rights arising from any refunds due with respect to
insurance premium payments and deposits;
(j) Except for any assets specifically enumerated in Annex
1.2(j), any and all tangible assets located at Seller's corporate headquarters
at 6601 West Broad Street in Henrico County, Virginia;
(k) All of Seller's right, title and interest in, to and under
trademarks and trademark rights, trade names and trade name rights, service
marks and service mark rights, service names and service name rights, brand
names, copy
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right rights, trade dress, business and product names, logos, slogans, and all
pending applications for and registrations of trademarks and service marks,
which (i) are neither used exclusively in the Business nor applicable
exclusively to the Business or (ii) include one or more of the following marks:
the trademarks REYNOLDS; Knight, Horse and Dragon Design or the names
"Reynolds," "Reynolds Metals Company," "Reynolds Aluminum" or any variation
thereof or any trademark containing REYNOLDS, REY, REYNO, or a Knight Horse and
Dragon design (the trademarks described in this clause (ii) are referred to
herein as the "REYNOLDS MARKS");
(l) Except for assets in Single Location Plans assumed by Buyer
under Section 5.4, all assets held in or for the Plans;
(m) Any assets identified in Annex 1.2(m);
(n) Books and records exclusively relating to Excluded Assets
and Excluded Liabilities;
(o) Any Tax refunds, credits or rights arising therefrom, for
all periods or portions of periods ending before the Closing Date; provided that
none of Ball, Buyer or their Affiliates has incurred or will incur an increased
Tax burden as a result of such refund;
(p) Except for those assets identified in Annex 1.1(q), Seller's
former Houston, Texas, and Fulton, New York, can plants;
(q) Seller's or its Affiliates' interests in, and contracts
relating to, UAC;
(r) Seller's rights under this Agreement and under any
agreement, instrument or document delivered in connection herewith;
(s) The portion of the Owned Real Property located in Torrance,
California which constitutes Seller's extrusion plant as more specifically
described in Annex 1.2(s) subject to minor adjustment of the boundary lines
thereof in accordance with Section 1.10; and
(t) Except as specifically provided in Section 1.1 (a), (e),
(i), and (o), and subject to Section 1.7(e) and the data processing services
agreement
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substantially in the form of Exhibit 1.2(t) (the "DATA PROCESSING SERVICES
AGREEMENT"), any owned or leased premises, Permits, Environmental Permits,
computer software, claims, causes of action, choses in action, rights of
recovery and rights of setoff.
Section 1.3 ASSUMPTION OF LIABILITIES.
(a) On the Closing Date, except as otherwise specifically
provided in this Agreement or in any agreement, instrument or document delivered
in connection herewith, subject to the terms and conditions of this Agreement,
Buyer shall assume the following liabilities (the "ASSUMED LIABILITIES") and no
others:
(i) Liabilities relating to Transferred
Employees and employee benefits to the extent set forth in Sections
5.4, 5.5 and 5.6, including, without limitation, all liabilities and
obligations related to the Single Location Plans assumed by Buyer
under Section 5.4 and under Collective Bargaining Agreements in
accordance with Sections 5.4 and 5.5;
(ii) All trade accounts payable of the Business
(including trade payables to other divisions of Seller for aluminum
can sheet) to the extent set forth on the Closing Statement and other
current liabilities of the Business to the extent set forth on the
Closing Statement;
(iii) All liabilities and obligations of Seller
and its majority-owned subsidiaries to deliver goods or services to
customers of the Business arising from orders placed in the normal
course of business of the Business which are assigned to Buyer
pursuant hereto;
(iv) All obligations of Seller or any of its
majority-owned subsidiaries to be performed from and after the
Closing Date under any contract, lease, commitment, license, permit,
approval, authorization or other agreement or arrangement constituting
part of the Business Assets to the extent assigned to Buyer pursuant
hereto including, without limitation, the following:
(A) the liabilities of Seller for certain
metal-related financial derivative arrangements contained in
certain of Seller's aluminum can sheet purchase contracts which
are unmatched
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to similar arrangements contained in Seller's customer contracts being
assumed by the Buyer pursuant to this Section 1.3(a)(iv);
(v) Subject to Ball's and Buyer's right to
indemnification from Seller set forth in Article VI, liabilities and
obligations under Environmental Laws with respect to Environmental
Conditions;
(vi) All liabilities that constitute matters of
record relating to Seller's ownership of the Owned Real Property to
the extent specifically disclosed in Section 4.4(b) of the Disclosure
Schedule and subject to the limitations set forth therein or accepted
by Ball or Buyer under Section 4.4; and
(vii) All other liabilities to the extent set
forth in or specifically reserved against on the Closing Statement or
to the extent specifically described in Annex 1.3(a)(vii).
(b) Except as expressly provided in Section 1.3(a), Buyer will
not assume or be liable for the following liabilities and obligations (the
"EXCLUDED LIABILITIES"):
(i) Except as otherwise provided in this
Agreement (including, without limitation, in Section 1.6, which shall
control to the extent of any conflict with this Section 1.3(b)), (x)
any federal, state, local or foreign taxes including, without
limitation, any net income, alternative or add-on minimum tax, gross
income, gross receipts, excise, sales, use, ad valorem, franchise,
capital, paid-up capital, profits, greenmail, license, withholding,
payroll, environmental, windfall profits tax or other tax or any
custom or duty, or any other charges, fees, levies, penalties or other
assessments imposed by any Taxing Authority, including, in each case,
any interest, penalties or additions thereto ("TAXES"), that are
attributable to any period or portion thereof ending on or before the
Closing Date imposed on Seller or its Affiliates or related to the
Business or the Shares and (y) any liability for Taxes of any other
person under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise;
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(ii) All liabilities and obligations relating
to any employee or any employee benefits which are not to be assumed
by Buyer under Section 1.3(a)(i) or Sections 5.4, 5.5 and 5.6;
(iii) All liabilities or obligations to the
extent relating to the acquisition, ownership or use of any of the
Excluded Assets (including the Retained Contracts);
(iv) Any liabilities listed in Annex
1.3(b)(iv);
(v) All liabilities or obligations arising
under Environmental Laws other than those expressly assumed by Buyer
pursuant to Section 1.3(a)(v), including, without limitation, all
liabilities or obligations arising under Environmental Laws in
connection with facts, events, conditions, actions or omissions
existing or occurring before Closing at any location other than the
Business Locations ("OFFSITE OBLIGATIONS");
(vi) Except as otherwise provided in Section
1.3(a)(vii), any liability or claim for injury to person or property
or warranty claim which arises out of the operation of the Business or
the sale of any product before the Closing Date; and
(vii) Any other liabilities, debts, commitments
or obligations, known or unknown, contingent or otherwise, of Seller
or its Affiliates other than those specified in Section 1.3(a).
Section 1.4 PURCHASE PRICE. Subject to the terms and conditions of
this Agreement, in reliance on the representations, warranties and agreements
contained herein, and in consideration of the sale, assignment, transfer and
delivery of the Business Assets and the Shares referred to in Section 1.1 and
Seller's other obligations set forth herein (including in Section 5.8), Ball and
Buyer agree to pay or cause to be paid to Seller at the Closing, and Seller
agrees to accept the sum of $820 million (the "PURCHASE PRICE") payable as
follows: (i) shares of common stock, no par value, of Ball having an aggregate
Designated Value, determined as set forth below, of up to $100 million (the
"BALL SHARES") plus (ii) an amount in cash equal to the Purchase Price minus the
aggregate Designated Value of the Ball Shares (the "CASH PRICE"), plus or minus
the adjustment set forth in Section 1.5. Not later than the close of business
on the fourth day prior to the Closing Date, Ball shall notify
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Seller whether it intends to pay a portion of the Purchase Price in Ball Shares
and the number of Ball Shares and the per Share and aggregate Designated Value
of the Ball Shares to be so issued. If Ball elects to pay a portion of the
Purchase Price in Ball Shares, the shares so issued shall have an aggregate
Designated Value of no less than $25 million and no more than $100 million. The
per Share "DESIGNATED VALUE" of Ball Shares shall mean the average of the daily
volume weighted average trading price of Ball Shares as reported in the
BLOOMBERG FINANCIAL MARKETS for the 20 consecutive trading days ending five days
prior to the Closing Date; provided that in no event shall the per Share
Designated Value of Ball Shares used to determine the number of Ball Shares to
be issued in payment of a portion of the Purchase Price exceed $42 or be less
than $25.25.
Section 1.5 CASH PURCHASE PRICE ADJUSTMENT.
(a) As soon as practicable, but in no event later than 60 days
following the Closing Date, Seller shall prepare and deliver to Buyer a working
capital statement of the Business as of 12:01 a.m. on the Closing Date (the
"CLOSING STATEMENT"), setting forth the current assets included in the Business
Assets less the current liabilities included in the Assumed Liabilities (such
difference being referred to herein as the "WORKING CAPITAL") in conformity with
United States Generally Accepted Accounting Principles ("GAAP") determined on a
basis consistent with the balance sheet included in the Audited Financial
Statements (the "AUDITED BALANCE SHEET") except that a current liability of (i)
$250,000 shall be recorded as a reserve on the Closing Statement for title
insurance payments and (ii) $250,000 shall be recorded as a reserve for SUB
liability in accordance with Section 5.4(c). For greater certainty, the parties
acknowledge and agree that both the Closing Statement and the Audited Balance
Sheet exclude spare or replacement parts from current assets.
(b) After receipt of the Closing Statement, Buyer shall have 30
days to review it. Buyer and its authorized representatives shall have
reasonable access to all relevant books and records and employees of Seller and
Seller's accountants to the extent required to complete their review of the
Closing Statement, including, without limitation, the accountants' work papers
used in preparation thereof. Unless Buyer delivers written notice to Seller on
or prior to the 30th day after receipt of the Closing Statement specifying in
reasonable detail its objections to the Closing Statement on the grounds that
the Closing Statement was not prepared in accordance with GAAP, consistently
applied with the Audited Balance Sheet or with respect to any arithmetic errors,
the parties shall be deemed to have accepted and agreed to the Closing
Statement. If Buyer so notifies Seller of such an objection to
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the Closing Statement, the parties shall within 30 days following the date of
such notice (the "RESOLUTION PERIOD") attempt to resolve their differences. Any
resolution by them as to any disputed amount shall be final, binding, conclusive
and nonappealable, provided, however, that agreement by Seller and Buyer as to
the Final Closing Statement or a determination pursuant to Section 1.5(c) shall
not prevent either party from making any claims under Article VI hereof. The
term "FINAL CLOSING STATEMENT" shall mean the definitive Closing Statement
agreed to by Seller and Buyer in accordance with this Section 1.5(b) or the
definitive Closing Statement resulting from the determination made by the
Neutral Auditor in accordance with Section 1.5(c) (in addition to those items
theretofore agreed to by Seller and Buyer).
(c) If at the conclusion of the Resolution Period, the parties
have not resolved the disputes, then all amounts remaining in dispute shall, at
the election of either party, be submitted to an auditor who shall be selected
by Ball and Seller (the "NEUTRAL AUDITOR"). The Neutral Auditor shall be
engaged no later than three business days after an election by either party to
submit its objections to the Neutral Auditor, and each party agrees to execute,
if requested by the Neutral Auditor, a reasonable engagement letter. The
Neutral Auditor shall be a nationally recognized certified public accounting
firm that is not rendering (and during the preceding two-year period has not
rendered) audit services to either Seller or Ball in North America. If the
parties are unable to agree on such Neutral Auditor, then the respective
accounting firms of each of Ball and Seller shall choose the Neutral Auditor.
All fees and expenses of the Neutral Auditor shall be borne equally by Seller
and Buyer. The Neutral Auditor shall act as an arbitrator to determine, based
solely on the presentations by Seller and Buyer, and not by independent review,
only those issues still in dispute. The Neutral Auditor's determination shall
be made within 30 days of its engagement or as soon thereafter as possible,
shall be set forth in a written statement delivered to Seller and Buyer and
shall be final, binding, conclusive and nonappealable.
(d) All Inventory reflected on the Closing Statement shall be
based upon a physical count of the Inventory taken by Seller (with Buyer and its
independent auditors being permitted to observe such count and take additional
test counts as Buyer reasonably deems appropriate) as of 12:01 a.m. on the
Closing Date. Such physical inventory shall be conducted in accordance with
procedures to be mutually agreed and shall be taken immediately prior to the
Closing Date. The physical inventory shall include all products of Seller and
list the type and quantity of the inventory as of the date the physical count
was taken. For purposes of the Closing Statement, the Inventory shall include
only finished goods, work-in-process
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and raw materials (which are either currently used in production of products or
are products currently offered for sale by Seller). In connection with the
physical inventory, no later than 90 days after the Closing Date, Buyer shall
prepare, with assistance from Seller, a listing of Inventory deemed to be
potentially obsolete and the book value thereof as reflected on the Closing
Statement (the "INVENTORY CARRYING VALUE"). If any Inventory so identified is
not sold by Buyer within twelve months after the Closing Date, then Seller shall
promptly pay to Buyer an amount equal to the Inventory Carrying Value of such
Inventory less the scrap value thereof, provided that such payment, in the
aggregate, shall not exceed $1,000,000. Notwithstanding any other provision
hereof to the contrary, no other reserve for obsolete and slow-moving inventory
shall be included in the Closing Statement.
(e) The Purchase Price shall be (i) increased dollar-for-dollar
to the extent the Working Capital as reflected on the Final Closing Statement is
greater than $78 million and (ii) decreased dollar-for-dollar to the extent the
Working Capital as reflected on the Final Closing Statement is less than $78
million. The amount of any such change in the Purchase Price pursuant to this
Section 1.5(e) shall be paid by Buyer to Seller, in the case of an increase, or
by Seller to Buyer, in the case of a decrease, in each case in cash plus
interest on such amount from the Closing Date through the date of payment at the
Prime Rate within five business days after the Final Closing Statement is agreed
to by Seller and Buyer or is determined by the Neutral Auditor. The "PRIME
RATE" means the prime lending rate as announced by First Chicago-NBD, or its
successor, as in effect on the Closing Date.
Section 1.6 ADJUSTMENT FOR PERIODIC ITEMS.
(a) Any sales, transfer, stamp or use Tax or fee applicable to
the sale of the Business Assets or Shares to Buyer, Ball or their Designees
pursuant to this Agreement shall be borne as follows. Buyer shall bear the
first $150,000 of the aggregate of such Taxes and fees and the remainder of such
Taxes and fees shall be borne equally by Buyer and Seller. Any such Taxes or
fees applicable to the sale of the Business Assets pursuant to this Agreement
shall initially be paid by the party legally liable under the laws applicable to
each taxing jurisdiction, and the parties shall from time to time remit payments
to one another to effect the sharing arrangements provided in the first sentence
of this Section 1.6(a). Under no circumstances shall this article be construed
to include, nor shall Ball, Buyer or their Affiliates be liable for, any income,
franchise, gross income, gross receipts or excise Tax or any other similar
liability of Seller related to the sale of the Business Assets. Buyer shall
provide Seller with resale exemption certificates or similar documents, as
appropriate. Buyer and Seller shall cooperate in using reasonable efforts of
legal means to
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minimize, to the extent permitted by law, the aggregate amount of Taxes, fees
and other charges imposed on the transactions contemplated in this Agreement.
(b) On the Closing Date or as promptly thereafter as
practicable, the parties shall adjust the other annualized or periodic items
related to the Business (to the extent not reserved or accrued for in the Final
Closing Statement) as of the Closing Date, with Seller responsible for matters
up to and including the Closing Date and Buyer responsible for matters from and
after the Closing Date. Such adjustable items shall include, without
limitation, electric, gas, telephone and utility charges of the operations of
Seller related to the Business Locations, either paid or accrued, and amounts
paid under leases and loans; provided, however, that nothing in this Section 1.6
shall increase the liabilities and obligations of Seller assumed by Buyer
pursuant to this Agreement. Such adjustable items shall also include customer
volume rebates and vendor volume rebates and incentives, which will be
attributed to Seller to the extent such rebates and incentives relate to items
purchased prior to the Closing and to Buyer to the extent such rebates and
incentives relate to items purchased on or after the Closing.
Section 1.7 CLOSING.
(a) The Closing will take place at the offices of Skadden, Arps,
Slate, Meagher & Flom (Illinois), 333 West Wacker Drive, Chicago, Illinois
60606, within seven days after all conditions set forth in Articles VII and VIII
(other than those requiring only performance by the parties at Closing) have
been satisfied or waived or such other time and place as the parties may agree
upon but in no event earlier than 7 days after the expiration or termination of
the waiting period under the HSR Act (the "CLOSING DATE") and shall be effective
as of 12:01 a.m. on the Closing Date.
(b) At the Closing, Seller will deliver to Ball, Buyer or their
Designees (i) if any Ball Shares are issued pursuant hereto, an executed copy of
the Stockholder's Agreement, (ii) all documents of title necessary to transfer
ownership to Buyer of the Business Assets other than the Real Property,
including a duly executed bill of sale substantially in the form of Exhibit
1.7(b)(ii) (the "BILL OF SALE"), (iii) executed copies of the consents referred
to in Section 2.6 hereof, (iv) certificates representing the Shares, accompanied
by appropriate stock powers or other transfer instruments duly executed in blank
or such other evidence of ownership and instruments of transfer as are
appropriate in the applicable jurisdiction, (v) with respect to Patents,
Trademarks and Copyrights included in the Business Assets (the "FILED
INTELLECTUAL PROPERTY"), (A) one "global assignment" of the Filed Intellectual
Property
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containing a schedule of all applications therefor and registrations thereof and
(B) individual assignments of Filed Intellectual Property, applications therefor
and registrations thereof, in recordable form for each jurisdiction in which
such Filed Intellectual Property is subsisting, (vi) all assignments of Permits
and Environmental Permits to be acquired by Buyer pursuant hereto, (vii) duly
executed and acknowledged special warranty deeds conveying title to the Owned
Real Property, subject only to the Permitted Exceptions, (viii) any documents
required of Seller by the title company to issue the title insurance policies
and endorsements in accordance with the provisions of Section 4.4(b) of this
Agreement, (ix) duly executed assignment and assumption agreements with respect
to the Real Property Leases substantially in the form of Exhibit 1.7(b)(ix) (the
"ASSIGNMENT AND ASSUMPTION OF LEASES"), (x) if subdivision of the Torrance,
California, parcel of Owned Real Property has not been completed prior to the
Closing, a lease and license of the can plant portion of such parcel as provided
in Section 1.10, (xi) all such other deeds, consents, endorsements, assignments
and other instruments as are necessary to vest in Buyer, Ball or their Designees
title to the Business Assets and the Shares to be transferred to Buyer, Ball or
their Designees and (xii) all other previously undelivered documents required to
be delivered by Seller to Ball, Buyer or their Designees at or prior to the
Closing in connection with the transactions contemplated by this Agreement.
(c) At the Closing, Ball and Buyer will deliver to Seller (i)
cash in the amount specified in Section 1.4 by wire transfer of immediately
available funds to an account designated in writing by Seller, (ii) a duly
executed assignment and assumption agreement substantially in the form of
Exhibit 1.7(c)(ii) (the "ASSIGNMENT AND ASSUMPTION AGREEMENT") for all Assumed
Liabilities, (iii) a duly executed Assignment and Assumption of Leases for the
Real Property Leases, (iv) if any Ball Shares are issued pursuant hereto, a duly
executed Stockholder's Agreement; (v) if any Ball Shares are issued pursuant
hereto, certificates representing the Ball Shares in accordance with Section
1.4, such certificates bearing a legend to the effect set forth in the
Stockholder's Agreement, (vi) if requested by Seller, the agreement regarding
performance of technical services with respect to UAC in substantially the form
of Exhibit 1.7(c)(iii) (the "AGREEMENT REGARDING PERFORMANCE OF TECHNICAL
SERVICES") and (vi) all previously undelivered documents required to be
delivered by Ball or Buyer to Seller at or prior to the Closing.
(d) At the Closing, Seller, Ball and Buyer shall, or shall cause
their respective Affiliates to, execute and deliver (i) the Data Processing
Services Agreement, (ii) the transitional trademark license agreement in
substantially the form of Exhibit 1.7(d)(ii) (the "TRANSITIONAL TRADEMARK
LICENSE AGREEMENT"), (iii) the supply program agreement in substantially the
form of Exhibit 1.7(d)(iii) (the "SUPPLY
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PROGRAM AGREEMENT"), (iv) an incentive loan agreement in substantially the form
of Exhibit 1.7(d)(iv) (the "INCENTIVE LOAN AGREEMENT"), (v) the transition
service agreement in substantially the form of Exhibit 1.7(d)(v) (the
"TRANSITION SERVICES AGREEMENT"), (vi) the payroll services agreement in
substantially the form of Exhibit 1.7(d)(vi) (the "PAYROLL SERVICES AGREEMENT"),
(vii) [intentionally omitted], (viii) the trademark license agreement in
substantially the form of Exhibit 1.7(d)(viii) (the "TRADEMARK LICENSE
AGREEMENT"), (ix) the cross-license agreement in substantially the form of
Exhibit 1.7(d)(ix)(the "CROSS-LICENSE AGREEMENT"), (x) the transportation
services agreement in substantially the form of Exhibit 1.7(d)(x)(the
"TRANSPORTATION SERVICES AGREEMENT") and (xi) the human resources services
agreement in substantially the form of Exhibit 1.7(d)(xi)(the "HUMAN RESOURCES
SERVICES AGREEMENT") and, together with the Stockholder's Agreement (if
executed), the Data Processing Services Agreement, the Transitional Trademark
License Agreement, the Transition Services Agreement, the Payroll Services
Agreement, the Agreement Regarding Performance of Technical Services (if
executed), the Trademark License Agreement, the Cross-License Agreement, and the
Supply Program Agreement, the "ANCILLARY AGREEMENTS").
(e) To the extent that the sale, conveyance, transfer or
assignment of any agreement, lease, contract or other document or instrument
(including, but not limited to, the Business related portion of any
Non-Exclusive Contract or Non-Exclusive Permit) requires the consent of any
person other than Buyer, Ball or Seller, this Agreement shall not constitute an
agreement to effect such sale, conveyance, transfer or assignment if such action
would constitute a breach thereof unless and until such consent or waiver of
such person has been obtained; provided that the foregoing shall not limit or
affect Seller's representations and warranties in this Agreement or the
condition set forth in Section 8.4 hereof. To the extent that any such consent
or waiver is not obtained by Seller, Seller shall (i) use all reasonable efforts
to provide or cause to be provided to Buyer (or Ball, as the case may be) the
benefits of any such agreement, lease, contract or other document or instrument
for which consent or waiver has not been obtained, (ii) cooperate in any
arrangement, reasonable and lawful as to both Seller and Ball, Buyer or their
Designees designed to provide such benefits to Buyer, Ball or their Designees
(in the case of Business Assets and Shares transferred to such party pursuant to
Section 1.1) after the Closing and (iii) enforce for the account of Buyer, Ball
or their Designees (in the case of Business Assets and Shares transferred to
such party pursuant to Section 1.1 (at Ball's or Buyer's expense, as the case
may be)), any rights of Seller arising from such agreement, lease, contract or
other document or instrument for which consent or waiver has not been obtained
against the other party, including, without limitation, the right to elect to
terminate in accordance with the terms
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thereof on the advice of Buyer. Subject to Section 6.4(b), Seller shall hold
Ball and Buyer harmless from any Loss suffered by Ball or Buyer as a result of
any failure of Seller to obtain such consent or waiver. Buyer, Ball or their
Designees (in the case of Business Assets and Shares transferred to such party
pursuant to Section 1.1) shall use all reasonable efforts to perform the
obligations of Seller arising under such agreement, lease, contract or other
document or instrument for which consent or waiver has not been obtained, to the
extent that by reason of the transactions consummated pursuant to this
Agreement, Buyer, Ball or their Designees (in the case of Business Assets and
Shares transferred to such party pursuant to Section 1.1) has control over the
resources necessary to perform such obligations.
Section 1.8 FURTHER ASSURANCES. After the Closing, each party shall,
from time to time, at the request of the other party and without further cost or
expense to the other party, execute and deliver such other instruments of
conveyance, assignment, transfer and assumption and take such other actions as
the other party may reasonably request, to consummate more effectively the
transactions contemplated hereby and to vest in Ball, Buyer and their Designees
title to the Business Assets and the Shares as contemplated by this Agreement,
or to cause Buyer to assume the Assumed Liabilities, as the case may be. As to
any of such licenses, registrations and permits which are transferable to Ball,
Buyer or their Designees, Seller shall cooperate with Ball, Buyer or their
Designees, to effect the transfer of such licenses, registrations and permits.
Notwithstanding the foregoing, no party shall be required under this Section 1.8
to make any payment or to incur any economic burden other than customary costs
and expenses arising from the performance of such party's obligations under this
Section 1.8.
Section 1.9 ALLOCATION OF PURCHASE PRICE. The Purchase Price (plus
Assumed Liabilities to the extent properly taken into account under section 1060
of the Code) shall be allocated among the Business Assets, the Shares and the
covenant not to compete in Section 5.8 hereof in accordance with Exhibit 1.9.
Buyer, Ball and Seller shall use their best efforts to agree, as soon as
practical after the Closing, but in no event later than 30 days after the
determination of the Cash Purchase Price Adjustment in Section 1.5, on the
allocation of the Purchase Price, including any adjustment pursuant to Section
1.5 (or such time as is mutually agreed by Seller and Buyer), among the Business
Assets, the Shares, and the covenant not to compete, and prepare and attach a
completed Exhibit 1.9 accordingly. Each of Buyer and Seller shall prepare and
timely file Internal Revenue Service Form 8594, reasonably cooperate with the
other party in the preparation of such forms and furnish the other party with
copies of such forms prepared in draft form within a reasonable period before
the filing due date. Any disputes resulting from disagreement upon the
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allocation of the Purchase Price shall be resolved by the Neutral Auditor in
accordance with procedures outlined in Section 1.5(c). Buyer, Ball and Seller
agree to (i) be bound by the allocation in Exhibit 1.9, (ii) act in accordance
with such allocation in filing of all Tax Returns (including, without
limitation, filing Form 8594 with its federal income Tax Return for the year
that includes the Closing Date) and in the course of any Tax audit, Tax review,
or Tax litigation relating thereto and (iii) take no position, and cause all
Affiliates not to take a position, that is inconsistent with such allocation for
federal or state income Tax purposes.
Section 1.10 TORRANCE, CALIFORNIA SITE.
(a) Seller's can plant in the City of Torrance, California is
currently a part of an unsubdivided parcel of real estate (the "PARCEL") on
which Seller's extrusion plant (which is not part of the Business Assets) (the
"EXTRUSION LAND") is also located. Seller, at its sole cost and expense, shall
use its best efforts to subdivide the Parcel such that the can plant portion of
the site, together with the improvements located thereon depicted as such on
Exhibit 1.10(a) (the "PLANT LAND"), is a separate legally subdivided lot (the
"SUBDIVISION"). Seller anticipates that such Subdivision may not be completed
until after the Closing Date. Accordingly, if the Subdivision has not been
completed by the Closing Date, Seller and Buyer shall, at the Closing Date,
enter into a lease and license substantially in the form of Exhibit 1.10(b) (the
"TORRANCE LEASE"). Upon completion of the Subdivision process, Seller shall
deliver to Buyer, and Buyer shall accept, a special warranty deed to the Plant
Land in compliance with the title and survey requirements set forth in Section
4.4. Seller will pay any and all costs associated with the Subdivision,
including, without limitation, costs associated with satisfying the conditions
of the Subdivision, the separation of utilities and new utility hook-ups, and
required site modifications such as drainage, fire protection and access. Buyer
shall cooperate with Seller at no out-of-pocket cost to Buyer or Ball (other
than such internal and administrative costs as appearing at hearings, providing
information and executing documents, such as any declaration of easements,
covenants and restrictions required in connection with such Subdivision and
Buyer's and Ball's attorneys' fees). Seller shall provide to Buyer copies of
all notices and material correspondence between the applicable Authority and
Seller regarding the Subdivision, as well as copies of any parcel maps or other
documents submitted to such Authority. Buyer and Ball may participate in any
and all meetings and hearings with or at the applicable Authority regarding the
Subdivision. Seller shall consult with Buyer prior to making official
submissions to any Authority in connection with the Subdivision. In no event
shall Seller execute any documents which create, or agree with any Authority to
impose,
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any conditions, restrictions or easements which affect the Plant Land without
first obtaining Buyer's written approval, which approval shall not be
unreasonably withheld or delayed. If during the Subdivision process, the
applicable Authority requests changes to the description of the Plant Land from
that described on Exhibit 1.10(a) as a condition to approval of the Subdivision,
the parties shall work cooperatively and in good faith to respond to such
changes so as to maintain, to the greatest degree possible, the business deal
embodied in this Agreement and the related documents and to provide each party
the benefits contemplated herein; provided, that in no event shall Seller modify
the legal description of the Plant Land without first obtaining the written
approval of Buyer, which approval shall not be unreasonably withheld or delayed.
(b) If the Subdivision is not completed and title to the Plant
Land in fee simple has not been transferred to Buyer on or before the second
anniversary of the Closing Date, then except to the extent that Seller's failure
to complete the Subdivision is directly attributable to Buyer's act or failure
to act as required under the Torrance Lease, Seller will indemnify and hold
harmless Buyer from all Losses arising: (i) from Buyer's inability to operate
the Plant Land in a manner reasonably consistent with Seller's prior operation,
where such inability is directly attributable to Buyer's not holding title to
the Plant Land in fee simple, including all such Losses incurred after the
Closing or (ii) from any bona fide sale or mortgage, or attempt to sell or
mortgage, the Leased Premises (as defined in section 1.1 of the Torrance Lease)
to an independent third party, attributable to the "Differential." The
"DIFFERENTIAL" equals the excess of the fair market value of a fee simple
interest in the Plant Land as if the Subdivision had occurred over the fair
market value of the Leased Premises as if the Subdivision had not occurred.
Buyer will promptly notify Seller of any inability to operate as described in
clause (b)(i) above.
(c) Until the first to occur of (i) the fourth anniversary of
the Closing Date or (ii) the conveyance of the Plant Land to Buyer, Seller will
not sell, transfer or otherwise convey the Parcel to any third party other than
(w) to Buyer, (x) to an Affiliate of Seller, (y) in connection with a taking by
eminent domain or deed in lieu thereof or (z) as reasonably required to effect
the Subdivision and thereafter, Seller may only sell such property subject to
the Torrance Lease and the right of first refusal set forth below. If at any
time after the fourth anniversary of the Closing Date but before the conveyance
of the Plant Land to Buyer, Seller receives a bona fide offer from any Person to
purchase the Parcel subject to the Torrance Lease or any interest therein, which
offer Seller intends to accept, or Seller intends to execute a contract with
respect to such sale, Seller shall notify Buyer of the terms
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and provisions of such offer or contract in reasonable detail and of the
intention of Seller to accept such offer or execute such contract. Buyer shall
have the right within thirty (30) days after such notice to accept the offer to
purchase the Parcel on the same terms and conditions (with appropriate reduction
of the purchase price for any part thereof allocated to the Plant Land, if
indeed any reduction is appropriate given the observation in Section 1.10(g))
and on the other terms and conditions specified in such offer or contract,
subject to the provisions of Section 1.10(f) below. If Buyer shall not so
exercise its right or shall reject the terms and conditions of such offer or
contract within such thirty (30) day period, Seller may then sell the Parcel,
subject to the Torrance Lease, to said third party purchaser, provided that such
sale is for the purchase price and on the same terms and conditions set forth in
the notification to Buyer. If for any reason, however, such sale to said
purchaser is not consummated within 12 months from the initial notification to
Buyer, any subsequent sale shall again be subject to this right of first
refusal. Following any such sale to a third party purchaser and the assumption
by the third party purchaser of all of the obligations of Seller under the
Torrance Lease, Buyer will thereafter look to the third party purchaser for
performance of the Torrance Lease, and Seller will thereafter have no further
obligations with respect to the Plant Land except for the indemnity obligations
of Seller as provided in this Agreement. If Buyer exercises its right of first
refusal under this Section 1.10(c) to purchase the Parcel, or its Option under
Section 1.10(e) to purchase the Parcel, upon the closing of such sale, the
Torrance Lease will terminate, and Seller will have no further obligations with
respect to the Plant Land or the Extrusion Land, except as set forth in the
purchase agreement for the Parcel and in this Agreement. Buyer's right of first
refusal hereunder will not apply to any conveyance described in clauses (w) -
(z) above. If Seller makes a conveyance pursuant to clause (x), Seller will
remain liable for all of its duties and obligations hereunder, and Buyer may
exercise its right of first refusal and its Option vis-a-vis the Affiliate.
(d) Buyer's right of first refusal is personal to Buyer but may
be assigned by Buyer to Ball or a Designee of Buyer and, to the extent so
assigned, the references in Section 1.10(c) to Buyer shall include references to
Ball or the Designee of Buyer, where appropriate.
(e) After the date which is three years and six months after the
Closing Date, and before the Plant Land has been conveyed to Buyer, and provided
that Seller's failure to complete the Subdivision is not directly attributable
to Buyer's act or failure to act as required under the Torrance Lease, Buyer
shall have the option to purchase (the "OPTION") the Parcel at the fair market
value of the
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Extrusion Land, as determined by an independent M.A.I. appraiser chosen by the
parties. In estimating such fair market value, the appraiser will take into
account that the Parcel is not subdivided, is being sold "as-is" without
environmental indemnification of any kind pursuant to Section 1.10(f) but shall
ignore the effect of the Torrance Lease. The Option will be suspended during
the 12-month sale period described in Section 1.10(c) unless during such period,
(i) such sale is consummated, in which case the Option will expire or (ii) such
sale is terminated, in which case the Option will no longer be suspended. At
any time after the date which is three years and five months after the Closing
Date, and before the Plant Land has been conveyed to Buyer, Buyer shall have the
right to enter, or cause its consultants to enter, upon the Extrusion Land to
make physical inspections, tests and surveys thereof, including environmental
reports and audits, soil, geology, boring, sampling and other tests, for the
purpose of determining whether Buyer will elect to exercise its Option. Buyer
shall indemnify Seller for any damage to the Extrusion Land and any liability
for personal injury or damage to other property of Seller or its tenants
directly caused by such inspection and testing and shall require its consultants
to leave the Extrusion Land in the same condition it was in prior to such
inspection and testing. Buyer shall provide Seller with copies of the written
results of all such tests and inspections but shall otherwise keep the results
of any such inspection or testing confidential except to the extent that
disclosure is required by law, judicial or administrative process or, in the
event Buyer elects to exercise its Option, the results of such inspection and
testing may be shared with the appraiser (provided the appraiser also agrees to
keep such results confidential) to aid in its determination of fair market value
of the Extrusion Land.
(f) Any purchase of the Parcel by Buyer, whether pursuant to its
right of first refusal or the exercise of the Option, shall, as to the Plant
Land only, be governed by and in compliance with the terms of this Agreement,
including the title and survey requirements of Section 4.4 and the indemnities
of Seller in Article VI. The purchase of the Parcel by Buyer pursuant to the
Option shall, as to the Extrusion Land, be "as-is" without environmental or any
other indemnities from Seller, provided Seller will deliver to Buyer a special
warranty deed, and, at Buyer's expense, an ALTA form owner's title policy (Form
B-1992 with extended coverage insuring over the general or standard exceptions)
and, at Seller's expense, a survey meeting the requirements of Section 4.4(c)
for the Parcel.
(g) The parties intend that Buyer will not have to pay for the
value of the Plant Land but once and only at the Closing Date. The parties
acknowledge that because the Torrance Lease is for a term of up to 99 years and
calls for
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payment of only $1.00 in rent, no third party purchaser or appraiser is likely
to attribute any value to the Plant Land and may, in fact, discount its offer
for the Extrusion Land due to the obligations imposed by the Torrance Lease.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Ball and Buyer as follows:
Section 2.1 DISCLOSURE SCHEDULE. All representations and warranties
in this Agreement shall survive the Closing to the extent provided in Section
6.1 (and, except as otherwise provided herein, none shall merge into any
instrument of conveyance), regardless of any investigation or lack of
investigation by any of the parties to this Agreement. Seller shall have no
liability for any breach or alleged breach of any representation or warranty
relating to an Excluded Liability to the extent Seller fully and timely
discharges such Excluded Liability, without Buyer incurring any cost of
investigation or defense with respect thereto. Each representation and warranty
of Seller is made subject to the exceptions which are noted in the corresponding
section of the Disclosure Schedule. For the purposes of this Agreement, the
"DISCLOSURE SCHEDULE" is the schedule delivered by Seller and Ball concurrently
herewith and identified by the parties as such. Seller shall number all
exceptions noted in the Disclosure Schedule to correspond to the applicable
section of Article II to which such exception refers. EXCEPT AS SPECIFICALLY
SET FORTH IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES TO
BALL, BUYER OR THEIR DESIGNEES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Except as otherwise expressly noted therein, the disclosures in any subsection
of the Disclosure Schedule thereof shall not constitute disclosure for purposes
of any other subsection.
Section 2.2 CORPORATE ORGANIZATION. Each of Seller, RIB, and LAR is
(and at the Closing, each of RCAL and RIND will be) a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to carry on its business as it is now being conducted and to own or
lease and operate its assets. The copies of the charter, bylaws, or
corresponding organizational documents of Seller, RIB, RCAL,
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RIND and LAR heretofore delivered to Buyer are true, complete and correct copies
of such instruments as in effect as of the date of this Agreement.
Section 2.3 OPERATION OF THE BUSINESS. Except for the license
agreements listed in Section 2.3 of the Disclosure Schedule, the Business is
conducted only through Seller, RCAL, RIND and LAR. Except for the Business, and
for the disposition of certain surplus equipment formerly used in the Business
at Seller's Houston can plant, and for interests held by its majority-owned
subsidiaries in Latasa, SVE, and UAC, Seller and its Affiliates are not engaged
in the design, manufacture, distribution and sale of beverage can bodies and
ends. The Business Assets taken as a whole, together with the licenses being
granted and the services being provided to Buyer under the Ancillary Agreements,
constitute all of the rights, properties and assets (tangible and intangible)
necessary for the continued conduct of the Business by Ball and Buyer as such
Business has been conducted by Seller.
Section 2.4 AUTHORIZATION. Except as set forth in Section 2.4 of the
Disclosure Schedule, Seller has all necessary corporate power and authority to
enter into this Agreement and the Ancillary Agreements and to carry out the
transactions contemplated hereby and thereby. Seller's Board of Directors has
taken all corporate action required by law, Seller's Certificate of
Incorporation, its Bylaws or otherwise required to be taken by it to authorize
the execution and delivery of this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes, and the Ancillary Agreements to be executed by Seller
(when duly executed and delivered by Seller at or before the Closing, assuming
this Agreement and the Ancillary Agreements constitute the valid and binding
obligation of Ball and Buyer) will constitute, the valid and binding obligation
of Seller, each enforceable in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 2.5 NO VIOLATION. Except as set forth in Section 2.5 of the
Disclosure Schedule, neither the execution, delivery and performance of this
Agreement and the Ancillary Agreements nor the consummation of the transactions
contemplated hereby or thereby will (i) violate or be in conflict with any
provision of the charter, bylaws or similar organizational document of Seller,
RIB, RCAL, RIND or LAR, (ii) be in conflict with, or constitute a default (or an
event which, with the
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giving of due notice or lapse of time, or both, would constitute such a default)
under, or cause the acceleration of the maturity of, or give rise to any right
of termination, imposition of fees or penalties on Ball, Buyer or their
Designees under any debt, lease, mortgage, indenture, license, contract,
instrument or other obligation to which Seller, RIB, RCAL, RIND or LAR is a
party or by which the Business Assets or the Shares are bound or result in the
creation of any Encumbrance upon any Business Assets or the Shares, which would
(A) have a Material Adverse Effect or (B) interfere with Seller's ability to
consummate the transactions contemplated by this Agreement or any of the
Ancillary Agreements, or (iii) violate any law, judgment, order, regulation,
rule, ordinance or decree (hereinafter sometimes separately referred to as a
"LAW") of any foreign, federal, state or local governmental or
quasi-governmental, administrative, regulatory or judicial court, department,
commission, agency, board, bureau, instrumentality or other authority
(hereinafter sometimes referred to as an "AUTHORITY") which violation would (A)
have a Material Adverse Effect or (B) interfere with Seller's ability to
consummate the transactions contemplated by this Agreement.
Section 2.6 CONSENTS AND APPROVALS. Except as set forth in Section
2.6 of the Disclosure Schedule, no filing or registration with, notice to, or
authorization, consent or approval of, any third party under any Contract or any
Authority, or any required filings with, or clearance from, any Authority, is
necessary for execution and delivery of this Agreement or the Ancillary
Agreements or the consummation by Seller of the transactions contemplated hereby
or thereby or to enable Ball or Buyer to conduct the Business at its present
locations immediately after the Closing Date in a manner which is consistent
with that in which the Business is presently conducted, except for compliance
with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), and the Administrative Council for Economic Defense in Brazil
("CADE").
Section 2.7 FINANCIAL STATEMENTS.
(a) The unaudited balance sheets of Seller's global can
operations (consisting of the Business, Seller's interests in Latasa and SVE,
together with certain other Excluded Assets and Excluded Liabilities as
described in Section 2.7 of the Disclosure Schedule) as of December 31, 1997 and
December 31, 1996, and the related unaudited statements of income and cash flows
for the years ended December 31, 1997, 1996 and 1995 (including the notes
thereto, the "UNAUDITED FINANCIAL STATEMENTS"), are set forth in Section 2.7 of
the Disclosure Schedule; provided that Buyer acknowledges that the footnotes
contained in the Unaudited
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Financial Statements are incomplete with respect to disclosures to be included
relating to Latasa. Such financial statements (i) have been derived from the
books and records of Seller, (ii) have been prepared in conformity with GAAP
consistently applied for all periods, and (iii) present fairly the results of
operations, cash flows and financial condition of Seller's global can operations
as of the dates and for the periods specified therein.
(b) The unaudited quarterly financial statements (balance sheet
and statements of income and cash flow) for Seller's global can operations to be
prepared and delivered to Buyer for periods after December 31, 1997 (the
"INTERIM FINANCIAL STATEMENTS") (x) will be derived from the books and records
of Seller, (y), except as indicated below, will be prepared in conformity with
GAAP consistently applied for all periods and consistently with the principles
applied in preparation of the Audited Financial Statements and (z) will present
fairly the results of operations, cash flows and financial condition of Seller's
global can operations as of the dates and for the periods specified therein;
provided, however, that in the preparation of the Interim Financial Statements.
(i) U.S. federal, state and local and Puerto
Rican income Taxes will not be included;
(ii) debt and interest expense will not be
included;
(iii) Seller's corporate-level general and
administrative expenses will not be allocated to the Business;
(iv) restructuring and environmental reserves
and costs will not be included; and
(v) footnotes will not be included, except to
the extent that quarterly financial statements on a Quarterly Report
on Form 10-Q filed under the Exchange Act in accordance with the rules
and regulations thereunder would be required to include footnotes.
Section 2.8 ACCOUNTS RECEIVABLE. All Accounts Receivable reflected
on the Closing Statement (a) arose in the ordinary course of business and (b)
are collectible in the ordinary course of business and are not subject to
counterclaims or setoffs, subject in either case to reserves reflected on the
Closing Statement. Except
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as set forth in Section 2.8 of the Disclosure Schedule, Seller is not presently
a party to and has not entered into any agreement to factor, sell, pledge or
otherwise dispose of any Accounts Receivable.
Section 2.9 INVENTORY AND WORKING CAPITAL. Except as set forth in
Section 2.9 of the Disclosure Schedule, the Inventory (a) consists of items of a
quantity and quality which are usable or saleable in the ordinary course of
Seller's business, except for items of obsolete material which have been written
down on the Closing Statement to estimated net realizable value and (b) is
sufficient but not excessive in kind or amount for the conduct of the Business
as it is presently being conducted.
Based on Seller's current operating practices which, to the Knowledge
of Seller, may be continued after Closing at the discretion of Ball and Buyer,
the aggregate working capital of the Business is sufficient to meet the current
operating requirements of the Business and the sales volume of the Business
currently anticipated by Seller.
Section 2.10 ABSENCE OF CERTAIN CHANGES. Except as set forth in
Section 2.10 of the Disclosure Schedule and as permitted by this Agreement,
since December 31, 1997, Seller has not, with respect to the Business,
(a) suffered any adverse change in its business, operations,
properties, assets, working capital, liabilities or condition (financial or
otherwise) which resulted in or is reasonably likely to result in a Material
Adverse Effect, and there has not been any damage, destruction, loss or other
event which resulted in, or is reasonably likely to result in, a Material
Adverse Effect;
(b) paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) involving more than
$100,000 with respect to the Business, other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practices of liabilities and obligations reflected or reserved against in the
Audited Balance Sheet or incurred in the ordinary course of business and
consistent with past practice since the date of the Audited Balance Sheet other
than payment, discharge and satisfaction of Excluded Liabilities;
(c) permitted or allowed any of the Business Assets to be
subject to any Encumbrance other than Permitted Exceptions;
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(d) cancelled any debts of more than $100,000 or waived any
claims or rights of the Business having a value in excess of $100,000;
(e) sold, transferred or otherwise disposed of any of the
Business Assets other than sales of Inventory and other items described in
Section 4.1(a)(ii) in the ordinary course of business;
(f) granted any general increase in the compensation of
officers, senior executives or employees of the Business (including any such
increase pursuant to any bonus, pension, profit-sharing or other plan or
commitment) other than in the ordinary course of business;
(g) made capital expenditures or commitments for additions to
property, plant, equipment or intangible capital assets of the Business totaling
more than $1,000,000;
(h) made any change in any method of financial or Tax accounting
or financial or Tax accounting practice;
(i) except for travel advances in the ordinary course of
business, loaned or advanced amounts in excess of $10,000 to, or sold,
transferred or leased any Business Assets to, any of the officers or employees
of the Business or any affiliate or associate of any of the officers or
employees of the Business or entered into any agreement or arrangement with
respect to the foregoing or with respect to any payments or acceleration of
payments to such parties in connection with the transactions contemplated
hereby; or
(j) agreed to take any action described in this Section.
Section 2.11 TITLE TO PROPERTIES; ENCUMBRANCES. Except as set forth
in Section 2.11 of the Disclosure Schedule, Seller has (or as of the Closing,
RCAL and RIND will have) good, valid and marketable title to the Owned Real
Property, and valid title, or, in the case of leased Business Assets (including,
without limitation, the Leased Premises), valid and effective leases, to all the
Business Assets which it purports to own or lease (real, personal and mixed,
tangible and intangible). With respect to the Business Locations used by Seller
in the operation of the Business in Puerto Rico, except as set forth in Section
2.11 of the Disclosure Schedule, LAR will, on the Closing Date, have good, valid
and marketable title to the Owned Real Property located in Puerto Rico and valid
title, or, in the case of leased Business
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Assets (including, without limitation, the Leased Premises), valid and effective
leases, to all the Business Assets located in Puerto Rico (real, personal and
mixed, tangible and intangible). Except as set forth in Section 2.11 of the
Disclosure Schedule, the Owned Real Property and Seller's interests in the
remaining Business Assets (including, without limitation, the Shares and
Seller's interests in the Leased Premises but limited in the case of the Real
Property Leases and the Leased Premises to Seller's acts) are free and clear of
all title defects or objections, liens, claims, charges, security interests or
other encumbrances, including, without limitation, leases, chattel mortgages,
conditional sales contracts, collateral security arrangements and other title or
interest retention arrangements (collectively, "ENCUMBRANCES") except for liens
for current Taxes that are not yet due or Taxes that are being contested in good
faith by appropriate proceeding; provided that Seller shall indemnify Ball and
Buyer and hold them harmless from any Encumbrances arising out of any such
contests. Seller has not received written notice of any proceedings, claims or
disputes affecting any Business Locations that are reasonably likely to curtail
or interfere with the present use or adversely affect the value of such Business
Locations in any material respect. There is not any action of eminent domain or
condemnation pending or, to the Knowledge of Seller, threatened for any portion
of any Business Locations.
(a) Seller has not received any written notice in the last three
years or which is currently unresolved from any Authority having jurisdiction
over any Business Locations threatening a suspension, modification or
cancellation of certificates of occupancy or Permits required under applicable
Law to occupy and use lawfully any Business Location to conduct business as
presently conducted.
(b) To the Knowledge of Seller, Seller's use and operation of
the Business Locations in the Business as presently conducted is not dependent
on a nonconforming use or other waiver from an Authority, the absence of which
would materially limit the use of the Business Locations or the operation of the
Business as presently conducted.
(c) To the Knowledge of Seller, no portion of the Business
Locations on which any building is located is in any flood plain which requires
Seller to obtain federal flood hazard insurance.
(d) There is free and uninterrupted ingress and egress (which in
some cases may be via easement which is perpetual or, in the case of Leased
Premises, at least of a duration equal to the term of the Real Property Lease,
and suitable for the operation of the Business as presently conducted) to the
Owned Real
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Property and, to the Knowledge of Seller, Leased Premises from a public street,
road or highway.
Section 2.12 EQUIPMENT. Except as set forth in Section 2.12 of the
Disclosure Schedule, with respect to each Business Location, the plants,
structures, machinery, vehicles, equipment and other tangible personal property
included in the Business Assets and located at such Business Location
(including, without limitation, any Business Assets used in the operation of the
Business at such Business Location and located on any third party's property),
taken as a whole, are in good operating condition and repair (ordinary wear and
tear excepted) and are adequate for the uses to which they are being put. All
water, gas, electrical, steam, compressed air, telecommunications, sanitary and
storm sewage lines and systems and other similar systems reasonably necessary to
operate the Business as presently operated have been installed and are operating
sufficiently to conduct the Business as presently conducted. Except as
expressly set forth in this Agreement, Seller expressly disclaims any other
representation and warranty of any kind or nature, express or implied, as to the
condition, value or quality of the Business Assets and SPECIFICALLY DISCLAIMS
ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, OR FITNESS FOR ANY
PARTICULAR PURPOSE WITH RESPECT TO ANY OF THE BUSINESS ASSETS. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, THE BUSINESS ASSETS SHALL BE TRANSFERRED
TO PURCHASER "AS IS" AND "WHERE IS."
Section 2.13 INTELLECTUAL PROPERTY RIGHTS.
(a) Section 2.13 of the Disclosure Schedule contains a complete
and accurate list of the following types of Intellectual Property Rights
included in the Business Assets: (i) registrations and applications to register
Trademarks; (ii) Patents; (iii) registrations and applications to register
Copyrights and (iv) license agreements and other material agreements relating to
the development or acquisition of or granting to others the right to use
Intellectual Property Rights. There are no royalties, honoraria, fees or other
payments payable by Seller to any Person in connection with the ownership,
licensure, use, or sale of any Patents, registered Trademarks, Copyrights or
other Intellectual Property Rights which are material to the Business.
(b) (i) Seller, RIB, RCAL, RIND and LAR collectively own or have
the right to use all of the Intellectual Property Rights included in the
Business Assets, (ii) Seller is the owner of record of the registrations and
applications set
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forth in Section 2.13 of the Disclosure Schedule and is listed in the records of
the appropriate U.S., state or foreign agency as the owner of record for each
such registration and application and (iii) no registration or application
listed in Section 2.13 of the Disclosure Schedule is the subject of any existing
or, to the Knowledge of Seller, threatened opposition, interference,
cancellation or other proceeding before any registration authority in any
jurisdiction. The registrations listed in Section 2.13 of the Disclosure
Schedule are valid and subsisting, in proper form and enforceable, and have been
duly maintained.
(c) To the Knowledge of Seller, use of the Intellectual Property
Rights included in the Business Assets by Seller, RIB, RCAL, RIND or LAR does
not infringe upon, or misappropriate any intellectual property right of any
third party. There are no claims pending or, to the Knowledge of Seller,
threatened, and Seller has not received any notice of any claim to such effect.
To the Knowledge of Seller, no third party is infringing upon or
misappropriating any Intellectual Property Rights. No such claims have been
made by or on behalf of Seller to such effect within the past three years.
(d) There is no material default (or event which with the giving
of notice and/or passage of time would constitute a material default) by Seller,
RIB, RCAL, RIND or LAR, under any of the license agreements set forth in Section
2.13 of the Disclosure Schedule and, to the Knowledge of Seller, by any other
party thereto.
(e) Section 2.13(e) of the Disclosure Schedule identifies the
general actions taken by Seller to date as part of a program to enable software
included in the Technology and related hardware to perform during and after the
year 2000 without error relating to date data, including, without limitation,
any error which references the wrong century or more than one century. Nothing
in this Section 2.13(e) or in Section 2.13(e) of the Disclosure Schedule shall
be construed as a guarantee by Seller that such software or hardware will
perform without error relating to such year 2000 date data.
(f) Section 2.13(f) of the Disclosure Schedule identifies all
Trademarks other than the Reynolds Marks that are used in the Business and not
transferred to Ball pursuant to Section 1.2(k).
(g) There are no Patents, Trademarks or Copyrights used
exclusively in the Business and not being transferred to Ball, Buyer or their
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Designees hereunder other than those set forth in Section 2.13(g) of the
Disclosure Schedule.
Section 2.14 CERTAIN CONTRACTS.
(a) Section 2.14(a) of the Disclosure Schedule lists all (i)
employment or other contracts (including, without limitation, consulting,
non-competition, severance or indemnification agreements) which are included in
the Business Assets with any employee, agent, consultant or current or living
former officer or employee of Seller providing service to the Business whose
total rate of annual remuneration exceeds $90,000, except (A) those that are
terminable by Seller on 60 days' notice or less without liability, penalty or
premium and (B) at-will employment contracts, (ii) union or collective
bargaining contracts relating to employees of Seller employed in the Business,
(iii) instruments or agreements for money borrowed (including, without
limitation, any indentures, guarantees, loan agreements, sale and leaseback
agreements, or purchase money obligations incurred in connection with the
acquisition of property other than in the ordinary and usual course of business
consistent with past practice) in excess of $100,000 included in the Assumed
Liabilities, (iv) leases or subleases for personal property included in the
Business Assets which require lease payments in excess of $100,000 annually
(other than those agreements which are terminable on 60 days' notice) and the
Real Property Leases, (v) agreements for acquisitions or dispositions, purchase
or sale of assets or stock or otherwise of a business unit of the Business
entered into within the last five years, (vi) joint venture or partnership
agreements included in the Business Assets, (vii) purchase and supply contracts
in existence (or under negotiation) with a remaining (or prospective) term of
six months or more included in the Business Assets and calling for aggregate
future payments exceeding $250,000, (viii) guarantees, suretyships,
indemnification and contribution agreements included in the Business Assets and
(ix) other agreements, contracts, notes, security agreements, understandings or
commitments that obligate Seller for an amount in excess of $250,000 in the
Business Assets (the agreements described in clauses (i) through (ix) above are
collectively referred to as the "CONTRACTS"). A true and complete copy of each
Contract (together with all amendments thereto) has been provided or made
available to Buyer. Each Contract is or upon execution will be a valid and
binding obligation of Seller. Seller is not in material breach or default under
any of the Contracts, and to the Knowledge of Seller, there has not been any
material breach or default of any Contract by any party thereto.
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(b) The policy of Seller with respect to entering into
confidentiality agreements with its employees is as set forth in Section 2.14(b)
of the Disclosure Schedule. Except as set forth in Section 2.14(b) of the
Disclosure Schedule, no Contract, Permit or other understanding that would be
binding upon Ball or Buyer restricts the ability of Seller to own, possess or
use any of the Business Assets or conduct any of Seller's operations related to
the Business in any geographic area.
Section 2.15 ORDERS AND COMMITMENTS. Except as set forth in Section
2.15 of the Disclosure Schedule, all outstanding orders and commitments of the
Business have been made in the ordinary course of the Business. Returns of
product manufactured in the Business as a percentage of sales for the year 1997
are as set forth in Section 2.15 of the Disclosure Schedule. As of the date of
this Agreement, there are no claims in excess of $100,000 per claim pending
against Seller to return any merchandise sold by the Business by reason of
alleged overshipments, defective merchandise or otherwise, or of merchandise in
the hands of customers under an understanding that such merchandise would be
returnable. As of the date of this Agreement, such claims in the aggregate do
not exceed $1,000,000.
Section 2.16 TAXES. Except as set forth in Section 2.16 of the
Disclosure Schedule,
(a) Each of Seller, RIB, RCAL, RIND and LAR has duly and timely
filed (or had filed on its behalf) all Tax Returns required to be filed by it
with respect to the Business, and each such Tax Return is true, correct and
complete in all material respects;
(b) Seller (with respect to the Business) and each of RIB, RCAL,
RIND and LAR has duly paid or made adequate provision for the due and timely
payment of all Taxes and other charges, including, without limitation, deposits
required with respect to employee withholdings, interest, penalties, assessments
and deficiencies, due or claimed to be due from it (other than amounts being
contested in good faith, adequate reserves for which have been established);
(c) There are no liens for Taxes (other than statutory liens for
property Taxes not yet due and payable) or other such charges upon the Business
Assets or the Shares;
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(d) All deficiencies and assessments resulting from examination
of the Tax Returns filed by (i) Seller with respect to the Business Assets or
(ii) by RIB, RCAL, RIND and LAR, in either case by any Authority and declared by
such Authority to be due or ordered to be paid, have been paid (other than
amounts being contested in good faith for which adequate reserves have been
established);
(e) There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any Tax Return of RIB, RCAL, RIND
or LAR for any period;
(f) No federal, state, local or foreign income or other material
Tax audits are pending with respect to RIB, RCAL, RIND and LAR;
(g) None of RIB, RCAL, RIND and LAR is a party to any
Tax-sharing agreement, arrangement or indemnity relating to Taxes;
(h) None of RIB, RCAL, RIND and LAR has been a member of any
affiliated group within the meaning of section 1504(a) of the Code, or any
similar affiliated or consolidated group for Tax purposes under state, local or
foreign law, or has any liability for the Taxes of any person under Treasury
Regulation section 1.1502-6 or any similar provision of state, local or foreign
law, as a transferee or successor, by contract or otherwise; and
(i) None of RIB, RCAL, RIND or LAR is a party to any contract,
agreement, arrangement or plan (and Seller is not a party to any contract,
agreement, arrangement or plan that will be assumed by Buyer, Ball or any of
their Affiliates as a result of this Agreement) that has resulted or would
result in connection with the transactions contemplated by this Agreement,
separately or in the aggregate, in the payment of (x) any "excess parachute
payments" within the meaning of section 280G of the Code (without regard to the
exceptions set forth in section 280G(b)(4) and (5) of the Code) or (y) any
amount for which a compensation deduction would be disallowed under section
162(m) of the Code.
Section 2.17 LITIGATION. Except as set forth in Section 2.17 of the
Disclosure Schedule, no claim, demand, action, suit, inquiry, proceeding or
investigation by or before any Authority is pending or, to the Knowledge of
Seller, threatened against or involving Seller with respect to the Business, the
Business Assets or the Shares, or which questions or challenges the validity of
this Agreement or the Ancillary Agreements or any action taken or to be taken by
Seller pursuant to this
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Agreement or the Ancillary Agreements or in connection with the transactions
contemplated hereby or thereby. Except as set forth in Section 2.17 of the
Disclosure Schedule, Seller is not subject to any judgment, court order or
decree, or any arbitration order issued within six years prior to the date of
this Agreement with respect to the Business or Business Assets.
Section 2.18 COMPLIANCE WITH LAW. Except as set forth in Section
2.18 of the Disclosure Schedule and excluding those matters relating to the
representations and warranties contained in Sections 2.19, 2.20 and 2.21, the
Business has been conducted in compliance in all material respects with all
applicable Laws. Seller has not received any notification from any Authority of
any asserted present failure by Seller to comply with Laws in regard to the
Business. All material Permits held by Seller in connection with the operation
of the Business or the Business Assets are set forth in Section 2.18 of the
Disclosure Schedule.
Section 2.19 ENVIRONMENTAL PROTECTION. Except as set forth in
Section 2.19 of the Disclosure Schedule,
(a) Seller has obtained (or is in the process of obtaining) all
material Environmental Permits which are required under applicable Environmental
Laws for the ownership, use and operation of each parcel of Owned Real Property
and for the conduct by Seller of its activities on the Leased Premises. All
such material Environmental Permits previously obtained by Seller are in effect
or in the application process. To the Knowledge of Seller, no action is pending
to revoke any such material Environmental Permits. Seller is in material
compliance with the terms and conditions of such Environmental Permits. All
such material Environmental Permits with respect to the Business are listed in
Section 2.19(a) of the Disclosure Schedule. To the extent Seller has not yet
obtained any Environmental Permit for which it is applying, it is not in
violation of any Environmental Law as a result thereof. All material
Environmental Permits for which Seller has applied but has not obtained are
listed in Section 2.19(a) of the Disclosure Schedule.
(b) With respect to the Business, Seller, the Owned Real
Property and Seller's activities on the Leased Premises are in material
compliance with all applicable Environmental Laws.
(c) Seller has made available to Buyer true and complete copies
of all material final environmental studies made or prepared by third parties in
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the last five years relating to the Business Locations in Seller's possession,
such studies being listed in Section 2.19(c) of the Disclosure Schedule.
(d) There is no civil, criminal or administrative action, claim,
investigation, notice or demand letter pending or, to the Knowledge of Seller,
threatened, under any Environmental Laws relating to the Owned Real Property and
Seller's activities on the Leased Premises on which any substance relating to
the Business has been disposed or released.
(e) Since January 1, 1992, to the best Knowledge of Seller,
(i) except for the generation, storage,
disposal and transportation to offsite facilities in the ordinary
course of business in compliance in all material respects with
applicable Environmental Laws, there has been no generation, storage,
disposal, treatment or transportation of any Hazardous Substances at
the Owned Real Property or arising from Seller's activities at the
Leased Premises in violation of, or which could give rise to any
material obligation under, any Environmental Laws; and
(ii) there has been no Release requiring
Cleanup at the Owned Real Property or arising from Seller's activities
at the Leased Premises.
(f) No Release or Cleanup has occurred at any Owned Real
Property resulting in the assertion or creation of an Encumbrance on any Owned
Real Property by any Authority nor, to the Knowledge of Seller, has any such
assertion of an Encumbrance been made in writing by any Authority.
(g) To the Knowledge of Seller, except for matters which are
Excluded Liabilities under Section 1.3(b)(v), Seller has not, within three years
preceding the date of this Agreement or, to the extent currently unresolved, at
any time prior to the date hereof, received any written notice or any order from
any Authority advising it that it is, with respect to any Business Location,
responsible for or potentially responsible for Cleanup or paying for the cost of
Cleanup of Hazardous Substances, and Seller has not entered into any agreements
concerning such Cleanup.
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(h) To the Knowledge of Seller, the Business Locations do not
contain any (i) underground storage tanks, (ii) friable asbestos, (iii)
equipment containing PCBs, (iv) underground injection wells, or (v) septic tanks
in which any Hazardous Substances have been disposed.
Section 2.20 LABOR RELATIONS. Except as set forth in Section 2.20 of
the Disclosure Schedule,
(a) Section 2.20(a) of the Disclosure Schedule identifies all
collective bargaining agreements (including, without limitation, any written
amendments or written side agreements thereto) to which Seller, RCAL, RIND or
LAR is a party that apply to the employees of the Business (the "COLLECTIVE
BARGAINING AGREEMENTS");
(b) each of Seller, RCAL, RIND or LAR is, with respect to the
Business, in compliance with all applicable Laws respecting employment and
employment practices, terms and conditions of employment, occupational safety
and health and wages and hours, except for such noncompliance that could not
reasonably be expected to have a Material Adverse Effect, and is not engaged in
any unfair labor practice as defined in the National Labor Relations Act or
other applicable Law;
(c) there is no unfair labor practice charge or complaint
against Seller, RCAL, RIND or LAR with respect to the Business pending or, to
the Knowledge of Seller, threatened before the National Labor Relations Board or
any similar Authority;
(d) there is no labor strike, dispute, slowdown, lockout or
stoppage pending or, to the Knowledge of Seller, threatened against Seller,
RCAL, RIND or LAR with respect to the Business, and during the past three years,
there has not been any such action;
(e) no written grievance rising to the fourth step of the
grievance procedures under the Collective Bargaining Agreements is pending
against Seller with respect to the Business;
(f) to the Knowledge of Seller, there are no current union
organizing activities among such employees, nor does any question concerning
representation exist concerning such employees;
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(g) there are no material written personnel policies, rules or
procedures applicable to employees employed by Seller in the Business, other
than those listed in Section 2.20(a) of the Disclosure Schedule, true and
correct copies of which have been made available to Buyer;
(h) no charges against or involving Seller, RCAL, RIND or LAR
with respect to the Business are pending or, to the Knowledge of Seller,
threatened before any Authority responsible for the prevention of unlawful
employment practices;
(i) there are no lawsuits or other proceedings pending or, to
the Knowledge of Seller, threatened by or on behalf of any present or former
employee employed by Seller, RCAL, RIND or LAR or alleged to be employed by
Seller, RCAL, RIND or LAR in connection with the operation of the Business, any
applicant for such employment or classes of the foregoing alleging breach of any
express or implied contract of employment, any Law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship; and
(j) none of the employees employed by Seller, RCAL, RIND or LAR
in the Business has suffered an "employment loss" (as defined in the Worker
Adjustment and Retraining Notification Act ("WARN ACT")) since three months
before the date of this Agreement.
Section 2.21 EMPLOYEE BENEFIT MATTERS.
(a) Section 2.21(a) of the Disclosure Schedule contains a true
and complete list of each pension, retirement, savings, profit-sharing, stock
bonus, stock purchase, stock option, restricted stock, deferred compensation,
bonus or other incentive compensation, equity compensation plan, program,
policy, agreement, contract, arrangement or fund, including each pension plan,
fund or program within the meaning of section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), each medical, dental,
hospitalization, supplemental unemployment benefits, life insurance or other
welfare plan, program, policy, agreement, contract, arrangement or fund,
including each welfare plan, fund or program within the meaning of section 3(1)
of ERISA, each employment, termination or severance plan, program, policy,
agreement, contract or arrangement and each other employee benefit plan,
program, policy, agreement, contract, arrangement or fund, in each case, that is
sponsored, maintained or contributed to or required to
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be contributed to by Seller, RCAL, RIND or LAR or by any trade or business,
whether or not incorporated (an "ERISA AFFILIATE"), that together with Seller
would be deemed a single employer within the meaning of section 4001(b) of
ERISA, or to which Seller or an ERISA Affiliate is party, that are currently
maintained by Seller for the benefit of, or to which Seller contributes on
behalf of, any employee of the Business as a result of such employee's
employment in the Business (each a "PLAN"). Section 2.21(a) of the Disclosure
Schedule identifies each of the Plans that is subject to section 302 or Title IV
of ERISA or section 412 of the Code (the "TITLE IV PLANS").
Except as set forth in Section 2.21 of the Disclosure Schedule (with
respect to paragraphs (b)-(h)):
(b) With respect to each Plan that covers Represented Employees,
Seller has heretofore delivered or made available to Buyer true and complete
copies of the current version of the Plan and any amendments thereto, any
related trust or other funding vehicle, any summaries required under ERISA or
the Code and the most recent determination letter received from the Internal
Revenue Service with respect to each Plan intended to qualify under section
401(a) of the Code. To the Knowledge of Seller, no event has occurred since the
date of such determination that would affect such determination.
(c) No liability under Title IV or section 302 of ERISA has been
incurred by Seller or any ERISA Affiliate that has not been satisfied in full,
and no condition exists that presents a risk to Seller or any ERISA Affiliate of
incurring any such liability, other than liability for premiums due the Pension
Benefit Guaranty Corporation (which premiums have been paid when due). To the
extent this representation applies to section 4064, 4069 or 4204 of Title IV of
ERISA, it is made not only with respect to the Title IV Plans but also with
respect to any material employee benefit plan, program, agreement or arrangement
subject to Title IV of ERISA to which Seller or an ERISA Affiliate made, or was
required to make, contributions during the six-year period ending on the
Closing.
(d) Neither Seller, any ERISA Affiliate, any Plan, any trust
created thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which Seller, any ERISA Affiliate, any Plan, any
such trust, or any trustee or administrator thereof, or any party dealing with
any Plan or any such trust could be subject to either a civil penalty assessed
pursuant to section 409 or 502(i) of ERISA or a tax imposed pursuant to section
4975 or 4976 of the Code.
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(e) No Title IV Plan is a "multiemployer pension plan," as
defined in section 3(37) of ERISA.
(f) All contributions required to be made with respect to any
Plan on or before the Closing Date have been timely made.
(g) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable Law, including, without
limitation, ERISA and the Code.
(h) There are no pending or, to the Knowledge of Seller,
threatened, claims by or on behalf of any Plan by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
(i) The Employee Lists and the Employee Benefits Data provided
to Buyer by Seller pursuant to Section 5.5 are true and complete as of the date
of such lists.
Section 2.22 CUSTOMERS AND SUPPLIERS. Except as set forth in Section
2.22 of the Disclosure Schedule, since September 30, 1997, (a) there has not
been any material adverse change in the business relationship between Seller and
any customer of the Business which customer accounts for annual sales to Seller
of $5,000,000 or more on an annualized basis and (b) to the Knowledge of Seller,
no such customer has advised Seller that it intends to terminate its
relationship with Seller or significantly reduce its purchases from Seller.
Since September 30, 1997, there has not been any material adverse change in the
business relationship between Seller and any supplier of the Business accounting
for sales to Seller of $1,000,000 or more on an annualized basis providing
supplies to Seller which are not readily obtainable from other sources in the
ordinary course of business.
Section 2.23 BROKERS AND FINDERS. Neither Seller nor any of its
officers, directors or Affiliates has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
Section 2.24 INVESTMENT. Seller (i) understands that the Ball Shares
have not been registered under the Securities Act of 1933, as amended (the
"ACT"), or under any state securities laws, and are being offered and sold in
reliance upon
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federal and state exemptions for transactions not involving any public offering,
and may not be sold except in a transaction registered under the Act or exempt
from such registration requirements and (ii) is acquiring the Ball Shares solely
for its own account for investment purposes, and not with a view to the
distribution thereof, other than a sale or distribution which is registered
under the Act or is exempt from such registration or except pursuant to the
registration rights provisions contained in the Stockholder's Agreement.
Section 2.25 CAPITALIZATION OF SUBSIDIARIES.
(a) Section 2.25(a) of the Disclosure Schedule lists RCAL's,
RIND's and LAR's authorized, issued and outstanding capital stock and all of the
owners thereof. Seller's interest in RCAL, RIND or LAR is free and clear of all
Encumbrances and free of any limitation or restriction on the right to vote,
sell or otherwise dispose of such interests (other than those imposed by
foreign, federal and state securities laws), and there are no outstanding (i)
securities of RCAL, RIND or LAR convertible into or exchangeable for shares of
capital stock or other voting securities or ownership interests in RCAL, RIND or
LAR or (ii) options or other rights to acquire from RCAL, RIND or LAR 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 RCAL, RIND or LAR (the items in clauses (i)
and (ii) being referred to collectively as the "DOMESTIC SUBSIDIARY
SECURITIES"). There are no outstanding obligations to repurchase, redeem or
otherwise acquire any outstanding Domestic Subsidiary Securities. The issued
and outstanding shares of capital stock of RCAL, RIND and LAR are duly
authorized, validly issued, fully paid and nonassessable and have not been
issued in violation of any preemptive rights, including any rights of first
refusal.
(b) Section 2.25(b) of the Disclosure Schedule lists the
authorized, issued and outstanding capital stock of RIB and the direct and
indirect ownership interest of Seller and its Affiliates therein as of the date
hereof. The issued and outstanding shares of capital stock of RIB are duly
authorized, validly issued, fully paid and nonassessable and have not been
issued in violation of any preemptive rights, including any rights of first
refusal. Seller's interest in RIB is free and clear of all Encumbrances and
free of any restriction on the right to vote, sell or otherwise dispose of such
interest (other than those imposed by foreign, federal and state securities
laws), and there are no outstanding (i) securities of RIB convertible into or
exchangeable for shares of capital stock or other voting securities or ownership
interests in RIB, or (ii) options or other rights to acquire from RIB, any
capital
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stock, voting securities or other ownership interest in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interest in RIB. There are no outstanding obligations to repurchase,
redeem or otherwise acquire any outstanding RIB securities.
(c) Section 2.25(c) of the Disclosure Schedule lists the
ownership interests of Seller or its Affiliates in Latasa, each of the
subsidiaries of Latasa (the "LATASA SUBSIDIARIES"), the respective authorized,
issued and outstanding capital stock of each such entity and all the owners
thereof. Except as set forth in Section 2.25(c) of the Disclosure Schedule, the
interests of Seller or its Affiliates in Latasa and of Latasa in the Latasa
Subsidiaries are free and clear of all Encumbrances and free of any limitation
or restriction on the right to vote, sell or otherwise dispose of such interests
(other than those imposed by foreign, federal and state securities laws), and
there are no outstanding (i) securities of Latasa or any of the Latasa
Subsidiaries owned by Seller or its Affiliates convertible into or exchangeable
for shares of capital stock or other voting securities or ownership interests in
Latasa or the Latasa Subsidiaries and (ii) options or other rights to acquire
from Latasa or the Latasa Subsidiaries 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 Latasa or the
Latasa Subsidiaries independent of the assets transferred to Buyer. There are
no outstanding obligations to repurchase, redeem or otherwise reacquire any
outstanding securities of Latasa or the Latasa Subsidiaries. The issued and
outstanding shares of capital stock of each of Latasa and the Latasa
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and have not been issued in violation of any preemptive rights, including any
rights of first refusal.
(d) Section 2.25(d) of the Disclosure Schedule lists all
agreements, arrangements or commitments to which Seller or any of its Affiliates
is a party relating to the holding, voting or transfer of any of RIB, RCAL, RIND
and LAR securities or the governance of any of such subsidiaries.
(e) The execution, delivery and performance of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby will not create an Encumbrance on the Shares.
(f) RIB and RILA own 11,504,994 and 5,159,250 shares,
respectively, of capital stock in Latasa, which shares are duly authorized,
validly issued, fully paid and nonassessable.
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(g) Reynolds and its Affiliates own 123,840 shares of capital
stock of SVE.
Section 2.26 LATASA AGREEMENTS.
(a) Seller has previously delivered to Buyer true and complete
copies of all the Latasa Agreements.
(b) Seller is not in material breach of any of the Latasa
Agreements.
(c) Other than the transactions contemplated by this Agreement,
to the Knowledge of Seller, there is no fact that would allow a party to the
Latasa Agreements to terminate any such agreement or that would result in an
Encumbrance on the Shares.
(d) Except as set forth in Section 2.26(d) of the Disclosure
Schedule, neither the execution, delivery and performance of this Agreement and
the Ancillary Agreements nor the consummation of the transactions contemplated
hereby or thereby will (i) violate or be in conflict with any provision of the
charter, bylaws or similar organizational document of Latasa or any of the
Latasa Subsidiaries or (ii) be in conflict with, or constitute a default (or an
event which, with the giving of due notice or lapse of time, or both, would
constitute such a default) under, or cause the acceleration of the maturity of,
or give rise to any right of termination, imposition of fees or penalties on
Ball or Buyer under any debt, lease, mortgage, indenture, license, contract,
instrument or other obligation to which Latasa or any of the Latasa Subsidiaries
is a party or by which the Business Assets or the Shares are bound or result in
the creation of any Encumbrance upon any Business Assets or the Shares, which
would (A) have a Material Adverse Effect or (B) interfere with Seller's ability
to consummate the transactions contemplated by this Agreement or the Ancillary
Agreements; or (iii) violate any law, judgment, order, regulation, rule,
ordinance or decree of any Authority which violation would (A) have a Material
Adverse Effect or (B) interfere with Seller's ability to consummate the
transactions contemplated by this Agreement.
Section 2.27 LATASA OFFERING STATEMENT. The Latasa offering statement
dated May 14, 1997 (the "LATASA OFFERING STATEMENT"), a copy of which has been
previously delivered to Buyer, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein,
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in light of the circumstances in which they were made, not misleading. Except
as set forth in Section 2.27 of the Disclosure Schedule, to the Knowledge of
Seller, since the date of the Offering Statement, no event has occurred which
could reasonably be expected to have a material adverse effect on Latasa.
Section 2.28 LATASA FINANCIAL STATEMENTS. The unaudited balance
sheets of Latasa as of December 31, 1997 and 1996 and the related unaudited
statements of income and cash flows for the years then ended, including the
related notes thereto (in English) are set forth in Section 2.28 of the
Disclosure Schedule (the "UNAUDITED LATASA FINANCIAL STATEMENTS"). Such
financial statements (i) have been derived from the books and records of Latasa,
(ii) have been prepared in conformity with GAAP consistently applied for all
periods and (iii) present fairly the results of operations, cash flows and
financial condition of Latasa as of the dates and for the periods specified
therein.
Section 2.29 SVE AGREEMENT. Seller has previously delivered to Buyer
a true and complete copy of the Continuing Know-How and Technical Services
Agreement between Seller or its Affiliate and SVE (the "SVE TECHNICAL SERVICES
AGREEMENT"). Seller is not in material breach of the SVE Technical Services
Agreement.
Section 2.30 SELLER'S EXPOSURE ESTIMATES. The information contained
in Section 2.30 of the Disclosure Schedule is based on Seller's records,
Seller's past business experiences and practices and Seller's current business
beliefs and expectations. Assuming the continuation of Seller's existing
business practices and existing, pending and anticipated contracts related to
Seller's existing metals cost programs and can price programs, the information
contained in Section 2.30 of the Disclosure Schedule is a reasonable estimate of
the exposure limits described therein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BALL AND BUYER
Ball and Buyer jointly and severally represent and warrant to Seller
as follows:
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Section 3.1 CORPORATE ORGANIZATION, ETC. Each of Ball and Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and each has full corporate power and
authority to carry on its business as it is now being conducted and to own or
lease and operate its assets and, in the case of Buyer, to operate the Business
after the Closing. The copies of the charter and bylaws of each of Ball and
Buyer delivered to Seller as of the date hereof are true, complete and correct
copies of such instruments as in effect on the date of this Agreement.
Section 3.2 AUTHORIZATION, ETC. Each of Ball and Buyer has all
necessary corporate power and authority to enter into this Agreement and the
Ancillary Agreements and to carry out the transactions contemplated hereby and
thereby. The Board of Directors of each of Ball and Buyer has taken all action
required by law, and the charter and bylaws of each of Ball and Buyer, and
otherwise required to be taken by it to authorize the execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes, and
the Ancillary Agreements to be executed by Ball and Buyer (when duly executed
and delivered by Ball and Buyer at or before Closing, assuming this Agreement
and the Ancillary Agreements constitute the valid and binding obligations of
Seller) will constitute, the valid and binding obligation of Ball and Buyer,
each enforceable in accordance with its terms except that (i) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
Section 3.3 NO VIOLATION. Neither the execution, delivery and
performance of this Agreement and the Ancillary Agreements nor the consummation
of the transactions contemplated hereby or thereby will (i) violate or be in
conflict with any provision of the charter or bylaws of Ball or Buyer, (ii) as
of the Closing, violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, or cause the acceleration of the maturity of or give rise to any right of
termination, imposition of fees or penalties on Ball or Buyer under any debt,
lease, mortgage, indenture, license, contract, instrument or other obligation to
which Ball or Buyer is a party or by which the property or assets of Ball or
Buyer are bound or result in the creation of any Encumbrance upon any property
or assets of Ball or Buyer which violation or Encumbrance would materially (A)
adversely affect the business of Ball or Buyer or
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(B) interfere with Buyer's or Ball's ability to consummate the transactions
contemplated by this Agreement or the Ancillary Agreements, or (iii) violate any
Law, which violation would materially (A) adversely affect the business of Ball
or Buyer or (B) interfere with Buyer's or Ball's ability to consummate the
transactions contemplated by this Agreement or the Ancillary Agreements.
Section 3.4 LITIGATION. There is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending, or, to the best
knowledge of Ball and Buyer, threatened against or involving Ball or Buyer which
questions or challenges the validity of this Agreement or the Ancillary
Agreements or any action taken or to be taken by Ball or Buyer pursuant to this
Agreement or the Ancillary Agreements or in connection with the transactions
contemplated hereby or thereby; nor, to the best knowledge of Ball and Buyer, is
there any valid basis for any such action, proceeding or investigation.
Section 3.5 SEC REPORTS. Ball has filed all periodic reports
required to be filed by it under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") with the U.S. Securities and Exchange Commission (the
"SEC") since January 1, 1996 , all of which, as of their respective filing
dates, complied in all material respects with all applicable requirements of the
Exchange Act (as such documents have been amended since the time of their
filing, collectively, the "BALL SEC REPORTS"). None of the Ball SEC Reports,
including, without limitation, any financial statements or schedules included
therein, as of their respective dates or, if amended, as of the date of the last
such amendment, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 3.6 BROKERS AND FINDERS. Except for the fees and expenses of
Lehman Brothers (which shall be paid by Ball), neither Ball nor Buyer nor any of
their officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
Section 3.7 AUTHORIZATION OF SHARES. The issuance of the Ball Shares
has been duly authorized by all requisite corporate action on the part of Ball,
and upon issuance in accordance with the terms hereof, the Ball Shares will be
validly issued, fully paid, and nonassessable free and clear of all encumbrances
(other than
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under applicable federal or state securities laws) and shall not have been
issued in violation of any preemptive rights. The authorized, issued and
outstanding shares of capital stock of Ball, all of which are validly issued and
outstanding, fully paid and non-assessable, are set forth in Section 3.7 of the
Disclosure Schedule. Except as disclosed in Section 3.7 of the Disclosure
Schedule, there are no (a) options, warrants, conversion privileges or other
rights, agreements, arrangements or other commitments obligating Ball to issue,
sell, purchase or redeem any shares of its capital stock or (b) any stock
appreciation, phantom or similar rights outstanding based upon the book value,
earnings or any other attribute of any of the capital stock of Ball. Section
3.7 of the Disclosure Schedule lists all agreements, arrangements or commitments
to which Ball or Buyer is a party relating to the holding, voting or transfer of
any of the shares in Ball or the operations or governance of Ball. Ball owns
all of the outstanding capital stock of each of its subsidiaries, including
Buyer, free of Encumbrances other than (i) liens for taxes not yet due or taxes
being contested in good faith by appropriate proceedings and (ii) any other
encumbrances incurred as a result of the Financing (as defined in Section 3.9).
Section 3.8 CONSENTS AND APPROVALS. Except as set forth in Section
3.8 of the Disclosure Schedule, no filing or registration with, notice to or
authorization, consent or approval of, any third party under any material
contract to which Ball or Buyer is a party or any Authority, or any required
filings with, or clearance from, any Authority, is necessary for execution and
delivery of this Agreement or the Ancillary Agreements by Ball or Buyer or the
consummation by Ball or Buyer of the transactions contemplated hereby or thereby
except for compliance with the HSR Act or Cade.
Section 3.9 FINANCING. Ball has received a commitment letter (the
"COMMITMENT LETTER"), dated April 22, 1998, from The First National Bank of
Chicago, First Chicago Capital Markets, Inc., Bank of America National Trust
and Savings Association, BancAmerica Robertson Stephens, Inc., Lehman Brothers
Inc. and Lehman Commercial Paper Inc. to provide $1.8 billion of debt financing
(the "FINANCING") to Ball and Buyer in connection with the transactions
contemplated hereby and the refinancing of other indebtedness of Ball on the
terms set forth in the Commitment Letter. A true and complete copy of the
Commitment Letter has been delivered to Seller.
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ARTICLE IV
COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer:
Section 4.1 CONDUCT OF THE BUSINESS.
(a) From the date hereof until the Closing Date, Seller shall
conduct the Business in the ordinary course consistent with past practice and
use all reasonable efforts to preserve intact the present business organization
and its relationships with suppliers, dealers, customers and third parties
having business relationships with the Business 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, Seller will not,
without the prior written consent of the Chairman, Vice Chairman or President of
Ball:
(i) acquire assets valued in excess of
$250,000 in the aggregate from any Person other than in the ordinary
course consistent with past practice or as provided in the capital
expenditure plan included in Section 2.10 of the Disclosure Schedule;
(ii) sell, lease, license or otherwise dispose
of any Business Assets except for sales of Inventory and the following
other items in the ordinary course consistent with past practice: (A)
aluminum scrap generated by the production process; (B) other scrap
metal; (C) used beverage cans; (D) waste oil; (E) recyclable paper,
chipboards and separators; (F) non-usable pallets; (G) corrugated
cardboard; (H) waste water treatment room slurry accumulation; and (I)
packing materials and plant process materials sold to other can and
end manufacturers who are experiencing emergency shortages;
(iii) enter into any material agreement or
contract with respect to the Business or any of the Business Assets
which is not assignable (or which requires the consent of a third
party to assign which consent has not been obtained) to Ball or Buyer;
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(iv) cancel any debts in excess of $200,000
individually or $1,000,000 in the aggregate, or waive any claims or
rights of material value related to the Business or the Business
Assets;
(v) grant any increase in the rates or terms
of compensation payable or to become payable to officers or employees
of Seller related to the Business (including any such increase
pursuant to any benefit plan), except in the ordinary and usual course
of business consistent with past practice or required by any labor or
other agreement in effect as of the date hereof or as described in
Section 2.10 of the Disclosure Schedule;
(vi) enter into, extend, amend, or renew any
material contract, agreement, purchase or supply agreement or
commitment or other obligation of the Business to which Seller is a
party, except in the ordinary and usual course of business consistent
with past practice;
(vii) make any material change in any
management, operation, financial, Tax or accounting principles,
methods, practices or procedures of the Business;
(viii) enter into any collective bargaining
agreement or labor contract of any kind related to the Business; or
(ix) agree or commit to do any of the
foregoing.
(b) From the date hereof until Closing, Seller shall not,
without the prior written consent of the Chairman, Vice Chairman or President of
Ball or Buyer:
(i) vote, or allow any of its subsidiaries to
vote, the equity interests in Latasa held by RIB and RILA so as to
materially change the nature of the business conducted by Latasa; or
(ii) allow any of its subsidiaries to (A)
dispose of, (B) grant any rights, options or warrants with respect to
or (C)
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create any Encumbrances on any shares owned directly or indirectly by
Seller which represent or hold equity interests in Latasa or SVE.
Section 4.2 ACCESS. Seller shall afford to Buyer, Ball, and their
counsel, accountants, other representatives and financing sources, reasonable
access during normal business hours and subject to Seller's safety regulations,
as Ball or Buyer may reasonably request, to the plants, offices, warehouses,
properties, advisors, auditors, officers, employees and the books and records of
Seller related to the Business, the Business Assets and the Shares, and with
Seller's consent, material customers, suppliers and joint venture partners, so
that Buyer may investigate the Business (including, without limitation,
conducting environmental investigations) and obtain information requested by
financing sources. Seller will cooperate with Ball and Buyer in their
investigation and furnish to Buyer such additional financial, operating and
other information related to the Business, Business Assets or the Shares as
Buyer shall from time to time reasonably request. If employee consent is
required for Buyer to review any personnel file, at Buyer's reasonable request
Seller shall use reasonable efforts to obtain such consent. Such investigations
shall be conducted so as not to interfere unreasonably with the operation of the
Business. Notwithstanding anything contained herein to the contrary, Seller
shall not be required to make available to Buyer, Ball or their Affiliates,
agents, or representatives any information relating to existing or contemplated
pricing, price discount, and customer rebate information or other similar
sensitive information relating to the Business. From and after the date hereof,
Seller will provide to Buyer, promptly following the end of each month, monthly
financial reports consistent with those currently provided to management of the
Business and, as available, quarterly financial statements of the Business
consistent with the representations set forth in Section 2.7.
Section 4.3 CONSENTS. Seller shall use all reasonable efforts to
obtain all consents necessary to consummate the transactions contemplated
hereby, including those approvals set forth in Section 2.6 of the Disclosure
Schedule. Seller will provide to Buyer copies of each such consent promptly
after it is obtained. Ball and Buyer will cooperate with Seller in obtaining
such consents and shall use all reasonable efforts to obtain all consents from
parties to agreements with Ball or Buyer necessary to consummate the
transactions contemplated hereby (including those approvals referred to in
Section 3.8).
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Section 4.4 TITLE TO REAL PROPERTY.
(a) Except as contemplated by Section 1.10, Seller shall convey
to Buyer, at the Closing, by special warranty deeds, in a form reasonably
acceptable to Buyer, title in fee simple to all of the Owned Real Property
subject only to (i) liens for real estate taxes and assessments and other
governmental charges which are a lien but which are not yet due and payable and
(ii) Permitted Exceptions and such additional title and survey matters as are
contemplated by Section 4.4(b) and (c) below or, in the case of Torrance,
California, as are contemplated herein or in the Torrance Lease.
(b) Seller has previously delivered to Buyer title commitments
(the "TITLE COMMITMENTS"), which are described in Section 4.4(b) of the
Disclosure Schedule, issued by Lawyers' Title Insurance Company (the "TITLE
COMPANY"), along with copies of all documents creating exceptions, as listed in
the Title Commitments and surveys of the Owned Real Property and any other
document with respect to Real Property reasonably requested by Buyer. Buyer
hereby approves the following as "PERMITTED EXCEPTIONS": (i) the matters shown
on the Title Commitments and on the surveys heretofore delivered to Buyer which
are specifically identified as Permitted Exceptions in Section 4.4(b) of the
Disclosure Schedule; (ii) a deed restriction applicable to burden the Fort
Worth, Texas parcel substantially as contemplated by the Model Deed Certificate
Language set forth as part of Exhibit 4.4(b); (iii) a 20-foot utility easement
for electric lines to burden the Moultrie, Georgia parcel substantially in the
form contemplated as a part of Exhibit 4.4(b); (iv) a railroad easement to
burden the Hayward, California parcel for the benefit of the surplus property to
be retained by Seller as shown on the drawing attached as a part of Exhibit
4.4(b); (v) such matters as are to relate to the Torrance, California parcel as
are contemplated herein or in the Torrance Lease; and (vi) such matters as to
which Buyer does not timely object as set forth in Section 4.4(b) or 4.4(c) or
which are otherwise resolved either by affirmative insurance from the Title
Company or Seller's indemnity or which are waived by Buyer all as hereinafter
provided. No less than 20 days prior to Closing, Seller shall deliver to Buyer
date downs of the Title Commitments. At the Closing, Seller, provided that
Buyer pays the cost thereof, shall cause the Title Company to furnish to Buyer
ALTA form owner's policies of title insurance (Form B-1992 with extended
coverage insuring over the general or standard exceptions), or "marked-up" Title
Commitments, in amounts equal to the value of the Owned Real Property designated
by Buyer. In connection with the issuance of such title insurance, Seller shall
furnish such reasonable and customary affidavits or documents requested by the
Title Company which do not expand Seller's special
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warranty covenant so as to enable the Title Company to issue to Buyer owner's
policies of title insurance. The cost of such title insurance shall be borne by
Buyer. Buyer, at its sole expense, may obtain such endorsements as Buyer may
desire (including, without limitation, survey endorsement, contiguity
endorsement (if applicable), subdivision endorsement, zoning 3.1 endorsement (or
equivalent), access endorsement and tax parcel endorsement); however, the
obtaining of such endorsements shall not be a condition of Closing and, in
connection therewith, Seller shall furnish such reasonable and customary
affidavits requested by the Title Company which do not expand Seller's special
warranty covenant. If any such date downs of the Title Commitments reveal any
exceptions which are not already Permitted Exceptions and which have an "Adverse
Effect" (which term, for purposes of this Section 4.4(b), shall mean having an
effect on the applicable parcel of Owned Real Property as a whole that is
reasonably expected to be materially adverse to the use of the Owned Real
Property for industrial purposes, except that exceptions resulting from the acts
of Seller after the date of the Title Commitments and not otherwise specifically
permitted by the terms of this Agreement or the Torrance Lease shall be deemed
to have an "ADVERSE EFFECT"), then Buyer shall give Seller notice of objection
within ten days after receipt of the date downs of the Title Commitments
(otherwise the objection shall be deemed waived). If any survey described in
Section 4.4(c) reveals any exceptions which are not already Permitted Exceptions
and which have an Adverse Effect, then Buyer shall give Seller notice of
objection within ten days after receipt of the survey (otherwise the objection
shall be deemed waived). If Buyer gives notice of objection to matters shown on
the date downs or the surveys and if the Title Company is not willing to
provide Buyer with adequate affirmative coverage insuring over the same then
Ball and Buyer may either (A) waive the exception, (B) cause Seller to indemnify
and hold harmless Buyer for any loss, claim, cause of action or damage arising
from such objections having an Adverse Effect or (C) in the event such matters
have a Material Adverse Effect, terminate the Agreement in accordance with
Article IX, including without limitation, Section 9.2(e) hereof. The cost of
affirmative title insurance over such matters shall be paid by Seller to the
extent that the cost of the title policies required by this Section 4.4 (b),
with extended coverage over general or standard exceptions, but not the cost of
additional endorsements Buyer elects to obtain (the "TITLE COSTS"), exceeds
$250,000. Buyer shall pay all costs of affirmative insurance until the cost
thereof, when added to the Title Costs, equals $250,000. In the event Seller is
required to pay additional sums for affirmative insurance pursuant to the
preceding two sentences, Seller, at its option, may elect to indemnify Buyer for
any loss, claim, cause of action or damage arising from such objections in lieu
of paying the cost of such affirmative insurance.
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(c) Seller has ordered surveys of the Owned Real Property (other
than Torrance, California, which survey shall not be provided until that Owned
Real Property has been subdivided) as hereinafter described. The surveys shall
(i) be prepared and certified by a Registered Public Surveyor or Registered
Professional Engineer, (ii) comply with 1997 ALTA/ACSM minimum detail
requirements for Urban Land Title Surveys including Table A, items 1-4, 6-11 and
13, (iii) locate all improvements, building lines, rights-of-way and easements
(identified by appropriate recording reference) and other matters of record,
evidenced by on-site observation or as determined by the surveyor's examination
of Seller's records affecting the Owned Real Property, (iv) contain a legal
description of the Owned Real Property and (v) be certified to Buyer and the
Title Company and Buyer's lender, if such name is provided prior to Closing. To
the extent Seller has not already delivered any such surveys on or before the
date of execution of this Agreement, Seller shall do so promptly following
receipt and review thereof, but in any event Seller shall deliver the remaining
surveys to Buyer at least 20 days before Closing.
Section 4.5 NO SOLICITATION.
(a) Until Closing or the earlier termination or expiration of
this Agreement, Seller shall not, directly or indirectly, without the consent of
Buyer, through any officer, director, employee, investment banker, attorney or
agent, (i) solicit, initiate, or encourage any inquiries or proposals regarding
the sale, lease or other disposition of the Business or any substantial part of
the Business or Business Assets or the Shares other than the transactions
contemplated by or described in this Agreement (any of the foregoing inquiries
or proposals being referred to in this Agreement as an "ACQUISITION PROPOSAL"),
(ii) engage in negotiations or discussions concerning, or provide any non-public
information or data to any person or entity relating to, any Acquisition
Proposal or (iii) agree to any Acquisition Proposal or otherwise facilitate any
effort to make an Acquisition Proposal. Seller will immediately terminate any
existing activities with any parties conducted heretofore with respect to any of
the foregoing and secure the return of confidential information regarding the
Business provided to any party other than Ball and Buyer in connection
therewith.
(b) Seller shall promptly notify Buyer after receipt by Seller
of any Acquisition Proposal or any inquiries indicating that any person is
considering making or wishes to make an Acquisition Proposal, identifying such
person and the details thereof.
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Section 4.6 SUPPLEMENTS TO DISCLOSURE SCHEDULE. From time to time
prior to the Closing, Seller will promptly supplement or amend the Disclosure
Schedule with respect to any matter hereafter arising which, if existing at the
date of this Agreement, would have been required to be set forth in the
Disclosure Schedule. Except for supplements and amendments reflecting
transactions permitted by this Agreement (including, for example, and not by way
of limitation, the execution of contracts permitted by Section 4.1), no such
supplement to or amendment shall be deemed to qualify or amend any
representation or warranty or cure any breach of any representation or warranty
made in this Agreement; provided, that if any such breach arising out of events
occurring after the date hereof and prior to the Closing is sufficiently
material that Ball and Buyer would not be obligated to close under Section 8.1
as a result thereof, their remedy for such breach, unless the parties otherwise
agree, shall be to elect not to close.
Section 4.7 BULK SALES LAWS. Each party hereby waives compliance by
Seller with the provisions of the "bulk sales," "bulk transfer" and similar laws
of any state. Seller agrees to indemnify and hold Ball, Buyer and their
respective Affiliates (including, after the Closing, LAR, RCAL and RIND)
harmless against any and all claims, losses, damages, liabilities (including Tax
liabilities), costs and expenses incurred by Buyer, Ball or any of their
respective Affiliates (including, after the Closing, LAR, RCAL and RIND) as a
result of any failure to comply with any such "bulk sales," "bulk transfer" or
similar laws.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
Section 5.1 REASONABLE EFFORTS. Subject to the terms and conditions
of this Agreement, the parties will use all reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary or
desirable to consummate, as promptly as practicable, the transactions
contemplated by this Agreement; provided that Ball may, in its discretion upon
written notice to Seller, extend the 7 day time period referred to in Section
1.7(a) by up to 21 days in order to complete its financing arrangements with
respect to the transactions contemplated hereby. In addition, subject to the
terms and conditions of this Agreement, Ball and Buyer will use their best
reasonable efforts to consummate the Financing in accordance with the terms of
the Commitment Letter. Each party agrees to cooperate fully with the other
parties in assisting them to comply with the provisions of this
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Section 5.1. 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 to consummate the transactions
contemplated by this Agreement.
Section 5.2 WARN ACT. The parties agree to cooperate in good faith
to determine whether any notification may be required under the WARN Act as a
result of the transactions contemplated by this Agreement. Seller will be
responsible for providing any notification that may be required under the WARN
Act with respect to any employees of the Business.
Section 5.3 REGULATORY AND OTHER AUTHORIZATIONS; CONSENTS.
(a) Each party will use all reasonable efforts to obtain all
authorizations, consents, orders and approvals of Authorities (including from
Cade) and all third party consents that may be or become necessary for the
execution and delivery of, and the performance of its respective obligations
pursuant to, this Agreement and the Ancillary Agreements, provided that neither
Ball nor Buyer shall be under any obligation to divest itself of any assets, to
hold assets separate or to agree to alter the manner in which Ball operates its
business, the Business is operated or the business of Latasa is operated. As
soon as practicable and in any event no more than 5 business days after the date
hereof, Seller, Ball and Buyer will each file with the United States Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice, pursuant to the HSR Act, Notification and Report Forms (FTC Form C4,
Rev. 9/95) with respect to the transactions contemplated by this Agreement and
respond as promptly as is practicable to all inquiries received from either
agency for additional information or documentation. The parties agree that no
filing will be made with Cade until after the Closing.
(b) The parties will consult with one another, and consider in
good faith the views of one another, in determining whether any action by or in
respect of, or filing with, any Authority is required or in connection with any
filings, analyses, appearances, representations, memoranda, briefs, arguments,
opinions and proposals made, or required to be made or submitted by or on behalf
of any party in connection with proceedings under or relating to the HSR Act or
any other federal, state or foreign antitrust or fair trade law. Each party
shall promptly notify the other party of any communication to that party from
any Authority in connection with any required filing with, or approval or review
by, such Authority in connection with the transactions contemplated by this
Agreement.
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(c) Seller, Ball and Buyer shall each use its best efforts to
(i) lift, rescind or appeal any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated hereby and (ii) defend any litigation seeking to enjoin, prevent or
delay the consummation of the transactions contemplated hereby or seeking
material damages as a result thereof; provided, that no party shall be required
to take any such action to the extent there is not a reasonable chance of
prevailing with respect thereto.
Section 5.4 EMPLOYEE MATTERS FOR REPRESENTED EMPLOYEES.
(a) The term "REPRESENTED EMPLOYEES" means all of the employees
of the Business represented in collective bargaining units pursuant to the
Collective Bargaining Agreements, including those employees ("ABSENT REPRESENTED
EMPLOYEES") on lay-off, disability or leave of absence, whether paid or unpaid,
including without limitation under the Family Medical Leave Act of 1993
("FMLA"), military leaves or workers' compensation, and the term "TRANSFERRED
REPRESENTED EMPLOYEES" shall mean all of the Represented Employees (including
Absent Represented Employees) employed by Buyer pursuant to this Section 5.4.
(b) Effective at Closing, Buyer shall offer employment to all
Represented Employees as of the Closing Date. At Closing, except as otherwise
provided in this Section 5.4, Buyer shall also assume Seller's obligations under
the Collective Bargaining Agreements, other than with respect to plans
maintained by Seller as of the Closing Date (all such plans, collectively,
"SELLER'S PLANS"), it being acknowledged and agreed that (i) Seller shall remain
liable to all Transferred Represented Employees for benefits under Seller's
Plans in which such employees are or will become vested as of the Closing Date
and that Buyer shall provide to Transferred Represented Employees the benefits
under the Collective Bargaining Agreements from and after the Closing Date under
the Replacement Plan (as defined in Section 5.4(f) below), and other plans of
Buyer, subject to the remainder of this Section 5.4, and (ii) Seller shall amend
Seller's Plans to provide that all Represented Employees shall be 100% vested in
their benefits accrued as of the Closing Date under all tax-qualified plans
maintained or contributed to by Seller on behalf of Represented Employees.
Seller hereby represents that it neither maintains nor contributes to any other
employee benefit plan under which Represented Employees may be eligible to
receive benefits that have the potential to vest, but not including for purposes
of this sentence any vacation pay plan.
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Buyer and Seller shall cooperate and shall use their reasonable
efforts to enable all Transferred Represented Employees to commence
participation in employee benefit plans maintained by, or on behalf of, Buyer
commencing effective as of the Closing Date.
Notwithstanding the foregoing, with respect to (i) any gainsharing
plan, (ii) any plan based in whole or in part on either Seller's or Buyer's
profits, earnings, returns or revenues, or (iii) any provision of a plan
pursuant to which provision benefits or plan assets are distributed or invested
(including investments directed by plan participants or beneficiaries) in
employer securities or other forms of investment in which it would be
impracticable or infeasible for Buyer to distribute or invest (as the case may
be), or plan assets that Buyer determines should be invested, in whole or in
part, in investments different from the plan investments immediately prior to
the Closing Date, such benefits, provisions, investments or any similar
modifications or adaptations shall be subject to good faith negotiations between
Buyer and the applicable unions. Because it would be inappropriate or
impracticable for Buyer to assume the foregoing plans and provisions in their
entirety, Buyer, after negotiating with the appropriate unions, shall provide
reasonably comparable alternative benefits for Transferred Represented Employees
to replicate or substitute for Seller's profit sharing and gainsharing plans and
those provisions of the employee benefit plans that are described in clause
(iii) of the preceding sentence.
Seller represents that, to the best of its knowledge and belief the
interplant transfer provisions in Article XXXV of the Collective Bargaining
Agreements at the Bristol, Kansas City, Seattle and Tampa can plants (the
"Interplant Transfer Provisions") and , the plans and provisions described in
the preceding paragraph represent the only obligations (other than procedural or
administrative obligations) under the Collective Bargaining Agreements that
would be impracticable or inappropriate for another reasonable party to assume.
Buyer shall not assume the Interplant Transfer Provisions.
Notwithstanding anything in this Agreement to the contrary, Seller
shall reimburse Buyer for all liabilities and obligations incurred by Buyer with
respect to all Absent Represented Employees unless and until such employees
commence active employment with Buyer.
Seller shall retain (i) all liabilities and obligations with respect
to severance, termination pay and related liabilities for all Represented
Employees who terminate or are terminated by Seller on or prior to the Closing
Date, or arising in
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connection with the Closing by reason of any action, omission or failure to take
action by, or on behalf of, Seller, (ii) all liabilities and obligations
incurred by Buyer relating to the failure of any of Seller's Plans to conform
to, or be administered in accordance with, the Collective Bargaining Agreement
to which it relates, if applicable.
Buyer, however, shall assume and be solely responsible for any Losses
incurred by Seller as a result of any equal employment opportunity claims,
disability discrimination claims and/or claims under the Collective Bargaining
Agreements alleging a violation arising solely from Buyer's decision not to
restore an Absent Represented Employee to active employment.
(c) There will be no transfer of any funds at Closing from
Seller to Buyer regarding the contractual supplemental unemployment benefit
plans. Buyer shall assume the obligation to pay supplemental unemployment
benefits under its own plan or plans (collectively, if more than one, "BUYER'S
SUB PLAN") in accordance with the terms of the Collective Bargaining Agreements,
with respect to benefits payable from and after the Closing Date.
Seller, however, shall reimburse Buyer for benefits provided by Buyer
under Buyer's SUB Plan to, or on behalf of, Absent Represented Employees (i)
with respect to any restructuring initiated prior to Closing (E.G., Torrance),
for any and all periods prior to the date such employee first becomes actively
employed by Buyer (if ever), and (ii) with respect to layoffs in the ordinary
course, for any and all payment periods commencing on, or prior to, the 60th day
following the Closing Date. Seller shall include on the Closing Statement
$250,000 as an accrued liability for SUB payments pursuant to Section 1.5(a ).
Seller hereby represents that Seller is not and has not been required to fund
(other than on a pay-as-you-go basis) any supplemental unemployment compensation
benefits on behalf of Seller Employees (as defined in Section 5.5(a)). Seller
shall indemnify and hold Buyer and its Affiliates harmless from and against any
and all Losses with respect to (i) Seller's supplemental unemployment
compensation benefit plans or their funding arrangements or their summary plan
descriptions, (ii) any liability incurred by Buyer as a result of Seller's
breach of the foregoing representation, and (iii) any liabilities arising out of
Seller's obligation to make cash funding contributions to trusts established
pursuant to its supplemental unemployment compensation benefit plans or to
disclose such benefits or funding, or any incidents of mistakes or noncompliance
by Seller with respect to the supplemental unemployment compensation benefits.
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(d) Buyer acknowledges that certain Collective Bargaining
Agreements require Buyer to establish a 401(k) defined contribution plan as of
the Closing Date, and Buyer shall use its reasonable efforts to promptly
implement any such plan. If Buyer is unable to provide a 401(k) defined
contribution plan as of the Closing Date, Buyer shall take such reasonable steps
as may be necessary to contribute to the applicable plan or plans the required
matching or other employer contributions due for the period between the Closing
Date and the date Buyer's plan becomes effective, but not including any wage
deferral contributions pursuant to employee elections under section 401(k) of
the Code.
(e) Buyer shall recognize Transferred Represented Employees'
seniority and service with Seller and any predecessor under Buyer's employee
benefit plans (whether or not funded and whether or not subject to ERISA),
personnel policies and fringe benefit plans, programs and arrangements
established for or offered to Transferred Represented Employees to the same
extent and for the same purposes that Seller is required to recognize such
service pursuant to the Collective Bargaining Agreements. On and after the
Closing Date, Buyer and the applicable unions are free to negotiate from time to
time new terms and conditions of employment, including without limitation
seniority and benefit plans, consistent with the National Labor Relations Act.
(f) Except as otherwise provided in Section 5.4(g) regarding the
possible assumption of certain Single Location Plans (as defined therein), on or
as soon as practicable following the Closing Date, but with retroactive effect
to the Closing Date, Buyer shall establish a defined benefit pension plan or
plans (collectively, if more than one, the "REPLACEMENT PLAN") providing
benefits to Transferred Represented Employees required pursuant to the
Collective Bargaining Agreements, which Replacement Plan shall (x) be designed
to qualify under section 401(a) of the Code, and (y) provide that the
Transferred Represented Employees who were participants in a Union Pension Plan
immediately before Closing and who become Transferred Represented Employees
shall commence participation in the Replacement Plan as of the Closing Date.
Each Replacement Plan shall provide Transferred Represented Employees
with credit for service with Seller for purposes of eligibility to participate,
vesting, eligibility to receive benefits, and benefit accruals under the
Replacement Plan; provided, however, that the benefit payable to a Transferred
Represented Employee under a Replacement Plan shall be offset by the benefit
payable to the Transferred Represented Employee under the applicable Seller's
Plans (collectively,
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the "UNION PENSION PLANS"). Such offset (the "OFFSET") shall be calculated in
accordance with the principles outlined below. The pension benefit examples set
forth in Exhibit 5.4(f) are intended to illustrate the calculations of the
Offset in accordance with these principles, but are not intended to be
exhaustive.
(i) A participant may elect to begin receiving
a benefit under the Union Pension Plan as provided under that plan.
(ii) In the event that a Transferred
Represented Employee is eligible for a monthly retirement benefit
(other than a retirement benefit due to Permanent Shutdown, layoff,
accident or sickness, which benefit is hereinafter referred to as a
"SPECIAL RETIREMENT BENEFIT") or a deferred vested monthly benefit
under the Replacement Plan, the Offset shall be based on the age 65
(or if later, normal retirement date) benefit payable under the Union
Pension Plan, and the benefit payable under the Replacement Plan shall
be adjusted based on age at benefit commencement under the Replacement
Plan, the participant's form of payment under the Replacement Plan,
the preretirement survivor coverage, if any, under the Replacement
Plan, and preretirement survivor coverage, if any, under the Union
Pension Plan that was in force while such participant was employed by
Buyer. Notwithstanding the foregoing, this subparagraph (ii) shall
not apply for determining the Offset for a Transferred Represented
Employee with a deferred vested monthly benefit under a Defined
Benefit Single Location Plan (as defined in Section 5.4(g)) that has
not been assumed by Buyer, which participant cannot elect to commence
receiving such monthly benefit before age 65 due to having earned
fewer than 10 years of vesting service with Seller. For such
Transferred Represented Employee, the Offset shall be equal to (a) $0
until the date immediately preceding age 65, and (b) from and after
such date, such monthly benefit that is payable under such Defined
Benefit Single Location Plan.
(iii) In the event that a Transferred
Represented Employee is eligible for a monthly retirement benefit
(other than a Special Retirement Benefit) under the Replacement Plan,
the Offset shall include the graded minimum supplement under the Union
Pension Plan if such Transferred Represented Employee is eligible for
such supplement as of the Closing Date.
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(iv) In the event that a Transferred
Represented Employee is eligible for a special retirement payment
under the Replacement Plan, the Offset shall include the special, ten
week, payment, if any, payable under the Union Pension Plan but shall
not include weeks of accrued vacation, if any, as of the Closing Date,
and if the special retirement payment payable under the Union Pension
Plan exceeds $0, the Transferred Represented Employee shall commence
to receive a monthly retirement benefit under the Replacement Plan
upon retirement instead of three months following retirement.
(v) In the event that a Transferred
Represented Employee is eligible for a disability benefit or a Special
Retirement Benefit under the Replacement Plan, the Offset shall be
equal to (a) $0 until the date immediately preceding the earliest date
that benefits could commence under the Union Pension Plan, and (b)
from and after such earliest date, the benefit that could be paid
under the Union Pension Plan assuming that the benefit commences on
such earliest date.
(vi) In the event that a Transferred
Represented Employee dies while employed by Buyer and the Transferred
Represented Employee's surviving spouse is eligible for a death
benefit under the Replacement Plan, the Offset shall equal the
benefit, if any, which is payable under the Union Pension Plan on
account of such death.
(vii) In the event that a Transferred
Represented Employee either (A) separates from service with Buyer at a
time when the participant is eligible for a deferred vested monthly
benefit under the Replacement Plan and subsequently dies prior to the
commencement of benefits under the Replacement Plan, and the
Transferred Represented Employee's surviving spouse is eligible for a
death benefit under the Replacement Plan due to preretirement survivor
coverage under the Replacement Plan, or (B) separates from service
with Buyer at a time when the participant is eligible for a monthly
retirement benefit under the Replacement Plan and subsequently dies
prior to the commencement of benefits under the Replacement Plan, then
in either case, the benefit payable under the Replacement Plan
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shall be determined as in (ii) above, and further reduced by 50% on account
of payment to the surviving spouse.
(viii) In the event that a Transferred
Represented Employee dies subsequent to both separation from service
with Buyer and benefit commencement from the Replacement Plan, the
death benefit, if any, payable from the Replacement Plan shall be
determined solely with regard to the form of payment in effect at
death and the monthly benefit under the Replacement Plan.
(ix) Benefits under the Union Pension Plans
shall be paid to Transferred Represented Employees based on the plan
provisions in effect as of the Closing Date, but taking into account
the amendments described below in this Section 5.4(f).
(x) The above principles (i) through (ix)
should not be interpreted to entitle a participant in a Defined
Benefit Single Location Plan to any benefits, including but not
limited to Special Retirement Benefits and special retirement payments
under the Replacement Plan or the Union Pension Plans, other than
benefits expressly contemplated by the applicable Collective
Bargaining Agreement.
Seller shall fund the Union Pension Plans as necessary to ensure that
benefits payable thereunder to Transferred Represented Employees will be fully
paid when due. In addition, Seller shall amend each Union Pension Plan that is
not a Defined Benefit Single Location Plan and that provides an unreduced
benefit upon retirement with 30 years of service so that Transferred Represented
Employees' service with Buyer will be credited under the Union Pension Plans for
purposes of determining a Transferred Represented Employee's eligibility for,
and entitlement to, a thirty-year pension under the Union Pension Plan upon a
Transferred Represented Employee's termination, resignation, retirement or death
from Buyer following the Closing Date. Further, Seller shall amend each Union
Pension Plan that is not a Defined Benefit Single Location Plan to provide that
(i) a Transferred Represented Employee who retires under a Replacement Plan
shall have his or her benefit under such Union Pension Plan converted to a joint
and 50% survivor annuity using factors applicable to a participant who retires
under such Union Pension Plan irrespective of whether such Transferred
Represented Employee was eligible to retire under such Union Pension Plan as
of the Closing Date, (ii) if a Transferred Represented Em-
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ployee elects, or does not opt out of, preretirement survivor coverage under
a Union Pension Plan, and subsequently dies while employed by Buyer and while
such coverage is in effect, the death benefit payable from the Union Pension
Plan shall commence at death in a monthly amount equal to 50% of the accrued
benefit, including the reduction for preretirement survivor coverage, and
(iii) the special retirement payment payable to a Transferred Represented
Employee shall be determined without regard to any weeks of accrued vacation.
Notwithstanding the foregoing, in the event that Buyer incurs any
additional liabilities or obligations as a result of the failure of the
applicable union or any applicable governmental agency or authority, to agree
to, or approve, the crediting of service, or the timing or methodology of the
Offset, in each case, in the manner and to the extent described in this Section
5.4(f) and Exhibit 5.4(f), thereby resulting in a duplication of pension
benefits or additional benefits beyond those contemplated by this Section 5.4(f)
and Exhibit 5.4(f), payable to or on behalf of Transferred Represented
Employees, Seller shall reimburse Buyer for any additional out-of-pocket costs
incurred by Buyer to the extent resulting from such duplication of benefits or
additional benefits beyond those contemplated by this Section 5.4(f) and Exhibit
5.4(f). In addition, Seller shall reimburse Buyer for any and all Losses
suffered by Buyer by reason of any Permanent Shutdown (as defined in Section
5.4(h)) occurring as a result of Seller's actions on or before the Closing Date
or as a result of the execution, delivery or performance of this Agreement, or
the consummation of transactions contemplated hereby, provided that Buyer has
assumed Seller's obligations under the Collective Bargaining Agreements as
required by this Section 5.4.
(g) SINGLE LOCATION PLANS.
(i) With respect to any Business Locations
where separate tax-qualified defined benefit and/or defined
contribution plans are maintained for Transferred Represented
Employees and/or Transferred Nonrepresented Hourly Employees (as
defined in Section 5.5(b)) ("SINGLE LOCATION PLANS"), Buyer shall have
the right, in its sole discretion, to elect, on or prior to the
Closing Date, to assume sponsorship of one or more of the Single
Location Plans that are defined contribution plans (the "DEFINED
CONTRIBUTION SINGLE LOCATION PLANS"), and to elect, at the time
prescribed in clause (vii) below, to assume sponsorship of all (or
none) of the Single Location Plans that are defined benefit plans (the
"DEFINED BENEFIT SINGLE
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LOCATION PLANS"). In this regard, if Buyer elects to assume sponsorship of
any of the Defined Contribution Single Location Plans, Buyer may elect to
either assume the trust in which the assets of any such plan are invested,
or to receive a transfer of plan assets from the plan's trust in
conjunction with the assumption of the liabilities of such plan, and if
Buyer elects to assume sponsorship of the Defined Benefit Single Location
Plans, Buyer shall receive transfers of plan assets in conjunction with the
assumption of the liabilities from each of the respective trusts in which
assets of the Defined Benefit Single Location Plans are invested, as
described below.
(ii) With respect to each Single Location Plan,
Seller has heretofore delivered to Buyer true and complete copies of
the current version of the plan and any amendments thereto, any
related trust or other funding vehicle, the most recent summary plan
descriptions and summaries of economics provided to participants under
ERISA or the Code, the most recent determination letter received from
the Internal Revenue Service with respect to each such plan and other
related documents. To the knowledge of Seller, no event has occurred
since the date of such determination that would affect such
determination. The plans and related documents provided to Buyer as
of the date hereof pursuant to this Section 5.4(g)(ii) are herein
referred to as the "INITIAL DOCUMENT PRODUCTION." Commencing as of
the date hereof, Seller shall use its reasonable efforts to provide to
Buyer updated plans, related trusts, amendments, summaries of
economics, summary plan descriptions, summary of material
modifications and related information required under ERISA or the
Code. In addition, as of the Closing Date, Seller shall identify for
Buyer those documents required under ERISA or the Code relating to the
Single Location Plans that Seller will not deliver to Buyer as of the
Closing Date. To the extent that Seller fails to timely provide Buyer
with the documents and information that are reasonably appropriate or
needed for Buyer to operate and administer the Single Location Plans,
Seller shall indemnify and hold harmless Buyer from any and all Losses
suffered by Buyer pursuant to Section 5.4(g)(x) related to such
failure, and further, to the extent that such failure interferes with
Buyer's ability to satisfy its obligations under Section 5.4, 5.5 or
5.6, Buyer shall be relieved of its obligations to the extent that
Buyer's inabilities result from Seller's failure, until (A) Seller
cures such failure
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and (B) Buyer has had a reasonable period of time thereafter to satisfy its
related obligations.
(iii) Seller hereby represents that each of the
Single Location Plans is, and has been administered, in compliance
with its terms and, to the extent required, with all applicable law,
including the applicable provisions of ERISA and the Code ;provided,
however, that Seller shall not be deemed to have breached this
representation to the extent that plan documents provided to Buyer
have not been amended to comply with applicable law, but solely with
respect to those amendments that are not required to be made as of the
date hereof, or as of the Closing Date, as the case may be. In
addition, Seller hereby represents that all documents, financial and
census data and reports and other pertinent information provided, or
required to be provided to Buyer pursuant to this Agreement, are true
and complete as of the date so provided, and that, where applicable,
the terms of each Single Location Plans or, if updated by a summary of
economics, then the terms of the applicable summary of economics are
consistent with the terms of the Collective Bargaining Agreements to
which such plan or summary relates as of the date hereof with respect
to the documents provided to Buyer as of the date hereof, and as of
the date provided to Buyer with respect to the documents provided to
Buyer following the date hereof, but prior to the Closing Date.
(iv) With respect to the Defined Contribution
Single Location Plans that Buyer may elect to assume, if any, on, or
as soon as practicable following, the Closing Date, Buyer shall take
all actions necessary and appropriate to assume such plans, and Buyer
and Seller shall cooperate to effectuate the foregoing.
(v) With respect to the Defined Benefit Single
Location Plans that Buyer may elect to assume, no later than the
earlier of (A) June 1, 1998, or (B) 45 days prior to the Closing Date,
Seller or Seller's actuary or the trustee or trustees (the "MASTER
TRUSTEE") of the master trust or trusts in which the assets of the
Defined Benefit Single Location Plans are invested (the "MASTER
TRUST") shall provide to Buyer (A) a schedule containing the projected
benefit obligations, as of January 1, 1998, or such later date as
Seller
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shall determine, for each participant, beneficiary and alternate payee
(within the meaning of section 414(p)(8) of the Code) under each of the
Defined Benefit Single Location Plans, (B) such additional census data for
all plan participants and other pertinent census-related information that
Buyer or Buyer's actuary may reasonably request to enable Buyer to
calculate the liabilities under such plans, in each case, as of January 1,
1998, or such later date as Seller shall determine, and (C) such other
pertinent information that Buyer or Buyer's actuary may reasonably request
to evaluate such plans from a financial and legal compliance perspective.
(vi) On the day following the last day of the
month coincident with or next following the Closing Date (the
"VALUATION DATE"), Seller shall provide to Buyer an estimate of the
fair market value of the assets allocable to each of the Defined
Benefit Single Location Plans (the "GUARANTEED PENSION ASSET VALUE").
(vii) As soon as practicable, but in no event
more than five business days following the Valuation Date, Buyer shall
notify Seller whether or not Buyer has elected to assume the Defined
Benefit Single Location Plans. If Buyer has elected to assume such
plans, then, as soon as practicable, but in no event later than four
business days following the date that Buyer has notified Seller that
it has elected to assume such plans, Seller shall cause the Master
Trustee to transfer to a trustee or trustees designated by Buyer, in
cash, assets from the Master Trust equal to 90% of the Guaranteed
Pension Asset Value.
(viii) No later than 60 days following the Valuation
Date, Seller shall cause the Master Trustee to transfer to a trustee or
trustees designated by Buyer, in cash, assets from the Master Trust
equal to the greater of (A) 10% of the Guaranteed Pension Asset Value or
(B) the fair market value of the assets allocable to each of the Defined
Benefit Single Location Plans as of the Valuation Date minus 90% of the
Guaranteed Pension Asset Value. At such time, Seller (or Seller's
actuary or the Master Trustee) shall also provide to Buyer a report of
the fair market value of the assets of each of the Defined Benefit
Single Location Plans as of the Valuation Date, financial information
relating to the calculation of such assets as of the
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Valuation Date, and such other pertinent information as Buyer may
reasonably request to evaluate the report on assets prepared by the
Master Trustee, and such other reports, if any, prepared by Seller or
Seller's actuary, and (C) such other pertinent information that Buyer or
Buyer's actuary may reasonably request to evaluate such plans from a
financial and legal compliance perspective, and to evaluate the
calculations prepared by the Master Trustee, and Seller or Seller's
actuary, if applicable. The report prepared valuing the assets in the
Master Trust allocable to the Defined Benefit Single Location Plans as
of the Valuation Date shall be prepared by the Master Trustee in
accordance with such rules, regulations and procedures governing such
preparation.
(ix) Seller hereby represents that the transfer
of assets and liabilities contemplated by this Section 5.4(g) shall be
in compliance with section 414(l) of the Code, to the extent
applicable.
(x) Seller shall indemnify and hold Buyer and
its Affiliates harmless from and against any and all Losses with
respect to all liabilities and obligations arising under the plans
that are assumed by Buyer pursuant to this Section 5.4(g) that result
from (A) the acts or omissions of Seller, any trustee or other
fiduciary with respect to such plans, which acts or omissions
occurred, or should have occurred, on or prior to the date the
applicable assets are transferred, including, without limitation, any
acts or omissions relating to any inaccuracies or omissions in the
data, documents or other information that Seller (or Seller's actuary
or the Master Trustee) were required to provide to Buyer pursuant to
this Agreement or that were reasonably appropriate or needed for Buyer
to operate and administer the Single Location Plans, or (B) Buyer's
reliance on, or taking any actions with respect to, the Initial
Document Production, to the extent that the information provided
therein differed from, or failed to conform with, any documents or
subsequent information received by Buyer from Seller, the terms of any
applicable Collective Bargaining Agreement or applicable law.
(xi) Seller and Buyer shall cooperate in the
filing of any required forms, applications or communications, and in
taking all other actions that are necessary or appropriate relating to
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the Internal Revenue Service, the Pension Benefit Guaranty Corporation, the
U.S. Department of Labor, and any other regulatory agency that has
jurisdiction over the transfers and assumptions contemplated by this
Section 5.4(g) to consummate such transfers and assumptions.
(xii) To the extent that Buyer elects to assume
any or all of the Defined Contribution Single Location Plans and all
of the Defined Benefit Single Location Plans pursuant to this Section
5.4(g) (each, an "ASSUMED BENEFIT PLAN," and collectively, the
"ASSUMED BENEFIT PLANS"), Buyer shall not be required to establish a
plan for the employees at the applicable Business Locations pursuant
to paragraph (f) above, or Section 5.5 hereof.
(h) The parties to this Agreement intend that this transaction
should not be construed as a "permanent shutdown" either under the Collective
Bargaining Agreements or for purposes of Article III of Seller's Pension Plans
for Hourly Employees or otherwise ("PERMANENT SHUTDOWN").
(i) All reimbursements described in this Section 5.4 shall be
made in accordance with the reimbursement procedures set forth in Section 5.5(i)
hereof. All references in this Section 5.4 to liabilities or obligations
incurred by Buyer, shall be deemed to include all liabilities or obligations
incurred by any pension plan maintained or sponsored by Buyer or Ball, or to
which Buyer or Ball is obligated to contribute, including the Replacement Plan.
(j) For purposes of Sections 5.4, 5.5 and 5.6 of this Agreement,
references to Buyer shall be interpreted to include or be replaced by references
to Ball with respect to references to the entity sponsoring or maintaining an
employee benefit plan, the entity taking or required to take any action with
respect to any such plan, the entity for whom an employee is employed or from
whom an employee has terminated employment, and the entity incurring employee
benefit related liability, in each case, as the context permits.
Section 5.5 GENERAL EMPLOYEE MATTERS, EMPLOYEE MATTERS FOR
NONREPRESENTED EMPLOYEES AND WELFARE BENEFIT PROVISIONS FOR ALL EMPLOYEES.
(a) GENERAL. Seller has previously provided to Buyer the
information listed below pertaining to all employees employed by Seller in the
Business, including Headquarter Employees (as defined in Section 5.5(c)) as of
the
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date indicated (the "EMPLOYEE LISTS"). Each such person is herein referred to
individually as a "SELLER EMPLOYEE," and collectively as the "SELLER EMPLOYEES":
name, title, work location, wage grade or Hay Grade, date of birth, status as
salaried or hourly employee and union code, whether such employee is exempt or
non-exempt, monthly salary or hourly wage rate, employee's current status,
status date and reason code if employee is inactive, service dates and the date
definitions for purposes of vesting and eligibility to participate under any
employee benefit plan.
As soon as practicable, but no later than 30 days following the date
hereof, Seller shall provide to Buyer certain employee benefits data (the
"EMPLOYEE BENEFITS DATA") with respect to all Seller Employees containing the
type of information set forth on Section 5.5(a) of the Disclosure Schedule.
Seller shall provide updated Employee Benefits Data no later than 14 days
following the Closing Date.
No later than 14 days following the Closing Date, Seller shall provide
Buyer with (i) the number of remaining 1998 vacation days accrued as of the
Closing Date for each Transferred Employee (as defined below), and (ii) Employee
Lists updated as of the Closing Date.
In addition, within 180 days following the Closing Date, Seller shall
provide to Buyer (i) for each Transferred Employee, individual pension service
information, including the period of continuous service with Seller (and
including all service that Seller is required to take into account for purposes
of all applicable benefit plans), which information includes credited service
for benefit and vesting purposes, and (ii) such other information regarding
Transferred Represented Employees and Transferred Nonrepresented Hourly
Employees (as defined in Section 5.5(b)) that actuaries would reasonably agree
is sufficient and necessary to value the liabilities of, and/or administer, the
Replacement Plans and any Defined Benefit Single Location Plans that are assumed
by Buyer, pursuant to the terms of such plans, including individual accrued
benefits for each Transferred Represented Employee and Transferred
Nonrepresented Hourly Employees. In the event, however, that any Transferred
Employee terminates, retires, dies or becomes disabled during the 180 day period
following the Closing Date, upon notification of the date of separation of
service, Seller shall provide to Buyer all pension information for such person
within 5 business days of notification.
Commencing as of the date hereof, Seller shall provide to Buyer, upon
Buyer's request, such employee benefits data, including dates of hire and breaks
in service, pertaining to a specific individual or individuals, reasonably
requested by
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Buyer, as soon as practicable, but in no event later than 7 days, following the
date of such request. In addition, Seller shall provide to Buyer, within 36
months following the Closing Date, break in service information with respect to
each Transferred Employee, by individual.
To the extent that Seller fails to satisfy its obligations to provide
Buyer with the information described in the foregoing paragraphs of this Section
5.5(a) in a timely and accurate manner, Seller shall indemnify and hold harmless
Buyer from any and all Losses related to such failure, and further, to the
extent that such failure interferes with Buyer's ability to satisfy its
obligations under Section 5.4, 5.5 or 5.6 hereof, Buyer shall be relieved of its
obligations to the extent that Buyer's inabilities result from Seller's failure,
until (i) Seller cures such failure and (ii) Buyer has had a reasonable period
of time thereafter to satisfy its related obligations.
Each Seller Employee (other than any Represented Employee) who becomes
actively employed by Buyer within the time prescribed by Section 5.5 or 5.6, is
herein referred to individually as a "TRANSFERRED EMPLOYEE" and all such Seller
Employees collectively as "TRANSFERRED EMPLOYEES," in each case, as of the date
such Transferred Employee commences active employment with Buyer. Each
Transferred Represented Employee is herein referred to individually as a
Transferred Employee and all such Transferred Represented Employees,
collectively as Transferred Employees, as of the Closing Date. Employment of
Transferred Employees by Buyer on or after the Closing Date, other than those
employees covered by a Collective Bargaining Agreement, shall be employment "at
will," and nothing herein shall be construed to be an employment agreement for
the benefit of any such employee.
Any Absent Nonrepresented Hourly Employee, as defined Section 5.5(b),
or Absent Salaried Employee, as defined in Section 5.5(c), shall not be deemed
to be a Transferred Employee until such employee commences active employment
with Buyer.
Except for certain obligations relating to Assumed Benefit Plans that
are assumed by Buyer as of the Closing Date, as described in Section 5.4(g), and
obligations relating to Represented Employees, as described in Sections 5.4 and
5.5, Seller shall retain all liabilities and obligations whatsoever pertaining
to (i) all Seller Employees, or any employees of Seller who have retired or
terminated, are on lay off, short-term disability, long-term disability,
workers' compensation, leave of absence or any other inactive status immediately
prior to the Closing Date and, in each case, who do not become Transferred
Employees, whether such liabilities and
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obligations are incurred prior to, on or after the Closing Date, and (ii) all
Seller Employees, including Transferred Employees, with respect to all
liabilities and obligations incurred prior to the Closing Date, and Seller shall
reimburse Buyer for any and all liabilities or obligations incurred by Buyer
that are described in clauses (i) or (ii), above. Except as otherwise provided
in Sections 5.4, 5.5 and 5.6 hereof, Buyer shall be liable for all obligations
incurred with respect to Transferred Employees from the date such employees
become Transferred Employees.
(b) NONREPRESENTED HOURLY EMPLOYEES. Effective at Closing,
Buyer shall offer employment to all hourly employees associated with the
Business who are not covered by a Collective Bargaining Agreement ("SELLER
NONREPRESENTED HOURLY EMPLOYEES") other than those employees ("ABSENT
NONREPRESENTED HOURLY EMPLOYEES") on short- and long-term disability, leaves of
absence, including, without limitation, under FMLA or military leaves, lay off
or workers' compensation.
In addition, Buyer shall offer employment to all Absent Nonrepresented
Hourly Employees who are available to commence active employment on or prior to
the 180th day following the Closing Date or such later date to the extent that
Buyer is so required pursuant to applicable law. Those Seller Nonrepresented
Hourly Employees who commence active employment with Buyer as of the Closing
Date and those Absent Nonrepresented Hourly Employees who commence active
employment with Buyer within the time prescribed by this paragraph shall, as of
the date such employees commence active employment with Buyer, be considered
Transferred Employees and shall herein be referred to as the "TRANSFERRED
NONREPRESENTED HOURLY EMPLOYEES."
Buyer shall offer to Transferred Nonrepresented Hourly Employees who
commence active employment on the Closing Date the same hourly wage rate in
effect with Seller immediately prior to the Closing Date, and benefits
substantially comparable to those benefits provided to such employees by Seller
immediately prior to the Closing Date. Buyer shall offer to Transferred
Nonrepresented Hourly Employees who commence active employment after the Closing
Date the same hourly wage rate in effect for similarly situated employees of
Buyer at that location, and benefits substantially comparable to those benefits
provided to similarly situated employees of Buyer at that location, in each
case, as of the date such employees commence active employment with Buyer.
Notwithstanding the foregoing, Buyer shall have no obligation to guarantee to
continue the hourly wage rate or benefits provided to Transferred Nonrepresented
Hourly Employees pursuant to this paragraph.
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Buyer shall recognize Transferred Nonrepresented Hourly Employees'
service with Seller to the same extent and for the same purposes (other than for
purposes of benefit accrual under defined benefit plans) that Seller is required
to recognize such service pursuant to the terms of Seller's plans, in accordance
with the provisions governing crediting of service from time to time under
Buyer's employee benefit plans (whether or not funded and whether or not subject
to ERISA) and personnel policies; provided, however, that Buyer shall be
required to credit service with Seller under Buyer's employee benefit plans only
if, and to the extent that, Buyer gives credit to similarly situated employees
of Buyer for comparable service performed by such employees for Buyer.
Except as provided in Section 5.6(a)(4), Seller shall be solely
responsible for, and shall retain all liabilities and obligations for, all
Absent Nonrepresented Hourly Employees unless and until such employees become
Transferred Employees. Seller shall be solely responsible for, and shall retain
all liabilities and obligations with respect to, severance, termination pay and
related liabilities for all Seller Nonrepresented Hourly Employees who terminate
or are terminated by Seller prior to the date such employees become Transferred
Employees, and shall reimburse Buyer for any and all liabilities and obligations
incurred by Buyer that are retained by Seller or for which Seller is obligated
to reimburse Buyer pursuant to this paragraph.
(c) SALARIED EMPLOYEES INCLUDING HEADQUARTER EMPLOYEES,
COMMENCING EMPLOYMENT AS OF THE CLOSING DATE. Effective at Closing, Buyer may
offer employment to (i) any salaried employees associated with the Business who
are employed at Seller's Can Division headquarters, and (ii) any salaried
employees listed on Section 5.5(c)(2) of the Disclosure Schedule hereto located
at operating locations but who are not directly associated with plant
responsibilities (E.G., regional sales or services employees) (collectively, the
"HEADQUARTER EMPLOYEES"), in either case, whom Buyer, in its sole discretion,
chooses to employ.
Effective at Closing, Buyer shall also offer employment to all
salaried employees located at operating locations and directly associated with
plant responsibilities of the Business (collectively, the "PLANT SALARIED
EMPLOYEES") other than those employees ("ABSENT SALARIED EMPLOYEES") on short-
and long-term disability, leaves of absence, including, without limitation,
under FMLA or military leaves, layoff or workers' compensation. The definition
of Absent Salaried Employees shall not include any Headquarter Employees.
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In addition, Buyer shall offer employment to all Absent Salaried
Employees who are available to commence active employment on or prior to the
180th day following the Closing Date or such later date to the extent that Buyer
is so required pursuant to applicable law.
Those salaried employees of Seller described in this Section 5.5(c),
including Headquarter Employees ("SELLER SALARIED EMPLOYEES") who commence
active employment with Buyer within the time prescribed by this Section 5.5(c)
or Section 5.6 shall, as of the date such employees commence active employment
with Buyer, be herein referred to as "TRANSFERRED SALARIED EMPLOYEES."
Buyer shall offer to Transferred Salaried Employees who commence
active employment with Buyer as of the Closing Date the same salary levels in
effect with Seller immediately prior to the Closing Date, and benefits
consistent with benefits provided to similarly situated employees of Buyer as of
the Closing Date. Buyer shall offer to Transferred Salaried Employees who
commence active employment with Buyer after the Closing Date salary levels
consistent with salary levels in effect for similarly situated employees of
Buyer and benefits consistent with benefits provided to similarly situated
employees of Buyer, in either case, as of the date such employees commence
active employment with Buyer. Notwithstanding the foregoing, (i) Buyer shall
have no obligation to guarantee to continue the salary levels or benefits
provided to such Transferred Salaried Employees pursuant to this paragraph, (ii)
Buyer shall have no obligation to provide Transferred Salaried Employees who are
not participants as of the Closing Date in an incentive plan maintained by
Seller with incentive compensation or bonuses, or to include such employees as
participants in any incentive compensation or bonus plans, and (iii) with
respect to Transferred Salaried Employees who were participants in Seller's
Performance Incentive Plan for 1997 during the 1997 calendar year, Buyer shall
permit such employees to participate in the annual cash incentive compensation
plan, if any, maintained by Buyer from and after the Closing Date at such levels
as shall be determined by Buyer in its sole discretion, from time to time,
pursuant to the terms of Buyer's plans. Prior to the date hereof, Seller shall
have provided Buyer with a true and complete list of the Transferred Salaried
Employees described in clause (iii) above.
Buyer shall recognize Transferred Salaried Employees service with
Seller to the same extent and for the same purposes (other than for purposes of
benefit accrual under defined benefit plans) that Seller is required to
recognize such service pursuant to the terms of Seller's plans, in accordance
with the provisions governing crediting of service from time to time under
Buyer's employee benefit
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plans (whether or not funded and whether or not subject to ERISA) and personnel
policies; provided, however, that Buyer shall be required to credit service with
Seller under Buyer's employee benefit plans only if, and to the extent that,
Buyer gives credit to similarly situated employees of Buyer for comparable
service performed by such employees for Buyer.
Except as provided in Section 5.6(a)(4), Seller shall be solely
responsible for, and shall retain all liabilities and obligations for, all
Absent Salaried Employees unless and until such employees become Transferred
Employees. Seller shall be solely responsible for, and shall retain all
liabilities and obligations with respect to, severance, termination pay and
related liabilities for all Seller Salaried Employees who terminate or are
terminated by Seller prior to the date such employees become Transferred
Employees, and shall reimburse Buyer for any and all liabilities and obligations
incurred by Buyer that are retained by Seller or for which Seller is obligated
to reimburse Buyer pursuant to this paragraph.
(d) EMPLOYEE DEFINED BENEFIT PENSION BENEFITS.
(i) TRANSFERRED NONREPRESENTED HOURLY
EMPLOYEES. Buyer shall provide Transferred Nonrepresented Hourly
Employees with pension benefits substantially comparable in the
aggregate to those benefits provided to them immediately prior to the
Closing Date by Seller pursuant to the terms of Seller's pension plans
that are intended to qualify under section 401(a) of the Code;
PROVIDED, HOWEVER, that Buyer shall have no obligation to provide any
gainsharing plan, any plan based in whole or in part on either
Seller's or Buyer's profits, earnings, returns or revenues, any plan
pursuant to which benefits or plan assets are distributed or invested
in employer securities or other form of investment in which it would
be impracticable or infeasible for Buyer to distribute or invest, as
the case may be, or any plan the assets of which Buyer determines
should be invested, in whole or in part, in investments different from
the plan investments immediately prior to the Closing Date (including
participant directed investments).
Effective on, or as soon as practicable following, the Closing
Date, Seller shall timely amend Seller's tax-qualified pension plans that
cover Transferred Nonrepresented Hourly Employees to provide that all
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Nonrepresented Hourly Employees participating in such plans shall be 100%
vested in their benefits accrued under such plans as of the Closing Date.
(ii) TRANSFERRED SALARIED EMPLOYEES. With
respect to Transferred Salaried Employees, effective as of the Closing
Date or, if later, the date such employees become Transferred Salaried
Employees, Buyer shall provide or cause to be provided coverage under
a tax-qualified defined benefit plan maintained by Buyer, which is
intended to provide benefits consistent with the benefits provided to
similarly situated employees of Buyer, and that provides benefits for
periods of service of such employees occurring on or after the Closing
Date, or if later, the date such employees become Transferred Salaried
Employees. Buyer shall recognize, for purposes of vesting and
eligibility for participation, ancillary benefits or early retirement
or disability subsidies, but not for purposes of benefit accrual or
final average compensation, under such plan, all service credited to
such Transferred Salaried Employees for such purposes under the
tax-qualified defined benefit plans maintained by Seller for such
employees immediately prior to the Closing Date, or if later the date
such employees become Transferred Employees. Buyer shall have no
liability or obligation whatsoever with respect to the defined benefit
plans retained by Seller pursuant to this Section 5.5.
Effective on, or as soon as practicable following, the Closing Date,
Seller shall timely amend Seller's tax-qualified pension plans that cover
Transferred Salaried Employees to provide that all Transferred Salaried
Employees participating in such plans shall be 100% vested in their benefits
accrued under such plans as of the Closing Date.
(e) DEFINED CONTRIBUTION PLANS. Effective on, or as soon as
practicable following, the Closing Date, Buyer shall adopt a tax-qualified
defined contribution plan or plans, or amend an existing defined contribution
plan or plans, as necessary or appropriate, to permit Transferred Employees to
direct that distributions from Seller's defined contribution plans that satisfy
the requirements of an "eligible rollover distribution" within the meaning of
section 402(c)(4) of the Code be rolled over into Buyer's plan or plans.
Notwithstanding the foregoing, the parties agree that Buyer shall have no
obligation to accept (directly or indirectly) participant loans as rollovers
into Buyer's plans, and in no event shall Buyer's failure to accept participant
loans be deemed to be a breach of, or failure by Buyer to satisfy its
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obligations under, Section 5.4. Buyer and Seller shall cooperate as necessary
to effectuate the foregoing. In addition, Seller shall use reasonable efforts
to take all actions necessary or appropriate to enable Buyer, at Buyer's
election, to accept direct rollovers of participant loans from Seller's defined
contribution plans.
(f) WELFARE BENEFITS.
(i) POST-RETIREMENT MEDICAL AND LIFE INSURANCE
BENEFIT LIABILITY FOR ALL EMPLOYEES. Seller shall retain all
liabilities and obligations for all post-retirement medical and life
insurance liabilities payable under the terms of Seller's
post-retirement plans for employees ("POST-RETIREMENT ELIGIBLE
EMPLOYEES") receiving or eligible to receive post-retirement medical
and life insurance benefits as of the Closing Date, including those
who are eligible for post-retirement medical and life insurance
benefits upon termination of employment or commencement of pension
benefits as of the Closing Date, or if later, the date such employees
become Transferred Employees.
Post-Retirement Eligible Employees shall be primarily covered by
Buyer's active medical plans and shall be covered secondarily, using a
"carve-out" method of claims payment, by Seller's post-retirement medical
plans while actively employed by Buyer. Once such employees terminate
employment with Buyer, such employees shall be covered primarily by the
post-retirement medical plans maintained by Seller as of the Closing Date,
and shall be covered secondarily, using a "carve-out" method of claims
payment, by the post-retirement medical plans, if any, maintained by Buyer
as of the date of retirement for similarly situated employees. For
purposes of the foregoing sentence, a "carve-out" method of claims payment
shall mean that for the same covered health care expense, the benefits
payable by the secondary claims payor are reduced by the benefits payable
by the primary claims payor.
With respect to Transferred Employees who are not Post-Retirement
Eligible Employees, when such employees terminate employment with Buyer,
Buyer shall provide such employees post-retirement medical and life
insurance benefits in accordance with the terms of Buyer's plan or plans,
if any (including requirements for eligibility and participation), then in
effect for such employees.
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With respect to those employees who have not satisfied the age
and service requirements for "Rule of 90" post-retirement benefits as of
the Closing Date pursuant to the terms of Seller's post-retirement welfare
plans, and consequently are required to contribute toward their coverage,
Seller shall not be required to give such employees credit for service with
Buyer for purposes of reducing such employees' required contributions for
such coverage.
Each of Seller and Buyer retains the right to change at any time,
and from time to time, any and all of its employee benefit plans, including
those plans providing medical and other welfare benefits to its retired
employees, including those who may become Transferred Employees, provided
that no change may be made that would single out the Transferred Employees
for special adverse treatment or that would adversely affect Transferred
Employees differently than other similarly situated employees of Seller or
Buyer. Notwithstanding the foregoing, if in accordance with the foregoing
sentence, Seller changes the kind and/or level of the benefits covered by
its retiree medical benefit plans from those in effect as of the Closing
Date, Seller shall reimburse Buyer for any additional out-of-pocket costs
incurred by Buyer as a result of such change. In like manner, if Buyer
changes the kind and/or level of the medical benefits covered by the plans
it maintains for its active employees from those in effect as of the
Closing Date, Buyer shall reimburse Seller for any additional out-of-pocket
costs incurred by Seller under its retiree medical plans as a result of
such change.
(ii) ACTIVE WELFARE BENEFITS. Effective as of the
Closing Date (or such later date as a Seller Employee becomes a
Transferred Employee), Buyer shall provide, or cause to be provided,
without any waiting period, where applicable, medical, life insurance,
accident, sickness and other group insurance benefits and short-term and
long-term disability benefits ("WELFARE BENEFITS") to all Transferred
Employees and, to the extent applicable, their respective eligible
dependents, in plans maintained by, or for the benefit of, Buyer
("BUYER'S WELFARE PLANS"). Benefits under Buyer's Welfare Plans, (A)
shall be, with respect to Transferred Nonrepresented Hourly Employees
who commence active employment with Buyer on the Closing Date,
substantially comparable to those benefits provided to such employees by
Seller immediately prior to the Closing Date, and with respect to
Transferred Nonrepresented Hourly Employees who
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commence active employment with Buyer after the Closing Date,
substantially comparable to those benefits provided to similarly
situated employees of Buyer as of the date such employee commences
active employment with Buyer, and (B) with respect to Transferred
Salaried Employees, shall be consistent with benefits provided to
similarly situated employees of Buyer. With respect to Transferred
Represented Employees, Buyer's Welfare Plans shall conform to the terms
of the applicable collective bargaining agreements.
Buyer shall be responsible for medical expenses covered under the
terms of the applicable Buyer's Welfare Plans incurred by a Transferred Employee
and/or his or her covered dependents who are enrolled in such plans on and after
the later of (A) the Closing Date or (B) the date such employee becomes a
Transferred Employee. Seller shall be responsible for medical expenses covered
under the terms of Seller's welfare plans (the "SELLER'S WELFARE PLANS")
incurred prior to the Closing Date or the date the employee becomes a
Transferred Employee, if later, by a Transferred Employee or a covered
dependent. If a Transferred Employee or a covered dependent of a Transferred
Employee is hospitalized immediately prior to the Closing Date, Seller's Welfare
Plans shall pay the covered medical expenses of such person until he or she is
discharged from the hospital, to the extent coverage is provided under the terms
of Seller's Welfare Plans.
Buyer shall be responsible for claims for Welfare Benefits other than
medical claims covered under Buyer's Welfare Plans that are incurred by a
Transferred Employee and/or his or her covered dependents who are enrolled in
such plans on and after the later of (A) the Closing Date or (B) the date such
employee becomes a Transferred Employee.
For purposes of this Section 5.5(f), a claim will be deemed "incurred"
on the date that the event that gives rise to the claim occurs (for purposes of
life insurance, severance and sickness, accident and disability programs), or on
the date that treatment or services are provided (for purposes of healthcare
programs).
Seller shall be responsible for, and shall reimburse Buyer for claims
for Welfare Benefits other than medical claims, in each case with respect to
Seller Employees and their covered dependents, whether covered under Seller's
Welfare Plans, Buyer's Welfare Plans, or otherwise, that are incurred prior to
the later of the Closing Date and the date the affected Seller Employee becomes
a Transferred Employee.
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(g) WORKERS' COMPENSATION CLAIMS. Seller shall be responsible
for and shall pay any and all workers' compensation and other similar statutory
claims asserted by or with respect to Seller Employees in respect of any injury
or other compensable event or occupational illness or disease that occurred or
is attributable to any event, state of facts or condition that existed or
occurred in whole before the later of the Closing Date and the date the
applicable Seller Employee becomes a Transferred Employee. Buyer shall be
responsible for and shall pay any and all workers' compensation and other
similar statutory claims asserted by or with respect to any Transferred
Employees in respect of any injury or any other compensable event or
occupational illness or disease that occurred or is attributable to any event,
state of facts or condition that existed or occurred in whole after the later of
the Closing Date and the date the applicable Transferred Employee becomes a
Transferred Employee.
If the liabilities for any claims for injuries or other compensable
events or occupational illnesses or diseases of any Transferred Employee who was
employed by Seller before the Closing Date and was actively employed by Buyer on
or after the Closing Date is attributable in part to causes occurring before the
Closing Date and in part to causes occurring on or subsequent to the Closing
Date and is the basis of a workers' compensation or other similar statutory
claim, the liability for any such claims shall be shared by Seller and Buyer in
the proportion of the period of employment of such Transferred Employee with
Seller and the period of active employment with Buyer, if any. In the event
that one party hereto is required by an applicable state workers' compensation
law to pay workers' compensation otherwise allocated to the other party pursuant
to this Section 5.5(g), the party obligated to pay such amount pursuant to this
Section shall reimburse the paying party.
(h) ALTERNATE ARRANGEMENTS; PARTIES' COOPERATION.
Notwithstanding anything in Section 5.4, 5.5 or 5.6 to the contrary, to the
extent that Buyer, in its sole discretion, deems it necessary or appropriate in
order to implement Section 5.4, 5.5 or 5.6, or otherwise to fulfill its
obligations hereunder during a transition period from and following the Closing
Date, Buyer may cause the benefits and coverage described in Section 5.4, 5.5 or
5.6, to be provided under separate arrangements that are not maintained by
Buyer, including leased or contracted plans or arrangements.
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Buyer and Seller shall cooperate and shall use reasonable efforts (i)
to enable Buyer to satisfy its obligations under Sections 5.4, 5.5 and 5.6, (ii)
to facilitate Buyer's relationships with the applicable unions, and (iii) to
facilitate the administration of Buyer's and Seller's employee benefit plans.
(i) REIMBURSEMENT. The parties to this Agreement agree that the
provisions of Sections 5.4, 5.5 and 5.6 set forth the intent of the parties with
regard to the allocation of liabilities, responsibilities and costs relating to
employees of the Business and the payment of benefits to such employees before,
on, and after the Closing Date. If one party makes a payment that under the
terms of Section 5.4, 5.5 or 5.6 should have been made by or on behalf of the
other party, whether by mistake or in accordance with a ruling, regulation, or
order of an Authority, or as a payment where a reimbursement is expressly
contemplated pursuant to Section 5.4, 5.5 or 5.6, then the party that is
obligated under the provisions of Section 5.4, 5.5 or 5.6, to make such payment
or reimbursement, as the case may be, shall reimburse the party that actually
made the payment or who is entitled to the reimbursement (or for whose benefit
the payment was made). Anything in this Agreement to the contrary
notwithstanding, the reimbursement obligations under Section 5.4, 5.5 or 5.6
shall remain in force and effect so long as either party is making payments to
which these provisions apply; provided however, that a specific request for a
reimbursement must be made no later than two years following the date that the
related reimbursement obligation arose.
All reimbursements under this Section 5.5(i) shall be paid to the
party to be reimbursed once each month for the first two years following the
Closing Date and once each calendar quarter thereafter, in either case, within
thirty (30) days after receipt of a bill from the party to be reimbursed (which
bill shall not be submitted more frequently than monthly, or quarterly, as the
case may be) describing each element of reimbursement claimed and shall be
subject to reasonable timely audit and verification by the other party, and
their accountants, actuaries and/or consultants.
(j) COBRA. With respect to each (i) current and former employee
of Seller who does not become a Transferred Employee, (i) each Transferred
Employee for any period prior to the date any such employee becomes a
Transferred Employee, and (iii) each other individual who is a "qualified
beneficiary" with respect to such current or former employee, in connection with
a "group health plan" maintained by Seller or an Affiliate (as such terms are
defined in Code section 4980B), Seller shall be responsible for providing "group
health plan" continuation coverage with regard to any event that occurs before
the employee becomes a Transferred
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Employee. Seller shall indemnify and hold Buyer and its Affiliates harmless
from and against any and all Losses with respect to such individual arising in
connection with group health plan continuation required under Code section 4980B
or Part 6 of Subtitle B of ERISA.
Section 5.6 SPECIAL EMPLOYMENT AND TRANSITION RULES FOR SALARIED
EMPLOYEES.
(a) EMPLOYMENT OF SALARIED EMPLOYEES.
(i) No later than 14 days before the Closing
Date, Buyer shall provide Seller with a list identifying those
Headquarter Employees whom Buyer desires to remain employed by Seller
on and after the Closing Date, but who shall on and after the Closing
Date perform services for Buyer, at the direction of Buyer (the
"SECONDED EMPLOYEES"). It is not intended that Seconded Employees
will perform services covered by the transition agreements described
in Section 1.7(d). Once identified, except with respect to the
"Extended Seconded Employees," as defined below, a Seconded Employee
shall remain employed by Seller in this capacity for 180 days from the
Closing Date (the "SELECTION PERIOD") or for such shorter period as
Buyer may determine if it so notifies Seller at least 14 days in
advance with regard to a particular Seconded Employee. Prior to the
expiration of the Selection Period, Buyer may extend the Selection
Period for up to an additional 60 days with respect to no more than 35
Seconded Employees (the "EXTENDED SECONDED EMPLOYEES"), who shall be
selected by Buyer in its sole discretion. Buyer shall provide Seller
at least 14 days before the end of the original Selection Period with
a list identifying the Extended Seconded Employees. For purposes of
the Extended Seconded Employees, if any, the Selection Period shall
mean the period commencing on the Closing Date and terminating 240
days following the Closing Date, or for such shorter period as Buyer
may determine if it so notifies Seller at least 14 days in advance
with regard to a particular Extended Seconded Employee. Buyer shall
reimburse Seller monthly in arrears in accordance with Section
5.6(a)(1) of the Disclosure Schedule for the costs incurred by Seller
with respect to the salary and benefits provided by Seller to the
Seconded Employees during the Selection Period.
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(ii) At any time during the Selection Period,
Buyer in its sole discretion may offer employment to any or all of the
Seconded Employees. A Seconded Employee who becomes employed by Buyer
by the end of the Selection Period shall be treated as a Transferred
Salaried Employee for purposes of this Agreement as of the date such
employee commences active employment with Buyer.
(iii) A Seconded Employee who has not been
employed by Buyer by the end of the Selection Period (or by the end of
such shorter period as Buyer may determine if it so notifies Seller at
least 14 days in advance with regard to a particular Seconded
Employee) shall be either retained or terminated by Seller in Seller's
sole discretion, but in either case Buyer shall have no further
reimbursement or other obligation with regard to such Seconded
Employee after the end of the Selection Period (or after such shorter
period as Buyer may determine with regard to a particular Seconded
Employee). Buyer shall give Seller at least 14 days advance notice
with regard to any Seconded Employee to whom Buyer does not intend to
offer employment by the end of the Selection Period.
(iv) Buyer shall indemnify Seller against, and
shall hold it harmless from, any and all Losses incurred or suffered
as a result of any claim by (A) a Seconded Employee (during the period
such employee was seconded to Buyer, but in no event after the
Selection Period), (B) an Absent Nonrepresented Hourly Employee or an
Absent Salaried Employee (in each case, during the period from the
Closing Date to the 180th day thereafter), in each case, that arises
out of or in any way relates to the acts or omissions of Buyer,
including, without limitation, claims arising under federal, state or
local statute(s) (including, without limitation, Title VII of the
Civil Rights Act, as amended, the Age Discrimination in Employment
Act, as amended, the Equal Pay Act, as amended, the Americans with
Disabilities Act, as amended, and all other statutes regarding the
terms and conditions of employment), regulation(s) or ordinance(s),
under the common law or equity (including any claims for wrongful
discharge or otherwise).
(v) Seller shall indemnify Buyer against, and
shall hold it harmless from, any and all Losses incurred or suffered
as
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a result of any claim by a Seconded Employee, an Absent Nonrepresented
Hourly Employee or an Absent Salaried Employee that arises out of or in any
way relates to the acts or omissions of Seller, including, without
limitation, claims arising under federal, state or local statute(s)
(including, without limitation, Title VII of the Civil Rights Act, as
amended, the Age Discrimination in Employment Act, as amended, the Equal
Pay Act, as amended, the Americans with Disabilities Act, as amended, and
all other statutes regarding the terms and conditions of employment),
regulation(s) or ordinance(s), under the common law or equity (including
any claims for wrongful discharge or otherwise).
(b) SEVERANCE OBLIGATION.
(i) Notwithstanding anything in this Agreement
to the contrary except for Buyer's reimbursement obligations as set
forth in Section 5.6(a)(i) and (iv), Seller shall retain all
liabilities and obligations, including but not limited to severance
obligations, pertaining to Headquarter Employees and Plant Salaried
Employees who do not become Transferred Salaried Employees pursuant to
this Agreement, including, without limitation, Seconded Employees who
terminate employment on or prior to the end of the Selection Period
without becoming Transferred Salaried Employees. Seller shall
reimburse Buyer for any and all liabilities and obligations incurred
by Buyer that are retained by Seller pursuant to this paragraph.
(ii) If a Seller Nonrepresented Hourly Employee
becomes a Transferred Nonrepresented Hourly Employee, or a Salaried
Employee becomes a Transferred Salaried Employee, and in either case,
Buyer terminates such employee's employment other than for cause, then
Buyer shall be obligated to pay such employee severance benefits, if
any, determined pursuant to the terms of Buyer's severance plan or
policy, if any, in effect at such time, based on combined service with
Buyer plus service credited with Seller, to the extent and for the
same purposes that such service was required to have been taken into
account for purposes of Seller's severance plan in effect as of the
Closing Date, or if later, the date the individual becomes a
Transferred Employee.
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(c) NONSOLICITATION AGREEMENT. Except for the four individuals
listed on Section 5.6(c) of the Disclosure Schedule of this Agreement, Seller
shall refrain, and shall use its best efforts to cause its Affiliates to
refrain, from (i) interfering with Buyer's efforts to hire any of the employees
employed by Seller in the Business, including its Headquarter Employees and (ii)
without obtaining prior written consent from Buyer, offering employment to any
Transferred Employees from the date of this Agreement until the end of 24 months
following the Closing Date, unless such employee has been terminated from Buyer
for at least six continuous months. Notwithstanding the foregoing, Seller may
offer employment (i) to any Plant Salaried Employee who does not become a
Transferred Salaried Employee as of the Closing Date, or such later date as an
Absent Salaried Employee is available to commence employment with Buyer, if
applicable; (ii) to any Headquarter Employee who does not become a Seconded
Employee or a Transferred Salaried Employee as of the Closing Date; and (iii) to
any Seconded Employee who does not become a Transferred Employee by the end of
the Selection Period. Seller agrees that (x) if it retains a Seconded Employee
to whom Buyer has offered employment and such employee has rejected Buyer's
offer, then Seller shall reimburse Buyer for any and all amounts paid by Buyer
to Seller to cover the costs of benefits for such Seconded Employee during the
Selection Period (but not for the direct cost of compensation or FICA or FUTA
(as defined in Section 5.6(d) hereof)), and (y) if Seller hires any Transferred
Employee prior to the earlier of 24 months following the Closing Date and six
months following such employee's termination of employment from Buyer, Seller
shall reimburse Buyer for all relocation, severance and related costs and
expenses paid by or on behalf of Buyer for such Transferred Employee.
(d) EMPLOYMENT TAXES. Seller, Buyer and Ball shall (i) treat
Buyer and Ball each as a "successor employer" and Seller as a "predecessor,"
within the meaning of section 3121(a)(1) of the Code and for purposes of Taxes
imposed under the United States Federal Unemployment Tax Act ("FUTA") or the
United States Federal Insurance Contributions Act ("FICA") and (ii) cooperate
with each other to avoid, to the extent possible, the filing of more than one
Internal Revenue Service Form W-2 with respect to each Transferred Employee for
the calendar year within which the Closing Date occurs. At the request of Buyer
with respect to any particular applicable Tax Law relating to employment,
unemployment insurance, social security, disability, workers' compensation,
payroll, healthcare or other similar Tax other than Taxes imposed under FICA and
FUTA, Seller, Buyer and Ball shall (i) treat Buyer and Ball each as a successor
employer and Seller as predecessor employer, within the meaning of the relevant
provisions of such Tax Law, with respect to Transferred Employees who are
employed by Buyer, to the extent
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permitted by applicable state and local laws and (ii) cooperate with each other
to avoid, to the extent possible, the filing of more than one individual
information reporting form pursuant to each such Tax Law with respect to each
such Transferred Employee for the calendar year within which the Closing Date
occurs.
(e) REIMBURSEMENT. All reimbursements described in this Section
5.6, including Section 5.6(a)(1) of the Disclosure Schedule, shall be made in
accordance with the reimbursement procedures set forth in Section 5.5(i) hereof.
(f) INDEMNIFICATION PROCEDURES. Any claim for indemnification
made under Sections 5.4, 5.5 or 5.6 hereunder shall be made according to, and
shall be governed by, the procedures contained in Section 6.4(c)-(h) of this
Agreement.
Section 5.7 TAX MATTERS.
(a) CONSOLIDATED SUBSIDIARIES. Seller represents and warrants
that each of LAR, RCAL and RIND is a fully consolidated subsidiary of Seller for
federal income Tax purposes at Closing. Each of LAR, RCAL and RIND will be
included in the consolidated Tax Return of Seller for federal income Tax
purposes for the taxable period of each of LAR, RCAL and RIND that includes the
date of Closing.
(b) SECTION 338 ELECTIONS AND FORMS. With respect to the
acquisition of the stock of LAR, RCAL and RIND hereunder, Seller, Ball and Buyer
shall jointly make all available Section 338(h)(10) Elections, and with respect
to the acquisition of the stock of RIB hereunder, Buyer or Ball shall make a
Section 338(g) Election, in each case in accordance with applicable Tax Laws on
a timely basis and as set forth herein. Seller, Ball and Buyer will supply in
advance to one another copies of all correspondence, filings or communications
(or memoranda setting forth the substance thereof) to be sent or made by Ball,
Buyer or Seller or their respective representatives to or with the IRS relating
to any Section 338 Elections. Buyer, Ball and Seller agree to report the
transfers under this Agreement consistent with any Section 338 Elections and the
allocations provided by Section 5.7(d), and shall take no position contrary
thereto unless required to do so by applicable Tax Laws pursuant to a
"determination" (as described in section 1313 of the Code).
(c) PREPARATION OF FORMS. Buyer shall be responsible for the
preparation and filing of all Section 338 Forms in accordance with applicable
Tax
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Laws and the terms of this Agreement; provided that Seller shall be responsible
for filing any form related to a Section 338 Election that must be filed with a
Tax Return of Seller or one of its Affiliates. Buyer shall deliver such forms
and related documents to Seller at least 20 days prior to the date such Section
338 Forms are required to be filed under applicable Tax Laws. Seller shall
provide all information reasonably requested by Buyer and shall execute and
deliver to Buyer such documents or forms as are reasonably requested by Buyer
and are required by any Tax Laws to properly complete the Section 338 Forms, no
more than 10 days after the date such documents or forms are requested by Buyer.
Seller shall be responsible for the preparation and filing of the Tax Returns of
LAR, RCAL and RIND for all taxable years ending on or before the Closing Date
(including, without limitation, any consolidated, combined or unitary group
return of which LAR, RCAL or RIND is a member which includes the gain or loss on
the deemed sale of assets of LAR, RCAL and RIND under section 338 of the Code or
similar state or local statute).
(d) ALLOCATION. Seller and Buyer will allocate the "AGGREGATE
DEEMED SALES PRICE" arising from the Section 338(g) Elections and the "MODIFIED
AGGREGATE DEEMED SALE PRICE" arising from the Section 338(h)(10) Elections, as
computed under applicable Treasury Regulations (or similar state law provisions)
with respect to the acquisition of shares of stock of RIB, LAR, RCAL and RIND
among the assets of RIB, LAR, RCAL and RIND, respectively, for tax purposes in
accordance with the provisions of Section 1.9.
(e) TAXABLE PERIODS ENDING ON OR BEFORE THE CLOSING DATE.
Except as set forth in Section 1.6, Seller shall be liable for, shall pay and
shall indemnify and hold Buyer, Ball, RIB, LAR, RCAL and RIND harmless against,
all Taxes of Seller, RIB, LAR, RCAL, RIND and their Affiliates for any taxable
year or taxable period ending on or before the Closing Date due or payable with
respect to the Business or the operations, assets or business of Seller, LAR,
RCAL, RIND and their Affiliates on or before the Closing Date, including any
Taxes resulting from the making of the Section 338 Elections and any liability
for Taxes pursuant to Treasury Regulations Sections 1.1502-6, 1.338-5(b)(3) or
1.338(h)(10)-1(e)(5) (or any similar provision of Law). All liabilities and
obligations between RIB, LAR, RCAL or RIND on the one hand, and Seller or its
Affiliates on the other hand, under any tax allocation agreement or arrangement
in effect prior to Closing (other than this Agreement or as set forth herein)
shall cease to apply to RIB, LAR, RCAL and RIND as of the Closing.
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(f) TAXABLE PERIODS COMMENCING AFTER THE CLOSING DATE. Buyer
shall be liable for, shall pay and shall indemnify and hold Seller and its
Affiliates harmless against, any and all Taxes of RIB, LAR, RCAL and RIND for
any taxable year or taxable period commencing after the Closing Date other than
Taxes resulting from Section 338 Elections.
(g) TAXABLE PERIODS COMMENCING ON OR BEFORE THE CLOSING DATE AND
ENDING AFTER THE CLOSING DATE. Except as set forth in Section 1.6, any Taxes
for a taxable period beginning on or before the Closing Date and ending after
the Closing Date (the "CLOSING PERIOD") with respect to RIB, LAR, RCAL or RIND
shall be apportioned between Seller and Buyer as if the Closing Period had ended
at the Closing but with Seller bearing the effect of all Section 338 Elections.
For purposes of Section 5.7(e), (f) and (g), the portion of the Closing Period
deemed to end on the Closing Date shall be deemed to be a taxable period (the
"PRE-CLOSING PERIOD"). All real property Taxes, personal property Taxes,
intangible Taxes and similar ad valorem obligations levied with respect to the
Business Assets or assets held by RIB, LAR, RCAL or RIND for the Closing Period
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 Period and
the number of days of such taxable period after the Closing Date. Upon receipt
of any bill for Taxes relating to the Closing Period, Seller, Buyer or their
respective Affiliates, as the case may be, shall present to the other a
statement setting forth amounts of any reimbursement due under this Section
5.7(g) together with such supporting evidence as is reasonably necessary to
calculate the apportioned amount. The apportioned amount shall be paid by the
party owing the reimbursement to the other party as soon as possible but no
later than 30 days after delivery of such statement.
(h) REFUNDS OR CREDITS. Except as otherwise set forth in this
Agreement, any refunds or credits of Taxes, to the extent that such refunds or
credits are attributable to taxable periods ending on or before the Closing Date
shall be for the account of Seller, and, to the extent that such refunds or
credits are attributable to taxable periods beginning after the Closing Date,
such refunds or credits shall be for the account of Buyer. To the extent that
such refunds or credits are attributable to Taxes for the Closing Period that
are described in Section 5.7(g), such refunds and credits shall be for the
account of the party who bears responsibility for such Taxes pursuant to Section
5.7(g). Buyer shall, or shall cause RIB, LAR, RCAL or RIND to, forward to
Seller or to reimburse Seller for any such refunds or credits due Seller
pursuant to this Section 5.7(h) within 15 days after receipt thereof by any of
Buyer, Ball, RIB, LAR, RCAL or RIND that are for the account of Seller
hereunder, and
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Seller shall forward to Buyer or reimburse Buyer for any refunds or credits that
are for the account of Buyer within 15 days after receipt thereof by Seller or
its Affiliates that are for the account of Buyer hereunder; provided, however,
that the refunding party shall be entitled to deduct from the amount to be
refunded a proportionate share of reasonable costs and expenses incurred by such
refunding party in obtaining such refund and provided further that the amount of
costs and expenses deducted by the refunding party from the amount to be paid to
the other party shall not exceed such other party's share of such refund.
(i) CERTIFICATES. Seller shall, on the Closing Date, provide
Buyer with any clearance certificates or similar documents which may be required
by any foreign or domestic Taxing Authority to relieve Buyer of any obligation
to withhold any portion of the Purchase Price or to hold Buyer harmless for any
sales or use or other Tax liability, including, without limitation, an affidavit
described in section 1445(b)(2) of the Code.
(j) MUTUAL COOPERATION. Seller and Buyer shall each (i) provide
the other with such assistance as may reasonably be requested by either of them
in connection with the preparation of any Tax Return, audit or other examination
by any Taxing Authority relating to liability for Taxes, (ii) retain and provide
the other, at the other's expense, with any records or other information which
may be relevant to such Tax Return, audit or examination, proceeding or
determination and (iii) provide the other, at the other's expense, with any
requested information relating to final determination of any such audit or
examination, proceeding or determination that affects any amount required to be
shown on any Tax Return of the other for any period. Without limiting the
foregoing, Buyer and Ball on the one hand, and Seller on the other hand, shall
cooperate in taking all reasonable actions to obtain and provide each other with
information necessary to allow either party to determine and claim United States
foreign Tax credits with respect to foreign income Taxes paid by LAR, RIB and
Latasa (including the Latasa Subsidiaries) attributable to any Closing Period.
Specifically and without limitation, the parties shall provide to each other, as
applicable, official receipts (or other evidence acceptable to the United States
Internal Revenue Service) showing the amount of foreign income Tax paid by each
of LAR, RIB and Latasa (including the Latasa Subsidiaries) with respect to its
applicable Closing Period, copies of the foreign income Tax Returns filed by
each of LAR, RIB and Latasa (including the Latasa Subsidiaries) for its
applicable Closing Period and schedules prorating the taxable income of LAR, RIB
and Latasa (including the Latasa Subsidiaries) for its applicable Closing Period
between the Pre-Closing Period and the portion of such Closing Period after the
Closing Date.
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(k) CONTESTS. Whenever any Taxing Authority asserts a claim,
makes an assessment, or otherwise disputes the amount of Taxes owed by RIB, LAR,
RCAL or RIND for which Seller is or may be liable under this Agreement, Buyer
shall promptly inform Seller, and Seller shall have the right to control any
resulting proceedings and to determine whether and when to settle any such
claim, assessment or dispute to the extent such proceedings or determinations
would affect the amount of Taxes for which Seller is liable under this
Agreement; provided, however, that Seller shall not enter into any such
settlement without the consent of Buyer (which consent shall not be unreasonably
withheld) if such settlement could reasonably be expected to affect the amount
of Taxes for which Buyer or Ball is liable under this Agreement. Whenever any
Taxing Authority asserts a claim, makes an assessment or otherwise disputes the
amount of Taxes for which Buyer or Ball is liable under this Agreement, Seller
shall promptly inform Buyer, and Buyer shall have the right to control any
resulting proceedings and to determine whether and when to settle any such
claim, assessment or dispute to the extent such proceedings would affect the
amount of Taxes for which Buyer or Ball is liable under this Agreement;
provided, however, that Buyer shall not enter into any such settlement without
the consent of Seller (which consent shall not be unreasonably withheld) if such
settlement could reasonably be expected to affect the amount of Taxes for which
Seller is liable under this Agreement.
(l) RESOLUTION OF DISAGREEMENTS BETWEEN SELLER AND BUYER. If
Seller, on the one hand, and Buyer or Ball, on the other hand, disagree as to
the amount of Taxes for which each is liable under this Agreement or are unable
to agree on any matter relating to the Section 338 Elections, Seller and Buyer
shall promptly consult each other in an effort to resolve such dispute. If any
such point of disagreement cannot be resolved within 15 days of the date of
consultation (which period may be extended by mutual agreement of Buyer and
Seller), Seller and Buyer shall within 10 days after such 15-day period jointly
engage the Neutral Auditor to act as an arbitrator to resolve all points of
disagreement concerning tax accounting matters with respect to this Agreement.
All fees and expenses relating to the work performed by the Neutral Auditor in
accordance with this Section 5.7(l) shall be borne equally by Seller and Buyer,
unless otherwise ordered by the Neutral Auditor.
(m) PUERTO RICO TAX EXEMPTION. Seller will use all reasonable
efforts to assist Ball, Buyer and LAR in obtaining such approvals and consents
as are necessary so that from and after the Closing Ball, Buyer and LAR will
have the full benefit of the partial Puerto Rico Tax exemptions that are
currently enjoyed by LAR with respect to the operation of the Business in Puerto
Rico.
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Section 5.8 NON-COMPETITION.
(a) Seller agrees that, to assure Ball and Buyer that Buyer will
retain the value of the Business as a "going concern," for a period of six years
beginning on the Closing Date, Seller shall not, directly or indirectly, itself
or through one or more Affiliates, engage or have an interest, anywhere in the
world, alone or in association with others, as partner or shareholder or through
the investment of capital, lending of money or property, provision of management
or engineering services, technology or know-how, or otherwise, in the
development, manufacture, distribution, sale or marketing of products or
services that are competitive with the products or services provided by the
Business, consisting of metal beverage cans and ends and PET beverage
containers. Notwithstanding the foregoing, Seller and its Affiliates may, after
the Closing, engage or continue to engage in the following business activities
related to metal beverage can bodies and ends: the development, manufacture,
distribution, sale and marketing of can, end and tab sheet; the recycling and
reclamation of metal beverage can bodies and ends; Machinery Operations; the
design, manufacture and sale of printing cylinders, printing plates and color
separations used by Persons other than Seller and its Affiliates in the
manufacture of metal beverage can bodies and ends; and ancillary services
customarily provided to manufacturers of metal beverage can bodies and ends by
persons engaged in the foregoing businesses, provided that such services are
directly related to such businesses and do not use any Intellectual Property
Rights. In addition, notwithstanding the foregoing, Seller may:
(i) from and after the Closing Date, own an
equity interest of not greater than 50% in the Russian company or
group of companies which owns the Sayansk aluminum smelter and/or the
Samara rolling mill (such company or group, "SIBERIAN ALUMINUM"), even
though Siberian Aluminum in turn owns a significant interest in the
Rostar-Dmitrov aluminum can and end manufacturing plant near Moscow;
provided that Seller shall use all reasonable efforts as an equity
holder in Siberian Aluminum, if Siberian Aluminum includes can, end
and tab sheet operations, to facilitate the supply of can, end and tab
sheet to the can and end plant near Moscow established by PLM Beverage
Can Manufacturing ZAO on mutually acceptable terms;
(ii) from and after the third anniversary of
the Closing Date, own an equity interest of not greater than 50% in
any
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Person which, in addition to its primary business or businesses, is engaged
in the development, manufacture, distribution, sale or marketing of metal
beverage cans and ends provided that the portion of such Person's
consolidated revenues attributable to activities related to metal beverage
cans and ends does not exceed 20% of its total consolidated revenues and
such Person's manufacturing activities are conducted solely in Russia,
China or India; provided further that (x) subject to other obligations such
Person may have, Seller shall use all reasonable efforts as an equity
holder in such Person to cause such Person to offer to Ball the opportunity
to invest in such metal beverage can and end business and/or to provide
management and engineering services, technology and know-how to such
business on mutually acceptable terms, and (y) Seller shall, if such
Person's operations include can, end and tab sheet operations, use all
reasonable efforts as an equity holder to facilitate the supply of can, end
and tab sheet on mutually acceptable terms to any can and/or end
manufacturing ventures in Russia, China and India in which Ball or any of
its Affiliates has an equity interest; and
(iii) from and after the Closing Date, continue
to own its current 27.5% equity interest in UAC and continue
activities directly related to the current operations of UAC pursuant
to its current agreements with UAC;
and for greater certainty, Seller and its Affiliates shall not, as a consequence
of clauses (i), (ii) or (iii) hereof, be permitted, in respect of any Person, to
provide management or engineering services, technology or know-how to any
operations engaged in the development, manufacture, distribution, sale or
marketing of metal beverage cans and ends and PET beverage containers.
(b) Seller shall not at any time on or after the Closing Date,
directly or indirectly, through one or more Affiliates, use or purport to
authorize any person to use any name, mark, logo, trade dress or other
identifying words or images which are the same as or confusingly similar to any
of those included in the Intellectual Property Rights, whether or not such use
would be in a business in which Seller is prohibited from engaging pursuant to
Section 5.8(a) provided, that this Section 5.8(b) shall not apply to any
registered trademark which Ball, its successors or assigns has allowed to expire
commencing one year after such expiration.
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(c) The provisions of this Section 5.8 shall not be deemed to
prohibit Seller from acquiring not more than 5% of any class of securities of
any company with a class of securities registered under the Exchange Act (or any
similar foreign statute) or otherwise publicly traded, provided that Seller does
not have control over or does not attempt to control or influence such company.
(d) If, at the time of enforcement of this Section 5.8, a court
shall hold that the duration, scope or area restrictions stated herein are
unreasonable under the circumstances then existing, the maximum duration, scope
or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area. Seller acknowledges and agrees that Ball and Buyer
would be damaged irreparably if any of the provisions of this Section 5.8 are
not performed in accordance with their specific terms or otherwise are breached.
Accordingly, Seller and Buyer each agrees that the other party shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Section 5.8 and to enforce specifically the terms and provisions of this Section
5.8 in any action instituted in any court having jurisdiction over the parties
and the matter, in addition to any other remedy to which it may be entitled, at
law or in equity.
Section 5.9 CONFIDENTIALITY.
(a) Prior to the Closing, each party will hold and will cause
its consultants and advisors to hold in confidence, all documents and
information concerning the other party furnished it by such other party or its
representatives in connection with the transactions contemplated by this
Agreement pursuant to the terms of the Confidentiality Agreement, dated May 28,
1997 between Seller and Buyer, as amended (the "CONFIDENTIALITY AGREEMENT").
(b) Prior to and after the Closing, Seller, Ball and Buyer 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 (x) concerning the Business, the Business Assets, the
Shares and Seller and provided to Ball or Buyer or (y) concerning Ball or Buyer
and provided to Seller, except to the extent that such information can be shown
to have been or to have become (i) generally available to the public other than
as a result of disclosure by the officers, directors, employees,
representatives, consultants or advisors of Seller, Ball or Buyer, (ii)
disclosed to the other party from a source other than the officers, directors,
employ-
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ees, representatives, consultants or advisors of Seller, Ball or Buyer from a
source that was permitted to disclose it or (iii) known to the other party
before the date of the disclosure of such information. However, nothing
contained in this Section 5.9(b) shall (i) prevent any party from using or
disclosing information to (A) perform its obligations or enforce its rights
hereunder or (B) to defend or prosecute any claim or (ii) preclude the
disclosure of such information on the condition that it remain confidential to
auditors, attorneys, lenders, financial advisors and other consultants and
advisors in connection with the performance of their duties in preparation for
consummation of the transactions contemplated hereby.
Section 5.10 MATERIALS RECEIVED AFTER CLOSING. Following the
Closing, Buyer may receive and open all mail, telecopies or telexes addressed to
Seller and deal with the contents thereof in its discretion to the extent that
such mail, telecopies or telexes and the contents thereof relate to the
Business, Business Assets or the Shares. Ball and Buyer shall promptly deliver
to Seller all material they receive (including mail, checks, money, telecopies,
telefaxes and the contents thereof) which is addressed to Seller or its
Affiliates to the extent it does not relate to the Business, the Business Assets
or the Shares or to the extent it deals with Excluded Assets or Excluded
Liabilities. Seller shall promptly deliver to Ball or Buyer, as the case may
be, all of the mail, checks, money, telecopies, telexes and the contents thereof
with respect to the Business, the Business Assets or the Shares received by
Seller following the Closing.
Section 5.11 ACCESS TO BOOKS AND RECORDS.
(a) Each party agrees that from and after the Closing Date to
the seventh anniversary thereof, during normal business hours, it will permit
(at no charge, cost or expense to such party and without unreasonable disruption
of such party's business) the other party and its auditors, through their
authorized representatives, to have reasonable access to and to examine and take
copies of all books and records (including, without limitation, correspondence,
memoranda, books of account, tax reports and returns and the like) included in
the Business Information or otherwise reasonably relating to the Business or the
Business Assets (including, without limitation, records with respect to Tax,
pension, severance and litigation matters) and reasonably relating to events
occurring prior to the Closing Date and to events occurring subsequent to the
Closing Date which are related to or arise out of events occurring prior to the
Closing Date, in any case, subject to the confidentiality provisions of Section
5.9.
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(b) Each party will direct its employees to render any
assistance which the other party may reasonably request in examining or using
such books and records. Until the seventh anniversary of the Closing Date,
neither party will destroy any files or records which are subject to this
Section 5.11 without giving reasonable notice to the other party, and within 30
days of receipt of such notice, the other party may cause to be delivered to it
the records intended to be destroyed; provided, however, that books or records
relating to Tax matters may not in any event be destroyed for seven years after
the Closing Date (and, if at the expiration thereof, any Tax audit or judicial
proceeding is in progress or the applicable statute of limitations has been
extended, for such longer period as such audit or judicial proceeding is in
progress or such statutory period is extended).
(c) Seller shall request that records of the type described in
Section 5.11(a) in possession of its independent accountants be retained by them
for the customary retention period established by the firm (but not less than
the applicable statute of limitations period) and that such records be made
available to Buyer on request.
(d) Seller is currently engaged in a study to establish Seller's
right to research and experimentation tax credits for the years 1990 through
1997. In connection with this study, Seller may require information pertaining
to the Business or the Business Assets, including, without limitation,
interviews with persons employed in the Business prior to the Closing Date.
Ball or Buyer shall permit Seller reasonable access (solely for purposes of the
study) to any such persons and/or information in the employ or possession of
Ball, Buyer or any Affiliate of either, at Seller's expense but without any
charge for any interviewee's time.
Section 5.12 ACTIONS BY BALL. Ball shall be jointly and severally
liable with Buyer for all obligations of Buyer (or any assignee or Designee of
Ball or Buyer) hereunder or under the Ancillary Agreements. Ball hereby
guarantees Buyer's (or any assignee's or Designee's) performance of all
obligations required of Buyer by this Agreement or the Ancillary Agreements.
Section 5.13 DELIVERY OF FINANCIAL STATEMENTS.
(a) Within 30 days after the date hereof, Seller shall deliver to
Buyer the financial statements of Seller's global can operations referred to in
Section 2.7(a), except that such financial statements shall be audited and shall
be delivered with the report thereon of Ernst and Young LLP, independent
certified public
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accountants (the "AUDITED FINANCIAL STATEMENTS"). Insofar as the Audited
Financial Statements pertain to the U.S. domestic operations of the Business,
they shall not differ in any respect from the Unaudited Financial Statements
previously delivered to Buyer. The amounts included in the balance sheets,
results of operations and cash flows included in the Audited Financial
Statements which relate to Latasa shall not differ in any material respect from
those contained in the Unaudited Financial Statements previously delivered to
Buyer.
(b) Within 30 days after the date hereof, Seller shall deliver
to Buyer the financial statements of Latasa referred to in Section 2.28, except
that such statements shall be audited and shall be delivered with the report
thereon of Price Waterhouse, independent certified public accountants (the
"AUDITED LATASA FINANCIAL STATEMENTS"). The Audited Latasa Financial Statements
shall not differ in any material respect from the Unaudited Latasa Financial
Statements previously delivered to Buyer.
Section 5.14 LITIGATION SUPPORT. With respect to any litigation
being conducted by Seller, Buyer, Ball or their Affiliates, not the subject of
indemnification under Article VI hereof, but relating to the Business, the
Business Assets, the Shares, the Assumed Liabilities or the Excluded
Liabilities, the other party shall cooperate with the litigating party and its
counsel in such action, make available personnel and provide such testimony and
access to books and records as shall be reasonably necessary in connection with
such action, provided that the litigating party shall reimburse the other party
for reasonable out-of-pocket costs and expenses (including reimbursement for
employees' time) for furnishing such cooperation.
Section 5.15 RETURNS. At Seller's request and expense, Ball and
Buyer shall use reasonable efforts to assist Seller in the processing of any
returns by, and the provision of any replacement products to, customers of the
Business for product sales as to which Seller remains liable.
Section 5.16 ACCOUNTS RECEIVABLE. If any Accounts Receivable
reflected in the Final Closing Statement remain uncollected six months after the
Closing Date, Seller shall purchase such Accounts Receivable from Buyer at the
amounts reflected in the Final Closing Statement therefor less (i) amounts
previously paid to Ball or Buyer with respect thereto and (ii) any reserve for
uncollectible amounts included in the Final Closing Statement. Such purchase
shall be completed within seven days of receipt by Seller of a written request
from Buyer to such effect.
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If no such notice has been received by Seller within nine months after Closing,
Seller's obligations under this paragraph shall expire.
Section 5.17 INADVERTENTLY RETAINED INFORMATION. Ball, Buyer and
Seller acknowledge that the Business and certain other portions of Seller's
operations (including, without limitation, the Machinery Operations) have been
run on an integrated basis. Accordingly, Seller may have in its possession
after Closing documents (whether in paper, mylar, microfilm or electronically
stored form) containing or embodying Business Information or Intellectual
Property Rights, and Buyer or Ball may have in its possession after Closing
documents (whether in paper, mylar, microfilm or electronically stored form)
containing or embodying confidential business information or intellectual
property of Seller which are Excluded Assets (in either case, "INADVERTENTLY
RETAINED INFORMATION"). Each of Ball, Buyer and their Designees and Seller
shall (i) use Inadvertently Retained Information only to the extent expressly
permitted by this Agreement or the Ancillary Agreements and (ii) as the
existence of Inadvertently Retained Information comes to its attention, use
reasonable efforts to destroy or expunge it or return it to Ball, Buyer and
their Designees or Seller, as the case may be; provided, however, Ball, Buyer,
their Designees and Latasa and its subsidiaries shall not be required to
destroy, expunge or return documents which Seller or its Affiliates make
available to third party purchasers of goods and services from Seller or its
Affiliates or would make available if the Business were a third party purchaser
of goods and services from Seller or its Affiliates.
ARTICLE VI
SURVIVAL AND INDEMNIFICATION
Section 6.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations and warranties of each party contained in this Agreement
shall survive the Closing, regardless of any investigation made by the other
party, for a period ending on the second anniversary of the Closing Date, except
that: (i) the representations and warranties set forth in Sections 2.4, 2.23,
3.2 and 3.6 shall survive indefinitely and (ii) the representations and
warranties set forth in Section 2.16 shall survive until the expiration of the
applicable statutes of limitation plus 90 days. The covenants and agreements
contained herein shall survive the Closing without limitation as to time unless
the covenant or agreement specifies a term, in which case such covenant or
agreement shall survive for such specified term. The
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respective expiration dates for the survival of the representations and
warranties and the covenants shall be referred to herein as the relevant
"EXPIRATION DATE." All representations with respect to title to Owned Real
Property shall be merged into the respective special warranty deeds and shall
not survive the Closing.
Section 6.2 INDEMNIFICATION BY BALL AND BUYER. Ball and Buyer agree
to indemnify, defend and hold Seller, its officers, directors, employees,
agents, Affiliates and representatives harmless, from and against any and all
cost, expense, loss, liability or damage (except punitive damages attributable
to an Indemnified Party's acts or omissions) and actions and claims in respect
thereof (including, without limitation, amounts paid in settlement and herein
referred to as "LOSSES" suffered or incurred by reason of (i) the
representations and warranties of Ball and Buyer in Article III hereof or the
Article V Representations of Ball and Buyer being untrue (without giving effect
to any qualification contained therein as to materiality, Material Adverse
Effect or knowledge of any party) as of the date hereof and as of the Closing
Date, notice of which is given to Ball and Buyer on or prior to the relevant
Expiration Date, (ii) any nonfulfillment of any covenant or agreement of Ball
and Buyer in this Agreement, notice of which is given to Buyer on or prior to
the relevant Expiration Date, (iii) subject to Section 6.5 with respect to the
Assumed Liabilities referred to in Section 1.3(a)(v), any failure to pay and
discharge the Assumed Liabilities, (iv) claims arising out of conduct of the
Business by Buyer, Ball or their Designees after the Closing Date to the extent
Seller is not obligated to indemnify Ball or Buyer with respect thereto pursuant
to Section 6.3, and (v) all reasonable costs and expenses, including, without
limitation, legal fees and expenses, incurred in connection with enforcing the
indemnification rights of Seller pursuant to this Section 6.2.
Section 6.3 INDEMNIFICATION BY SELLER. Seller agrees to indemnify,
defend and hold Ball and Buyer, their officers, directors, employees, agents,
Affiliates and representatives harmless from and against all Losses suffered or
incurred by reason of (i) the representations and warranties of Seller in
Article II hereof or the Article V Representations of Seller being untrue
(without giving effect to any qualification contained therein as to materiality,
Material Adverse Effect or knowledge of any party in Sections 2.5, 2.11(b),
2.11(c), 2.13(a) (last sentence), 2.13(c) (first two sentences), 2.13(d) (with
respect to defaults by Seller), 2.14 (with respect to defaults by Seller), 2.16,
2.18, 2.20(b), 2.20(c), 2.21(b), 2.21(g), 2.26(b) and 2.29) as of the date
hereof and as of the Closing Date, notice of which is given to Seller on or
prior to the relevant Expiration Date; (ii) any nonfulfillment of any covenant
or agreement of Seller in this Agreement, notice of which is given to Seller
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on or prior to the relevant Expiration Date; (iii) any liability, obligation or
contract of Seller not specifically assumed by Ball or Buyer hereunder
(including, but not limited to, the Excluded Liabilities); (iv) any Losses
arising out of or in connection with Seller's or Buyer's non-compliance with any
so-called bulk transfer laws set forth in Section 4.7; (v) any Tax liability
caused by the recapture of any deferred intercompany gains or excess loss
accounts or by any consolidated return liability arising under Treasury
Regulation Section 1.1502-6 or similar provision of state, local or foreign law;
and (vi) all reasonable costs and expenses, including, without limitation, legal
fees and expenses, incurred in connection with enforcing the indemnification
rights of Ball and Buyer pursuant to this Section 6.3. Notwithstanding anything
contained herein to the contrary, any claims for which indemnification is
provided under Section 6.5 shall not be subject to this Section 6.3, and
notwithstanding anything herein to the contrary, if Seller shall be required to
indemnify both Ball and Buyer with respect to the same matter, the satisfaction
of such indemnity to one of them shall discharge its obligation to the other to
the extent of the amount paid.
Section 6.4 CLAIMS FOR INDEMNIFICATION.
(a) LIMITS ON INDEMNIFICATION. Notwithstanding the provisions
of Sections 6.2 and 6.3, to the extent that (x) Seller incurs a Loss under
Section 6.2(i) or (y) Ball or Buyer incurs a Loss under Section 6.3(i) (other
than with respect to a breach of the representation set forth in Section 2.13(g)
for which Ball and Buyer shall be entitled to indemnification without such
limits), the other party shall be required to indemnify and hold harmless the
party incurring the Loss with respect to such Loss only if the aggregate of all
such Losses to that party exceeds $3.75 million and then only with respect to
Losses in excess of that amount, provided that the foregoing limit does not
apply to Seller's breach of any representation or warranty relating to Taxes.
Notwithstanding anything contained in this Agreement, Seller's indemnification
obligations shall not, in the aggregate, exceed the Purchase Price.
(b) Notwithstanding any provision hereof to the contrary, (i)
Seller's obligations with respect to any breach of the representations and
warranties set forth in the first sentence of Section 2.8 shall be solely as
provided in Section 5.16 (ii) Seller's obligations with respect to any breach of
the representations and warranties set forth in Section 2.9(a) insofar as any
such breach relates to obsolete or slow-moving Inventory shall be solely as
provided in Section 1.5(d) and (iii) Seller's indemnification obligations under
Section 1.7(e) shall be limited to $1,000,000.00 in the aggregate.
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(c) GENERAL. The parties intend that all indemnification claims
be made as promptly as practicable by the party seeking indemnification (the
"INDEMNIFIED PARTY"). Whenever any claim shall arise for indemnification, the
Indemnified Party shall promptly notify the party from whom indemnification is
sought (the "INDEMNIFYING PARTY") of the claim, and the facts constituting the
basis for such claim. The failure to so notify the Indemnifying Party shall not
relieve the Indemnifying Party of any liability that it may have to the
Indemnified Party, except to the extent the Indemnifying Party demonstrates that
the defense of such action is prejudiced thereby.
(d) CLAIMS BY THIRD PARTIES. With respect to claims made by
third parties, the Indemnifying Party, upon acknowledgment of its liability for
the claim, shall be entitled to assume control of the defense of such action or
claim with counsel reasonably satisfactory to the Indemnified Party, provided,
however, that:
(i) the Indemnified Party shall be entitled to
participate in the defense of such claim and to employ counsel at its
own expense to assist in the handling of such claim;
(ii) no Indemnifying Party shall consent to the
entry of any judgment or enter into any settlement if such judgment or
settlement (A) does not include as an unconditional term thereof the
giving by each claimant or plaintiff to each Indemnified Party of a
release from all liability in respect to such claim or (B) if as a
result of such consent or settlement injunctive or other equitable
relief would be imposed against the Indemnified Party or such judgment
or settlement could materially interfere with the business, operations
or assets of the Indemnified Party;
(iii) if the Indemnifying Party does not assume
control of the defense of such claim in accordance with the foregoing
provisions within 10 days after receipt of notice of the claim, the
Indemnified Party shall have the right to defend such claim in such
manner as it may deem appropriate at the cost and expense of the
Indemnifying Party, and the Indemnifying Party will promptly reimburse
the Indemnified Party therefor in accordance with this Article VI,
provided that without the prior written consent of the Indemnifying
Party the Indemnified Party shall not be entitled to consent to the
entry of any judgment or enter into any settlement (A) if such consent
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or settlement does not include as an unconditional term thereof the giving
by each claimant or plaintiff to each Indemnifying Party of a release from
all liability in respect of such claim or (B) if as a result of such
consent or settlement injunctive or other equitable relief would be imposed
against the Indemnifying Party or such judgment or settlement could
materially interfere with the business operations or assets of the
Indemnifying Party; and
(iv) the Indemnified Party shall make available
to the Indemnifying Party and its attorneys, accountants and other
representatives all books and records in its possession relating to
such claim and the parties shall otherwise render each other
assistance as may be reasonably requested to ensure the proper and
adequate defense to the claim.
(e) REMEDIES CUMULATIVE. Subject to Section 10.12, the remedies
provided herein shall be cumulative and shall not preclude assertion by any
party of any rights or the seeking of any other remedies against any other
party.
(f) DISCLOSURE. Except as otherwise provided herein, no action
by an Indemnified Party to determine the extent of indemnified liability,
including, without limitation, voluntary disclosure to Authorities or potential
claimants, shall in any way affect such Indemnified Party's right to
indemnification from the Indemnifying Party.
(g) SUBROGATION. In connection with any indemnity payment
hereunder, an Indemnifying Party shall not be entitled to require that any
action be brought against any third party before an action is brought against
the Indemnifying Party hereunder by an Indemnified Party but, to the extent of
such payment, the Indemnifying Party shall be subrogated to any such right of
action of the Indemnified Party against any third party (other than any third
party insurer) in respect of the Loss to which such payment relates; provided,
however, that until the Indemnified Party recovers full payment of such Loss,
any claims of the Indemnifying Party against any such third party are hereby
made expressly subordinated and subject, in right of payment, to the Indemnified
Party's rights against such third party.
(h) NO DUPLICATION OF REMEDIES. If a party is entitled to
indemnification under more than one provision of this Agreement for the same
Loss, it shall be entitled to only a single recovery for such Loss, or, if
applicable, such Loss
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shall only be taken into account once in the calculation of the $3.75 million
threshold amount set forth in Section 6.4(a).
(i) CERTAIN EMPLOYEE BENEFITS REPRESENTATIONS. Statements in
Sections 5.4, 5.5 and 5.6 hereof which use the word "represent" and derivations
thereof (the "ARTICLE V REPRESENTATIONS") shall be deemed "representations" for
purposes of Section 6.3(i) hereof (if made by Seller) and Section 6.2(i) hereof
(if made by Ball or Buyer). Notwithstanding the foregoing, any provision of
Sections 5.4, 5.5 and 5.6 that expressly provides for indemnification or
reimbursement of any party shall not be subject to the limitations contained in
Section 6.4(a) hereof.
Section 6.5 ENVIRONMENTAL INDEMNIFICATION.
(a) Without regard to whether any breach of a representation or
warranty is involved, subject to the limits set forth in Section 6.5(b) and the
provisions of Exhibit 6.5, Seller shall indemnify and hold harmless Ball and
Buyer against Losses (as calculated herein) arising out of any Environmental
Condition existing at the Business Locations, to the extent attributable to any
condition existing at or before the Closing or event occurring at or before the
Closing, (i) that, as of the Closing, constitutes a violation of applicable
Environmental Law or (ii) with respect to which there is liability for Cleanup
before or after the Closing under applicable Environmental Law in effect as of
the Closing, any such Loss being referred to herein as an "ENVIRONMENTAL LOSS."
(b) With respect to Environmental Losses relating to matters
that are initially asserted:
(i) on or before the third anniversary of
Closing, Seller shall be responsible for 100% of the Loss;
(ii) on or before the fourth anniversary of
Closing, Seller shall be responsible for 80% of the Loss;
(iii) on or before the fifth anniversary of
Closing, Seller shall be responsible for 60% of the Loss; and
(iv) on or before the date five years and six
months after the Closing, Seller shall be responsible for 40% of the
Loss.
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Notwithstanding any provision hereof to the contrary, with regard to matters
initially asserted after the date five years and six months after the Closing,
Seller shall have no responsibility pursuant to this Agreement for any Loss
under any Environmental Law other than for any Offsite Obligations.
(c) All claims for indemnification under either Section 6.3 (i)
(with respect to a breach of Section 2.19 relating to matters located on the
Business Locations) or this Section 6.5 with respect to Environmental Laws shall
be subject to the provisions of this Section 6.5 and the provisions of Exhibit
6.5.
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATION
The obligation of Seller to consummate the sale of the Business, the
Business Assets and the Shares pursuant to this Agreement shall be subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions, unless waived in writing by Seller:
Section 7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties contained in Article III and in all certificates and other
documents delivered by Ball or Buyer to Seller pursuant to this Agreement shall
be true, complete and correct in all material respects as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of another date) as of the Closing Date as though such representations and
warranties were made on and as of such date, except for changes expressly
contemplated by the terms of this Agreement.
Section 7.2 PERFORMANCE. Ball and Buyer shall have performed and
complied in all material respects with all agreements, obligations and
conditions required by this Agreement to be performed or complied with by Ball
and Buyer or both, as the case may be, at or before the Closing.
Section 7.3 NO INJUNCTION, LITIGATION, ETC. On the Closing Date,
there shall be no injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction directing that the
transactions provided for in this Agreement or any of them not be consummated as
so provided. No order of any Authority shall be in effect which restrains or
prohibits the consum-
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mation of the transactions contemplated by this Agreement, and there shall not
have been threatened, nor shall there be pending, any action or proceeding in
any such court or before any such governmental agency seeking to prohibit or
delay, or challenging the validity of, the transactions contemplated by this
Agreement.
Section 7.4 STOCKHOLDER'S AGREEMENT. If any Ball Shares are issued
pursuant hereto, Ball shall have executed and delivered the Stockholder's
Agreement.
Section 7.5 LEGAL OPINION. Ball shall have furnished Seller with a
legal opinion from its general counsel substantially in the form set forth in
Exhibit 7.5.
Section 7.6 HSR ACT WAITING PERIODS. All waiting periods applicable
to this Agreement and the transactions contemplated hereby under the HSR Act
shall have expired or been terminated.
Section 7.7 CERTIFICATES. Ball and Buyer shall have furnished Seller
with such certificates of their officers to evidence compliance with the
conditions set forth in this Article VII as may be reasonably requested by
Seller, including, without limitation, a certificate as to the effectiveness of
attached resolutions authorizing execution by Ball and Buyer of this Agreement
and the Stockholder's Agreement and the consummation by Ball and Buyer of the
transactions contemplated hereby.
Section 7.8 CONSENTS. Those consents of third parties identified in
Section 7.8 of the Disclosure Schedule shall have been obtained.
ARTICLE VIII
CONDITIONS TO BUYER'S OBLIGATION
The obligation of Ball and Buyer to consummate the purchase of the
Business, the Business Assets and the Shares pursuant to this Agreement shall be
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, unless waived in writing by Ball and Buyer:
Section 8.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties contained in Article II hereof, the Disclosure Schedule and in
all certificates and other documents delivered by Seller to Ball or Buyer
pursuant to this
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Agreement shall be true, complete and correct in all material respects as of the
date of this Agreement and (except to the extent such representations and
warranties speak as of another date) as of the Closing Date as though such
representations and warranties were made on and as of such date, except for
changes expressly contemplated by the terms of this Agreement.
Section 8.2 PERFORMANCE. Seller shall have performed and complied in
all material respects with all agreements, obligations and conditions required
by this Agreement to be performed or complied with by Seller at or before the
Closing.
Section 8.3 NO INJUNCTION, LITIGATION, ETC. On the Closing Date,
there shall be no injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction directing that the
transactions provided for in this Agreement or any of them not be consummated as
so provided. No order of any Authority shall be in effect which restrains or
prohibits the consummation of the transactions contemplated by this Agreement,
and there shall not have been threatened, nor shall there be pending, any action
or proceeding in any such court or before any such governmental agency seeking
to prohibit or delay, or challenging the validity of, the transactions
contemplated by this Agreement.
Section 8.4 GOVERNMENTAL FILINGS AND CONSENTS; THIRD PARTY CONSENTS.
All governmental filings or consents required to be made or obtained prior to
the Closing Date by Seller in connection with the execution and delivery of this
Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby shall have been made or obtained. All
authorizations, consents and approvals of any third party (other than an
Authority) required in connection with the execution and delivery of this
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby which are material to the operation of the Business or the
consummation by Seller of the transactions contemplated hereby (including those
expressly set forth in Section 8.4 of the Disclosure Schedule) shall have been
obtained.
Section 8.5 STOCKHOLDER'S AGREEMENT. If any Ball Shares are issued
pursuant hereto, Seller shall have executed and delivered the Stockholder's
Agreement.
Section 8.6 HSR ACT WAITING PERIODS. All waiting periods applicable
to this Agreement and the transactions contemplated hereby under the HSR Act
shall have expired or been terminated.
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Section 8.7 NO MATERIAL ADVERSE CHANGE. Since December 31, 1997, no
condition, event, change or occurrence, or any series of the foregoing, shall
exist or shall have occurred which, individually or in the aggregate, has had,
or is reasonably likely to have, a Material Adverse Effect.
Section 8.8 CERTIFICATES. Seller shall have furnished Buyer with
such certificates of its officers and others to evidence compliance with the
conditions set forth in this Article VIII as may be reasonably requested by
Buyer, including, without limitation, certificates as to the effectiveness of
attached resolutions authorizing execution by Seller of this Agreement and the
Stockholder's Agreement and the consummation by Seller of the transactions
contemplated hereby.
Section 8.9 FINANCING CONDITIONS. The conditions set forth in
clauses (i), (ii) and (iii) of the fourth paragraph of the Commitment
(commencing at the end of page two thereof and continuing on the top of page
three thereof) Letter and under the heading "Conditions Precedent - Due
Diligence" on the Term Sheet attached thereto (the "DUE DILIGENCE CONDITION")
shall have been satisfied; provided that, only with respect to the condition set
forth in clause (i) of the fourth paragraph of the Commitment Letter (the
"DOCUMENTATION CONDITION") and the Due Diligence Condition, the condition set
forth in this Section 8 shall expire and be of no further effect at the close of
business on the 45th day after the date hereof.
Section 8.10 ACTIONS BY SELLER. Seller shall have completed all of
the actions described in Annex 8.10.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 METHODS OF TERMINATION. This Agreement and the
transactions contemplated herein may be terminated and abandoned at any time
prior to the Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by either Buyer or Seller if the Closing shall not have
occurred on or before December 31, 1998;
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(c) by either Seller or Buyer if any court of competent
jurisdiction in the United States or other Authority shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby, and such order, decree or
ruling or other action shall have become final and nonappealable after the
affected party or parties have made all reasonable efforts to contest and appeal
the issuance of such order, decree, ruling or other action;
(d) by either Buyer or Seller (provided that the terminating
party is not then in material breach of any representation, warranty or covenant
in this Agreement) if there shall have been a material breach of any of the
representations, warranties or covenants in this Agreement on the part of the
other party, which breach is not cured within 30 days following written notice
to the party committing such breach, or which breach, by its nature, cannot be
cured prior to Closing; and
(e) by Buyer on the next business day following the 45th day
after the date hereof if either the Documentation Condition or the Due Diligence
Condition has not been satisfied on or before such 45th day.
Section 9.2 PROCEDURE UPON TERMINATION. In the event of termination
and abandonment of this Agreement pursuant to Section 9.1 hereof, written notice
thereof shall forthwith be given to the other party, and the transactions
contemplated by this Agreement shall be terminated and abandoned. If the
transactions contemplated by this Agreement are so terminated and abandoned:
(a) each party, if requested, will redeliver all documents, work
papers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same;
(b) all confidential information received by Seller with respect
to Ball or Buyer or their Affiliates shall be treated in accordance with the
Confidentiality Agreement and Section 5.9 hereof;
(c) all confidential information received by Ball or Buyer with
respect to Seller or its Affiliates shall be treated in accordance with the
Confidentiality Agreement and Section 5.9 hereof;
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(d) notwithstanding any such termination, Sections 5.9, 9.2,
10.3 and 10.12 shall remain in full force and effect; and
(e) no party and none of its respective directors, officers,
Affiliates or agents shall have any liability to the other parties to this
Agreement or the Ancillary Agreements as a result of the transactions
contemplated hereby or thereby, except for the willful breach of this Agreement
or any breach of the provisions of this Agreement that survive such termination
pursuant to Section 9.2(d).
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 AMENDMENT AND MODIFICATION. This Agreement may be
amended, modified and supplemented only by written agreement of Seller, Ball and
Buyer.
Section 10.2 WAIVER OF COMPLIANCE. Any failure of Seller on the one
hand, or Ball and Buyer on the other, to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by an
authorized representative of Buyer or Seller, respectively, but such waiver or
failure to insist upon compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
Section 10.3 EXPENSES, ETC. Except as otherwise set forth herein,
whether or not the transactions contemplated by this Agreement shall be
consummated, the fees and expenses incurred by a party in connection with this
Agreement shall be borne by such party.
Section 10.4 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or sent by overnight courier
or telecopy (and promptly confirmed by certified mail, return receipt
requested):
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(a) if to Seller, to:
Reynolds Metals Company
6601 West Broad Street
Richmond, Virginia 23230
Attention: General Counsel
Telecopier: (804) 281-3740
and a copy to:
McGuire, Woods, Battle & Boothe, LLP
One James Center
901 E. Cary Street
Richmond, Virginia 23219-4030
Attention: Marshall H. Earl, Jr., Esq.
Telecopier: (804) 698-2044
or to such other person or address as Seller shall furnish to Ball and Buyer in
writing.
(b) if to Ball or Buyer, to:
Ball Corporation
Ball Metal Beverage Container Corp.
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Attention: General Counsel
Telecopier: (303) 460-2691
and a copy to:
Skadden, Arps, Slate, Meagher &
Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
Attention: Charles W. Mulaney, Jr.
Telecopier: (312) 407-0411
or to such other person or address as Ball or Buyer shall furnish to Seller in
writing.
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Section 10.5 ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party without the prior written consent of the other party, except by operation
of law and except that Buyer may assign its rights under this Agreement, in
whole or in part, to Ball or any direct or indirect wholly-owned subsidiary or
subsidiaries of Ball.
Section 10.6 PUBLICITY. Neither Seller nor Ball and Buyer shall make
any announcement or statement concerning this Agreement or the transactions
contemplated hereby to the general public or Seller's Employees without the
prior consent of the other party. This provision shall not apply, however, to
any announcement or written statement required to be made by law or the
regulations of any federal or state governmental agency, except that the party
required to make such announcement shall, whenever practicable, consult with the
other party concerning the timing and content of such announcement before such
announcement is made.
Section 10.7 GOVERNING LAW. This Agreement and the legal relations
among the parties shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to its conflicts of law doctrine.
Section 10.8 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 10.9 HEADINGS. The headings of the Sections and Articles of
this Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
Section 10.10 ENTIRE AGREEMENT. This Agreement, including the
Annexes and Exhibits hereto, the Disclosure Schedule, the Ancillary Agreements,
the other documents and certificates delivered pursuant to this Agreement and
the Confidentiality Agreement set forth the entire agreement and understanding
of the parties in respect of the subject matter hereof and supersede all prior
agreements, representations or warranties, whether oral or written, by any party
unless a contrary intention is indicated by a specific reference to this clause
in any such written agreement.
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Section 10.11 THIRD PARTIES. Except as specifically referred to
herein, nothing herein shall be construed to give to any Person other than the
parties and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
Section 10.12 DISPUTE RESOLUTION.
(a) Except as otherwise provided in this Agreement or any
Ancillary Agreement, including by way of example Exhibit 6.5, all disputes,
controversies or claims (a "DISPUTE") arising between Seller on the one hand,
and Buyer, Ball or their Designees, on the other hand, arising out of or
relating to this Agreement and the subject matter hereof, will be settled as
provided herein. The parties may by written agreement modify the specified time
limitations and procedures.
(b) The parties shall promptly attempt to resolve any Dispute by
negotiation. If a Dispute is not resolved by negotiations in the normal course
of business, and a party wishes to pursue the matter further, it shall give the
other party written notice requesting "HIGHER LEVEL EXECUTIVE NEGOTIATIONS."
Specifically, Executives of both parties at levels one step above the personnel
who have previously been involved in the Dispute shall meet at a mutually
acceptable time and place in Chicago, Illinois (or such other place as the
parties mutually agree), within 15 calendar days after giving such notice, and
thereafter as often as they reasonably deem necessary, to attempt to resolve the
Dispute.
(c) If a Dispute has not been resolved by Higher Level Executive
Negotiations within 30 calendar days of the claiming party's giving notice, and
the claiming party wishes to pursue the matter further, it shall give the
responding party written notice requesting a "SENIOR EXECUTIVE ABBREVIATED
MINI-TRIAL," as described in this Section 10.12(c). The Dispute shall be
referred to senior executives of the parties who have authority to settle the
dispute. The senior executives shall meet at a time and place in Chicago,
Illinois (or such other place as the parties mutually agree), mutually agreed
upon within 15 calendar days after such notice requesting a Senior Executive
Abbreviated Mini-Trial. The claiming party will make a presentation of its
position to the senior executives. The presentation will not exceed one hour in
length. The responding party will then make its presentation, not to exceed one
hour in length. The claiming party may make a rebuttal not to exceed 20 minutes
in length. The responding party may make an answer to the rebuttal not to
exceed 20 minutes in length. The presentations of the parties may be made by
counsel or other persons designated by the senior executives. When the
presenta-
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tions have been concluded, the senior executives will discuss the matter
privately. In preparation for the meeting, a senior executive may make a
non-binding request to the other party to provide limited information believed
to be important and significant in achieving a resolution. The senior
executives may also involve a mediator if they mutually agree. Unless the
parties otherwise agree, any such mediator will be appointed by the Center for
Public Resources, New York, New York, a not-for-profit dispute resolution
organization.
(d) If any Dispute is not resolved by the foregoing dispute
resolution processes, the parties shall resolve such Dispute exclusively by
litigation; provided, however, that neither party shall commence litigation
until (i) Higher Level Executive Negotiations and the Senior Executive
Abbreviated Mini-Trial have been conducted in accordance with this dispute
resolution provision, (ii) the time specified for such (together with any
additional time the parties have agreed upon) has expired or (iii) a party has
breached its obligation to participate in the pre-litigation dispute resolution
process. The parties agree to use all reasonable efforts to expedite any such
litigation with respect to a Dispute.
(e) For all claims that are resolved by litigation, the
prevailing party, to the extent it prevails on its claims, will be entitled to
its attorneys' and experts' fees and disbursements incurred in resolving the
dispute (including those of in-house counsel and experts) and any other expense
directly related to the dispute.
(f) For all claims that are resolved by litigation, interest on
any claim that is determined to be payable will accrue from the time the claim
is originally made at an interest rate per annum equal to the Prime Rate in
effect from time to time.
(g) For all claims that are resolved by litigation, the parties
consent to the exclusive jurisdiction of any state or federal court located in
Delaware and irrevocably agree that all such actions or proceedings arising out
of or related to this Agreement shall be litigated in such courts. Each party
accepts for itself and in connection with its respective properties, generally
and unconditionally, the exclusive jurisdiction and venue of the aforesaid
courts and waives any defense of forum non conveniens, and irrevocably agrees to
be bound by any nonappealable judgement rendered in connection with this
Agreement. THE PARTIES EXPRESSLY WAIVE THEIR RIGHTS TO A TRIAL BY JURY.
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(h) Notwithstanding anything to the contrary contained herein,
and in addition to any other remedy available to such party, Seller, Ball or
Buyer may seek provisional or permanent equitable relief to enforce the
provisions of this Agreement and remedy any breach hereof, including, without
limitation, temporary restraining orders and preliminary or permanent
injunctions, in addition to the other remedies set forth herein.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
BALL CORPORATION
By: /s/ R. David Hoover
--------------------------------------------
Name: R. David Hoover
Title: Vice Chairman and Chief Financial
Officer
BALL METAL BEVERAGE CONTAINER CORP.
By: /s/ George A. Matsik
--------------------------------------------
Name: George A. Matsik
Title: Chairman and Chief Executive
Officer
REYNOLDS METALS COMPANY
By: /s/ D. Michael Jones
--------------------------------------------
Name: D. Michael Jones
Title: Senior Vice President and General
Counsel
<PAGE>
ANNEX A
DEFINED TERMS
"AFFILIATE(S)" means, with respect to any Person, (i) an entity of
which such Person is a direct or indirect subsidiary, (ii) a direct or indirect
subsidiary of such Person or (iii) a Person that controls, is controlled by or
is under common control with such Person, provided that Latasa shall not be
deemed to be an Affiliate of Seller.
"CLEANUP" means all actions required by any Authority or under any
Environmental Law to contain or otherwise ameliorate an Environmental Condition,
including preventing a Release and performing preremedial studies and
investigations and postremedial monitoring and care.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COPYRIGHTS" means all registered and unregistered copyrights
(including, without limitation, copyrights in software and databases) and
registrations and applications for copyright registration, all rights of
authorship therein, and all rights to sue for past infringement thereof.
"DESIGNEE" means a direct or indirect wholly-owned subsidiary of Ball
or Buyer whose specific obligations Ball guarantees in accordance with Section
5.12.
"ENVIRONMENT" means ambient air, surface water, groundwater, land
surface or land subsurface.
"ENVIRONMENTAL CONDITION" means any condition existing at any Business
Location (or at any nearby property as a result of migration through the air,
soil, groundwater or stormwater run-off from a Business Location) to the extent
(i) resulting from a Release of any Hazardous Substance into the Environment or
(ii) resulting from the violation of or noncompliance with any Environmental
Law.
"ENVIRONMENTAL LAWS" means all Laws and standards applicable to Seller
or the Business Locations relating to pollution or protection of the
Environment, including, without limitation, Laws relating to Releases or
threatened Releases of Hazardous Substances into the Environment or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
Release, transport or handling of
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<PAGE>
Hazardous Substances and all Laws with regard to record keeping, notification,
disclosure and reporting requirements respecting Hazardous Substances.
"ENVIRONMENTAL PERMITS" means licenses, permits, approvals,
applications and authorizations from any Authority, whether federal, state or
local, domestic or foreign, which are required under or issued under
Environmental Laws.
"HAZARDOUS SUBSTANCES" means pollutants, contaminants, pesticides,
petroleum and petroleum products, polychlorinated biphenyl ("PCBS"), asbestos,
any "hazardous substance" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act, 41 U.S.C. Section 9601, ET SEQ., as
amended and reauthorized ("CERCLA"), any "hazardous waste" as defined in the
Resource Conservation and Recovery Act ("RCRA").
"KNOWLEDGE OF SELLER" means the knowledge, both actual knowledge and
knowledge that should be known in the ordinary course of their duties, of the
following persons employed by Seller or its Affiliates:
William E. Leahey, Jr.* Senior Vice President, Global Cans
D. Michael Jones Senior Vice President and General
Counsel
Edmund H. Polonitza Vice President, Planning & Development
F. Robert Newman Vice President, Human Resources
Chuck D. McLane, Jr. Director, Financial Reporting &
Analysis
C. S. Weidman Director, Employee Relations
Homer M. Cole Director, Health and Safety
Cathy C. Taylor Director, Environmental Quality
F. R. Ellsworth Director, Real Estate & Administrative
Services
Lucile J. Anutta Senior Employee Benefits Counsel
Donna C. Dabney Secretary and Assistant General Counsel
Edwin A. Harper Senior Division Counsel
Patrick R. Laden Chief Labor Counsel
Robert C. Lyne, Jr. Senior Patent Counsel
James E. McKinnon Chief Environmental Counsel
E. Michael Lewandowski* Director, Finance & Administration
C. Griffin Jones* Director, Manufacturing
Roger H. Donaldson* Director, Technology
Cornell D. Ward* Director, Human Resources
Paul G. Cobbledick* Director, Sales and Marketing
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Paulo R. Rochet* Director, Business Development
Thomas P. Mackell* Director, Materials Management
Managers, Can and End Plants*
*Global Can Business employees
"MACHINERY TECHNOLOGY" means all technical information and know-how,
confidential or non-confidential, inventions, whether patented or unpatented,
and trade secrets, including, without limitation, all information and know-how
related to increasing manufacturing efficiency and profitability, patterns,
plans, designs, research data, formulae, manufacturing, sales, service or other
processes, operating manuals, drawings, equipment and parts lists (with related
descriptions and instructions), manuals, data, records, procedures, packaging
instructions, product specifications, analytical methods, sources and
specifications for raw materials, manufacturing and quality control procedures,
toxicity and health and safety information, environmental compliance and
regulatory information, research and development records and reports and other
documents relating to the foregoing including the contents of any invention
disclosures and open invention dockets for which no patent application has been
filed, in each case to the extent the foregoing relates exclusively or primarily
to the Machinery Operations.
"MATERIAL ADVERSE EFFECT" means an individual or cumulative adverse
change in, or effect on, the business, customers, operations, properties,
condition (financial or otherwise), assets or liabilities of the Business taken
as a whole that is reasonably expected to be materially adverse to the business,
customers, operations, properties, condition (financial or otherwise), assets or
liabilities of the Business taken as a whole.
"PATENTS" means all patents, patent applications and related patent
rights, including all reissues, divisionals, continuations and
continuations-in-part, extensions, all improvements thereon and all rights to
sue for past infringement thereof.
"PERMITS" means licenses, permits, consents, approvals, applications,
product registrations and authorizations from any Authority, whether federal,
state or local, domestic or foreign, other than Environmental Permits,
including, without limitation, licenses, permits or approvals from, and
registrations with, U.S. Equal Employment Opportunity Commission ("EEOC"), U.S.
Occupational Safety and Health Administra-
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tion, U.S. Federal Trade Commission, U.S. Department of Justice, U.S. Department
of Commerce, U.S. Department of Transportation, U.S. Food and Drug
Administration, U.S. Department of Agriculture or Authorities responsible for
the administration of workers' compensation laws.
"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.
"RELEASE" means any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the Environment of any Hazardous Substances not including any
such action which results in exposure to employees solely within a work place or
omissions from the engine or exhaust of a motor vehicle, rolling stock or
vessel.
"SECTION 338 ELECTIONS" means both a Section 338(g) Election and a
Section 338(h)(10) Election.
"SECTION 338(g) ELECTION" means an election described in section
338(g) of the Code or deemed election described in section 338(e) of the Code.
The Term "Section 338(g) Election" shall also include any substantially similar
elections under a state or local statute corresponding to federal Laws.
"SECTION 338(h)(10) ELECTION" means an election described in section
338(h)(10) of the Code. The Term "Section 338(h)(10) Election" shall also
include any substantially similar election under a state or local statute
corresponding to federal Laws.
"SECTION 338 FORMS" shall mean all returns, documents, statements, and
other forms that are required to be submitted to any federal, state, county, or
other local Taxing Authority in connection with a Section 338(g) Election or a
Section 338(h)(10) Election. Section 338 Forms shall include, without
limitation, any "statement of section 338 election" and United States Internal
Revenue Service Form 8023 (together with any schedules or attachments thereto)
that are required pursuant to Treas. Reg. Section 1.338-1 or Treas. Reg. Section
1.338(h)(10)-1.
"TAX LAWS" means the Code and any other Laws relating to Taxes and any
official administrative pronouncements released thereunder.
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"TAX RETURN(S)" means any return, report, information return or other
document (including any related or supporting information and any amendment to
any of the foregoing) filed or required to be filed with any Taxing Authority
with respect to Taxes.
"TAXING AUTHORITY" means any domestic or foreign governmental
authority responsible for the imposition, collection or administration of any
Tax.
"TECHNOLOGY" means all technical information and know-how,
confidential or non-confidential, inventions, whether patented or unpatented,
and trade secrets, including, without limitation, all information and know-how
related to increasing manufacturing efficiency and profitability, patterns,
plans, designs, research data, formulae, manufacturing, sales, service or other
processes, operating manuals, drawings, equipment and parts lists (with related
descriptions and instructions), manuals, data, records, procedures, packaging
instructions, product specifications, analytical methods, sources and
specifications for raw materials, manufacturing and quality control procedures,
toxicity and health and safety information, environmental compliance and
regulatory information, research and development records and reports and other
documents relating to the foregoing including the contents of any invention
disclosures and open invention dockets for which no patent application has been
filed, in each case to the extent the foregoing relates exclusively or primarily
to the Business.
"TRADEMARKS" means all common law and registered trademarks, service
marks, logos, trade dress and trade names, the goodwill of the business
symbolized thereby, other business, product or service identifiers and all
registrations and applications for registration of the foregoing and all rights
to sue for past infringement or dilution thereof.
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The following terms shall have the definitions contained in the sections of
the Asset Purchase Agreement identified below:
<TABLE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
<S> <C>
Absent Nonrepresented Hourly Employees 5.5(b)
Absent Represented Employees 5.4(a)
Absent Salaried Employees 5.5(c)
Accounts Receivable 1.1(h)
Acquisition Proposal 4.5(a)(i)
Act 2.24(i)
Adverse Effect 4.4(b)
Affiliate(s) Annex A
Aggregate Deemed Sales Price 5.7(d)
Agreement Preamble
Agreement Regarding Performance of Technical Services 1.7(c)(viii)
Ancillary Agreements 1.7(d)
Article V Representations 6.4(i)
Assignment and Assumption Agreement 1.7(c)(ii)
Assignment and Assumption of Leases 1.7(b)(ix)
Assumed Benefit Plan(s) 5.4(g)(xii)
Assumed Liabilities 1.3(a)
Audited Balance Sheet 1.5(a)
Audited Financial Statements 5.13(a)
Audited Latasa 1997 Financial Statements 5.13(b)
Authority 2.5
Ball Preamble
Ball SEC Reports 3.5
Ball Shares 1.4
Bill of Sale 1.7(b)(ii)
Business Preamble
Business Assets 1.1
Business Information 1.1(d)
Business Locations 1.1(a)
Buyer Preamble
Buyer's SUB Plan 5.4(c)
Buyer's Welfare Plans 5.5(f)(ii)
Cade 2.6
Cash Price 1.4
CERCLA Annex A
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<PAGE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
Cleanup Annex A
Closing 1.1
Closing Date 1.7(a)
Closing Period 5.7(g)
Closing Statement 1.5(a)
Code Annex A
Collective Bargaining Agreements 2.20(a)
Commitment Letter 3.9
Confidentiality Agreement 5.9(a)
Contracts 2.14(a)
Copyrights Annex A
Cross-License Agreement 1.7(d)(ix)
Data Processing Services Agreement 1.2(t)
Defined Benefit Single Location Plans 5.4(g)(i)
Defined Contribution Single Location Plans 5.4(g)(i)
Designated Value 1.4
Designee Annex A
Differential 1.10(b)
Disclosure Schedule 2.1
Dispute 10.12(a)
Documentation Condition 8.9
Domestic Subsidiary Securities 2.25(a)
Due Diligence Condition 8.9
EEOC Annex A
Employee Benefits Data 5.5(a)
Employee Lists 5.5(a)
employment loss 2.20(j)
Encumbrances 2.11
Environment Annex A
Environmental Condition Annex A
Environmental Laws Annex A
Environmental Loss 6.5(a)
Environmental Permits Annex A
Equipment 1.1(b)
ERISA 2.21(a)
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<PAGE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
ERISA Affiliate 2.21(a)
Exchange Act 3.5
Excluded Assets 1.2
Excluded Liabilities 1.3(b)
Extended Seconded Employees 5.6(a)(i)
Extrusion Land 1.10(a)
Expiration Date 6.1
FICA 5.6(d)
Filed Intellectual Property 1.7(b)
Final Closing Statement 1.5(b)
Financing 3.9
FMLA 5.4(a)
FUTA 5.6(d)
GAAP 1.5(a)
Guaranteed Pension Asset Value 5.4(g)(vi)
Hazardous Substances Annex A
Headquarter Employees 5.5(c)
Higher Level Executive Negotiations 10.12(b)
HSR Act 2.6
Human Resources Services Agreement 1.7(d)(xi)
Inadvertently Retained Information 5.17
Incentive Loan Agreement 1.7(d)(iv)
Indemnified Party 6.4(c)
Indemnifying Party 6.4(c)
Initial Document Production 5.4(g)(ii)
Intellectual Property Rights 1.1(c)
Interim Financial Statements 2.7(b)
Interplant Transfer Provisions 5.4(b)
Inventory 1.1(g)
Inventory Carrying Value 1.5(d)
Knowledge of Seller Annex A
LAR Preamble
Latasa Preamble
Latasa Agreements 1.1(f)
Latasa Offering Statement 2.27
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<CAPTION>
DEFINED TERM SECTION
------------ -------
Latasa Subsidiaries 2.25(c)
Law(s) 2.5
Leased Premises 1.1(a)
Loss(es) 6.2
Machinery Operations Preamble
Machinery Technology Annex A
Master Trust 5.4(g)(v)
Master Trustee 5.4(g)(v)
Material Adverse Effect Annex A
Modified Aggregate Deemed Sale Price 5.7(d)
Neutral Auditor 1.5(c)
Non-Exclusive Contract(s) 1.1(j)
Non-Exclusive Permit(s) 1.1(e)
Offset 5.4(f)
Offsite Obligations 1.3(b)(v)
Option 1.10(e)
Owned Real Property 1.1(a)
Parcel 1.10(a)
Patents Annex A
Payroll Services Agreement 1.7(d)(vi)
PCBs Annex A
Permanent Shutdown 5.4(h)
Permits Annex A
Permitted Exceptions 4.4(b)
Person Annex A
Plan(s) 2.21(a)
Plant Land 1.10(a)
Plant Salaried Employees 5.5(c)
Post-Retirement Eligible Employees 5.5(f)(i)
Pre-Closing Period 5.7(g)
Prime Rate 1.5(e)
Purchase Price 1.4
RCAL Preamble
RCRA Annex A
Real Property Leases 1.1(a)
A-9
<PAGE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
Release Annex A
Replacement Plan 5.4(f)
Represented Employees 5.4(a)
Resolution Period 1.5(b)
Retained Contracts 1.2(f)
Reynolds Marks 1.2(k)
RIB Preamble
RILA Preamble
RIND Preamble
SEC 3.5
Seconded Employees 5.6(a)(i)
Section 338 Elections Annex A
Section 338(g) Election Annex A
Section 338(h)(10) Election Annex A
Section 338 Forms Annex A
Selection Period 5.6(a)(i)
Seller Preamble
Seller Employee(s) 5.5(a)
Seller Nonrepresented Hourly Employees 5.5(b)
Seller Salaried Employees 5.5(c)
Seller's Plans 5.4(b)
Seller's Welfare Plans 5.5(f)
Senior Executive Abbreviated Mini-Trial 10.12(c)
Shares 1.1
Siberian Aluminum 5.8(a)(i)
Single Location Plans 5.4(g)(i)
Special Retirement Benefit 5.4(f)(ii)
Stockholder's Agreement Preamble
Subdivision 1.10(a)
Supply Program Agreement 1.7(d)(iii)
SVE Preamble
SVE Technical Services Agreement 2.29
Tax Laws Annex A
Tax Return(s) Annex A
Taxes 1.3(b)(i)
A-10
<PAGE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
Taxing Authority Annex A
Technology Annex A
Title Commitments 4.4(b)
Title Company 4.4(b)
Title Costs 4.4(b)
Title IV Plans 2.21(a)
Torrance Lease 1.10(a)
Trademarks Annex A
Trademark License Agreement 1.7(d)(viii)
Transferred Employee(s) 5.5(a)
Transferred Nonrepresented Hourly Employees 5.5(b)
Transferred Represented Employees 5.4(a)
Transferred Salaried Employees 5.5(c)
Transition Services Agreement 1.7(d)(v)
Transitional Trademark License Agreement 1.7(d)(ii)
Transportation Services Agreement 1.7(d)(x)
UAC Preamble
Unaudited Financial Statements 2.7(a)
Unaudited Latasa Financial Statements 2.28
Union Pension Plans 5.4(f)
Valuation Date 5.4(g)(vi)
WARN Act 2.20(j)
Welfare Benefits 5.5(f)(ii)
Working Capital 1.5(a)
</TABLE>
A-11
<PAGE>
EXHIBIT 5(a)
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- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of August 10, 1998
by and among
Ball Corporation
Subsidiary Guarantors Parties Hereto
and
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
BancAmerica Robertson Stephens
First Chicago Capital Markets, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of August 10, 1998, by and among Ball Corporation, an Indiana
corporation (the "COMPANY"),Ball Aerospace and Technologies Corp., a Delaware
corporation, Ball Asia Pacific Limited, a Colorado corporation, Ball Glass
Container Corporation, a Delaware corporation, Ball Holdings Corp., a
Delaware corporation, Ball Metal Beverage Container Corp., a Colorado
corporation, Ball Metal Food Container Corp., a Delaware corporation, Ball
Metal Packaging Sales Corp., a Colorado corporation, Ball Packaging Corp., a
Colorado corporation, Ball Plastic Container Corp., a Colorado corporation,
Ball Technologies Holdings Corp., a Colorado corporation, Ball Technology
Services Corporation, a California corporation, BG Holdings I, Inc., a
Delaware corporation, BG Holdings II, Inc., a Delaware corporation, Efratom
Holding, Inc., a Colorado corporation, Latas de Aluminio Reynolds, Inc., a
Delaware corporation, RCAL Cans, Inc., a Delaware corporation and RIND Cans,
Inc., a Delaware corporation (collectively, the "SUBSIDIARY GUARANTORS") and
Lehman Brothers Inc. ("LEHMAN BROTHERS"), Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("MERRILL LYNCH"), BancAmerica Robertson Stephens
("BANCAMERICA") and First Chicago Capital Markets, Inc. ("FIRST CHICAGO" and,
together with Lehman Brothers, Merrill Lynch and BancAmerica, the "INITIAL
PURCHASERS"), each of whom has agreed to purchase the Company's 7 3/4% Senior
Notes due 2006 (the "SENIOR NOTES") pursuant to the Purchase Agreement (as
defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
August 5, 1998, (the "PURCHASE AGREEMENT"), by and among the Company, the
Subsidiary Guarantors and the Initial Purchasers. In order to induce the
Initial Purchasers to purchase each tranche of the Series A Notes, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 2 of the
Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in
the City of New York, or in the city of the corporate trust office of the
Trustee, on which banks are authorized to close.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
BROKER-DEALER TRANSFER RESTRICTED SECURITIES: New Senior Notes
that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Senior Notes that such Broker-Dealer acquired for its own account as a result
of market making activities or other trading activities (other than Senior
Notes acquired directly from the Company or any of its affiliates).
CERTIFICATED SECURITIES: As defined in the Indenture.
CLOSING DATE: The date hereof.
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<PAGE>
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Senior Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture of New Senior Notes in the same
aggregate principal amount as the aggregate principal amount of Senior Notes
tendered by Holders thereof pursuant to the Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Senior Notes, each
Interest Payment Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company under the Act of
the New Senior Notes pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for New Senior Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such
Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Senior Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act.
GLOBAL NOTEHOLDER: As defined in the Indenture.
HOLDERS: As defined in Section 2 hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
INDENTURE: The Indenture, dated the Closing Date, among the
Company, the Subsidiary Guarantors and The Bank of New York, as trustee (the
"TRUSTEE"), pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with the terms
thereof.
INTEREST PAYMENT DATE: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
NEW SENIOR NOTES: The Company's 7 3/4% Senior Notes due 2006,
Series B, to be issued pursuant to the Indenture (i) in the Exchange Offer or
(ii) upon the request of any Holder of Senior Notes covered by a Shelf
Registration Statement, in exchange for such Senior Notes.
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<PAGE>
NOTES: The Senior Notes and the New Senior Notes.
PERSON: An individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political
subdivision thereof.
PROSPECTUS: The prospectus prepared pursuant to this Agreement and
included in a Registration Statement at the time such Registration Statement
is declared effective, as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including post-effective
amendments, and all material incorporated by reference into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date, each
Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
and the Subsidiary Guarantors relating to (a) an offering of New Senior Notes
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each
case, (i) which is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits
and material incorporated by reference therein.
RESTRICTED BROKER-DEALER: Any Broker-Dealer which holds
Broker-Dealer Transfer Restricted Securities.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the date
on which such Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Note is distributed to the
public pursuant to Rule 144 under the Act.
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration
in which securities of the Company are sold to an underwriter for reoffering
to the public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
3
<PAGE>
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have
been complied with), the Company and the Subsidiary Guarantors shall (i)
cause to be filed with the Commission no later than 90 days after the Closing
Date, the Exchange Offer Registration Statement, (ii) use its reasonable best
efforts to cause such Exchange Offer Registration Statement to become
effective no later than 150 days after the Closing Date, (iii) in connection
with the foregoing, (A) file all pre-effective amendments to such Exchange
Offer Registration Statement as may be reasonably necessary in order to cause
such Exchange Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all filings which
to the knowledge of the Company are necessary, if any, in connection with the
registration and qualification of the New Senior Notes to be made under the
Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of
the New Senior Notes to be offered in exchange for the Senior Notes that are
Transfer Restricted Securities and to permit sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers as contemplated by Section
3(c) below.
(b) The Company and the Subsidiary Guarantors shall use their
respective best efforts to cause the Exchange Offer Registration Statement to
be effective continuously, and shall keep the Exchange Offer open for a
period of not less than the minimum period required under applicable federal
and state securities laws to Consummate the Exchange Offer; PROVIDED,
HOWEVER, that in no event shall such period be less than 20 Business Days.
The Company and the Subsidiary Guarantors shall cause the Exchange Offer to
comply with all applicable federal and state securities laws. No securities
other than the Notes shall be included in the Exchange Offer Registration
Statement. The Company and the Subsidiary Guarantors shall use their
respective reasonable best efforts to cause the Exchange Offer to be
Consummated on or prior to 30 Business Days after the Exchange Offer
Registration Statement has become effective.
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Restricted Broker-Dealer who holds Senior Notes
that are Transfer Restricted Securities and that were acquired for the
account of such Broker-Dealer as a result of market-making activities or
other trading activities, may exchange such Senior Notes (other than Transfer
Restricted Securities acquired directly from the Company or any affiliate of
the Company) pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of each New Senior Subordinated Note
received by such Broker-Dealer in the Exchange Offer, which prospectus
delivery requirement may be satisfied by the delivery by such Broker-Dealer
of the Prospectus contained in the Exchange Offer Registration Statement.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers that the Commission may require in order to permit
such sales pursuant thereto, but such "Plan of Distribution" shall not name
any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer, except to the extent required by the Commission as a result of
a change in policy after the date of this Agreement.
4
<PAGE>
The Company and the Subsidiary Guarantors shall use their
respective reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Section 6(c) below to the extent necessary to ensure that it is
available for sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the date on which the Exchange Offer is Consummated.
The Company and the Subsidiary Guarantors shall promptly provide
sufficient copies of the latest version of such Prospectus to such Restricted
Broker-Dealers promptly upon request, at any time during such 180-day period
in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Company is not required to
file an Exchange Offer Registration Statement with respect to the New Senior
Notes because the Exchange Offer is not permitted by applicable law (after
the procedures set forth in Section 6(a)(i) below have been complied with) or
(ii) if any Holder of Transfer Restricted Securities shall notify the Company
within 20 Business Days following the Consummation of the Exchange Offer that
(A) such Holder was prohibited by law or Commission policy from participating
in the Exchange Offer or (B) such Holder may not resell the New Senior Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or
(C) such Holder is a Broker-Dealer and holds Senior Notes acquired directly
from the Company or one of its affiliates, then the Company and the
Subsidiary Guarantors shall (x) cause to be filed on or prior to 90 days
after the date on which the Company determines that it is not required to
file the Exchange Offer Registration Statement pursuant to clause (i) above
or 90 days after the date on which the Company receives the notice specified
in clause (ii) above a shelf registration statement pursuant to Rule 415
under the Act (which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "SHELF REGISTRATION STATEMENT")), relating to
all Transfer Restricted Securities the Holders of which shall have provided
the information required pursuant to Section 4(b) hereof, and shall (y) use
their respective commercially reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to 150 days after the
date on which the Company becomes obligated to file such Shelf Registration
Statement. If, after the Company has filed an Exchange Offer Registration
Statement which satisfies the requirements of Section 3(a) above, the Company
is required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer shall not be permitted under applicable federal
law, then the filing of the Exchange Offer Registration Statement shall be
deemed to satisfy the requirements of clause (x) above. Such an event shall
have no effect on the requirements of clause (y) above. The Company and the
Subsidiary Guarantors shall use their respective reasonable best efforts to
keep the Shelf Registration Statement discussed in this Section 4(a)
continuously effective, supplemented and amended as required by and subject
to the provisions of Sections 6(b) and (c) hereof to the extent necessary to
ensure that it is available for sales of Transfer Restricted Securities by
the Holders thereof entitled to the benefit of this Section 4(a), and to
ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time
to time, for a period of at least two years (as extended pursuant to Section
6(c)(i)) following the date on which such Shelf Registration Statement first
becomes effective under the Act.
5
<PAGE>
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Company in writing, within 10 Business Days after
receipt of a request therefor, such information specified in Item 507 of
Regulation S-K under the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required
to be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing
in this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 30 Business Days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective immediately (each such event referred to in clauses
(i) through (iv), a "REGISTRATION DEFAULT"), then the Company and the
Subsidiary Guarantors hereby jointly and severally agree to pay liquidated
damages to each Holder of Transfer Restricted Securities with respect to the
first 90-day period immediately following the occurrence of such Registration
Default, in an amount equal to $.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder for each week or portion
thereof that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000
in principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up
to a maximum amount of liquidated damages of $.50 per week per $1,000
principal amount of Transfer Restricted Securities. Notwithstanding anything
to the contrary set forth herein, (1) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (i) above, (2) upon the effectiveness of the
Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of
the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a
result of such clause (i), (ii), (iii) or (iv), as applicable, shall
immediately cease.
All accrued liquidated damages shall be paid to the Global Note
Holder by wire transfer of immediately available funds or by federal funds
check and to Holders of Certificated Securities by wire transfer to the
accounts specified by them or by mailing checks to their registered
addresses, if no such accounts have been specified, on each Damages Payment
Date. All obligations of the Company and the Subsidiary Guarantors set forth
in the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall
6
<PAGE>
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Subsidiary Guarantors shall comply with
all applicable provisions of Section 6(c) below, shall use their respective
reasonable best efforts to effect such exchange and to permit the sale of
Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
(i) If, following the date hereof there has been published a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, such that in the reasonable opinion of counsel to the
Company there is a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company and the Subsidiary
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Subsidiary
Guarantors to Consummate an Exchange Offer for such Senior Notes. The
Company and the Subsidiary Guarantors hereby agree to pursue the issuance
of such a decision to the Commission staff level. In connection with the
foregoing, the Company and the Subsidiary Guarantors hereby agree to take
all such other actions as are requested by the Commission or otherwise
required in connection with the issuance of such decision, including
without limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursuing a resolution (which need not be favorable) by
the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written
representation to the Company and the Subsidiary Guarantors (which may
be contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend
to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the New Senior Notes to be issued in
the Exchange Offer and (C) it is acquiring the New Senior Notes in its
ordinary course of business. Each Holder hereby acknowledges and agrees
that any Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated
in MORGAN STANLEY AND CO., INC. (available June 5, 1991) and EXXON
CAPITAL HOLDINGS CORPORATION (available May 13, 1988), as interpreted in
the Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above), and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary
resale transaction must be covered by an effective registration
statement containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K if the resales are of
New Senior Notes obtained by such
7
<PAGE>
Holder in exchange for Senior Notes acquired by such Holder directly
from the Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Subsidiary Guarantors shall, if requested by
the Commission, provide a supplemental letter to the Commission (A) stating
that the Company and the Subsidiary Guarantors are registering the Exchange
Offer in reliance on the position of the Commission enunciated in EXXON
CAPITAL HOLDINGS CORPORATION (available May 13, 1988), MORGAN STANLEY AND
CO., INC. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above, (B) including a representation that
neither the Company nor any Subsidiary Guarantor has entered into any
arrangement or understanding with any Person to distribute the New Senior
Notes to be received in the Exchange Offer and that, to the best of the
Company's and each Subsidiary Guarantor's information and belief, each
Holder participating in the Exchange Offer is acquiring the New Senior
Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the New
Senior Notes received in the Exchange Offer and (C) any other undertaking
or representation reasonably required by the Commission as set forth in any
no-action letter obtained pursuant to clause (i) above.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Subsidiary Guarantors shall
comply with all the provisions of Section 6(c) below and shall use their
respective reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Subsidiary Guarantors will prepare and
file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance
with the intended method or methods of distribution thereof within the time
periods and otherwise in accordance with the provisions hereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without
limitation, any Exchange Offer Registration Statement and the related
Prospectus, to the extent that the same are required to be available to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers), the Company and the Subsidiary Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not to
be effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Company and the
Subsidiary Guarantors shall file promptly an appropriate amendment to
such Registration Statement, (1) in the case of clause (A), correcting
any such misstatement or omission, and (2) in the case of clauses (A)
and (B), use their respective reasonable best efforts to cause such
amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for their intended purpose(s) as
soon as reasonably practicable thereafter.
8
<PAGE>
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Act, and to comply fully in all material respects
with Rules 424, 430A and 462, as applicable, under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, selling Holders named in
any Registration Statement or Prospectus ("Named Holders") and any
Restricted Broker-Dealer (whether or not named in the Registration
Statement) who has requested copies of the Prospectus pursuant to the last
paragraph of Section 3 hereof, or has otherwise identified itself as a
Restricted Broker-Dealer to the Company, promptly and, if requested by such
Persons, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the
Company and the Subsidiary Guarantors shall use their respective reasonable
best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) furnish to the Initial Purchasers, each Named Holder and
each of the underwriter(s) in connection with such sale, if any, before
filing with the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment of
such Named Holders and underwriter(s) in connection with such sale, if
any, for a period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or any amendment
or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to which the
Named Holders of the Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s) in connection with such
sale, if any, shall reasonably object within five Business Days after
the receipt
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thereof. A Named Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission or fails to comply
with the applicable requirements of the Act;
(v) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the Named Holders and to
the underwriter(s) in connection with such sale, if any, make the
Company's and the Subsidiary Guarantors' representatives available for
discussion of such document and other customary due diligence matters,
and include such information in such document prior to the filing
thereof as such Named Holders or underwriter(s), if any, reasonably may
request;
(vi) make available at reasonable times for inspection by
the Named Holders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant retained by such Named Holders or any of such underwriter(s),
all financial and other records, pertinent corporate documents and
properties of the Company and the Subsidiary Guarantors subject to
appropriate confidentiality agreements and cause the Company's and the
Subsidiary Guarantors' officers, directors and employees to supply all
information that is (a) reasonably requested by any Named Holder,
underwriter, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness and (b) customarily
furnished in transactions of the type contemplated by such Registration
Statement;
(vii) if requested by any Named Holders or the
underwriter(s) in connection with such sale, if any, promptly include in
any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such Named
Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating to
the "Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being
paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as
soon as reasonably practicable after the Company is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(viii) furnish to each Named Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each Named Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company and the
Subsidiary Guarantors hereby consent to the use (in accordance with law)
of the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
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(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement as
may be reasonably requested by any Holder of Transfer Restricted
Securities or underwriter in connection with any sale or resale pursuant
to any Registration Statement contemplated by this Agreement, which
agreements must be in customary form, and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Company and the
Subsidiary Guarantors shall:
(A) furnish (or in the case of paragraphs (2) and (3), use
its commercially reasonable best efforts to furnish) to each Named
Holder and each underwriter, if any, upon the effectiveness of the
Shelf Registration Statement:
(1) a certificate, dated the date of effectiveness of
the Shelf Registration Statement, signed on behalf of the
Company and each Subsidiary Guarantor by (x) the President or
any Vice President and (y) a principal financial or accounting
officer of the Company and such Subsidiary Guarantor,
confirming, as of the date thereof, the matters set forth in
paragraphs (f) and (g) of Section 7 of the Purchase Agreement;
(2) an opinion, dated the date of effectiveness of the
Shelf Registration Statement, of counsel (which may include
the General Counsel of the Company) for the Company and the
Subsidiary Guarantors covering such matters as may be
reasonably requested, including a statement to the effect that
such counsel has participated in the preparation of the
applicable Registration Statement, including review and
discussion of the contents thereof, and no facts came to such
counsel's attention that caused such counsel to believe that
the Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
that the Prospectus contained in such Registration Statement
as of its date contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. Without limiting
the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial and statistical data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement, from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with primary underwritten
offerings; and
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or
resale pursuant to any Shelf Registration Statement the
indemnification provisions and procedures of Section 8 hereof with
respect to all parties to be indemnified pursuant to said Section.
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The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at
any time the representations and warranties of the Company and the
Subsidiary Guarantors contemplated in (A)(1) above cease to be true and
correct, the Company and the Subsidiary Guarantors shall so advise the
underwriter(s), if any and the Named Holders promptly and if requested
by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the Named Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the Named Holders
or underwriter(s), if any, may request and do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; PROVIDED, HOWEVER, that neither the
Company nor any Subsidiary Guarantor shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits
or to taxation, other than as to matters and transactions relating to
the Registration Statement, in any jurisdiction where it is not now so
subject;
(xii) issue, upon the request of any Holder of Senior Notes
covered by any Shelf Registration Statement contemplated by this
Agreement, New Senior Notes having an aggregate principal amount equal
to the aggregate principal amount of Senior Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such
Holder; such New Senior Notes to be registered in the name of such
Holder or in the name of the purchaser(s) of such Notes, as the case may
be; in return, the Senior Notes held by such Holder shall be surrendered
to the Company for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Named Holders and each
Restricted Broker-Dealer and the underwriter(s), if any, to facilitate
the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and to register such Transfer Restricted Securities
in such denominations and such names as the Named Holders, Restricted
Broker-Dealers or the underwriter(s), if any, may request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiv) use their respective reasonable best efforts to cause
the disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
domestic governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
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(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee
under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
(xvii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use their respective reasonable
best efforts to cause such Registration Statement to become effective
and approved by such governmental agencies or authorities as may be
necessary to enable the Holders selling Transfer Restricted Securities
to consummate the disposition of such Transfer Restricted Securities;
(xviii) otherwise use their respective commercially
reasonable best efforts to make generally available to its security
holders with regard to any applicable Registration Statement, as soon as
practicable, a consolidated earnings statement meeting the requirements
of Rule 158 (which need not be audited) covering a twelve-month period
beginning after the effective date of the Registration Statement (as
such term is defined in paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its reasonable
best efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred to
in Section 6(c)(i) or any notice from the Company of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant
to the applicable Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) hereof, or until it is advised in writing by the Company that the
use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus (the "Advice"). If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be
extended by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 6(c)(i) or Section
6(c)(iii)(D) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or
shall have received the Advice.
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SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Company, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by any Purchaser or Holder with the NASD
and its counsel that may be required by the rules and regulations of the
NASD); (ii) all fees and expenses of compliance with federal securities and
state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the New Senior Notes to be issued in the Exchange
Offer and printing of Prospectuses); (iv) all fees and disbursements of
counsel for the Company and the Subsidiary Guarantors; (v) all application
and filing fees in connection with listing the Notes on a national securities
exchange or automated quotation system pursuant to the requirements hereof;
and (vi) all fees and disbursements of independent certified public
accountants of the Company and the Subsidiary Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company will, in any event, bear its and the Subsidiary
Guarantors' internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Company or the Subsidiary
Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the
Subsidiary Guarantors will reimburse the Initial Purchasers and the Holders
of Transfer Restricted Securities being tendered in the Exchange Offer and/or
resold pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements (which
shall not exceed $25,000 without the prior written consent of the Company) of
not more than one counsel, who shall be chosen by the Holders of a majority
in principal amount of the Transfer Restricted Securities for whose benefit
such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Subsidiary Guarantors, jointly and
severally, agree to indemnify and hold harmless (i) each Holder and (ii) each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) any Holder (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling person") and
(iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any
person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "INDEMNIFIED HOLDER"), to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, judgments, actions
and expenses (including without limitation and as incurred, reimbursement of
all reasonable costs of investigating, preparing, pursuing or defending any
claim or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of counsel to any Indemnified Holder) directly or indirectly caused
by, related to, based upon, arising out of or in connection with any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus prepared pursuant to this
Agreement or
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Prospectus (or any amendment or supplement thereto), or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are caused
by an untrue statement or omission or alleged untrue statement or omission
that is made in reliance upon and in conformity with information relating to
any of the Holders furnished in writing to the Company by any of the Holders
expressly for use therein.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against
any of the Indemnified Holders with respect to which indemnity may be sought
against the Company or the Subsidiary Guarantors, such Indemnified Holder (or
the Indemnified Holder controlled by such controlling person) shall promptly
notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the
defense thereof, including the employment of counsel and payment of all fees
and expenses. Such Indemnified Holder shall have the right to employ its own
counsel in any such action, suit or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Holder unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying
parties have failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include such Indemnified Holder and the indemnifying parties and
such Indemnified Holder shall have been advised by its counsel that
representation of such indemnified party and any indemnifying party by the
same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between
them (in which case the indemnifying party shall not have the right to assume
the defense of such action, suit or proceeding on behalf of such Indemnified
Holder). It is understood, however, that the indemnifying parties shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Indemnified
Holders, which firm shall be designated in writing by the Indemnified
Holders, and that all such fees and expenses shall be reimbursed on a monthly
basis as provided in paragraph (a) hereof. The indemnifying parties shall
not be liable for any settlement of any such action, suit or proceeding
effected without their written consent, but if settled with such written
consent, or if there shall be a final judgment for the plaintiff in any such
action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless such Indemnified Holder, to the extent provided in paragraph
(a), and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Subsidiary Guarantors, and their respective directors, officers, and any
person controlling (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company or any Subsidiary Guarantor, to the same
extent as the foregoing indemnity from the Company and the Subsidiary
Guarantors to each of the Indemnified Holders, but only with respect to
information relating to such Holder furnished in writing by or on behalf of
such Holder expressly for use in any Registration Statement. In case any
action, suit or proceeding shall be brought against the Company, any
Subsidiary Guarantor or its directors or officers or any such controlling
person in respect of which indemnity may be sought against a Holder of
Transfer Restricted Securities pursuant to this paragraph (b), such Holder
shall have the rights and duties given the Company and the Subsidiary
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Guarantors (except that if the Company and the Subsidiary Guarantors shall
have assumed the defense thereof the Holders shall not be required to do so,
but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the Holders'
expense), and the Company, such Subsidiary Guarantor, such directors or
officers or such controlling person shall have the rights and duties given to
each Holder by the preceding paragraph. In no event shall any Holder be
liable or responsible for any amount in excess of the amount by which the
total received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid
by such Holder for such Transfer Restricted Securities and (ii) the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
foregoing indemnity agreement shall be in addition to any liability which the
Holders may otherwise have.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
in respect of any losses, claims, damages, liabilities or expenses referred
to therein, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Subsidiary Guarantors, on
the one hand, and the Holders, on the other hand, from their sale of Transfer
Restricted Securities or if such allocation is not permitted by applicable
law, the relative fault of the Company and the Subsidiary Guarantors, on the
one hand, and of the Indemnified Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company and the Subsidiary
Guarantors, on the one hand, and of the Indemnified Holder, on the other
hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or such Subsidiary Guarantor or by the Indemnified Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors and each Holder of Transfer
Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the provisions of this
Section 8, no Holder or its related Indemnified Holders shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds the sum of
(A) the amount paid by such Holder for such Transfer Restricted Securities
PLUS (B) the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in
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proportion to the respective principal amount of Senior Notes held by each of
the Holders hereunder and not joint.
(d) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
SECTION 9. RULE 144A
The Company and each Subsidiary Guarantor hereby agrees with each
Holder, for so long as any Transfer Restricted Securities remain outstanding
and during any period in which the Company or such Subsidiary Guarantor is
not subject to Section 13 or 15(d) of the Securities Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to
any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in customary underwriting
arrangements entered into in connection therewith and (b) completes and
executes all reasonable questionnaires, powers of attorney, and other
documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering and consented to by the Company, which consent shall not be
unreasonably withheld. Such investment bankers and managers are referred to
herein as the "underwriters."
SECTION 12. MISCELLANEOUS
(a) REMEDIES. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The
Company and the Subsidiary Guarantors agree that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by them
of the provisions of this Agreement and hereby agree to waive the defense in
any action for specific performance that a remedy at law would be adequate.
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(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Subsidiary Guarantor will, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's and the Subsidiary Guarantors' securities under any
agreement in effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE NOTES. Neither the Company nor any
Subsidiary Guarantor will take any action, or voluntarily permit any change
to occur, with respect to the Notes that is designed to and would materially
and adversely affect the ability of the Holders to Consummate any Exchange
Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case
of Section 5 hereof and this Section 12(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities
and (ii) in the case of all other provisions hereof, the Company has obtained
the written consent of Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities. Notwithstanding the foregoing, a
waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or
indirectly the rights of other Holders whose securities are not being
tendered pursuant to such Exchange Offer may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted
Securities subject to such Exchange Offer.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier,
or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records
of the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to the Company or the Subsidiary Guarantors:
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
Telecopier No.: (303) 460-2691
Attention: General Counsel
With a copy, which shall not constitute notice, to:
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, IL 60606
Telecopier No.: (312) 407-0411
Attention: Brian W. Duwe
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<PAGE>
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities directly from
such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights granted
with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BALL CORPORATION
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Treasurer
BALL AEROSPACE AND TECHNOLOGIES CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL ASIA PACIFIC LIMITED
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL GLASS CONTAINER CORPORATION
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL HOLDINGS CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL METAL BEVERAGE CONTAINER CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL FOOD CONTAINER CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL PACKAGING SALES CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PACKAGING CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PLASTIC CONTAINER CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL TECHNOLOGIES HOLDING CORP.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BALL TECHNOLOGY SERVICES CORPORATION
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS I, INC.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS II, INC.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
EFRATOM HOLDING, INC.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
LATAS DE ALUMINIO REYNOLDS, INC.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
RCAL CANS, INC.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
RIND CANS, INC.
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Vice President
Confirmed as of the date first
above written.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
FIRST CHICAGO CAPITAL MARKETS, INC.
By: LEHMAN BROTHERS INC.
By: /s/ Christoph E. Hodge
---------------------------
Name: Christoph E. Hodge
Title: Managing Director
<PAGE>
EXHIBIT 5(b)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of August 10, 1998
by and among
Ball Corporation
Subsidiary Guarantors Parties Hereto
and
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
BancAmerica Robertson Stephens
First Chicago Capital Markets, Inc.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of August 10, 1998, by and among Ball Corporation, an Indiana
corporation (the "COMPANY"), Ball Aerospace and Technologies Corp., a
Delaware corporation, Ball Asia Pacific Limited, a Colorado corporation, Ball
Glass Container Corporation, a Delaware corporation, Ball Holdings Corp., a
Delaware corporation, Ball Metal Beverage Container Corp., a Colorado
corporation, Ball Metal Food Container Corp., a Delaware corporation, Ball
Metal Packaging Sales Corp., a Colorado corporation, Ball Packaging Corp., a
Colorado corporation, Ball Plastic Container Corp., a Colorado corporation,
Ball Technologies Holdings Corp., a Colorado corporation, Ball Technology
Services Corporation, a California corporation, BG Holdings I, Inc., a
Delaware corporation, BG Holdings II, Inc., a Delaware corporation, Efratom
Holding, Inc., a Colorado corporation, Latas de Aluminio Reynolds, Inc., a
Delaware corporation, RCAL Cans, Inc., a Delaware corporation and RIND Cans,
Inc., a Delaware corporation (collectively, the "SUBSIDIARY GUARANTORS") and
Lehman Brothers Inc. ("LEHMAN BROTHERS"), Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("MERRILL LYNCH"), BancAmerica Robertson Stephens
("BANCAMERICA") and First Chicago Capital Markets, Inc. ("FIRST CHICAGO" and,
together with Lehman Brothers, Merrill Lynch and BancAmerica, the "INITIAL
PURCHASERS"), each of whom has agreed to purchase the Company's 8 1/4% Senior
Subordinated Notes due 2008 (the "SENIOR SUBORDINATED NOTES") pursuant to the
Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
August 5, 1998, (the "PURCHASE AGREEMENT"), by and among the Company, the
Subsidiary Guarantors and the Initial Purchasers. In order to induce the
Initial Purchasers to purchase each tranche of the Series A Notes, the Company
has agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 2 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
BUSINESS DAY: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
BROKER-DEALER TRANSFER RESTRICTED SECURITIES: New Senior Subordinated
Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Senior Subordinated Notes that such Broker-Dealer acquired for its own account
as a result of market making activities or other trading activities (other than
Senior Subordinated Notes acquired directly from the Company or any of its
affiliates).
CERTIFICATED SECURITIES: As defined in the Indenture.
CLOSING DATE: The date hereof.
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<PAGE>
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Senior Subordinated Notes to be issued in the Exchange
Offer, (b) the maintenance of such Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof and (c) the delivery by
the Company to the Registrar under the Indenture of New Senior Subordinated
Notes in the same aggregate principal amount as the aggregate principal amount
of Senior Subordinated Notes tendered by Holders thereof pursuant to the
Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Senior Subordinated Notes,
each Interest Payment Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company under the Act of the
New Senior Subordinated Notes pursuant to the Exchange Offer Registration
Statement pursuant to which the Company shall offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for New Senior Subordinated Notes in
an aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Senior Subordinated Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act.
GLOBAL NOTEHOLDER: As defined in the Indenture.
HOLDERS: As defined in Section 2 hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
INDENTURE: The Indenture, dated the Closing Date, among the Company,
the Subsidiary Guarantors and The Bank of New York, as trustee (the "TRUSTEE"),
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
INTEREST PAYMENT DATE: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
NEW SENIOR NOTES: The Company's 8 1/4% Senior
Subordinated Notes due 2008, Series B, to be issued pursuant to the Indenture
(i) in the Exchange Offer or (ii) upon the request of any
2
<PAGE>
Holder of Senior Subordinated Notes covered by a Shelf Registration
Statement, in exchange for such Senior Subordinated Notes.
NOTES: The Senior Subordinated Notes and the New Senior Subordinated
Notes.
PERSON: An individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
PROSPECTUS: The prospectus prepared pursuant to this Agreement and
included in a Registration Statement at the time such Registration Statement is
declared effective, as amended or supplemented by any prospectus supplement and
by all other amendments thereto, including post-effective amendments, and all
material incorporated by reference into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Subsidiary Guarantors relating to (a) an offering of New Senior Subordinated
Notes pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement, in
each case, (i) which is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
RESTRICTED BROKER-DEALER: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been disposed of in accordance with a Shelf Registration Statement, (c) the
date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan
of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
3
<PAGE>
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Subsidiary Guarantors shall (i) cause to be
filed with the Commission no later than 90 days after the Closing Date, the
Exchange Offer Registration Statement, (ii) use its reasonable best efforts to
cause such Exchange Offer Registration Statement to become effective no later
than 150 days after the Closing Date, (iii) in connection with the foregoing,
(A) file all pre-effective amendments to such Exchange Offer Registration
Statement as may be reasonably necessary in order to cause such Exchange Offer
Registration Statement to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all filings which to the knowledge of
the Company are necessary, if any, in connection with the registration and
qualification of the New Senior Subordinated Notes to be made under the Blue Sky
laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
New Senior Subordinated Notes to be offered in exchange for the Senior
Subordinated Notes that are Transfer Restricted Securities and to permit sales
of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as
contemplated by Section 3(c) below.
(b) The Company and the Subsidiary Guarantors shall use their
respective best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no
event shall such period be less than 20 Business Days. The Company and the
Subsidiary Guarantors shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Notes shall be included in the Exchange Offer Registration Statement. The
Company and the Subsidiary Guarantors shall use their respective reasonable best
efforts to cause the Exchange Offer to be Consummated on or prior to 30 Business
Days after the Exchange Offer Registration Statement has become effective.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Senior Subordinated Notes
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Senior Subordinated Notes (other than Transfer
Restricted Securities acquired directly from the Company or any affiliate of the
Company) pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with its
initial sale of each New Senior Subordinated Note received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other
4
<PAGE>
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in
order to permit such sales pursuant thereto, but such "Plan of Distribution"
shall not name any such Broker-Dealer or disclose the amount of Notes held by
any such Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy after the date of this Agreement.
The Company and the Subsidiary Guarantors shall use their
respective reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Section 6(c) below to the extent necessary to ensure that it is
available for sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the date on which the Exchange Offer is Consummated.
The Company and the Subsidiary Guarantors shall promptly provide
sufficient copies of the latest version of such Prospectus to such Restricted
Broker-Dealers promptly upon request, at any time during such 180-day period in
order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Company is not required to file
an Exchange Offer Registration Statement with respect to the New Senior
Subordinated Notes because the Exchange Offer is not permitted by applicable law
(after the procedures set forth in Section 6(a)(i) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Company within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the New
Senior Subordinated Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Senior Subordinated
Notes acquired directly from the Company or one of its affiliates, then the
Company and the Subsidiary Guarantors shall (x) cause to be filed on or prior to
90 days after the date on which the Company determines that it is not required
to file the Exchange Offer Registration Statement pursuant to clause (i) above
or 90 days after the date on which the Company receives the notice specified in
clause (ii) above a shelf registration statement pursuant to Rule 415 under the
Act (which may be an amendment to the Exchange Offer Registration Statement (in
either event, the "SHELF REGISTRATION STATEMENT")), relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof, and shall (y) use their respective
commercially reasonable best efforts to cause such Shelf Registration Statement
to become effective on or prior to 150 days after the date on which the Company
becomes obligated to file such Shelf Registration Statement. If, after the
Company has filed an Exchange Offer Registration Statement which satisfies the
requirements of Section 3(a) above, the Company is required to file and make
effective a Shelf Registration Statement solely because the Exchange Offer shall
not be permitted under applicable federal law, then the filing of the Exchange
Offer Registration Statement shall be deemed to satisfy the requirements of
clause (x) above. Such an event shall have no effect on the requirements of
clause (y) above. The Company and the Subsidiary Guarantors shall use their
respective reasonable best efforts to keep the Shelf Registration Statement
discussed in this Section 4(a) continuously effective, supplemented and amended
as required
5
<PAGE>
by and subject to the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for sales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission
as announced from time to time, for a period of at least two years (as
extended pursuant to Section 6(c)(i)) following the date on which such Shelf
Registration Statement first becomes effective under the Act.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 Business Days after receipt of a request
therefor, such information specified in Item 507 of Regulation S-K under the Act
for use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 30 Business Days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through (iv),
a "REGISTRATION DEFAULT"), then the Company and the Subsidiary Guarantors hereby
jointly and severally agree to pay liquidated damages to each Holder of Transfer
Restricted Securities with respect to the first 90-day period immediately
following the occurrence of such Registration Default, in an amount equal to
$.05 per week per $1,000 principal amount of Transfer Restricted Securities held
by such Holder for each week or portion thereof that the Registration Default
continues. The amount of the liquidated damages shall increase by an additional
$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.50 per week
per $1,000 principal amount of Transfer Restricted Securities. Notwithstanding
anything to the contrary set forth herein, (1) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange
Offer Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (ii) above, (3) upon Consummation of the Exchange
Offer, in the case of (iii) above, or (4) upon the filing of a post-effective
amendment to the Registration Statement or an additional Registration Statement
that causes the Exchange Offer Registration Statement (and/or, if applicable,
the Shelf Registration Statement) to again be declared effective or made usable
in the case of (iv) above, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or
(iv), as applicable, shall immediately cease.
6
<PAGE>
All accrued liquidated damages shall be paid to the Global Note
Holder by wire transfer of immediately available funds or by federal funds
check and to Holders of Certificated Securities by wire transfer to the
accounts specified by them or by mailing checks to their registered
addresses, if no such accounts have been specified, on each Damages Payment
Date. All obligations of the Company and the Subsidiary Guarantors set forth
in the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations
with respect to such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company and the Subsidiary Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective
reasonable best efforts to effect such exchange and to permit the sale of
Broker-Dealer Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with all of
the following provisions:
(i) If, following the date hereof there has been published a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, such that in the reasonable opinion of counsel to the
Company there is a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company and the Subsidiary
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Subsidiary
Guarantors to Consummate an Exchange Offer for such Senior Subordinated
Notes. The Company and the Subsidiary Guarantors hereby agree to pursue
the issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Company and the Subsidiary Guarantors
hereby agree to take all such other actions as are requested by the
Commission or otherwise required in connection with the issuance of such
decision, including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal bases,
if any, upon which such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a resolution (which need
not be favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company
and the Subsidiary Guarantors (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the New
Senior Subordinated Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Senior Subordinated Notes in its ordinary course of
business. Each Holder hereby acknowledges and agrees that any Broker-Dealer
and any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer (1)
could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in MORGAN
STANLEY AND CO., INC. (available June 5, 1991) and EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, and similar no-
7
<PAGE>
action letters (including, if applicable, any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the registration
and prospectus delivery requirements of the Act in connection with a
secondary resale transaction and that such a secondary resale transaction
must be covered by an effective registration statement containing the
selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of New Senior
Subordinated Notes obtained by such Holder in exchange for Senior
Subordinated Notes acquired by such Holder directly from the Company or
an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Subsidiary Guarantors shall, if requested by
the Commission, provide a supplemental letter to the Commission (A) stating
that the Company and the Subsidiary Guarantors are registering the Exchange
Offer in reliance on the position of the Commission enunciated in EXXON
CAPITAL HOLDINGS CORPORATION (available May 13, 1988), MORGAN STANLEY AND
CO., INC. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above, (B) including a representation that
neither the Company nor any Subsidiary Guarantor has entered into any
arrangement or understanding with any Person to distribute the New Senior
Subordinated Notes to be received in the Exchange Offer and that, to the
best of the Company's and each Subsidiary Guarantor's information and
belief, each Holder participating in the Exchange Offer is acquiring the
New Senior Subordinated Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the New Senior Subordinated Notes received in the Exchange
Offer and (C) any other undertaking or representation reasonably required
by the Commission as set forth in any no-action letter obtained pursuant to
clause (i) above.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Subsidiary Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their respective
reasonable best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Subsidiary Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without limitation,
any Exchange Offer Registration Statement and the related Prospectus, to the
extent that the same are required to be available to permit sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers),
the Company and the Subsidiary Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company and the Subsidiary
Guarantors shall file promptly an appropriate amendment to such
Registration Statement, (1) in the case of
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clause (A), correcting any such misstatement or omission, and (2) in the
case of clauses (A) and (B), use their respective reasonable best efforts
to cause such amendment to be declared effective and such Registration
Statement and the related Prospectus to become usable for their intended
purpose(s) as soon as reasonably practicable thereafter.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Act, and to comply fully in all material respects
with Rules 424, 430A and 462, as applicable, under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, selling Holders named in
any Registration Statement or Prospectus ("Named Holders") and any
Restricted Broker-Dealer (whether or not named in the Registration
Statement) who has requested copies of the Prospectus pursuant to the last
paragraph of Section 3 hereof, or has otherwise identified itself as a
Restricted Broker-Dealer to the Company, promptly and, if requested by such
Persons, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws, the
Company and the Subsidiary Guarantors shall use their respective reasonable
best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) furnish to the Initial Purchasers, each Named Holder and
each of the underwriter(s) in connection with such sale, if any, before
filing with the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated
by reference after the initial filing of such Registration Statement),
which documents will be subject to the review and comment of such Named
Holders and underwriter(s) in connection with such sale, if any, for a
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period of at least five Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement to
any such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which the Named Holders of the Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s) in connection with such sale, if any, shall reasonably
object within five Business Days after the receipt thereof. A Named
Holder or underwriter, if any, shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission or fails to comply with the
applicable requirements of the Act;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the Named Holders and to the
underwriter(s) in connection with such sale, if any, make the Company's and
the Subsidiary Guarantors' representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such Named
Holders or underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the
Named Holders, any managing underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such Named Holders or any of such underwriter(s), all
financial and other records, pertinent corporate documents and
properties of the Company and the Subsidiary Guarantors subject to
appropriate confidentiality agreements and cause the Company's and the
Subsidiary Guarantors' officers, directors and employees to supply all
information that is (a) reasonably requested by any Named Holder,
underwriter, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness and (b) customarily
furnished in transactions of the type contemplated by such Registration
Statement;
(vii) if requested by any Named Holders or the underwriter(s) in
connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such Named Holders and
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as reasonably practicable
after the Company is notified of the matters to be included in such
Prospectus supplement or post-effective amendment;
(viii) furnish to each Named Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each Named Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or
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supplement thereto as such Persons reasonably may request; the Company
and the Subsidiary Guarantors hereby consent to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by
each of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all such
other actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement as may be reasonably
requested by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Registration Statement
contemplated by this Agreement, which agreements must be in customary form,
and in such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an Underwritten Registration,
the Company and the Subsidiary Guarantors shall:
(A) furnish (or in the case of paragraphs (2) and (3), use its
commercially reasonable best efforts to furnish) to each Named Holder
and each underwriter, if any, upon the effectiveness of the Shelf
Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement, signed on behalf of the Company and
each Subsidiary Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company and such Subsidiary Guarantor, confirming, as of the
date thereof, the matters set forth in paragraphs (f) and (g) of
Section 7 of the Purchase Agreement;
(2) an opinion, dated the date of effectiveness of the
Shelf Registration Statement, of counsel (which may include the
General Counsel of the Company) for the Company and the
Subsidiary Guarantors covering such matters as may be reasonably
requested, including a statement to the effect that such counsel
has participated in the preparation of the applicable
Registration Statement, including review and discussion of the
contents thereof, and no facts came to such counsel's attention
that caused such counsel to believe that the Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness or
fairness of the financial statements, notes and schedules and
other financial and statistical data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement, from the
Company's independent accountants, in the customary
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form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with primary
underwritten offerings; and
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Shelf Registration Statement the indemnification
provisions and procedures of Section 8 hereof with respect to all
parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any
time the representations and warranties of the Company and the Subsidiary
Guarantors contemplated in (A)(1) above cease to be true and correct, the
Company and the Subsidiary Guarantors shall so advise the underwriter(s),
if any and the Named Holders promptly and if requested by such Persons,
shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the Named Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the Named Holders or underwriter(s),
if any, may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
PROVIDED, HOWEVER, that neither the Company nor any Subsidiary Guarantor
shall be required to register or qualify as a foreign corporation where it
is not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not now so subject;
(xii) issue, upon the request of any Holder of Senior
Subordinated Notes covered by any Shelf Registration Statement contemplated
by this Agreement, New Senior Subordinated Notes having an aggregate
principal amount equal to the aggregate principal amount of Senior
Subordinated Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such New Senior Subordinated Notes
to be registered in the name of such Holder or in the name of the
purchaser(s) of such Notes, as the case may be; in return, the Senior
Subordinated Notes held by such Holder shall be surrendered to the Company
for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Named Holders and each Restricted
Broker-Dealer and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and such
names as the Named Holders, Restricted Broker-Dealers or the
underwriter(s), if any, may request at least two Business Days prior to
such sale of Transfer Restricted Securities;
(xiv) use their respective reasonable best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
domestic governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (xi) above;
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(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under
the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use their respective reasonable best efforts to cause such
Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use their respective commercially reasonable
best efforts to make generally available to its security holders with
regard to any applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158 (which
need not be audited) covering a twelve-month period beginning after the
effective date of the Registration Statement (as such term is defined in
paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee and
the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use its reasonable best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(i) or any notice from the Company of the existence of any fact of
the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof,
or until it is advised in writing by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus (the "Advice"). If
so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
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Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of either such notice. In
the event the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 6(c)(i)
or Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof
or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Company, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made by any Purchaser or Holder with the NASD and its counsel
that may be required by the rules and regulations of the NASD); (ii) all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the New Senior Subordinated Notes to be issued in the Exchange Offer and
printing of Prospectuses); (iv) all fees and disbursements of counsel for the
Company and the Subsidiary Guarantors; (v) all application and filing fees in
connection with listing the Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company and the
Subsidiary Guarantors (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear its and the Subsidiary
Guarantors' internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company or the Subsidiary Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Subsidiary
Guarantors will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities being tendered in the Exchange Offer and/or resold
pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements (which shall
not exceed $25,000 without the prior written consent of the Company) of not more
than one counsel, who shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Subsidiary Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each Holder and (ii) each person, if
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers,
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directors, partners, employees, representatives and agents of any Holder or
any controlling person (any person referred to in clause (i), (ii) or (iii)
may hereinafter be referred to as an "INDEMNIFIED HOLDER"), to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation
and as incurred, reimbursement of all reasonable costs of investigating,
preparing, pursuing or defending any claim or action, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to any Indemnified
Holder) directly or indirectly caused by, related to, based upon, arising out
of or in connection with any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement, preliminary
prospectus prepared pursuant to this Agreement or Prospectus (or any
amendment or supplement thereto), or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by an untrue statement or
omission or alleged untrue statement or omission that is made in reliance
upon and in conformity with information relating to any of the Holders
furnished in writing to the Company by any of the Holders expressly for use
therein.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
the Company or the Subsidiary Guarantors, such Indemnified Holder (or the
Indemnified Holder controlled by such controlling person) shall promptly notify
the parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. Such
Indemnified Holder shall have the right to employ its own counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the Indemnified
Holder unless (i) the indemnifying parties have agreed in writing to pay such
fees and expenses, (ii) the indemnifying parties have failed to assume the
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include such Indemnified Holder
and the indemnifying parties and such Indemnified Holder shall have been advised
by its counsel that representation of such indemnified party and any
indemnifying party by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing interests
between them (in which case the indemnifying party shall not have the right to
assume the defense of such action, suit or proceeding on behalf of such
Indemnified Holder). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Indemnified
Holders, which firm shall be designated in writing by the Indemnified Holders,
and that all such fees and expenses shall be reimbursed on a monthly basis as
provided in paragraph (a) hereof. The indemnifying parties shall not be liable
for any settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there shall be
a final judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless such Indemnified
Holder, to the extent provided in paragraph (a), and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
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(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Subsidiary Guarantors, and their respective directors, officers, and any
person controlling (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company or any Subsidiary Guarantor, to the same
extent as the foregoing indemnity from the Company and the Subsidiary
Guarantors to each of the Indemnified Holders, but only with respect to
information relating to such Holder furnished in writing by or on behalf of
such Holder expressly for use in any Registration Statement. In case any
action, suit or proceeding shall be brought against the Company, any
Subsidiary Guarantor or its directors or officers or any such controlling
person in respect of which indemnity may be sought against a Holder of
Transfer Restricted Securities pursuant to this paragraph (b), such Holder
shall have the rights and duties given the Company and the Subsidiary
Guarantors (except that if the Company and the Subsidiary Guarantors shall
have assumed the defense thereof the Holders shall not be required to do so,
but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the Holders'
expense), and the Company, such Subsidiary Guarantor, such directors or
officers or such controlling person shall have the rights and duties given to
each Holder by the preceding paragraph. In no event shall any Holder be
liable or responsible for any amount in excess of the amount by which the
total received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid
by such Holder for such Transfer Restricted Securities and (ii) the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
foregoing indemnity agreement shall be in addition to any liability which the
Holders may otherwise have.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Subsidiary Guarantors, on the one hand, and the
Holders, on the other hand, from their sale of Transfer Restricted Securities or
if such allocation is not permitted by applicable law, the relative fault of the
Company and the Subsidiary Guarantors, on the one hand, and of the Indemnified
Holder, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault of the Company
and the Subsidiary Guarantors, on the one hand, and of the Indemnified Holder,
on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Subsidiary Guarantor or by the Indemnified
Holder and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors and each Holder of Transfer
Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating any claim or defending
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any such action, suit or proceeding. Notwithstanding the provisions of this
Section 8, no Holder or its related Indemnified Holders shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds the sum of
(A) the amount paid by such Holder for such Transfer Restricted Securities
PLUS (B) the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Senior Subordinated Notes held by each of the Holders
hereunder and not joint.
(d) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is a party
and indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such action, suit or
proceeding.
SECTION 9. RULE 144A
The Company and each Subsidiary Guarantor hereby agrees with each
Holder, for so long as any Transfer Restricted Securities remain outstanding and
during any period in which the Company or such Subsidiary Guarantor is not
subject to Section 13 or 15(d) of the Securities Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering and consented to by the Company, which consent shall not be
unreasonably withheld. Such investment bankers and managers are referred to
herein as the "underwriters."
17
<PAGE>
SECTION 12. MISCELLANEOUS
(a) REMEDIES. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The
Company and the Subsidiary Guarantors agree that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by them
of the provisions of this Agreement and hereby agree to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Subsidiary Guarantor will, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's and the Subsidiary Guarantors' securities under any
agreement in effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE NOTES. Neither the Company nor any
Subsidiary Guarantor will take any action, or voluntarily permit any change to
occur, with respect to the Notes that is designed to and would materially and
adversely affect the ability of the Holders to Consummate any Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
18
<PAGE>
(ii) if to the Company or the Subsidiary Guarantors:
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
Telecopier No.: (303) 460-2691
Attention: General Counsel
With a copy, which shall not constitute notice, to:
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, IL 60606
Telecopier No.: (312) 407-0411
Attention: Brian W. Duwe
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities directly from such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
19
<PAGE>
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BALL CORPORATION
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Treasurer
BALL AEROSPACE AND TECHNOLOGIES CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL ASIA PACIFIC LIMITED
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL GLASS CONTAINER CORPORATION
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL HOLDINGS CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL METAL BEVERAGE CONTAINER CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL FOOD CONTAINER CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL PACKAGING SALES CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PACKAGING CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PLASTIC CONTAINER CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL TECHNOLOGIES HOLDING CORP.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL TECHNOLOGY SERVICES CORPORATION
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS I, INC.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS II, INC.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
EFRATOM HOLDING, INC.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
LATAS DE ALUMINIO REYNOLDS, INC.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
RCAL CANS, INC.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
RIND CANS, INC.
By: /s/ Douglas E. Poling
---------------------------------
Name: Douglas E. Poling
Title: Vice President
THE BANK OF NEW YORK,
as Senior Note Trustee
By: /s/ Walter N. Gitlin
---------------------------------
Name: WALTER N. GITLIN
Title: Vice President
Confirmed as of the date first
above written.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
FIRST CHICAGO CAPITAL MARKETS, INC.
By: LEHMAN BROTHERS INC.
By: /s/ Christoph E. Hodge
-------------------------
Name: Christoph E. Hodge
Title: Managing Director
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
BALL CORPORATION
And
GUARANTORS
Parties Hereto
--------------------------------------
$300,000,000
SERIES A AND SERIES B
73/4% SENIOR NOTES DUE 2006
--------------------------------------
-----------------
SENIOR NOTE INDENTURE
DATED AS OF AUGUST 10, 1998
-----------------
THE BANK OF NEW YORK
Senior Note Trustee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 7.07
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;11.02
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;11.02
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05,11.02
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence). . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of this Senior Note Indenture.
F-2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.. . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions.. . . . . . . . . . . . . . . . . . . . 18
Section 1.03. Incorporation by Reference of Trust Indenture Act.. . . . 18
Section 1.04. Rules of Construction.. . . . . . . . . . . . . . . . . . 19
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . 19
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . 20
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . 21
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . 21
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . 22
Section 2.07. Replacement Senior Notes. . . . . . . . . . . . . . . . . 34
Section 2.08. Outstanding Senior Notes. . . . . . . . . . . . . . . . . 34
Section 2.09. Treasury Senior Notes.. . . . . . . . . . . . . . . . . . 35
Section 2.10. Temporary Senior Notes. . . . . . . . . . . . . . . . . . 35
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . 35
Section 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Senior Note Trustee. . . . . . . . . . . . . . 36
Section 3.02. Selection of Senior Notes to be Redeemed. . . . . . . . . 36
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . 36
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . 37
Section 3.05. Deposit of Redemption Price.. . . . . . . . . . . . . . . 37
Section 3.06. Senior Notes Redeemed in Part.. . . . . . . . . . . . . . 38
Section 3.07. Optional Redemption.. . . . . . . . . . . . . . . . . . . 38
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . . . . . . . 38
Section 3.09. Offer to Purchase by Application of Excess Proceeds.. . . 38
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes.. . . . . . . . . . . . . . . . . 40
Section 4.02. Maintenance of Office or Agency.. . . . . . . . . . . . . 40
Section 4.03. Reports.. . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . 41
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . 42
Section 4.07. Restricted Payments.. . . . . . . . . . . . . . . . . . . 42
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 4.08. Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.. . . . . . . . . . . . . . . . . 45
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock.. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.10. Assets Sales. . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.11. Transactions With Affiliates. . . . . . . . . . . . . . . 49
Section 4.12. Liens.. . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.13. Business Activities.. . . . . . . . . . . . . . . . . . . 50
Section 4.14. Corporate Existence.. . . . . . . . . . . . . . . . . . . 50
Section 4.15. Offer to Purchase Upon Change of Control. . . . . . . . . 51
Section 4.16. Additional Senior Subsidiary Guarantees.. . . . . . . . . 51
Section 4.17. Payment for Consents. . . . . . . . . . . . . . . . . . . 52
Section 4.18. Sale and Leaseback Transactions.. . . . . . . . . . . . . 52
Section 4.19. Certain Covenants to Be Suspended Under Certain
Conditions. . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets.. . . . . . . . . 53
Section 5.02. Successor Corporation Substituted.. . . . . . . . . . . . 53
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . 54
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 56
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 56
Section 6.06. Control by Majority . . . . . . . . . . . . . . . . . . . 56
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . 56
Section 6.07. Rights of Holders of Senior Notes to Receive Payment. . . 57
Section 6.08. Collection Suit by Senior Note Trustee. . . . . . . . . . 57
Section 6.09. Senior Note Trustee May File Proofs of Claim. . . . . . . 57
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . 58
ARTICLE 7
SENIOR NOTE TRUSTEE
Section 7.01. Duties of Senior Note Trustee . . . . . . . . . . . . . . 58
Section 7.02. Rights of Senior Note Trustee . . . . . . . . . . . . . . 59
Section 7.03. Individual Rights of Senior Note Trustee. . . . . . . . . 60
Section 7.04. Senior Note Trustee's Disclaimer. . . . . . . . . . . . . 60
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 60
Section 7.06. Reports by Senior Note Trustee to Holders of the
Senior Notes. . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . 61
Section 7.08. Replacement of Senior Note Trustee. . . . . . . . . . . . 61
Section 7.09. Successor Senior Note Trustee by Merger, Etc. . . . . . . 62
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . 62
Section 7.11. Preferential Collection of Claims Against Company . . . . 63
Section 7.12. Senior Note Trustee's Application for Instructions
from the Company. . . . . . . . . . . . . . . . . . . . . 63
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. 63
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . . . . . . 63
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . 64
Section 8.04. Conditions to Legal or Covenant Defeasance. . . . . . . . 64
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions. . . . . . . . . 65
Section 8.06. Repayment to Company. . . . . . . . . . . . . . . . . . . 66
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes. . . . . . . . 66
Section 9.02. With Consent of Holders of Senior Notes . . . . . . . . . 67
Section 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . 68
Section 9.04. Revocation and Effect of Consents . . . . . . . . . . . . 68
Section 9.05. Notation on or Exchange of Senior Notes . . . . . . . . . 69
Section 9.06. Senior Note Trustee to Sign Amendments, etc . . . . . . . 69
ARTICLE 10
SENIOR SUBSIDIARY GUARANTEES
Section 10.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.02. Limitation on Guarantor Liability . . . . . . . . . . . . 70
Section 10.03. Execution and Delivery of Senior Subsidiary Guarantee . . 70
Section 10.04. Guarantors May Consolidate, etc. on Certain Terms . . . . 71
Section 10.05. Releases Following Sale of Assets . . . . . . . . . . . . 72
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . 72
Section 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 11.03. Communication by Holders of Senior Notes with Other
Holders of Senior Notes . . . . . . . . . . . . . . . . . 73
Section 11.04. Certificate and Opinion as to Conditions Precedent. . . . 73
Section 11.05. Statements Required in Certificate. . . . . . . . . . . . 74
Section 11.06. Rules by Senior Note Trustee and Agents . . . . . . . . . 74
Section 11.07. No Personal Liability of Directors, Officers, Employees
and Stockholders. . . . . . . . . . . . . . . . . . . . . 74
Section 11.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . 74
Section 11.09. No Adverse Interpretation of Other Agreements . . . . . . 74
Section 11.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . 74
Section 11.11. Severability. . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.12. Counterpart Originals . . . . . . . . . . . . . . . . . . 75
Section 11.13. Table of Contents, Headings, etc. . . . . . . . . . . . . 75
</TABLE>
iii
<PAGE>
EXHIBITS AND SCHEDULES
Exhibit A1 FORM OF SENIOR NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL SENIOR NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTATION OF SENIOR SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL SENIOR NOTE INDENTURE TO BE DELIVERED BY
SUBSEQUENT GUARANTORS
Schedule I SCHEDULE OF GUARANTORS
iv
<PAGE>
SENIOR NOTE INDENTURE dated as of August 10, 1998 by and among Ball
Corporation, an Indiana corporation (the "COMPANY"), Ball Aerospace and
Technologies Corp., a Delaware corporation, Ball Asia Pacific Limited, a
Colorado corporation, Ball Glass Container Corporation, a Delaware corporation,
Ball Holdings Corp., a Delaware corporation, Ball Metal Beverage Container
Corp., a Colorado corporation, Ball Metal Food Container Corp., a Delaware
corporation, Ball Metal Packaging Sales Corp., a Colorado corporation, Ball
Packaging Corp., a Colorado corporation, Ball Plastic Container Corp., a
Colorado corporation, Ball Technologies Holdings Corp., a Colorado corporation,
Ball Technology Services Corporation, a California corporation, BG Holdings I,
Inc., a Delaware corporation, BG Holdings II, Inc., a Delaware corporation,
Efratom Holding, Inc., a Colorado corporation, Latas de Aluminio Reynolds, Inc.,
a Delaware corporation, RCAL Cans, Inc., a Delaware corporation and RIND Cans,
Inc., a Delaware corporation (collectively, the "GUARANTORS") and The Bank of
New York, a New York banking corporation, as Senior Note Trustee (the "SENIOR
NOTE TRUSTEE").
The Company and the Senior Note Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the 73/4%
Series A Senior Notes due 2006 (the "SERIES A SENIOR NOTES") and the 73/4%
Series B Senior Notes due 2006 (the "SERIES B SENIOR NOTES" and, together with
the Series A Senior Notes, the "SENIOR NOTES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL SENIOR NOTE" means a global note in the form of Exhibit A1
hereto bearing the Global Senior Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Senior Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person (a) existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person
or is otherwise acquired by such specified Person or (b) assumed in connection
with the purchase of all or substantially all the assets of such other Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into, acquiring or becoming
a Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.
"ACQUISITION" means the acquisition by the Company and Ball Metal Beverage
Container Corp. of substantially all the assets of the North American beverage
can business of Reynolds Metals Company.
"ADDITIONAL ASSETS" means (i) any property or assets (other than Capital
Stock, Indebtedness or rights to receive payments over a period greater than
180 days) that is usable by the Company or a Restricted Subsidiary in a
Permitted Business or (ii) the Capital Stock of a Person that is at the time, or
becomes, a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or
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indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED that beneficial ownership of
10% or more of the voting securities of a Person shall be deemed to be
control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Senior Note, the rules and procedures
of the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business consistent with past
practices (PROVIDED that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of Section 4.15
and/or Section 5.01 hereof and not by the provisions of Section 4.10 hereof, and
(ii) the issue or sale by the Company or any of its Restricted Subsidiaries of
Equity Interests of any the Company's Restricted Subsidiaries, in the case of
either clause (i) or (ii), whether in a single transaction or a series of
related transactions (a) that have a fair market value in excess of $5.0 million
or (b) for Net Proceeds in excess of $5.0 million. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Restricted Subsidiary
of the Company or by a Restricted Subsidiary of the Company to the Company or to
another Restricted Subsidiary of the Company, (ii) an issuance or sale of Equity
Interests by a Restricted Subsidiary of the Company to the Company or to another
Restricted Subsidiary of the Company that is a Guarantor, (iii) a Restricted
Payment that is not prohibited by Section 4.07 hereof, (iv) sales of receivables
of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity for the fair market value thereof,
including consideration in the amount specified in the proviso to the definition
of Qualified Securitization Transaction and (v) the sale or disposition of Cash
Equivalents or obsolete equipment, will not be deemed to be Asset Sales.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, all shares, interests,
participation, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on
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a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of not more than one year from the date of
acquisition, bankers' acceptances with maturities of not more than one year from
the date of acquisition and overnight bank deposits, in each case with any
domestic commercial bank having capital and surplus in excess of $500 million
and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above and (v)
commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or one of the two highest ratings from Standard & Poor's with
maturities of not more than six months from the date of acquisition.
"CEDEL" means Cedel Bank, SA.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries,
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act; (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above) becomes the "beneficial owners" (as such
term is defined in Rule 13d-3 and Rule l3d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the total of the Voting
Stock of the Company (measured by voting power rather than number of shares);
(iv) the first day on which a majority of the members of the Board of Directors
of the Company are not Continuing Directors; or (v) the Company consolidates
with, or merges with or into, any Person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Company is converted into or exchanged for cash, securities or
other property, other than any such transaction where the Voting Stock of the
Company outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance).
"COMPANY" means Ball Corporation, and any and all successors thereto.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such Consolidated
Net Income, plus (iii) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings and receivables financings, and net payments (if any)
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pursuant to Hedging Obligations), to the extent that any such expense was
deducted in computing such Consolidated Net Income, plus (iv) depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other noncash expenses (excluding any such noncash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period) of such Person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other noncash expenses were
deducted in computing such Consolidated Net Income, minus (v) non-cash items
increasing such Consolidated Net Income for such period (other than items that
were accrued in the ordinary course of business), in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of the Company shall be added to Consolidated Net Income to compute
Consolidated Cash Flow of the Company only to the extent (and in same
proportion) that the Net Income of such Restricted Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
(for such period, on a consolidated basis, determined in accordance with GAAP);
PROVIDED that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary,
(ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded, and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Senior Note Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"CORPORATE TRUST OFFICE OF THE SENIOR NOTE TRUSTEE" shall be at the address
of the Senior Note Trustee specified in Section 11.02 hereof or such other
address as to which the Senior Note Trustee may give notice to the Company.
"CREDIT AGREEMENTS" means (i) the Long-Term Credit Agreement dated as of
August 10, 1998 among the Company, the financial institutions from time to time
a party thereto as lenders, The First National Bank of Chicago, in its capacity
as Administrative Agent, Bank of America National Trust and Savings Association,
in its capacity as Syndication Agent, and Lehman Commercial Paper Inc., in its
capacity as Documentation Agent (as the same may from time to time be amended,
modified, supplemented and/or restated, the "LONG-TERM CREDIT AGREEMENT"), (ii)
the Short-Term Credit Agreement dated as of August 10, 1998 among the Company,
the financial institutions from time to time a party thereto as lenders, The
First National Bank of Chicago, in its capacity as Administrative Agent, Bank of
America National Trust and Savings Association, in its capacity as Syndication
Agent, and Lehman Commercial Paper Inc., in its capacity
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as Documentation Agent (as the same may from time to time be amended,
modified, supplemented and/or restated, the "SHORT-TERM CREDIT AGREEMENT"),
and (iii) the Canadian Revolving Credit Agreement dated as of August 10, 1998
among the Company, Ball Packaging Products Canada, Inc., and the Royal Bank
of Canada.
"CREDIT FACILITIES" means, with respect to the Company, one or more debt
facilities (including, without limitation, the Credit Agreements) or commercial
paper facility with banks or other institutional lenders providing for revolving
credit loans, receivables financing (including through the sale of receivables
to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
"CUSTODIAN" means the Senior Note Trustee, as custodian with respect to the
Senior Notes in global form, or any successor entity thereto.
"DEFAULT" means any event that is or with the passage of time or the giving
of notice (or both) would be an Event of Default.
"DEFINITIVE SENIOR NOTE" means a certificated Senior Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A1 hereto except that such Senior Note shall not bear the
Global Senior Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Senior Note" attached thereto.
"DEPOSITARY" means, with respect to the Senior Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Senior Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Senior Note Indenture.
"DESIGNATED NONCASH CONSIDERATION" means the fair market value of noncash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers' Certificate, setting forth the basis of
such valuation, executed by the principal executive officer and the principal
financial officer of the Company, less the amount of cash or Cash Equivalents
received in connection with a sale of such Designated Noncash Consideration.
"DESIGNATED SENIOR DEBT" means (i) any Indebtedness outstanding under the
Credit Agreements and (ii) any other Senior Debt permitted hereunder the
principal amount of which is $25.0 million or more and that has been designated
by the Company as "Designated Senior Debt."
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Senior Notes mature, except to the extent that such Capital Stock is
solely redeemable with, or solely exchangeable for, any Capital Stock of such
Person that is not Disqualified Stock.
"DOMESTIC SUBSIDIARY" means a Subsidiary that is (i) formed under the laws
of the United States of America or a state or territory thereof or (ii) as of
the date of determination, treated as a domestic entity or a partnership or a
division of a domestic entity for United States federal income tax purposes.
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"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" has the meaning set forth in the Senior Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the
Senior Registration Rights Agreement.
"EXCHANGE SENIOR NOTES" means the Senior Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"EXCLUDED SUBSIDIARY" means each of the following Subsidiaries of the
Company: Analytic Decisions, Incorporated, a Virginia corporation; Ball
Corporation, a Nevada corporation; Ball-Canada Holdings Inc., a Canadian
corporation; Ball Glass Containers, Inc., a Delaware corporation; Ball
International Sales Corporation, a Delaware corporation; Ball Metal Container
Corporation, an Indiana corporation; Ball Technology Licensing Corporation, an
Indiana corporation; Heekin Can, Inc., a Colorado corporation; Metropack
Containers Corporation, an Indiana corporation; Muncie & Western Railroad
Company, an Indiana corporation; Ball Pan Asia Ltd., a corporation organized
under the laws of Mauritius; and Ball Brazil Holdings Limited, a Company Limited
by Shares organized under the laws of the Cayman Islands; PROVIDED, that each
such Subsidiary shall be an Excluded Subsidiary only if and only for so long as
(i) each such Subsidiary is in existence solely for the purposes of being a
"name-holding" entity, (ii) each such Subsidiary engages in no business, (iii)
each such Subsidiary has no liabilities (including any guarantee of Indebtedness
of any other Person), and (iv) the aggregate of the assets (including
capitalization) of all such Subsidiaries shall not exceed $5,000,000.00.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the date of this Senior Note Indenture.
"FIXED CHARGES" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, to the extent properly characterized as interest expense in
accordance with GAAP, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), (ii) the consolidated
interest of such Person and its Restricted Subsidiaries that was capitalized
during such period, (iii) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted Subsidiaries
(whether, or not such Guarantee or Lien is called upon) and (iv) all dividend
payments, whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividend payments on
Equity Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock).
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems
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any Indebtedness (other than revolving credit borrowings under any Credit
Facility) or issues preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but on
or prior to the date on which the event for which the calculation of the
Fixed Charge Coverage Ratio is made (the "CALCULATION DATE"), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, Guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that
have been made by the Company or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related
financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period shall
be calculated without giving effect to clause (iii) of the proviso set forth
in the definition of Consolidated Net Income, (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the Calculation Date,
shall be excluded, and (iii) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
"FOREIGN SUBSIDIARIES" means Subsidiaries of the Company that are not
Domestic Subsidiaries.
"FTB" means FTB Packaging Limited, a Hong Kong corporation.
"FTB GROUP" means FTB and each of its Subsidiaries, including, without
limitation, MCP and each of its Subsidiaries and joint ventures.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the statements and pronouncements of
the Financial Accounting Standards Board and such other statements by such other
entities as have been approved by a significant segment of the accounting
profession, which are applicable at the date of this Senior Note Indenture.
"GLOBAL SENIOR NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Senior Notes issued
under this Senior Note Indenture.
"GLOBAL SENIOR NOTES" means, individually and collectively, each of the
Restricted Global Senior Notes and the Unrestricted Global Senior Notes, in the
form of Exhibits A1 and A2 hereto issued in accordance with Section 2.01,
2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTORS" means each Domestic Subsidiary of the Company (other than Ball
Capital Corp. and the Excluded Subsidiaries) as of the date of this Senior Note
Indenture and each other Subsidiary that becomes a party to a Senior Subsidiary
Guarantee.
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"HEDGING OBLIGATIONS" means, with respect to any Person, the net payment
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements in the ordinary course of business and pursuant to
past practices designed to protect such Person against fluctuations in commodity
prices, interest rates or currency exchange rates.
"HOLDER" means a Person in whose name a Senior Note is registered.
"IAI GLOBAL SENIOR NOTE" means the global Senior Note in the form of
Exhibit A1 hereto bearing the Global Senior Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Senior Notes sold to Institutional
Accredited Investors.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all Indebtedness of others
secured by a Lien on any asset of such Person (whether or not such Indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any Indebtedness of any other Person, and any
liability, whether or not contingent and whether or not it appears on the
balance sheet of such other Person. The amount of any Indebtedness outstanding
as of any date shall be (i) the accreted value thereof, in the case of any
Indebtedness that does not require current payments of interest, and (ii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a
Global Senior Note through a Participant.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other Obligations),
advances of assets or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business, prepaid expenses and accounts receivable),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any of its Restricted Subsidiaries sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a direct or indirect Restricted Subsidiary of the Company,
the Company or such Restricted Subsidiary, as the case may be, shall be deemed
to have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal office of
the Senior Note Trustee is located or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday
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at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Senior Notes for use by such Holders
in connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"LIMITED ORIGINATOR RECOURSE" means a reimbursement obligation to the
Company or a Restricted Subsidiary in connection with a drawing on a letter of
credit, revolving loan commitment, cash collateral account or other such credit
enhancement issued to support Indebtedness of a Securitization Entity under a
facility for the financing of trade receivables; PROVIDED that the available
amount of any such form of credit enhancement at any time shall not exceed 10.0%
of the principal amount of such Indebtedness at such time.
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to
Section 5 of the Senior Registration Rights Agreement.
"MARKETABLE SECURITIES" means, with respect to any Asset Sale, any readily
marketable equity securities that are (i) traded on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market; and (ii) issued by a
corporation having a total equity market capitalization of not less than $250.0
million; PROVIDED that the excess of (A) the aggregate amount of securities of
any one such corporation held by the Company and any Restricted Subsidiary over
(B) ten times the average daily trading volume of such securities during the 20
immediately preceding trading days shall be deemed not to be Marketable
Securities; as determined on the date of the contract relating to such Asset
Sale.
"MCP" means M.C. Packaging (Hong Kong) Limited, a Hong Kong corporation.
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss
together with any related provision for taxes on such gain or loss, realized in
connection with the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person
or any of its Restricted Subsidiaries, (ii) any extraordinary gain or loss,
together with any related provision for taxes on such extraordinary gain or
loss, and (iii) any one-time noncash charges (including legal, accounting and
debt issuance costs) resulting from the Transactions.
"NET PROCEEDS" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of all costs relating to such Asset Sale (including, without limitation, legal,
accounting, investment banking and brokers fees, and sales and underwriting
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
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"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Senior Notes being offered hereby) of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"OBLIGATIONS" means any principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or its Restricted Subsidiaries whether or
not a claim for post-filing interest is allowed in such proceeding), penalties,
fees, charges, expenses, indemnifications, reimbursement obligations, damages
(including Liquidated Damages), guarantees and other liabilities or amounts
payable under the documentation governing any Indebtedness or in respect
thereof.
"OFFICER" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be a vice-president, the
principal financial officer, the treasurer or the principal accounting officer
of the Company, that meets the requirements of Sections 11.04 and 11.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is acceptable
to the Senior Note Trustee, that meets the requirements of Sections 11.04 and
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Senior Note Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to The Depository Trust Company, shall include Euroclear and
Cedel).
"PARTICIPATING BROKER-DEALER" means a broker-dealer participating in the
Exchange Offer.
"PERMITTED BUSINESS" means the lines of business conducted by the Company
and its Restricted Subsidiaries on the date of this Senior Note Indenture and
businesses substantially similar, related or incidental thereto or reasonable
extensions thereof.
"PERMITTED INVESTMENTS" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary of the Company in
a Person engaged in a Permitted Business, if as a result of such Investment (i)
such Person becomes a Restricted Subsidiary of the Company and a Guarantor or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company that is a Guarantor; (d)
any Restricted Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereto; (e) any acquisition of assets solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(f) other Investments by
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the Company or any of its Restricted Subsidiaries in any Person having an
aggregate fair market value (measured as of the date made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (f) that are at the time
outstanding, not to exceed $50.0 million; (g) Investments arising in
connection with Hedging Obligations that are incurred in the ordinary course
of business consistent with past practices, for the purpose of fixing or
hedging currency, commodity or interest rate risk (including with respect to
any floating rate Indebtedness that is permitted by the terms of this Senior
Note Indenture to be outstanding) in connection with the conduct of the
business of the Company and its Restricted Subsidiaries which are Guarantors;
(h) any Investment by the Company or a Subsidiary of the Company in a
Securitization Entity or any Investment by a Securitization Entity in any
other Person in connection with a Qualified Securitization Transaction;
PROVIDED that any Investment in a Securitization Entity is in the form of a
Purchase Money Note or an equity interest; (i) any Investment existing on the
date of this Senior Note Indenture and any amendment, modification,
restatement, supplement, extension, renewal, refunding, replacement,
refinancing, in whole or in part, thereof; (j) any Investment in FTB Group,
the proceeds of which are used to permanently repay Indebtedness of FTB Group
that was outstanding on the date of this Senior Note Indenture; and (k)
Investments in Permitted Joint Ventures of up to $25 million outstanding at
any time.
"PERMITTED JOINT VENTURE" means a joint venture (however structured)
engaged in a Permitted Business and in which the Company or a Restricted
Subsidiary (a) owns at least 40% of the ownership interest or (b) has a right to
receive at least 40% of the profits or distributions; PROVIDED that such joint
venture is not a Subsidiary.
"PERMITTED LIENS" means (i) Liens on assets (including, without limitation,
the capital stock of a Subsidiary) of the Company or any of the Guarantors to
secure Indebtedness under the Credit Facilities that were permitted by the terms
of this Senior Note Indenture to be incurred; (ii) Liens on the assets of the
Company or any of the Guarantors to secure Hedging Obligations to any Person
that is a holder of Senior Debt (or an Affiliate thereof) with respect to
Indebtedness under any Credit Facility permitted by this Senior Note Indenture
to be incurred; (iii) Liens on property of a Person existing at the time such
Person is acquired by, merged into or consolidated with the Company or any
Restricted Subsidiary of the Company; PROVIDED that such Liens were in existence
prior to the contemplation of such acquisition, merger or consolidation and do
not extend to any assets other than those of the Person acquired by, merged into
or consolidated with the Company; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the Company,
PROVIDED that such Liens were in existence prior to the contemplation of such
acquisition and only extend to the property so acquired; (v) Liens existing on
the date of this Senior Note Indenture (including a Lien incurred or to be
incurred to secure outstanding Indebtedness under the existing 8.46% Guaranteed
ESOP Notes, Series A due January 15, 1999 and 8.83% Guaranteed ESOP Notes,
Series B due December 15, 2001 of the Ball Corporation Salary Conversion and
Employee Stock Ownership Plan Trust and the related guarantees thereof by the
Company); (vi) Liens to secure any Permitted Refinancing Indebtedness incurred
to refinance any Indebtedness secured by any Lien referred to in the foregoing
clauses (i) through (v), as the case may be, at the time the original Lien
became a Permitted Lien; (vii) Liens in favor of the Company or any Restricted
Subsidiary that is a Guarantor; (viii) Liens to secure Indebtedness permitted by
clause (xiv) of the second paragraph of Section 4.09 hereof, (ix) Liens incurred
in the ordinary course of business of the Company or any Restricted Subsidiary
of the Company with respect to obligations that do not exceed $25.0 million in
the aggregate at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Restricted Subsidiary; (x) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds, deposits to secure the
performance of bids, trade contracts, government contracts, leases or licenses
or other obligations of a like nature incurred in the ordinary course of
business (including, without limitation, landlord Liens on leased properties);
(xi) Liens for taxes, assessments or governmental charges or claims that are not
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yet delinquent or that are being contested in good faith by appropriate
proceedings; PROVIDED that any reserve or other appropriate provision as shall
be required to conform with GAAP shall have been made therefor; (xii) Liens to
secure Indebtedness (including Capital Lease Obligations) permitted by clause
(v) of the second paragraph of Section 4.09 hereof, covering only the assets
acquired with such Indebtedness; (xiii) carriers', warehousemen's, mechanics',
landlords' materialmen's, repairmen's or other like Liens arising in the
ordinary course of business in respect of obligations not overdue for a period
in excess of 60 days or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently prosecuted; PROVIDED that any
reserve or other appropriate provision as shall be required to conform with GAAP
shall have been made therefor; (xiv) easements, rights-of-way, zoning and
similar restrictions and other similar encumbrances or title defects incurred,
or leases or subleases granted to others, in the ordinary course of business,
which do not in any case materially detract from the value of the property
subject thereto or do not interfere with or adversely affect in any material
respect the ordinary conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole; (xv) Liens in favor of customs and revenue
authorities to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business and other similar Liens
arising in the ordinary course of business; and (xvi) leases or subleases
granted to third Persons not interfering with the ordinary course of business of
the Company or any of its Restricted Subsidiaries, (xvii) Liens (other than any
Lien imposed by ERISA or any rule or regulation promulgated thereunder) incurred
or deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance, and other types of social security;
(xviii) deposits made in the ordinary course of business to secure liability to
insurance carriers; (xix) Liens for purchase money obligations (including
refinancings thereof permitted under Section 4.09 hereof, PROVIDED that (A) the
Indebtedness secured by any such Lien is permitted under Section 4.09 hereof,
and (B) any such Lien encumbers only the asset so purchased; (xx) any attachment
or judgment Lien not constituting an Event of Default under clause (i) of the
first paragraph of Section 6.01 hereof; (xxi) any interest or title of a lessor
or sublessor under any operating lease; (xxii) Liens on assets transferred to a
Securitization Entity or on assets of a Securitization Entity, in either case
incurred in connection with a Qualified Securitization Transaction; and (xxiii)
Liens under licensing agreements for use of Intellectual Property entered into
in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); PROVIDED that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued and unpaid interest and premium, if any, on, any Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to the Senior Notes on terms at least as
favorable to the Holders of Senior Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or a Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
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"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.06(g)(i)
to be placed on all Senior Notes issued under this Senior Note Indenture except
where otherwise permitted by the provisions of this Senior Note Indenture.
"PUBLIC EQUITY OFFERING" means any underwritten primary public offering of
the Common Stock or other Voting Stock of the Company (other than Disqualified
Stock) pursuant to an effective registration statement (other than a
registration statement on Form S-4, Form S-8, or any successor or similar form)
under the Securities Act.
"PURCHASE MONEY NOTE" means a promissory note of a Securitization Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Restricted Subsidiary of the Company in connection with a Qualified
Securitization Transaction, which note shall be repaid from cash available to
the Securitization Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts paid
in connection with the purchase of newly generated receivables.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series of
transactions pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (a) a Securitization Entity (in the
case of a transfer by the Company or any of its Restricted Subsidiaries) and (b)
any other Person (in case of a transfer by a Securitization Entity), or may
grant a security interest in, any receivables (whether now existing or arising
or acquired in the future) of the Company or any of its Restricted Subsidiaries,
and any assets related thereto including, without limitation, all collateral
securing such receivables, all contracts and contract rights and all Guarantees
or other obligations in respect of such receivables, proceeds of such
receivables and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving receivables
(collectively, "transferred assets"); PROVIDED that in the case of any such
transfer by the Company or any of its Restricted Subsidiaries, the transferor
receives cash or Purchase Money Notes in an amount which (when aggregated with
the cash and Purchase Money Notes received by the Company and its Restricted
Subsidiaries upon all other such transfers of transferred assets during the
ninety days preceding such transfer) is at least equal to 75% of the aggregate
face amount of all receivables so transferred during such day and the ninety
preceding days.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL SENIOR NOTE" means a Regulation S Temporary Global
Senior Note or Regulation S Permanent Global Senior Note, as appropriate.
"REGULATION S PERMANENT GLOBAL SENIOR NOTE" means a permanent global Senior
Note in the form of Exhibit A1 hereto bearing the Global Senior Note Legend and
the Private Placement Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee, issued in a denomination equal to
the outstanding principal amount of the Regulation S Temporary Global Senior
Note upon expiration of the Restricted Period.
"REGULATION S TEMPORARY GLOBAL SENIOR NOTE" means a temporary global Senior
Note in the form of Exhibit A2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Senior Notes initially sold in reliance on Rule 903 of Regulation S.
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"RESPONSIBLE OFFICER," when used with respect to the Senior Note Trustee,
means any officer within the corporate trust department of the Senior Note
Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the Senior
Note Trustee who customarily performs functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Senior Note Indenture.
"RESTRICTED DEFINITIVE SENIOR NOTE" means a Definitive Senior Note bearing
the Private Placement Legend.
"RESTRICTED GLOBAL SENIOR NOTE" means a Global Senior Note bearing the
Private Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PERIOD" means the 40-day restricted period as defined in
Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary; PROVIDED that, on the date of
this Senior Note Indenture, all Subsidiaries of the Company other than FTB
Group, Ball Capital Corp. and the Excluded Subsidiaries shall be Restricted
Subsidiaries of the Company.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the Company (or
another Person in which the Company or any Restricted Subsidiary of the Company
makes an Investment and to which the Company or any Restricted Subsidiary of the
Company transfers receivables and related assets) that engages in no activities
other than in connection with the financing of receivables and that is
designated by the Board of the Directors of the Company (as provided below) as a
Securitization Entity (a) no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which (i) is guaranteed by the Company
or any Restricted Subsidiary of the Company other than pursuant to Standard
Securitization Undertakings or Limited Originator Recourse, (ii) is recourse to
or obligates the Company or any Restricted Subsidiary of the Company (other than
the Securitization Entity) in any way other than pursuant to Standard
Securitization Undertakings or Limited Originator Recourse or (iii) subjects any
property or asset of the Company or any Restricted Subsidiary of the Company
(other than the Securitization Entity), directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings or Limited Originator Recourse, (b) with which
neither the Company nor any Restricted Subsidiary of the Company has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons that are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing receivables of such entity and (c) to which neither
the Company nor
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any Restricted Subsidiary of the Company has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Senior Note Trustee by
filing with the Senior Note Trustee a certified copy of the resolution of the
Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"SENIOR DEBT" means (i) all Indebtedness outstanding under the Credit
Facility permitted under clauses (i) and (ii) of the second paragraph of Section
4.09 hereof, (ii) any other Indebtedness permitted to be incurred by the Company
under the terms of this Senior Note Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Senior Notes and (iii) all Obligations
with respect to the foregoing. Notwithstanding anything to the contrary in the
foregoing, Senior Debt will not include (w) any liability for federal, state,
local or other taxes owed or owing by the Company, (x) any Indebtedness of the
Company to any of its Subsidiaries or other Affiliates, (y) any trade payables
or (z) any Indebtedness that is incurred in violation of this Senior Note
Indenture.
"SENIOR MAKE-WHOLE PREMIUM" means, in connection with any optional
redemption of any Senior Note, the excess, if any, of (i) the aggregate present
value as of the date of such redemption of each dollar of principal of such
Senior Note being redeemed and the amount of interest (exclusive of interest
accrued to the date of redemption) that would have been payable in respect of
such dollar if such redemption had not been made, determined by discounting, on
a semiannual basis, such principal and interest at a rate equal to the sum of
the Treasury Yield (determined on the Business Day immediately preceding the
date of such redemption) plus 0.5% per annum, from the respective dates on which
such principal and interest would have been payable if such redemption had not
been made, over (ii) the aggregate principal amount of such Senior Note being
redeemed.
"SENIOR NOTE INDENTURE" means this Senior Note Indenture, as amended or
supplemented from time to time.
"SENIOR NOTES" has the meaning assigned to it in the preamble to this
Senior Note Indenture.
"SENIOR NOTE TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Senior Note
Indenture and thereafter means the successor serving hereunder.
"SENIOR REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement with respect to the Senior Notes, dated as of August 10, 1998, by and
among the Company and the other parties named on the signature pages thereof, as
such agreement may be amended, modified or supplemented from time to time.
"SENIOR SUBORDINATED NOTE INDENTURE" means that certain Senior Subordinated
Note Indenture, dated as of the date of this Senior Note Indenture, between the
Company, the Guarantors and The Bank of New York as Senior Subordinated Note
Trustee, as amended or supplemented from time to time, relating to the Senior
Subordinated Notes.
"SENIOR SUBORDINATED NOTES" means the Company's 8 1/4% Senior Subordinated
Notes due 2008 issued concurrently pursuant to the Senior Subordinated Note
Indenture.
"SENIOR SUBSIDIARY GUARANTEE" means the Guarantee of the Senior Notes by
each of the Guarantors pursuant to Article 10 hereof and in the form of
Guarantee endorsed on the forms of Senior Note attached as
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Exhibits A1 and A2 hereto and any additional Guarantee of the Senior Notes to
be executed by any Restricted Subsidiary of the Company pursuant to Section
4.16 hereof.
"SERIES A SENIOR NOTES" has the meaning assigned to it in the preamble to
this Senior Note Indenture.
"SERIES B SENIOR NOTES" has the meaning assigned to it in the preamble to
this Senior Note Indenture.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as
defined in the Senior Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Senior Note Indenture.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary of the
Company that are reasonably customary in receivables securitization
transactions.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the Credit Agreements or other
original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or an entity described in clause (i) and
related to such Person or (b) the only general partners of which are such Person
or of one or more entities described in clause (i) and related to such Person
(or any combination thereof).
"SUBORDINATED SUBSIDIARY GUARANTEE" means the Guarantee of the Senior
Subordinated Notes by each of the Guarantors pursuant to the Senior Subordinated
Note Indenture and any additional Guarantee of the Senior Subordinated Notes to
be executed by any Restricted Subsidiary of the Company pursuant to the Senior
Subordinated Note Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Senior Note Indenture is
qualified under the TIA.
"TOTAL ASSETS" means the total assets of the Company and its Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP, as
shown on the most recently available consolidated balance sheet of the Company
and its Restricted Subsidiaries.
"TRANSACTIONS" means the entering into the Credit Agreements; the issuance
of the Senior Notes and the Senior Subordinated Notes; and the Acquisition.
"TREASURY YIELD" means, in connection with the calculation of any Senior
Make-Whole Premium on any Senior Note, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical Release
H.15 (519) that has become publicly available at least two Business Days prior
to the date fixed for redemption
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(or, if such Statistical Release is no longer published, any publicly
available source of similar data)) equal to the then remaining maturity of
such Senior Note; PROVIDED that if no United States Treasury security is
available with such a constant maturity and for which a closing yield is
given, the Treasury Yield shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the closing yields of
United States Treasury securities for which such yields are given, except
that if the remaining maturity of such Senior Note is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"UNRESTRICTED DEFINITIVE SENIOR NOTE" means one or more Definitive Senior
Notes that do not bear and are not required to bear the Private Placement
Legend.
"UNRESTRICTED GLOBAL SENIOR NOTE" means a permanent global Senior Note in
the form of Exhibit A1 attached hereto that bears the Global Senior Note Legend
and that has the "Schedule of Exchanges of Interests in the Global Senior Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing a series of Senior Notes that do not
bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means each of FTB Group, Ball Capital Corp. and
the Excluded Subsidiaries. In addition, "Unrestricted Subsidiary" means (i) any
Subsidiary that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution; but only to the extent that such
Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company; (c) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's net worth; and (d) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries; PROVIDED,
HOWEVER, that the Company and its Restricted Subsidiaries may guarantee the
performance of Unrestricted Subsidiaries in the ordinary course of business
except for guarantees of Obligations in respect of borrowed money. Any such
designation by the Board of Directors shall be evidenced to the Senior Note
Trustee by filing with the Senior Note Trustee a certified copy of the board
resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.07 hereof.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
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"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary, 100% of the
outstanding Capital Stock and other Equity Interests of which is directly or
indirectly owned by the Company.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"AFFILIATE TRANSACTION". . . . . . . . . . . . . . . . . . . . . . 4.11
"AUTHENTICATION ORDER" . . . . . . . . . . . . . . . . . . . . . . 2.02
"CALCULATION DATE" . . . . . . . . . . . . . . . . . . . . . . . . 1.01
"CHANGE OF CONTROL OFFER". . . . . . . . . . . . . . . . . . . . . 4.15
"CHANGE OF CONTROL PAYMENT". . . . . . . . . . . . . . . . . . . . 4.15
"CHANGE OF CONTROL PAYMENT DATE" . . . . . . . . . . . . . . . . . 4.15
"COVENANT DEFEASANCE". . . . . . . . . . . . . . . . . . . . . . . 8.03
"DTC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"EVENT OF DEFAULT" . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"EXCESS PROCEEDS". . . . . . . . . . . . . . . . . . . . . . . . . 4.10
"INCUR". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"INVESTMENT GRADE RATINGS" . . . . . . . . . . . . . . . . . . . . 4.19
"LEGAL DEFEASANCE" . . . . . . . . . . . . . . . . . . . . . . . . 8.02
"LONG-TERM CREDIT AGREEMENT" . . . . . . . . . . . . . . . . . . . 1.01
"MOODY'S". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19
"OFFER AMOUNT" . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
"OFFER PERIOD" . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
"OTHER INDEBTEDNESS" . . . . . . . . . . . . . . . . . . . . . . . 4.16
"PAYING AGENT" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"PAYMENT DEFAULT". . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"PERMITTED DEBT" . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"PURCHASE DATE". . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
"RATING AGENCIES". . . . . . . . . . . . . . . . . . . . . . . . . 4.19
"REGISTRAR". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"RESTRICTED PAYMENTS". . . . . . . . . . . . . . . . . . . . . . . 4.07
"S&P". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19
"SENIOR ASSET SALE OFFER". . . . . . . . . . . . . . . . . . . . . 4.10
"SHORT-TERM CREDIT AGREEMENT". . . . . . . . . . . . . . . . . . . 1.01
"SUSPENDED COVENANTS". . . . . . . . . . . . . . . . . . . . . . . 4.19
"SUSPENSION PERIOD". . . . . . . . . . . . . . . . . . . . . . . . 4.19
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Senior Note Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Senior Note
Indenture.
The following TIA terms used in this Senior Note Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Senior Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Senior Note;
"INDENTURE TO BE QUALIFIED" means this Senior Note Indenture;
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"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Senior Note
Trustee; and
"OBLIGOR" on the Senior Notes and the Senior Subsidiary Guarantees
means the Company and the Guarantors, respectively, and any successor obligor
upon the Senior Notes and the Senior Subsidiary Guarantees, respectively.
All other terms used in this Senior Note Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with GAAP;
(3) "OR" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE SENIOR NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL. The Senior Notes and the Senior Note Trustee's certificate
of authentication shall be substantially in the form of Exhibits A1 and A2
hereto. The Senior Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Senior Note shall be dated the date
of its authentication. The Senior Notes shall be in denominations of $1,000 and
integral multiples thereof.
The terms and provisions contained in the Senior Notes shall constitute,
and are hereby expressly made, a part of this Senior Note Indenture and the
Company, the Guarantors and the Senior Note Trustee, by their execution and
delivery of this Senior Note Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
Senior Note conflicts with the express provisions of this Senior Note Indenture,
the provisions of this Senior Note Indenture shall govern and be controlling.
(b) GLOBAL SENIOR NOTES. Senior Notes issued in global form shall be
substantially in the form of Exhibits A1 or A2 attached hereto (including the
Global Senior Note Legend thereon and the "Schedule of Exchanges of Interests in
the Global Senior Note" attached thereto). Senior Notes issued in definitive
form shall be substantially in the form of Exhibit A1 attached hereto (but
without the Global Senior Note Legend thereon and without the "Schedule of
Exchanges of Interests in the Global Senior Note" attached thereto). Each
Global Senior Note shall represent such of the outstanding Senior Notes as shall
be specified therein
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and each shall provide that it shall represent the aggregate principal amount
of outstanding Senior Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Senior Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Senior Note to
reflect the amount of any increase or decrease in the aggregate principal
amount of outstanding Senior Notes represented thereby shall be made by the
Senior Note Trustee or the Custodian, at the direction of the Senior Note
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
(c) TEMPORARY GLOBAL SENIOR NOTES. Senior Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Senior Note, which shall be deposited on behalf of the
purchasers of the Senior Notes represented thereby with the Senior Note Trustee,
at its New York office, as custodian for the Depositary, and registered in the
name of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Cedel Bank, duly executed by
the Company and authenticated by the Senior Note Trustee as hereinafter
provided. The Restricted Period shall be terminated upon the receipt by the
Senior Note Trustee of (i) a written certificate from the Depositary, together
with copies of certificates from Euroclear and Cedel Bank certifying that they
have received certification of non-United States beneficial ownership of 100% of
the aggregate principal amount of the Regulation S Temporary Global Senior Note
(except to the extent of any beneficial owners thereof who acquired an interest
therein during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Senior Note or an IAI Global Senior Note
bearing a Private Placement Legend, all as contemplated by Section 2.06(a)(ii)
hereof), and (ii) an Officers' Certificate from the Company. Following the
termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Senior Note shall be exchanged for beneficial interests in
Regulation S Permanent Global Senior Notes pursuant to the Applicable
Procedures. Simultaneously with the authentication of Regulation S Permanent
Global Senior Notes, the Senior Note Trustee shall cancel the Regulation S
Temporary Global Senior Note. The aggregate principal amount of the Regulation
S Temporary Global Senior Note and the Regulation S Permanent Global Senior
Notes may from time to time be increased or decreased by adjustments made on the
records of the Senior Note Trustee and the Depositary or its nominee, as the
case may be, in connection with transfers of interest as hereinafter provided.
(d) EUROCLEAR AND CEDEL PROCEDURES APPLICABLE. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Senior Note and the
Regulation S Permanent Global Senior Notes that are held by Participants through
Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Senior Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Senior Note no
longer holds that office at the time a Senior Note is authenticated, the Senior
Note shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Senior Note Trustee. The signature shall be conclusive
evidence that the Senior Note has been authenticated under this Senior Note
Indenture.
The Senior Note Trustee shall, upon a written order of the Company signed
by one Officer (an "AUTHENTICATION ORDER"), authenticate Senior Notes for
original issue up to the aggregate principal amount stated in paragraph 4 of the
Senior Notes. The aggregate principal amount of Senior Notes outstanding at any
time may not exceed such amount except as provided in Section 2.07 hereof.
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The Senior Note Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Senior Notes. An authenticating agent may
authenticate Senior Notes whenever the Senior Note Trustee may do so. Each
reference in this Senior Note Indenture to authentication by the Senior Note
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Senior Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Senior Notes may be presented for payment ("PAYING
AGENT"). The Registrar shall keep a register of the Senior Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Senior Note Trustee in writing of the name
and address of any Agent not a party to this Senior Note Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Senior Note Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Senior Notes.
The Company initially appoints the Senior Note Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Senior Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Senior Note
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Senior Note Trustee all money held by the Paying Agent
for the payment of principal, premium or Liquidated Damages, if any, or interest
on the Senior Notes, and will notify the Senior Note Trustee of any default by
the Company in making any such payment. While any such default continues, the
Senior Note Trustee may require a Paying Agent to pay all money held by it to
the Senior Note Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Senior Note Trustee. Upon payment over to the
Senior Note Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the Senior
Note Trustee shall serve as Paying Agent for the Senior Notes.
SECTION 2.05. HOLDER LISTS.
The Senior Note Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Senior Note Trustee is not the Registrar, the Company shall furnish to the
Senior Note Trustee at least seven Business Days before each interest payment
date and at such other times as the Senior Note Trustee may request in writing,
a list in such form and as of such date as the Senior Note Trustee may
reasonably require of the names and addresses of the Holders of Senior Notes and
the Company shall otherwise comply with TIA Section 312(a).
21
<PAGE>
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL SENIOR NOTES. A Global Senior Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Senior Notes will be exchanged by the Company for Definitive Senior Notes if (i)
the Company delivers to the Senior Note Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Senior Notes (in whole but not in part)
should be exchanged for Definitive Senior Notes and delivers a written notice to
such effect to the Senior Note Trustee; provided that in no event shall the
Regulation S Temporary Global Senior Note be exchanged by the Company for
Definitive Senior Notes prior to (x) the expiration of the Restricted Period and
(y) the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Senior Notes shall be issued
in such names as the Depositary shall instruct the Senior Note Trustee. Global
Senior Notes also may be exchanged or replaced, in whole or in part, as provided
in Sections 2.07 and 2.10 hereof. Every Senior Note authenticated and delivered
in exchange for, or in lieu of, a Global Senior Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Senior Note.
A Global Senior Note may not be exchanged for another Senior Note other than as
provided in this Section 2.06(a), however, beneficial interests in a Global
Senior Note may be transferred and exchanged as provided in Section 2.06(b), (c)
or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL SENIOR
NOTES. The transfer and exchange of beneficial interests in the Global Senior
Notes shall be effected through the Depositary, in accordance with the
provisions of this Senior Note Indenture and the Applicable Procedures.
Beneficial interests in the Restricted Global Senior Notes shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. Transfers of beneficial interests in the Global
Senior Notes also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL SENIOR
NOTE. Beneficial interests in any Restricted Global Senior
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted
Global Senior Note in accordance with the transfer
restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the
Temporary Regulation S Global Senior Note may not be made to
a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Beneficial interests in
any Unrestricted Global Senior Note may be transferred to
Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Note.
No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL SENIOR NOTES. In connection with all transfers and
exchanges of beneficial interests that are not subject to
Section 2.06(b)(i) above, the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be
credited a beneficial
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<PAGE>
interest in another Global Senior Note in an amount equal
to the beneficial interest to be transferred or exchanged
and (2) instructions given in accordance with the
Applicable Procedures containing information regarding
the Participant account to be credited with such increase
or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Senior Note
in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by
the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Senior
Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided that in no
event shall Definitive Senior Notes be issued upon the
transfer or exchange of beneficial interests in the
Regulation S Temporary Global Senior Note prior to (x)
the expiration of the Restricted Period and (y) the
receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act. Upon
consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements
of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in
the Restricted Global Senior Notes. Upon satisfaction of
all of the requirements for transfer or exchange of
beneficial interests in Global Senior Notes contained in
this Senior Note Indenture and the Senior Notes or
otherwise applicable under the Securities Act, the Senior
Note Trustee shall adjust the principal amount of the
relevant Global Senior Note(s) pursuant to Section
2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL SENIOR NOTE. A beneficial interest in any Restricted
Global Senior Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in
another Restricted Global Senior Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above
and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Senior Note,
then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications
in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary
Global Senior Note or the Regulation S Global Senior
Note, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Senior Note, then
the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications and
certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL SENIOR NOTE FOR BENEFICIAL INTERESTS IN
THE UNRESTRICTED GLOBAL SENIOR NOTE. A beneficial interest
in any Restricted Global Senior Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted
Global Senior Note or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Senior Note if the exchange or transfer
complies with the requirements of Section 2.06(b)(ii) above
and:
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(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior
Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal or via the Depositary's book-entry system
that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange
Senior Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior
Registration Rights Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to exchange
such beneficial interest for a beneficial interest
in an Unrestricted Global Senior Note, a
certificate from such holder in the form of
Exhibit C hereto, including the certifications in
item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to transfer
such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Senior Note, a
certificate from such holder in the form of
Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect
that such exchange or transfer is in compliance with
the Securities Act and state "blue sky" laws and that
the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph
(B) or (D) above at a time when an Unrestricted Global
Senior Note has not yet been issued, the Company shall issue
and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Senior Note Trustee shall
authenticate one or more Unrestricted Global Senior Notes in
an aggregate principal amount equal to the aggregate
principal amount of beneficial interests transferred
pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Senior Note
cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a
Restricted Global Senior Note.
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(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE SENIOR
NOTES.
(i) Beneficial Interests in Restricted Global Senior Notes to
Restricted Definitive Senior Notes. If any holder of a
beneficial interest in a Restricted Global Senior Note
proposes to exchange such beneficial interest for a
Restricted Definitive Senior Note or to transfer such
beneficial interest to a Person who takes delivery thereof
in the form of a Restricted Definitive Senior Note, then,
upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to exchange such
beneficial interest for a Restricted Definitive Senior
Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1)
thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the
Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration
requirements of the Securities Act in accordance with
Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
the Senior Note Trustee shall cause the aggregate principal
amount of the applicable Global Senior Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Senior Note Trustee shall
authenticate and deliver to the Person designated in the
instructions a Definitive Senior Note in the appropriate
principal amount. Any Definitive Senior Note issued in
exchange for a beneficial interest in a Restricted Global
Senior Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized
denomination or denominations as the holder of such
beneficial interest shall
25
<PAGE>
instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant.
The Senior Note Trustee shall deliver such Definitive
Senior Notes to the Persons in whose names such Senior
Notes are so registered. Any Definitive Senior Note
issued in exchange for a beneficial interest in a
Restricted Global Senior Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer
contained therein.
Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global
Senior Note may not be exchanged for a Definitive Senior
Note or transferred to a Person who takes delivery thereof
in the form of a Definitive Senior Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by
the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act, except in the
case of a transfer pursuant to an exemption from the
registration requirements of the Securities Act other than
Rule 903 or Rule 904.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SENIOR NOTES TO
UNRESTRICTED DEFINITIVE SENIOR NOTES. A holder of a
beneficial interest in a Restricted Global Senior Note may
exchange such beneficial interest for an Unrestricted
Definitive Senior Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Senior Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the
distribution of the Exchange Senior Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior
Registration Rights Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to exchange
such beneficial interest for a Definitive Senior
Note that does not bear the Private Placement
Legend, a certificate from such holder in the form
of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Senior Note proposes to transfer
such beneficial interest to a Person who shall
take delivery thereof in the form of a Definitive
Senior Note that does not bear the Private
Placement Legend, a certificate
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from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect
that such exchange or transfer is in compliance with
the Securities Act and state "blue sky" laws and that
the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL SENIOR NOTES TO
UNRESTRICTED DEFINITIVE SENIOR NOTES. If any holder of a
beneficial interest in an Unrestricted Global Senior Note
proposes to exchange such beneficial interest for a
Definitive Senior Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form
of a Definitive Senior Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the
Senior Note Trustee shall cause the aggregate principal
amount of the applicable Global Senior Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Senior Note Trustee shall
authenticate and deliver to the Person designated in the
instructions a Definitive Senior Note in the appropriate
principal amount. Any Definitive Senior Note issued in
exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall be registered in such name or names and
in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Senior Note
Trustee shall deliver such Definitive Senior Notes to the
Persons in whose names such Senior Notes are so registered.
Any Definitive Senior Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE SENIOR NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE SENIOR NOTES TO BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL SENIOR NOTES. If any Holder of a
Restricted Definitive Senior Note proposes to exchange such
Senior Note for a beneficial interest in a Restricted Global
Senior Note or to transfer such Restricted Definitive Senior
Notes to a Person who takes delivery thereof in the form of
a beneficial interest in a Restricted Global Senior Note,
then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Senior Note
proposes to exchange such Senior Note for a beneficial
interest in a Restricted Global Senior Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Senior Note is being
transferred to a QIB in accordance with Rule 144A under
the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such Restricted Definitive Senior Note is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
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under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Senior Note is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Senior Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Senior Note is being
transferred to the Company or any of its Subsidiaries,
a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b)
thereof; or
(G) if such Restricted Definitive Senior Note is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Senior Note Trustee shall cancel the Restricted
Definitive Senior Note, increase or cause to be increased
the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Senior Note, in the
case of clause (B) above, the 144A Global Senior Note, in
the case of clause (c) above, the Regulation S Global Senior
Note, and in all other cases, the IAI Global Senior Note.
(ii) RESTRICTED DEFINITIVE SENIOR NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL SENIOR NOTES. A Holder of a
Restricted Definitive Senior Note may exchange such Senior
Note for a beneficial interest in an Unrestricted Global
Senior Note or transfer such Restricted Definitive Senior
Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of
a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the
Exchange Senior Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior
Registration Rights Agreement;
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(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Senior Notes
proposes to exchange such Senior Notes for a
beneficial interest in the Unrestricted Global
Senior Note, a certificate from such Holder in the
form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Senior Notes
proposes to transfer such Senior Notes to a Person
who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global
Senior Note, a certificate from such Holder in the
form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect
that such exchange or transfer is in compliance with
the Securities Act and state "blue sky" laws and that
the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Senior Note
Trustee shall cancel the Definitive Senior Notes and
increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Senior Note.
(iii) UNRESTRICTED DEFINITIVE SENIOR NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL SENIOR NOTES. A Holder of an
Unrestricted Definitive Senior Note may exchange such Senior
Note for a beneficial interest in an Unrestricted Global
Senior Note or transfer such Definitive Senior Notes to a
Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Senior Note at
any time. Upon receipt of a request for such an exchange or
transfer, the Senior Note Trustee shall cancel the
applicable Unrestricted Definitive Senior Note and increase
or cause to be increased the aggregate principal amount of
one of the Unrestricted Global Senior Notes.
If any such exchange or transfer from a Definitive Senior
Note to a beneficial interest is effected pursuant to
subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when
an Unrestricted Global Senior Note has not yet been issued,
the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof,
the Senior Note Trustee shall authenticate one or more
Unrestricted Global Senior Notes in an aggregate principal
amount equal to the principal amount of Definitive Senior
Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE SENIOR NOTES FOR DEFINITIVE SENIOR
NOTES. Upon request by a Holder of Definitive Senior Notes and such Holder's
compliance with the provisions of this Section
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2.06(e), the Registrar shall register the transfer or exchange of Definitive
Senior Notes. Prior to such registration of transfer or exchange, the
requesting Holder shall present or surrender to the Registrar the Definitive
Senior Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder
or by his attorney, duly authorized in writing. In addition, the requesting
Holder shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.06(e).
(i) RESTRICTED DEFINITIVE SENIOR NOTES TO RESTRICTED DEFINITIVE
SENIOR NOTES. Any Restricted Definitive Senior Note may be
transferred to and registered in the name of Persons who
take delivery thereof in the form of a Restricted Definitive
Senior Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the
Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE SENIOR NOTES TO UNRESTRICTED
DEFINITIVE SENIOR NOTES. Any Restricted Definitive Senior
Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Senior Note or transferred to a
Person or Persons who take delivery thereof in the form of
an Unrestricted Definitive Senior Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Senior
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of
a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the
Exchange Senior Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Senior
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Senior
Notes proposes to exchange such Senior Notes for
an Unrestricted Definitive
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Senior Note, a certificate from such Holder in the
form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Senior
Notes proposes to transfer such Senior Notes to a
Person who shall take delivery thereof in the form
of an Unrestricted Definitive Senior Note, a
certificate from such Holder in the form of
Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests, an Opinion of
Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in
compliance with the Securities Act and state "blue sky"
laws and that the restrictions on transfer contained
herein and in the Private Placement Legend are no
longer required in order to maintain compliance with
the Securities Act.
(iii) UNRESTRICTED DEFINITIVE SENIOR NOTES TO UNRESTRICTED
DEFINITIVE SENIOR NOTES. A Holder of Unrestricted
Definitive Senior Notes may transfer such Senior Notes to a
Person who takes delivery thereof in the form of an
Unrestricted Definitive Senior Note. Upon receipt of a
request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Senior Notes pursuant
to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Senior Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Senior Note Trustee shall authenticate (i) one or more Unrestricted
Global Senior Notes in an aggregate principal amount equal to the principal
amount of the beneficial interests in the Restricted Global Senior Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not broker-dealers, (y) they are not participating
in a distribution of the Exchange Senior Notes and (z) they are not affiliates
(as defined in Rule 144) of the Company, and accepted for exchange in the
Exchange Offer and (ii) Definitive Senior Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Senior Notes accepted
for exchange in the Exchange Offer. Concurrently with the issuance of such
Senior Notes, the Senior Note Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Senior Notes to be reduced accordingly, and
the Company shall execute and the Senior Note Trustee shall authenticate and
deliver to the Persons designated by the Holders of Definitive Senior Notes so
accepted Definitive Senior Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of all Global
Senior Notes and Definitive Senior Notes issued under this Senior Note Indenture
unless specifically stated otherwise in the applicable provisions of this Senior
Note Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Senior Note and each Definitive Senior Note (and
all Senior Notes issued in exchange therefor or
substitution thereof) shall bear the legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
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REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISION OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Senior Note or
Definitive Senior Note issued pursuant to subparagraphs
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 2.06 (and all Senior
Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) GLOBAL SENIOR NOTE LEGEND. Each Global Senior Note shall
bear a legend in substantially the following form:
"THIS GLOBAL SENIOR NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE SENIOR NOTE INDENTURE GOVERNING THIS SENIOR
NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE SENIOR
NOTE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE SENIOR NOTE
INDENTURE, (II) THIS GLOBAL SENIOR NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE SENIOR NOTE INDENTURE, (III) THIS GLOBAL SENIOR NOTE
MAY BE DELIVERED TO THE SENIOR NOTE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE SENIOR NOTE
INDENTURE AND
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(IV) THIS GLOBAL SENIOR NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."
(iii) REGULATION S TEMPORARY GLOBAL SENIOR NOTE LEGEND. The
Regulation S Temporary Global Senior Note shall bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
SENIOR NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR CERTIFICATED SENIOR NOTES, ARE AS SPECIFIED IN
THE SENIOR NOTE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL SENIOR NOTE SHALL BE ENTITLED TO RECEIVE
PAYMENT OF INTEREST HEREON."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SENIOR NOTES. At such time
as all beneficial interests in a particular Global Senior Note have been
exchanged for Definitive Senior Notes or a particular Global Senior Note has
been redeemed, repurchased or canceled in whole and not in part, each such
Global Senior Note shall be returned to or retained and canceled by the Senior
Note Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Senior Note is exchanged
for or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Senior Note or for Definitive Senior
Notes, the principal amount of Senior Notes represented by such Global Senior
Note shall be reduced accordingly and an endorsement shall be made on such
Global Senior Note by the Senior Note Trustee or by the Depositary at the
direction of the Senior Note Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Senior Note, such other Global Senior Note shall be increased accordingly and an
endorsement shall be made on such Global Senior Note by the Senior Note Trustee
or by the Depositary at the direction of the Senior Note Trustee to reflect such
increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Senior Note Trustee shall
authenticate Global Senior Notes and Definitive Senior
Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Senior Note or to a
Holder of a Definitive Senior Note for any registration
of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection
therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10,
4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Senior Note selected for
redemption in whole or in part, except the unredeemed
portion of any Senior Note being redeemed in part.
(iv) All Global Senior Notes and Definitive Senior Notes
issued upon any registration of transfer or exchange of
Global Senior Notes or Definitive Senior Notes shall be
the valid obligations of the Company, evidencing the
same debt, and entitled to the
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same benefits under this Senior Note Indenture, as the
Global Senior Notes or Definitive Senior Notes
surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Senior
Notes during a period beginning at the opening of
business 15 days before the day of any selection of
Senior Notes for redemption under Section 3.02 hereof
and ending at the close of business on the day of
selection, (B) to register the transfer of or to
exchange any Senior Note so selected for redemption in
whole or in part, except the unredeemed portion of any
Senior Note being redeemed in part or (C) to register
the transfer of or to exchange a Senior Note between a
record date and the next succeeding Interest Payment
Date.
(vi) Prior to due presentment for the registration of a
transfer of any Senior Note, the Senior Note Trustee,
any Agent and the Company may deem and treat the Person
in whose name any Senior Note is registered as the
absolute owner of such Senior Note for the purpose of
receiving payment of principal of and interest on such
Senior Notes and for all other purposes, and none of
the Senior Note Trustee, any Agent or the Company shall
be affected by notice to the contrary.
(vii) The Senior Note Trustee shall authenticate Global
Senior Notes and Definitive Senior Notes in accordance
with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar
pursuant to this Section 2.06 to effect a registration
of transfer or exchange may be submitted by facsimile.
SECTION 2.07. REPLACEMENT SENIOR NOTES.
If any mutilated Senior Note is surrendered to the Senior Note Trustee or
the Company and the Senior Note Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Senior Note, the Company shall issue and
the Senior Note Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Senior Note if the Senior Note Trustee's requirements
are met. If required by the Senior Note Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Senior Note Trustee and the Company to protect the Company, the Senior Note
Trustee, any Agent and any authenticating agent from any loss that any of them
may suffer if a Senior Note is replaced. The Company may charge for its
expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Senior Note Indenture
equally and proportionately with all other Senior Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Senior Note Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Senior Note effected by the Senior Note Trustee in accordance with the
provisions hereof, and those described in this Section as not outstanding.
Except as set forth in Section 2.09 hereof, a Senior Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Senior
Note.
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If a Senior Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Senior Note Trustee receives proof satisfactory to it
that the replaced Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Senior Notes payable on that date, then on and after that date such
Senior Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.
SECTION 2.09. TREASURY SENIOR NOTES.
In determining whether the Holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Senior Note Trustee shall be protected in relying on any
such direction, waiver or consent, only Senior Notes that a Responsible Officer
of the Senior Note Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SENIOR NOTES.
Until certificates representing Senior Notes are ready for delivery, the
Company may prepare and the Senior Note Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Senior Notes. Temporary
Senior Notes shall be substantially in the form of certificated Senior Notes but
may have variations that the Company considers appropriate for temporary Senior
Notes and as shall be reasonably acceptable to the Senior Note Trustee. Without
unreasonable delay, the Company shall prepare and the Senior Note Trustee shall
authenticate definitive Senior Notes in exchange for temporary Senior Notes.
Holders of temporary Senior Notes shall be entitled to all of the benefits
of this Senior Note Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior Notes to the Senior Note Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Senior
Note Trustee any Senior Notes surrendered to them for registration of transfer,
exchange or payment. The Senior Note Trustee and no one else shall cancel all
Senior Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall return such canceled Senior Notes to the
Company. The Company may not issue new Senior Notes to replace Senior Notes
that it has paid or that have been delivered to the Senior Note Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Senior Notes and in Section 4.01 hereof. The Company shall notify the
Senior Note Trustee in writing of the amount of defaulted interest proposed to
be paid on each Senior Note and the date of the proposed payment. The Company
shall fix or cause to be fixed each such special record date and payment date,
PROVIDED that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At
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least 15 days before the special record date, the Company (or, upon the
written request of the Company, the Senior Note Trustee in the name and at
the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Senior Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Senior Note Trustee shall use CUSIP numbers
in notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Senior Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Senior Notes, and any such redemption shall not be
affected by any defect in or the omission of such numbers. The Company will
promptly notify the Senior Note Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO SENIOR NOTE TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to the redemption
provisions of Section 3.07 hereof, it shall furnish to the Senior Note Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Senior Note Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Senior Notes to be redeemed, (iv) the redemption price
and (v) the CUSIP numbers of the Senior Notes to be redeemed.
SECTION 3.02. SELECTION OF SENIOR NOTES TO BE REDEEMED.
If less than all of the Senior Notes are to be redeemed or purchased in an
offer to purchase at any time, the Senior Note Trustee shall select the Senior
Notes to be redeemed or purchased among the Holders of the Senior Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Senior Notes are listed or, if the Senior Notes are not so
listed, on a PRO RATA basis, by lot or in accordance with any other method the
Senior Note Trustee considers fair and appropriate. In the event of partial
redemption by lot, the particular Senior Notes to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days prior
to the redemption date by the Senior Note Trustee from the outstanding Senior
Notes not previously called for redemption.
The Senior Note Trustee shall promptly notify the Company in writing of the
Senior Notes selected for redemption and, in the case of any Senior Note
selected for partial redemption, the principal amount thereof to be redeemed.
Senior Notes and portions of Senior Notes selected shall be in amounts of $1,000
or whole multiples of $1,000; except that if all of the Senior Notes of a Holder
are to be redeemed, the entire outstanding amount of Senior Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided
in the preceding sentence, provisions of this Senior Note Indenture that apply
to Senior Notes called for redemption also apply to portions of Senior Notes
called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Notes are to be redeemed at its registered address.
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The notice shall identify the Senior Notes to be redeemed, including the
CUSIP numbers, and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date upon surrender of such Senior Note, a new Senior Note or Senior
Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Senior Note;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Senior Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Senior Notes and/or Section of this Senior Note
Indenture pursuant to which the Senior Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Senior Notes.
At the Company's request, the Senior Note Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Senior Note Trustee, at least 45 days prior
to the redemption date, an Officers' Certificate requesting that the Senior Note
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Senior Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Senior Note Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Senior Notes to be redeemed
on that date. The Senior Note Trustee or the Paying Agent shall promptly return
to the Company any money deposited with the Senior Note Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay the redemption
price of, and accrued interest on, all Senior Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Senior
Notes or the portions of Senior Notes called for redemption. If a Senior Note
is redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Senior Note was
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registered at the close of business on such record date. If any Senior Note
called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date
until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the
Senior Notes and in Section 4.01 hereof.
SECTION 3.06. SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Senior Note Trustee shall
authenticate for the Holder at the expense of the Company a new Senior Note
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) The Senior Notes will be subject to redemption at any time at the
option of the Company, in whole but not in part, upon not less than 30 nor more
than 60 days' notice.
(b) The Senior Notes will be redeemable at a redemption price equal to
100% of the principal amount thereof plus the applicable Senior Make-Whole
Premium, plus, to the extent not included in the Senior Make-Whole Premium,
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth in Sections 3.09, 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence a Senior Asset Sale Offer, it shall follow the procedures
specified below.
The Senior Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "OFFER PERIOD"). No later than
five Business Days after the termination of the Offer Period (the "PURCHASE
DATE"), the Company shall purchase the principal amount of Senior Notes required
to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if less
than the Offer Amount has been tendered, all Senior Notes tendered in response
to the Senior Asset Sale Offer. Payment for any Senior Notes so purchased shall
be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Senior Asset Sale Offer.
Upon the commencement of a Senior Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Senior Note Trustee and each of the
Holders. The notice shall contain all instructions and
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materials necessary to enable such Holders to tender Senior Notes pursuant to
the Senior Asset Sale Offer. The Senior Asset Sale Offer shall be made to
all Holders. The notice, which shall govern the terms of the Senior Asset
Sale Offer, shall state:
(a) that the Senior Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Senior Asset
Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any Senior
Note accepted for payment pursuant to the Senior Asset Sale Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Note purchased pursuant to a
Senior Asset Sale Offer may only elect to have all of such Senior Note purchased
and may not elect to have only a portion of such Senior Note purchased;
(f) that Holders electing to have a Senior Note purchased pursuant to any
Senior Asset Sale Offer shall be required to surrender the Senior Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Senior Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Senior Note purchased;
(h) that, if the aggregate principal amount of Senior Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Senior Notes to
be purchased on a PRO RATA basis (with such adjustments as may be deemed
appropriate by the Company so that only Senior Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Senior Notes were purchased only in part shall be
issued new Senior Notes equal in principal amount to the unpurchased portion of
the Senior Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a PRO RATA basis to the extent necessary, the Offer
Amount of Senior Notes or portions thereof tendered pursuant to the Senior Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Senior Notes
tendered, and shall deliver to the Senior Note Trustee an Officers' Certificate
stating that such Senior Notes or portions thereof were accepted for payment by
the Company in accordance with the terms of this Section 3.09. The Company, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior Notes
tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Senior Note, and the Senior Note Trustee,
upon written request from the Company shall authenticate and mail or deliver
such new Senior Note to such Holder, in a principal
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amount equal to any unpurchased portion of the Senior Note surrendered. Any
Senior Note not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the
results of the Senior Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR NOTES.
The Company or a Guarantor shall pay or cause to be paid the principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Senior
Notes on the dates and in the manner provided in the Senior Notes. Principal,
premium, if any, and interest and Liquidated Damages, if any, shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest and
Liquidated Damages, if any, then due. The Company shall pay all Liquidated
Damages, if any, in the same manner on the dates and in the amounts set forth in
the Senior Registration Rights Agreement.
The Company or a Guarantor shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to the then applicable interest rate on the Senior Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Senior Note Trustee or
an affiliate of the Senior Note Trustee, Registrar or co-registrar) where Senior
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Senior Notes and
this Senior Note Indenture may be served. The Company shall give prompt written
notice to the Senior Note Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Senior
Note Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Administration Office
of the Senior Note Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Senior Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Senior Note Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Senior Note
Trustee as one such office or agency of the Company in accordance with Section
2.03.
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SECTION 4.03. REPORTS.
(a) Whether or not the Company is required by the rules and regulations of
the SEC, so long as any Senior Notes are outstanding, the Company will furnish
to each of the Holders of Senior Notes and to the Senior Note Trustee (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such financial information, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Company and
any consolidated Restricted Subsidiaries and, with respect to the annual
information only, reports thereon by the Company's independent public
accountants (which shall be firm(s) of established national reputation) and (ii)
all information that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports. All such information and
reports shall be filed with the SEC (unless the SEC will not accept such a
filing) on or prior to the dates on which such filings would have been required
to be made had the Company been subject to the rules and regulations of the SEC.
In addition, whether or not required by the rules and regulations of the SEC,
the Company shall file a copy of all such information and reports with the SEC
for public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA Section 314(a).
Delivery of such reports, information and documents to the Senior Note Trustee
is for informational purposes only and the Senior Note Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Senior Note
Trustee is entitled to rely exclusively on Officers' Certificates).
(b) For so long as any Senior Notes remain outstanding, the Company and
the Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Senior Note Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Senior Note Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Senior Note Indenture and is
not in default in the performance or observance of any of the terms, provisions
and conditions of this Senior Note Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Senior Notes
is prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying
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the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Notes are outstanding,
deliver to the Senior Note Trustee, as soon as possible, but in no event later
than five days after any Officer becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Senior Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Senior Note Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Senior Note Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company or other Affiliate of the Company; (iii) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire
or retire for value any subordinated Indebtedness, except a payment of interest
or principal at Stated Maturity; or (iv) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of
and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and
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(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company or any of its Restricted
Subsidiaries after the date of this Senior Note Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv), (v) or (x) of the next
succeeding paragraph), is less than the sum, without duplication, of (i) 50% of
the Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter immediately
following the date of this Senior Note Indenture to the end of the Company's
most recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus (ii) 100%
of the aggregate Net Cash Proceeds or the fair market value of property other
than cash received by the Company as a contribution to its common equity capital
or from the issue or sale since the date of this Senior Note Indenture of Equity
Interests of the Company (other than Disqualified Stock), or of Disqualified
Stock or debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Restricted Subsidiary of the Company and
other than Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (iii) to the extent not already
included in Consolidated Net Income of the Company for such period and without
duplication, any Restricted Investment that was made by the Company or any of
its Restricted Subsidiaries after the date of this Senior Note Indenture is sold
for cash or otherwise liquidated or repaid for cash, or any Unrestricted
Subsidiary which is designated as an Unrestricted Subsidiary subsequent to the
date of this Senior Note Indenture is sold for cash or otherwise liquidated or
repaid for cash, 100% of the cash return of capital with respect to such
Restricted Investment or Unrestricted Subsidiary (less the cost of disposition,
if any) and 50% of the excess of the fair market value of the Company's
Investment in such Unrestricted Subsidiary as of the date of such redesignation
over the amount of the Restricted Investment that reduced this clause (c);
PROVIDED FURTHER, that any amounts that increase this clause (c) shall not
duplicatively increase amounts available as Permitted Investments.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Senior Note Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebtedness which is subordinated Indebtedness or
Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of, other Equity Interests of the Company (other
than any Disqualified Stock); PROVIDED that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (c) (ii) of
the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition
of Indebtedness which is subordinated Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend or distribution by a Restricted
Subsidiary of the Company to the holders of its common Equity Interests so
long as the Company or such Restricted Subsidiary receives at least its pro
rata share of such dividend or distribution in accordance with its Equity
Interests in such class or series of securities;
(v) the payment of dividends on the Company's Common Stock and
Series B ESOP Convertible Preferred Stock of up to a combined amount of
$25.0 million per annum; PROVIDED that
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any amount not utilized by the Company to pay dividends in any calendar
year will not be carried forward to any subsequent year;
(vi) (a) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company that are held
by any member of the Company's (or any of its Restricted Subsidiaries)
management pursuant to any management equity subscription agreement or
stock option agreement or (b) the repurchase of Equity Interests of the
Company or any Restricted Subsidiary of the Company held by employee
benefits plans (whether directly or for employees, directors or former
directors) pursuant to the terms of agreements (other than management
equity subscription agreements or stock option agreements) approved by the
Company's Board of Directors; PROVIDED that, in the case of foregoing
clause (a) the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $10.0 million in the
aggregate since the date of this Senior Note Indenture and, in the case of
foregoing clause (b), the aggregate purchase price paid for all such
repurchased Equity Interests shall not exceed $15.0 million in any
twelve-month period;
(vii) repurchases of Equity Interests deemed to occur upon
exercise of stock options if such Equity Interests represent a portion of
the exercise price of such options;
(viii) the repurchase, redemption or other acquisition or
retirement for value of the Senior Subordinated Notes pursuant to the
provisions described under Section 3.07 of the Senior Subordinated Note
Indenture; PROVIDED, that the amount of any Equity Offering used to effect
such a repurchase, redemption or other acquisition or retirement for value
shall be excluded from the calculation made pursuant to clause (c)(ii) of
the preceding paragraph;
(ix) the repurchase, redemption or other acquisition or
retirement for value of the Senior Subordinated Notes pursuant to the
provisions described under Section 4.10 and Section 4.15 of the Senior
Subordinated Note Indenture; PROVIDED, that as of the date of such
repurchase, redemption or other acquisition or retirement for value, no
Default or Event of Default shall have occurred and be continuing or, with
the passage of time, would occur as a consequence thereof; and
(x) other Restricted Payments in an aggregate amount since the
date of this Senior Note Indenture not to exceed $50.0 million under this
clause (x);
PROVIDED that, with respect to clauses (ii), (iii), (v), (vi), (viii), (ix) and
(x) above, no Default or Event of Default shall have occurred and be continuing
immediately after such transaction or as a consequence thereof.
As of the date of this Senior Note Indenture, all of the Company's
Subsidiaries other than the FTB Group, Ball Capital Corp. and the Excluded
Subsidiaries will be Restricted Subsidiaries. The Board of Directors may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. All such outstanding Investments will
be deemed to constitute Investments in an amount equal to the fair market value
of such Investments at the time of such designation. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
If, at any time, any Unrestricted Subsidiary would fail to meet the
requirements in the definition of "Unrestricted Subsidiary" as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted
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Subsidiary for purposes of this Senior Note Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant). The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
PROVIDED that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only
be permitted if (i) such Indebtedness is permitted under Section 4.09 hereof
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, (ii) if such Subsidiary is a
Domestic Subsidiary, such Subsidiary shall have executed and delivered a
supplemental indenture pursuant to which it will become a Guarantor under
this Senior Note Indenture, and (iii) no Default or Event of Default would be
in existence following such designation.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary of the Company, pursuant to the Restricted Payment. The fair market
value of any noncash Restricted Payment or any adjustment made pursuant to
paragraph (c) of this Section 4.07 shall be determined by the Board of Directors
of the Company whose resolution with respect thereto shall be delivered to the
Senior Note Trustee, such determination to be based upon an opinion or appraisal
issued by an investment banking firm (or, if an investment banking firm is
generally not qualified to give such an opinion or appraisal, by an appraisal
firm) of national standing if such fair market value exceeds $25.0 million. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Senior Note Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this Section 4.07 were computed, together with a copy of any
fairness opinion or appraisal required by this Senior Note Indenture.
If any Restricted Investment is sold or otherwise liquidated or repaid or
any dividend or payment is received by the Company or a Restricted Subsidiary
and such amounts may be credited to clause (c) above, then such amounts will be
credited only to the extent of amounts not otherwise included in Consolidated
Net Income and that do not otherwise increase the amount available as a
Permitted Investment.
SECTION 4.08. DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries that are not Guarantors to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary of the Company or the
Company to (i)(x) pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its profits,
or (y) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries, (ii) make loans or advances to the Company or any of its
Restricted Subsidiaries or (iii) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (a) Existing Indebtedness as in
effect on the date of this Senior Note Indenture, (b) the Credit Facility as in
effect as of the date of this Senior Note Indenture, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, PROVIDED that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Credit
Facility as in effect on the date of this Senior Note Indenture, (c) this Senior
Note Indenture, the Senior Subordinated Note Indenture, the Senior Notes and the
Senior Subordinated Notes, (d) applicable law or any applicable rule, regulation
or order, (e) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in
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contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired,
PROVIDED that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of this Senior Note Indenture to be incurred, (f) by reason of
customary non-assignment provisions in leases or other contracts entered into
in the ordinary course of business and consistent with past practices, (g)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii)
above on the property so acquired, (h) Indebtedness of Guarantors, PROVIDED
that such Indebtedness was permitted to be incurred pursuant to this Senior
Note Indenture, (i) Permitted Refinancing Indebtedness, PROVIDED that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (j) secured Indebtedness
otherwise permitted to be incurred pursuant to the provisions of Section 4.12
hereof that limits the right of the debtor to dispose of assets securing such
Indebtedness, (k) provisions with respect to the disposition or distribution
of assets or property in joint venture or similar agreements entered into in
the ordinary course of business or (l) any Purchase Money Note, or other
Indebtedness or other contractual requirements of a Securitization Entity in
connection with a Qualified Securitization Transaction; PROVIDED that such
restrictions apply only to such Securitization Entity.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Indebtedness (including Acquired
Debt) and that the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; PROVIDED, HOWEVER, that the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock and any of the Company's
Restricted Subsidiaries may incur Indebtedness if the Company's Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.00 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this Section 4.09 shall not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
(i) the incurrence by the Company or its Restricted
Subsidiaries of term Indebtedness under the Credit Facility, letters of
credit (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) and related Guarantees under the Credit Facility;
PROVIDED that the aggregate principal amount of all term Indebtedness and
letters of credit of the Company and its Restricted Subsidiaries (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted Subsidiaries
thereunder) outstanding under the Credit Facility after giving effect to
such incurrence, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (i) does not exceed an amount equal to $550.0 million;
(ii) the incurrence by the Company or its Restricted Subsidiaries
of revolving credit Indebtedness under the Credit Facility, letters of
credit (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) and related Guarantees under the Credit Facility;
PROVIDED that the aggregate principal amount of all revolving Indebtedness
and letters of credit of the Company and its Restricted
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Subsidiaries (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) outstanding under the Credit
Facility after giving effect to such incurrence, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
other Indebtedness incurred pursuant to this clause (ii), does not
exceed $700.0 million less the aggregate amount of Asset Sale proceeds
applied by the Company and its Restricted Subsidiaries to permanently
reduce the availability of revolving credit Indebtedness under the
Credit Agreements pursuant to the provisions of Section 4.10 hereof;
(iii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Senior Notes, the Senior Subordinated
Notes, the Senior Subsidiary Guarantees and the Subordinated Subsidiary
Guarantees limited in aggregate principal amount, without duplication, to
amounts outstanding under this Senior Note Indenture and the Senior
Subordinated Note Indenture as of their respective dates;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace Indebtedness incurred pursuant to this
clause (v), not to exceed 5% of Total Assets;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that (i) if the
Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all Obligations with
respect to the Senior Note and this Senior Note Indenture, (ii) if a
Restricted Subsidiary of the Company is the obligor on such Indebtedness,
such Indebtedness is expressly subordinated to the prior payment in full in
cash of such Restricted Subsidiary's Senior Subsidiary Guarantee and
(iii)(A) any subsequent event or issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than the
Company or a Restricted Subsidiary of the Company and (B) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary of the Company shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or
such Restricted Subsidiary, as the case may be, that was not permitted by
this clause (vii);
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the normal course
of business for the purpose of fixing or hedging currency, commodity or
interest rate risk (including with respect to any Indebtedness that is
permitted by the terms of this Senior Note Indenture to be outstanding in
connection with the conduct of their respective businesses and not for
speculative purposes);
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in the ordinary course of business solely in
respect of performance, surety and similar bonds, completion or performance
guarantees or standby letters of credit issued for the purpose of
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supporting workers' compensation liabilities of the Company or any of its
Restricted Subsidiaries, to the extent that such incurrence does not result
in the incurrence of any obligation for the payment of borrowed money to
others;
(x) the incurrence of Indebtedness arising from agreements of
the Company or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary;
(xi) the incurrence by a Restricted Subsidiary of the Company of
Indebtedness in connection with and in contemplation of, the concurrent
disposition of such Restricted Subsidiary to the stockholders of the
Company; PROVIDED that such disposition occurs concurrently with such
incurrence and following such disposition, neither the Company nor any of
its Restricted Subsidiaries has any liability with respect to such
Indebtedness;
(xii) the incurrence by a Securitization Entity of Indebtedness in
a Qualified Securitization Transaction that is Non-Recourse Debt with
respect to the Company and its other Restricted Subsidiaries (except for
Standard Securitization Undertakings and Limited Originator Recourse);
(xiii) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.09; and
(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (xiv), not to
exceed $75.0 million.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xiv) above as of
the date of incurrence thereof or is entitled to be incurred pursuant to the
first paragraph of this Section 4.09 as of the date of incurrence thereof, the
Company shall, in its sole discretion, classify or reclassify such item of
Indebtedness as of the date of incurrence thereof in any manner that complies
with this Section 4.09 and such item of Indebtedness shall be treated as having
been incurred pursuant to only one of such clauses or pursuant to the first
paragraph of this Section 4.09. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this Section
4.09.
SECTION 4.10. ASSETS SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the fair market value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Senior Note
Trustee with respect to any Asset Sale determined to have a fair market value
greater than $25.0 million) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents; PROVIDED that the following amounts shall be deemed to be
cash: (w) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary of the Company (other than contingent liabilities and liabilities
that are by their terms subordinated to the Senior Notes or any Guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases
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the Company or such Restricted Subsidiary from further liability, (x) any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company
or such Restricted Subsidiary into cash within 180 days after the
consummation of such Asset Sale (to the extent of the cash received), (y) any
Designated Noncash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale; PROVIDED that the aggregate fair
market value (as determined above) of such Designated Noncash Consideration,
taken together with the fair market value at the time of receipt of all other
Designated Noncash Consideration received pursuant to this clause (y) less
the amount of Net Proceeds previously realized in cash from prior Designated
Noncash Consideration is less than 5% of Total Assets at the time of the
receipt of such Designated Noncash Consideration (with the fair market value
of each item of Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in value) and (z)
Additional Assets received in an exchange-of-assets transaction.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay
Indebtedness under any Credit Facility (and to correspondingly permanently
reduce the commitments with respect thereto in the case of revolving
borrowings), (b) to the acquisition of a controlling interest in another
business, the making of a capital expenditure or the acquisition of other
long-term assets, in each case, in Permitted Businesses or (c) to an Investment
in Additional Assets; PROVIDED, that the Company will have complied with clause
(c) if, within 365 days of such Asset Sale, the Company shall have entered into
a definitive agreement covering such Investment which is thereafter completed
within 365 days after the first anniversary of such Asset Sale. Pending the
final application of any such Net Proceeds, the Company may temporarily reduce
Indebtedness under any Credit Facility or otherwise invest such Net Proceeds in
any manner that is not prohibited by this Senior Note Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $20.0 million,
the Company shall be required to make an offer to all Holders of Senior Notes
and all holders of other Indebtedness that ranks PARI PASSU with the Senior
Notes containing provisions similar to those set forth in this Senior Note
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets (a "SENIOR ASSET SALE OFFER") to purchase the maximum principal
amount of Senior Notes and such other Indebtedness that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in this Senior Note Indenture and such other Indebtedness. To the extent
that any Excess Proceeds remain after consummation of a Senior Asset Sale Offer,
the Company may use any remaining Excess Proceeds for any purpose not otherwise
prohibited by this Senior Note Indenture. If the aggregate principal amount of
Senior Notes and such other Indebtedness tendered into such Senior Asset Sale
Offer surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Senior Note Trustee shall select the Senior Notes and such other Indebtedness to
be purchased on a pro rata basis. Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any properties or assets to, or purchase any property or assets from,
or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate of any such Person (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (ii) the Company delivers to
the Senior Note Trustee (a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a resolution of its Board of Directors set forth
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in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of its Board of Directors
and (b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $25.0
million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an investment banking
firm (or, if an investment banking firm is generally not qualified to give
such an opinion, by an appraisal firm) of national standing; PROVIDED that
none of the following shall be deemed to be Affiliate Transactions: (1) any
employment, severance or termination agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted
Subsidiary, as the case may be, (2) transactions between or among the Company
and/or its Restricted Subsidiaries that are Guarantors, (3) transactions
between or among the Company or its Restricted Subsidiaries that are
Guarantors with its Restricted Subsidiaries that are not Guarantors, FTB
Group and Permitted Joint Ventures on terms that are no less favorable to the
Company and/or such Subsidiary than those that would have been obtained in a
comparable transaction by the Company and/or such Subsidiary with an
unrelated Person, (4) any sale or other issuance of Equity Interests (other
than Disqualified Stock) of the Company, (5) Restricted Payments that are
permitted by and Investments that are not prohibited by Section 4.07 hereof,
(6) fees and compensation paid to members of the Board of Directors of the
Company and of its Restricted Subsidiaries in their capacity as such, to the
extent such fees and compensation are reasonable and customary, (7) advances
to employees for moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business and consistent
with past practices, (8) fees and compensation paid to, and indemnity
provided on behalf of, officers, directors or employees of the Company or any
of its Restricted Subsidiaries, as determined by the Board of Directors of
the Company or of any such Restricted Subsidiary, to the extent such fees and
compensation are reasonable and customary, shall not be deemed to be
Affiliate Transactions and (9) transactions effected as part of a Qualified
Securitization Transaction.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness, Attributable Debt,
or trade payables (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under this
Senior Note Indentures and the Senior Notes are secured on an equal and ratable
basis with the obligations so secured until such time as such obligations are no
longer secured by a Lien.
SECTION 4.13. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer
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desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Senior Notes.
SECTION 4.15. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Senior
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Senior Notes
pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "CHANGE OF CONTROL PAYMENT"). Within fifteen days following
any Change of Control, the Company will mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control and
offering to repurchase Senior Notes on the date specified in such notice, which
date shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE"), pursuant to the
procedures required by this Senior Note Indenture and described in such notice.
The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the
Senior Notes as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Senior Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Senior
Notes or portions thereof so tendered and (3) deliver or cause to be delivered
to the Senior Note Trustee the Senior Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Senior Notes or
portions thereof being purchased by the Company. The Paying Agent will promptly
mail to each Holder of Senior Notes so tendered the Change of Control Payment
for such Senior Notes, and the Senior Note Trustee will promptly authenticate
and mail (or cause to be transferred by book entry) to each Holder a new Senior
Note equal in principal amount to any unpurchased portion of the Senior Notes
surrendered, if any; PROVIDED that each such new Senior Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Senior Note Indenture are
applicable. Except as described above with respect to a Change of Control, this
Senior Note Indenture does not contain provisions that permit the Holders of the
Senior Notes to require that the Company repurchase or redeem the Senior Notes
in the event of a takeover, recapitalization or similar transaction.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this Senior
Note Indenture applicable to a Change of Control Offer made by the Company and
purchases all Senior Notes validly tendered and not withdrawn under such Change
of Control Offer.
SECTION 4.16. ADDITIONAL SENIOR SUBSIDIARY GUARANTEES.
If the Company or any of its Domestic Subsidiaries (i) acquires or creates
any Domestic Subsidiary after the date of this Senior Note Indenture that is not
a Guarantor or (ii) causes or permits any Foreign Subsidiary that is not a
Guarantor to, directly or indirectly, guarantee the payment of any Indebtedness
of the Company or any Restricted Subsidiary ("OTHER INDEBTEDNESS") then, in each
case the Company shall cause such Subsidiary to simultaneously execute and
deliver a supplemental indenture in form and substance
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substantially similar to Exhibit F hereto pursuant to which it will become a
Guarantor under this Senior Note Indenture; PROVIDED, HOWEVER, that if such
Other Indebtedness is (i) Indebtedness that is ranked PARI PASSU in right of
payment with the Senior Notes or such Subsidiary's Guarantee of the Senior
Notes, as the case may be, such Subsidiary's Guarantee of the Senior Notes
shall be PARI PASSU in right of payment with such Subsidiary's guarantee of
the Other Indebtedness; or (ii) subordinated Indebtedness, such Subsidiary's
Guarantee of the Senior Notes shall be senior in right of payment to the
guarantee of Other Indebtedness (which guarantee of such subordinated
Indebtedness shall provide that the guarantee is subordinated to such
Subsidiary's Guarantee of the Senior Notes to the same extent and in the same
manner as the Other Indebtedness is subordinated to the Senior Notes or such
Subsidiary's Guarantee of the Senior Notes, as the case may be).
SECTION 4.17. PAYMENT FOR CONSENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Senior Notes for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of this Senior Note Indenture or the Senior Notes
unless such consideration is offered to be paid or is paid to all Holders of the
Senior Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
SECTION 4.18. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company may enter into a sale and leaseback transaction if (i) the Company
could have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 4.09 hereof
and (ii) the gross cash proceeds of such sale and leaseback transaction are at
least equal to the fair market value (as determined in good faith by the Board
of Directors and set forth in an Officers' Certificate delivered to the Senior
Note Trustee) of the property that is the subject of such sale and leaseback
transaction and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.10 hereof.
SECTION 4.19. CERTAIN COVENANTS TO BE SUSPENDED UNDER CERTAIN CONDITIONS.
The covenants set forth in Section 4.01 through Section 4.18, inclusive, of
this Senior Note Indenture shall be applicable to the Company (and/or its
Restricted Subsidiaries, as appropriate) except that during any period of time
that (i) the ratings assigned to the Senior Notes by both Standard & Poor's
Ratings Group ("S&P") and Moody's Investors Service, Inc. ("MOODY'S" and,
together with S&P, the "RATING AGENCIES") are equal to or higher than BBB-- and
Baa3, or the equivalents thereof, respectively (the "INVESTMENT GRADE RATINGS"),
except subsequent to a Change of Control of the Company, and (ii) no Default or
Event of Default shall have occurred and be continuing, the Company and its
Subsidiaries will not be subject to the provisions of this Senior Note Indenture
described in Sections 4.07 through 4.11, inclusive, and Section 4.18,
(collectively, the "SUSPENDED COVENANTS"). In the event that the Company is not
subject to the Suspended Covenants for any period of time as a result of the
preceding sentence (a "SUSPENSION PERIOD") and, subsequently, one or both Rating
Agencies withdraws its ratings or downgrades the ratings assigned to the Senior
Notes below the required Investment Grade Ratings, then, from and after the date
of such withdrawal or downgrade, the Company and its Subsidiaries will again be
subject to the Suspended Covenants and compliance with the Suspended Covenants
with respect to Restricted Payments made after the time of such withdrawal or
downgrade will be calculated in accordance with the terms of Section 4.07 as if
such covenant had been in effect during the entire period of time from the date
of this Senior Note Indenture. Notwithstanding any other provision of this
Senior Note Indenture, the continued existence, after the date of
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such withdrawal or downgrade, of facts and circumstances that were incurred
or otherwise came into being during a Suspension Period shall not constitute
a breach of any covenant set forth in this Senior Note Indenture or a Default
or Event of Default hereunder.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not, directly or indirectly, consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person
unless (i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia; (ii) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, conveyance or
other disposition shall have been made assumes all the obligations of the
Company under the Senior Registration Rights Agreement, the Senior Notes and
this Senior Note Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Senior Note Trustee; (iii) immediately before and
after such transaction no Default or Event of Default shall have occurred; and
(iv) except in the case of a merger of the Company with or into a Subsidiary,
the Company or Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made will, immediately after
such transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, (A) be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof or (B) the Fixed Charge Coverage Ratio
for the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made would, immediately after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
not be less than such Fixed Charge Coverage Ratio for the Company and its
Restricted Subsidiaries immediately prior to such transaction. The Company may
not, directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. The
provisions of this Section 5.01 will not be applicable to a sale, assignment,
transfer, conveyance or other disposition of assets between or among the Company
and its Restricted Subsidiaries.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Senior Note Indenture referring to the "Company" shall refer
instead to the successor corporation and not to the Company), and may exercise
every right and power of the Company under this Senior Note Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Senior Notes except in
the case of a sale of all of the Company's assets that meets the requirements of
Section 5.01 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Senior Notes and such default
continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company or any of its Restricted Subsidiaries fails to comply with
the provisions of Section 5.01;
(d) the Company or any of its Restricted Subsidiaries fails for 30 days
after notice to comply with the provisions of Sections 4.07, 4.09, 4.10 or 4.15
hereof;
(e) the Company or any of its Restricted Subsidiaries fails for 60 days
after notice to observe or perform any other covenant, representation, warranty
or other agreement in this Senior Note Indenture or the Senior Notes;
(f) the Company or any of its Restricted Subsidiaries defaults under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (other than a Securitization
Entity) (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries (other than a Securitization Entity)) whether such
Indebtedness or guarantee now exists, or is created after the date of this
Senior Note Indenture, which default (a) is caused by a failure to pay principal
of or premium, if any, or interest on such Indebtedness prior to the expiration
of the grace period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT") or (b) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates without duplication $20.0 million or more;
(g) the Company or any of its Restricted Subsidiaries fails to pay final
judgments aggregating in excess of $20.0 million (excluding amounts covered by
insurance), which judgments are not paid, discharged or stayed for a period of
60 days;
(h) the Company or any of its Significant Subsidiaries that are Restricted
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
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(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries that are Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
in an involuntary case;
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the property of the Company or any
of its Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
(j) except as permitted by this Senior Note Indenture, any Senior
Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Senior Subsidiary Guarantee.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Company, any Significant
Subsidiary that is a Restricted Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary)
occurs and is continuing, the Senior Note Trustee or the Holders of at least 25%
in principal amount of the then outstanding Senior Notes may declare all the
Senior Notes to be due and payable immediately. Upon any such declaration, the
Senior Notes shall become due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in clause (g) or (h) of Section 6.01
hereof occurs with respect to the Company, any of its Significant Subsidiaries
that are Restricted Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Senior Notes shall be due and payable without further action or notice. Holders
of the Senior Notes may not enforce this Senior Note Indenture or the Senior
Notes except as provided in this Senior Note Indenture.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Senior Notes pursuant to
the optional redemption provisions of this Senior Note Indenture, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Senior Notes.
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The Company is required to deliver to the Senior Note Trustee annually a
statement regarding compliance with this Senior Note Indenture, and the Company
is required upon becoming aware of any Default or Event of Default, to deliver
to the Senior Note Trustee a statement specifying such Default or Event of
Default.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Senior Note Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest and Liquidated Damages, if any, on the Senior Notes or to
enforce the performance of any provision of the Senior Notes or this Senior Note
Indenture.
The Senior Note Trustee may maintain a proceeding even if it does not
possess any of the Senior Notes or does not produce any of them in the
proceeding. A delay or omission by the Senior Note Trustee or any Holder of a
Senior Note in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. All remedies are cumulative to the extent permitted by
law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the Senior Notes
then outstanding by notice to the Senior Note Trustee may on behalf of the
Holders of all of the Senior Notes waive any existing Default or Event of
Default and its consequences under this Senior Note Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Senior Notes (including in connection with an offer to
purchase); PROVIDED, HOWEVER, that the Holders of a majority in aggregate
principal amount of the then outstanding Senior Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Senior Note Indenture; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.06. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Senior
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Senior Note Trustee or exercising any
trust or power conferred on it. However, the Senior Note Trustee may refuse to
follow any direction that conflicts with law or this Senior Note Indenture that
the Senior Note Trustee determines may be unduly prejudicial to the rights of
other Holders of Senior Notes or that may involve the Senior Note Trustee in
personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Senior Note may pursue a remedy with respect to this Senior
Note Indenture or the Senior Notes only if:
(a) the Holder of a Senior Note gives to the Senior Note Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Senior Note Trustee to
pursue the remedy;
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(c) such Holder of a Senior Note or Holders of Senior Notes offer and, if
requested, provide to the Senior Note Trustee indemnity satisfactory to the
Senior Note Trustee against any loss, liability or expense;
(d) the Senior Note Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Senior Note Trustee
a direction inconsistent with the request.
A Holder of a Senior Note may not use this Senior Note Indenture to
prejudice the rights of another Holder of a Senior Note or to obtain a
preference or priority over another Holder of a Senior Note.
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Senior Note Indenture, the
right of any Holder of a Senior Note to receive payment of principal, premium
and Liquidated Damages, if any, and interest on the Senior Note, on or after the
respective due dates expressed in the Senior Note (including in connection with
an offer to purchase), or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY SENIOR NOTE TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Senior Note Trustee is authorized to recover judgment in its own
name and as Senior Note Trustee of an express trust against the Company for the
whole amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Senior Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Senior Note
Trustee, its agents and counsel.
SECTION 6.09. SENIOR NOTE TRUSTEE MAY FILE PROOFS OF CLAIM.
The Senior Note Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Senior Note Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Senior Note Trustee,
its agents and counsel) and the Holders of the Senior Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Senior Notes), its creditors or its property and shall be entitled and empowered
to collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Senior Note
Trustee, and in the event that the Senior Note Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Senior Note
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Senior Note Trustee, its agents and counsel,
and any other amounts due the Senior Note Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Senior Note Trustee, its agents and counsel, and any other
amounts due the Senior Note Trustee under Section 7.07 hereof out of the estate
in any such proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Senior Note Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
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reorganization, arrangement, adjustment or composition affecting the Senior
Notes or the rights of any Holder, or to authorize the Senior Note Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Senior Note Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
FIRST: to the Senior Note Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by
the Senior Note Trustee and the costs and expenses of collection;
SECOND: to Holders of Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Senior Notes for principal, premium and
Liquidated Damages, if any and interest, respectively; and
THIRD: to the Company.
The Senior Note Trustee may fix a record date and payment date for any
payment to Holders of Senior Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Senior
Note Indenture or in any suit against the Senior Note Trustee for any action
taken or omitted by it as a Senior Note Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Senior Note Trustee, a suit by a Holder of a Senior Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Senior Notes.
ARTICLE 7
SENIOR NOTE TRUSTEE
SECTION 7.01. DUTIES OF SENIOR NOTE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Senior Note
Trustee shall exercise such of the rights and powers vested in it by this Senior
Note Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Senior Note Trustee shall be determined solely
by the express provisions of this Senior Note Indenture and the Senior Note
Trustee need perform only those duties that are specifically set forth in
this Senior Note Indenture and no others, and no implied covenants or
obligations shall be read into this Senior Note Indenture against the
Senior Note Trustee; and
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(ii) in the absence of bad faith on its part, the Senior Note Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Senior Note Trustee and conforming to the
requirements of this Senior Note Indenture, but in the case of any such
certificates of opinions which by any provision hereof are specifically
required to be furnished to the Senior Note Trustee, the Senior Note
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Senior Note Indenture (but
need not confirm or investigate the accuracy of mathematical calculations
or other facts stated therein).
(c) The Senior Note Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Senior Note Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved
that the Senior Note Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Senior Note Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Senior Note Indenture that in any way relates to the Senior Note Trustee is
subject to paragraphs (a), (b), (c), (e) and (f) of this Section and Section
7.02.
(e) No provision of this Senior Note Indenture shall require the Senior
Note Trustee to expend or risk its own funds or incur any liability. The Senior
Note Trustee shall be under no obligation to exercise any of its rights and
powers under this Senior Note Indenture at the request of any Holders, unless
such Holder shall have offered to the Senior Note Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) The Senior Note Trustee shall not be liable for interest on any money
received by it except as the Senior Note Trustee may agree in writing with the
Company. Money held in trust by the Senior Note Trustee need not be segregated
from other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF SENIOR NOTE TRUSTEE.
(a) The Senior Note Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Senior Note Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Senior Note Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Senior
Note Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Senior Note Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Senior Note Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
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(d) The Senior Note Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Senior Note Indenture.
(e) Unless otherwise specifically provided in this Senior Note Indenture,
any demand, request, direction or notice from the Company or any Guarantor shall
be sufficient if signed by an Officer of the Company or Guarantor issuing such
demand, request or notice.
(f) The Senior Note Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Senior Note Indenture at the
request or direction of any of the Holders unless such Holders shall have
offered to the Senior Note Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF SENIOR NOTE TRUSTEE.
The Senior Note Trustee in its individual or any other capacity may become
the owner or pledgee of Senior Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Senior Note Trustee. The Senior Note Trustee is also subject to Sections 7.10
and 7.11 hereof.
SECTION 7.04. SENIOR NOTE TRUSTEE'S DISCLAIMER.
The Senior Note Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Senior Note Indenture or
the Senior Notes, it shall not be accountable for the Company's use of the
proceeds from the Senior Notes or any money paid to the Company or upon the
Company's direction under any provision of this Senior Note Indenture, it shall
not be responsible for the use or application of any money received by any
Paying Agent other than the Senior Note Trustee, and it shall not be responsible
for any statement or recital herein or any statement in the Senior Notes or any
other document in connection with the sale of the Senior Notes or pursuant to
this Senior Note Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Senior Note Trustee, the Senior
Note Trustee shall mail to Holders of Senior Notes a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest on any Senior Note, the Senior Note Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Senior
Notes.
SECTION 7.06. REPORTS BY SENIOR NOTE TRUSTEE TO HOLDERS OF THE SENIOR NOTES.
Within 60 days after each August 1 beginning with the August 1 following
the date of this Senior Note Indenture, and for so long as Senior Notes remain
outstanding, the Senior Note Trustee shall mail to the Holders of the Senior
Notes a brief report dated as of such reporting date that complies with TIA
Section 313(a) (but if no event described in TIA Section 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Senior Note Trustee also shall comply with TIA Section
313(b)(2). The Senior Note Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Senior Notes are listed in accordance
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with TIA Section 313(d). The Company shall promptly notify the Senior Note
Trustee when the Senior Notes are listed on any stock exchange or delisted
therefrom.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Senior Note Trustee from
time to time such compensation as agreed upon in writing for its acceptance of
this Senior Note Indenture and services hereunder. The Senior Note Trustee's
compensation shall not be limited by any law on compensation of a Senior Note
Trustee of an express trust. The Company and the Guarantors shall reimburse the
Senior Note Trustee promptly upon request for all disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Senior Note Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Senior Note Trustee
against any and all losses, liabilities, claims, damages or expenses (including
taxes other than taxes based upon the income of the Senior Note Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Senior Note Indenture, including the
costs and expenses of enforcing this Senior Note Indenture against the Company
and the Guarantors (including this Section 7.07) and defending itself against
any claim (whether asserted by the Company and the Guarantors or any Holder or
any other person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to its negligence or willful
misconduct. The Senior Note Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Senior Note Trustee to so
notify the Company shall not relieve the Company and the Guarantors of its
obligations hereunder. The Company shall defend the claim and the Senior Note
Trustee shall cooperate in the defense. The Senior Note Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07
shall survive the satisfaction and discharge of this Senior Note Indenture.
To secure the Company's and the Guarantors' payment obligations in this
Section, the Senior Note Trustee shall have a Lien prior to the Senior Notes on
all money or property held or collected by the Senior Note Trustee, except that
held in trust to pay principal and interest on particular Senior Notes. Such
Lien shall survive the satisfaction and discharge of this Senior Note Indenture.
When the Senior Note Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Senior Note Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF SENIOR NOTE TRUSTEE.
A resignation or removal of the Senior Note Trustee and appointment of a
successor Senior Note Trustee shall become effective only upon the successor
Senior Note Trustee's acceptance of appointment as provided in this Section.
The Senior Note Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Senior Notes of a majority in principal amount of the
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then outstanding Senior Notes may remove the Senior Note Trustee by so
notifying the Senior Note Trustee and the Company in writing. The Company
may remove the Senior Note Trustee if:
(a) the Senior Note Trustee fails to comply with Section 7.10 hereof;
(b) the Senior Note Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Senior Note Trustee under any
Bankruptcy Law;
(c) a custodian or public officer takes charge of the Senior Note Trustee
or its property; or
(d) the Senior Note Trustee becomes incapable of acting.
If the Senior Note Trustee resigns or is removed or if a vacancy exists in
the office of Senior Note Trustee for any reason, the Company shall promptly
appoint a successor Senior Note Trustee. Within one year after the successor
Senior Note Trustee takes office, the Holders of a majority in principal amount
of the then outstanding Senior Notes may appoint a successor Senior Note Trustee
to replace the successor Senior Note Trustee appointed by the Company.
If a successor Senior Note Trustee does not take office within 60 days
after the retiring Senior Note Trustee resigns or is removed, the retiring
Senior Note Trustee, the Company, or the Holders of Senior Notes of at least 10%
in principal amount of the then outstanding Senior Notes may petition at the
expense of the Company any court of competent jurisdiction for the appointment
of a successor Senior Note Trustee.
If the Senior Note Trustee, after written request by any Holder of a Senior
Note who has been a Holder of a Senior Note for at least six months, fails to
comply with Section 7.10, such Holder of a Senior Note may petition any court of
competent jurisdiction for the removal of the Senior Note Trustee and the
appointment of a successor Senior Note Trustee.
A successor Senior Note Trustee shall deliver a written acceptance of its
appointment to the retiring Senior Note Trustee and to the Company. Thereupon,
the resignation or removal of the retiring Senior Note Trustee shall become
effective, and the successor Senior Note Trustee shall have all the rights,
powers and duties of the Senior Note Trustee under this Senior Note Indenture.
The successor Senior Note Trustee shall mail a notice of its succession to
Holders of the Senior Notes. The retiring Senior Note Trustee shall promptly
transfer all property held by it as Senior Note Trustee to the successor Senior
Note Trustee, PROVIDED all sums owing to the Senior Note Trustee (including its
agents and/or counsel) hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Senior Note
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Senior Note Trustee.
SECTION 7.09. SUCCESSOR SENIOR NOTE TRUSTEE BY MERGER, ETC.
If the Senior Note Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Senior Note Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Senior Note Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate Senior Note Trustee power, that is subject to supervision or
examination by federal
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or state authorities and that has a combined capital and surplus of at least
$50.0 million as set forth in its most recent published annual report of
condition.
This Senior Note Indenture shall always have a Senior Note Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Senior
Note Trustee is subject to TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Senior Note Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Senior Note Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
SECTION 7.12. SENIOR NOTE TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE
COMPANY.
Any application by the Senior Note Trustee for written instructions from
the Company may, at the option of the Senior Note Trustee, set forth in writing
any action proposed to be taken or omitted by the Senior Note Trustee under this
Senior Note Indenture and the date on and/or after which such action shall be
taken or such omission shall be effective. The Senior Note Trustee shall not be
liable for any action taken by, or omission of, the Senior Note Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to the taking of such action (or the effective date
in the case of an omission), the Senior Note Trustee shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior Notes
upon compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Senior Notes and
to have each Guarantor's obligation discharged with respect to its Senior
Subsidiary Guarantee on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Senior Notes, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Senior Note Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Senior Notes
and this Senior Note Indenture (and the Senior Note Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Senior Notes to receive solely from the trust fund described in Section 8.04
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest and Liquidated Damages, if any, on
such Senior Notes when such
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payments are due, (b) the Company's obligations with respect to such Senior
Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Senior Note Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option applicable
to this Section 8.03, the Company and each Guarantor shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the
outstanding Senior Notes on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Senior
Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Senior Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Senior Notes, the Company and each Guarantor may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Senior Note Indenture and such Senior Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(d) through 6.01(f)
hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Senior Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Senior Note Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Senior Notes on the stated date
for payment thereof or on the applicable redemption date, as the case may be,
and the Company must specify whether the Senior Notes are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Senior Note Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Senior Note Trustee confirming that
(A) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Senior Note Indenture,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Senior Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
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(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Senior Note Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Senior Note Trustee confirming that
the Holders of the outstanding Senior Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Senior Notes pursuant to this Article 8 concurrently
with such incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof is
concerned, at any time in the period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Senior Note Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Senior Note Trustee an Opinion
of Counsel (which may be subject to customary exceptions) to the effect that
after the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Senior Note Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any creditors of
the Company or others; and
(h) the Company shall have delivered to the Senior Note Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Senior Note
Trustee (or other qualifying Senior Note Trustee, collectively for purposes of
this Section 8.05, the "SENIOR NOTE TRUSTEE") pursuant to Section 8.04 hereof in
respect of the outstanding Senior Notes shall be held in trust and applied by
the Senior Note Trustee, in accordance with the provisions of such Senior Notes
and this Senior Note Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Senior Note
Trustee may determine, to the Holders of such Senior Notes of all sums due and
to become due thereon in respect of principal, premium, if any, and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company and the Guarantors shall pay and indemnify the Senior Note
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to Section 8.04
hereof or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the outstanding Senior Notes.
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Anything in this Article 8 to the contrary notwithstanding, the Senior Note
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Senior Note Trustee (which may be the opinion delivered
under Section 8.04(a) hereof), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Senior Note Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Senior Note and remaining unclaimed for two years
after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Senior Note
shall thereafter, as a secured creditor, look only to the Company for payment
thereof, and all liability of the Senior Note Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as Senior Note
Trustee thereof, shall thereupon cease; provided, however, that the Senior Note
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Senior Note Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this Senior
Note Indenture and the Senior Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Senior Note Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Senior Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Senior Notes to receive such payment from the money held by the Senior Note
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SENIOR NOTES.
Notwithstanding Section 9.02 of this Senior Note Indenture, the Company,
the Guarantors and the Senior Note Trustee may amend or supplement this Senior
Note Indenture, the Senior Subsidiary Guarantees or the Senior Notes without the
consent of any Holder of a Senior Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in place
of certificated Senior Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
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(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Senior Notes by a successor to the Company or
a Guarantor pursuant to Article 5 or Article 10 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Senior Note;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Senior Note Indenture under the TIA; or
(f) to allow any Guarantor to execute a supplemental Senior Note Indenture
and/or a Senior Subsidiary Guarantee with respect to the Senior Notes.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental Senior
Note Indenture, and upon receipt by the Senior Note Trustee of the documents
described in Section 7.02 hereof, the Senior Note Trustee shall join with the
Company and the Guarantors in the execution of any amended or supplemental
Senior Note Indenture authorized or permitted by the terms of this Senior Note
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Senior Note Trustee shall not be obligated to
enter into such amended or supplemental Senior Note Indenture that affects its
own rights, duties or immunities under this Senior Note Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR NOTES.
Except as provided below in this Section 9.02, the Company and the Senior
Note Trustee may amend or supplement this Senior Note Indenture (including
Sections 3.09, 4.10 and 4.15 hereof), the Senior Subsidiary Guarantees and the
Senior Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Senior Notes then outstanding
voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Senior Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Senior Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Senior Note Indenture, the Senior Subsidiary
Guarantees or the Senior Notes may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Senior Notes voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Senior Notes). Section 2.08 hereof
shall determine which Senior Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental Senior
Note Indenture, and upon the filing with the Senior Note Trustee of evidence
satisfactory to the Senior Note Trustee of the consent of the Holders of Senior
Notes as aforesaid, and upon receipt by the Senior Note Trustee of the documents
described in Section 7.02 hereof, the Senior Note Trustee shall join with the
Company in the execution of such amended or supplemental Senior Note Indenture
unless such amended or supplemental Senior Note Indenture directly affects the
Senior Note Trustee's own rights, duties or immunities under this Senior Note
Indenture or otherwise, in which case the Senior Note Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Senior Note Indenture.
It shall not be necessary for the consent of the Holders of Senior Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Senior Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Senior Note Indenture or waiver. Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in aggregate principal amount of the Senior
Notes then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Senior Note
Indenture or the Senior Notes. However, without the consent of each Holder
affected, an amendment or waiver under this Section 9.02 may not (with respect
to any Senior Notes held by a non-consenting Holder):
(a) reduce the principal amount of Senior Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Senior
Note or alter or waive any of the provisions with respect to the redemption of
the Senior Notes except as provided above with respect to Sections 3.09, 4.10
and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on the Senior Notes
(except a rescission of acceleration of the Senior Notes by the Holders of at
least a majority in aggregate principal amount of the then outstanding Senior
Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Senior Note payable in money other than that stated in the
Senior Notes;
(f) make any change in the provisions of this Senior Note Indenture
relating to waivers of past Defaults or the rights of Holders of Senior Notes to
receive payments of principal of or premium, interest or Liquidated Damages, if
any, on the Senior Notes;
(g) waive a redemption payment with respect to any Senior Note (other than
a payment required pursuant to Section 4.10 or 4.15);
(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(i) release any Guarantor from any of its obligations under its Senior
Subsidiary Guarantee or this Senior Note Indenture, except in accordance with
the terms of this Senior Note Indenture.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Senior Note Indenture or the Senior
Notes shall be set forth in a amended or supplemental Senior Note Indenture that
complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Senior Note is a continuing consent by the Holder of a Senior
Note and every subsequent Holder of a Senior Note or portion of a Senior Note
that evidences the same debt as the consenting Holder's Senior Note, even if
notation of the consent is not made on any Senior Note. However, any such
Holder of a Senior Note or
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subsequent Holder of a Senior Note may revoke the consent as to its Senior
Note if the Senior Note Trustee receives written notice of revocation before
the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its
terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Senior Note Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Senior Note thereafter authenticated.
The Company in exchange for all Senior Notes may issue and the Senior Note
Trustee shall, upon receipt of an Authentication Order, authenticate new Senior
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. SENIOR NOTE TRUSTEE TO SIGN AMENDMENTS, ETC.
The Senior Note Trustee shall sign any amended or supplemental Senior Note
Indenture authorized pursuant to this Article 9 if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the
Senior Note Trustee. The Company may not sign an amendment or supplemental
Senior Note Indenture until the Board of Directors approves it. In executing
any amended or supplemental Senior Note Indenture, the Senior Note Trustee shall
be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental Senior Note Indenture is
authorized or permitted by this Senior Note Indenture.
ARTICLE 10
SENIOR SUBSIDIARY GUARANTEES
SECTION 10.01. GUARANTEE.
Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Senior Note
authenticated and delivered by the Senior Note Trustee and to the Senior Note
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Senior Note Indenture, the Senior Notes or the
obligations of the Company hereunder or thereunder, that: (a) the principal of
and interest on the Senior Notes will be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Senior Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the Senior Note Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Senior Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Senior Notes or this Senior Note Indenture, the absence of any action to enforce
the same, any waiver or consent by any Holder of the Senior Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the
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same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenant that this Senior Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Senior Notes and this Senior Note Indenture.
If any Holder or the Senior Note Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, Senior Note
Trustee, liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by either to the Senior Note Trustee
or such Holder, this Senior Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Senior Note Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article 6
hereof for the purposes of this Senior Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Senior Subsidiary Guarantee.
The Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Senior Subsidiary Guarantee.
SECTION 10.02. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Senior Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Senior Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Senior Subsidiary Guarantee. To effectuate the
foregoing intention, the Senior Note Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor under its Senior
Subsidiary Guarantee and this Article 10 shall be limited to the maximum amount
as will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 10, result in the
obligations of such Guarantor under its Senior Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance.
SECTION 10.03. EXECUTION AND DELIVERY OF SENIOR SUBSIDIARY GUARANTEE.
To evidence its Senior Subsidiary Guarantee set forth in Section 10.01,
each Guarantor hereby agrees that a notation of such Senior Subsidiary Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor on each Senior Note authenticated and delivered by the Senior
Note Trustee and that this Senior Note Indenture shall be executed on behalf of
such Guarantor by its President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Senior Subsidiary Guarantee set forth
in Section 10.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Senior Note a notation of such Senior Subsidiary
Guarantee.
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If an Officer whose signature is on this Senior Note Indenture or on the
Senior Subsidiary Guarantee no longer holds that office at the time the Senior
Note Trustee authenticates the Senior Note on which a Senior Subsidiary
Guarantee is endorsed, the Senior Subsidiary Guarantee shall be valid
nevertheless.
The delivery of any Senior Note by the Senior Note Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Senior
Subsidiary Guarantee set forth in this Senior Note Indenture on behalf of the
Guarantors.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Senior Note Indenture, if required by Section
4.16 hereof, the Company shall cause such Subsidiaries to execute supplemental
Senior Note Indentures to this Senior Note Indenture and Senior Subsidiary
Guarantees in accordance with Section 4.16 hereof and this Article 10, to the
extent applicable.
SECTION 10.04. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
No Guarantor may consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person) another Person whether or not affiliated
with such Guarantor unless:
(a) subject to Section 10.04 hereof, the Person formed by or surviving any
such consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor, pursuant to a
supplemental Senior Note Indenture in form and substance reasonably satisfactory
to the Senior Note Trustee, under the Senior Notes, this Senior Note Indenture,
the Senior Registration Rights Agreement and the Senior Subsidiary Guarantee on
the terms set forth herein or therein;
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(c) the Company would be permitted, immediately after giving effect to
such transaction, to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 hereof.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental Senior Note Indenture,
executed and delivered to the Senior Note Trustee and satisfactory in form to
the Senior Note Trustee, of the Senior Subsidiary Guarantee endorsed upon the
Senior Notes and the due and punctual performance of all of the covenants and
conditions of this Senior Note Indenture to be performed by the Guarantor, such
successor Person shall succeed to and be substituted for the Guarantor with the
same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Senior Subsidiary
Guarantees to be endorsed upon all of the Senior Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Senior Note Trustee. All the Senior Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Senior Note
Indenture as the Senior Subsidiary Guarantees theretofore and thereafter issued
in accordance with the terms of this Senior Note Indenture as though all of such
Senior Subsidiary Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(a) and (b) above, nothing contained in this Senior Note Indenture or in any of
the Senior Notes shall prevent any consolidation or merger of a Guarantor with
or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
71
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SECTION 10.05. RELEASES FOLLOWING SALE OF ASSETS.
In the event of (a) a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, (b) a sale or other
disposition of all of the capital stock of any Guarantor or (c) the designation
of a Guarantor as an Unrestricted Subsidiary in accordance with the terms of
this Senior Note Indenture, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the capital
stock of such Guarantor) or the corporation acquiring the property (in the event
of a sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Senior
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of this
Senior Note Indenture, including without limitation Section 4.10 hereof. Upon
delivery by the Company to the Senior Note Trustee of an Officers' Certificate
and an Opinion of Counsel to the effect that such sale or other disposition was
made by the Company in accordance with the applicable provisions of this Senior
Note Indenture, including without limitation Section 4.10 hereof, the Senior
Note Trustee shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Senior
Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Senior Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Senior Notes and for the other obligations of any Guarantor under this
Senior Note Indenture as provided in this Article 10.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Senior Note Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the Senior
Note Trustee to the others is duly given if in writing and delivered in Person
or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address.
If to the Company and/or any Guarantor:
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Telecopier No.: (303) 460-2691
Attention: Treasurer
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606
Telecopier No.: (312) 407-0411
Attention: Brian W. Duwe
72
<PAGE>
If to the Senior Note Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Administration
The Company, any Guarantor or the Senior Note Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class mail
postage prepaid, certified or registered mail, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Senior Note Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SENIOR NOTES WITH OTHER HOLDERS OF
SENIOR NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Senior Note Indenture or the Senior
Notes. The Company, the Senior Note Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Senior Note Trustee
to take any action under this Senior Note Indenture, the Company shall furnish
to the Senior Note Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Senior Note Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Senior Note
Indenture relating to the proposed action have been satisfied; and
(b) except with respect to the initial issuance of the Senior Notes, an
Opinion of Counsel in form and substance reasonably satisfactory to the Senior
Note Trustee (which shall include the statements set forth in Section 11.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
73
<PAGE>
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Senior Note Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
SECTION 11.06. RULES BY SENIOR NOTE TRUSTEE AND AGENTS.
The Senior Note Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or such Guarantor under the Senior Notes, the
Senior Subsidiary Guarantees, this Senior Note Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Senior Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Senior
Notes.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS SENIOR NOTE INDENTURE, THE SENIOR NOTES AND THE SENIOR SUBSIDIARY
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Senior Note Indenture may not be used to interpret any other Senior
Note Indenture, loan or debt agreement of the Company or its Subsidiaries or of
any other Person. Any such Senior Note Indenture, loan or debt agreement may
not be used to interpret this Senior Note Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Senior Note Indenture and the Senior
Notes shall bind its successors. All agreements of the Senior Note Trustee in
this Senior Note Indenture shall bind its successors.
74
<PAGE>
SECTION 11.11. SEVERABILITY.
In case any provision in this Senior Note Indenture or in the Senior Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Senior Note Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Senior Note Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Senior Note Indenture
and shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
75
<PAGE>
SIGNATURES
Dated as of August 10, 1998 BALL CORPORATION
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Treasurer
BALL AEROSPACE AND TECHNOLOGIES
CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL ASIA PACIFIC LIMITED
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL GLASS CONTAINER CORPORATION
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL HOLDINGS CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL METAL BEVERAGE CONTAINER CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL FOOD CONTAINER CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL METAL PACKAGING SALES CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PACKAGING CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL PLASTIC CONTAINER CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
BALL TECHNOLOGIES HOLDING CORP.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BALL TECHNOLOGY SERVICES CORPORATION
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS I, INC.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
BG HOLDINGS II, INC.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
EFRATOM HOLDING, INC.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
LATAS DE ALUMINIO REYNOLDS, INC.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
RCAL CANS, INC.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
RIND CANS, INC.
By: /s/ Douglas E. Poling
------------------------------
Name: Douglas E. Poling
Title: Vice President
<PAGE>
THE BANK OF NEW YORK,
as Senior Note Trustee
By: /s/ Walter N. Gitlin
------------------------------
Name: WALTER N. GITLIN
Title: Vice President
<PAGE>
EXHIBIT A1
(FACE OF SENIOR NOTE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[INSERT THE GLOBAL SENIOR NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE SENIOR NOTE INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE SENIOR NOTE INDENTURE]
CUSIP/CINS
7 3/4% [Series A] [Series B] Senior Notes due 2006
No. $
---------- ----------
BALL CORPORATION
promises to pay to ____________ or registered assigns, the principal sum of
________________________ Dollars on August 1, 2006.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
BALL CORPORATION
By:
--------------------------
Name:
Title:
This is one of the [Global]
Senior Notes referred to in the
within-mentioned Senior Note Indenture:
Dated: August 10, 1998
THE BANK OF NEW YORK,
as Senior Note Trustee
By:
------------------------------
Name:
Title:
A1-1
<PAGE>
(BACK OF SENIOR NOTE)
7 3/4% [Series A] [Series B] Senior Notes due 2006
Capitalized terms used herein shall have the meanings assigned to them in the
Senior Note Indenture referred to below unless otherwise indicated.
1. INTEREST. Ball Corporation, an Indiana corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Senior Note at 7 3/4%
per annum from August 10, 1998 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Senior Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on February 1 and August 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"INTEREST PAYMENT DATE"). Interest on the Senior Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; PROVIDED that if there is no existing Default
in the payment of interest, and if this Senior Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be February
1, 1999. The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to the then applicable interest rate on the Senior Notes to the extent lawful;
it shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Senior Notes at the close of business on the January 15 or
July 15 next preceding the Interest Payment Date, even if such Senior Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Senior Note Indenture with respect to
defaulted interest. Principal, premium, if any, and interest and Liquidated
Damages on the Senior Notes will be payable at the office or agency of the
Company maintained for such purpose within the City and State of New York or, at
the option of the Company, payment of interest and Liquidated Damages may be
made by check mailed to the Holders of the Notes at their respective addresses
set forth in the register of Holders of Notes; PROVIDED that all payments of
principal, premium, interest and Liquidated Damages thereon, if any, with
respect to Notes the Holders of which have given wire transfer instructions to
the Trustee will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Senior
Note Trustee under the Senior Note Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. SENIOR NOTE INDENTURE. The Company issued the Senior Notes under an Senior
Note Indenture dated as of August 10, 1998 ("SENIOR NOTE INDENTURE") between the
Company and the Senior Note Trustee. The terms of the Senior Notes include
those stated in the Senior Note Indenture and those made part of the Senior Note
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Sections 77aaa-77bbbb). The Senior Notes are subject to all such terms,
and Holders are referred to the Senior Note Indenture and such Act for a
statement of such terms. To the extent any provision of this Senior Note
conflicts with the express provisions of the Senior Note Indenture, the
provisions of the Senior Note Indenture shall govern and be controlling. The
Senior Notes are obligations of the Company limited to $300.0 million in
aggregate principal amount.
A1-2
<PAGE>
5. OPTIONAL REDEMPTION.
(a) The Senior Notes will be subject to redemption at any time at the
option of the Company, in whole but not in part, upon not less than 30 nor
more than 60 days' notice.
(b) The Senior Notes will be redeemable at a redemption price equal to
100% of the principal amount thereof plus the applicable Senior Make-Whole
Premium, plus, to the extent not included in the Senior Make-Whole Premium,
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption. For purposes of the foregoing, "SENIOR MAKE-WHOLE PREMIUM"
means, with respect to a Senior Note, an amount equal to the excess, if
any, of (i) the aggregate present value as of the date of such redemption
of each dollar of principal of such Senior Note being redeemed and the
amount of interest (exclusive of interest accrued to the date of
redemption) that would have been payable in respect of such dollar if such
redemption had not been made, determined by discounting, on a semiannual
basis, such principal and interest at a rate equal to the sum of the
Treasury Yield (determined on the Business Day immediately preceding the
date of such redemption) plus 0.5% per annum, from the respective dates on
which such principal and interest would have been payable if such
redemption had not been made, over (ii) the aggregate principal amount of
such Senior Note being redeemed.
(c) Any redemption pursuant to this Paragraph 5 shall be made pursuant to
the provisions of Article 3 of the Senior Note Indenture.
6. MANDATORY REDEMPTION. Except as set forth in Sections 3.09, 4.10 and 4.15
of the Senior Note Indenture, the Company shall not be required to make
mandatory redemption payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Notes at
a purchase price equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to
the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 15 days
following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer
as required by the Senior Note Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales
and the aggregate amount of Excess Proceeds exceeds $20.0 million, the
Company shall commence an offer to all Holders of Senior Notes (a "SENIOR
ASSET SALE OFFER") pursuant to Section 3.09 of the Senior Note Indenture to
purchase the maximum principal amount of Senior Notes that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date fixed for the closing of
such offer, in accordance with the procedures set forth in the Senior Note
Indenture. To the extent that the aggregate amount of Senior Notes
tendered pursuant to a Senior Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such deficiency for any
purpose not prohibited by the Senior Note Indenture. If the aggregate
principal amount of Senior Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Senior Note Trustee shall select the Senior
Notes to be purchased on a PRO RATA basis. Holders of Senior Notes that
are the subject of an offer to purchase will receive a Senior Asset Sale
Offer from the Company prior to any related purchase date and may elect to
have such Senior Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior Notes.
A1-3
<PAGE>
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder whose Senior
Notes are to be redeemed at its registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Senior Notes may be registered and Senior Notes may be exchanged
as provided in the Senior Note Indenture. The Registrar and the Senior Note
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Senior Note Indenture.
The Company need not exchange or register the transfer of any Senior Note or
portion of a Senior Note selected for redemption, except for the unredeemed
portion of any Senior Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Senior Notes for a period of 15 days
before a selection of Senior Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Senior Note Indenture, the Senior Subsidiary Guarantees or the Senior Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Senior Notes voting as a
single class, and any existing default or compliance with any provision of the
Senior Note Indenture, the Senior Subsidiary Guarantees or the Senior Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Senior Notes voting as a single class. Without the consent
of any Holder of a Senior Note, the Senior Note Indenture, the Senior Subsidiary
Guarantees or the Senior Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Senior Notes
in addition to or in place of certificated Senior Notes, to provide for the
assumption of the Company's or Guarantor's obligations to Holders of the Senior
Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Senior Notes or
that does not adversely affect the legal rights under the Senior Note Indenture
of any such Holder, to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Senior Note Indenture under the
Trust Indenture Act or to allow any Guarantor to execute a supplemental Senior
Note Indenture to the Senior Note Indenture and/or a Senior Subsidiary Guarantee
with respect to the Senior Notes.
13. DEFAULTS AND REMEDIES. An "EVENT OF DEFAULT" occurs if: (i) the Company
defaults in the payment when due of interest on, or Liquidated Damages, if any,
with respect to, the Senior Notes and such default continues for a period of 30
days; (ii) the Company defaults in the payment when due of principal of or
premium, if any, on the Senior Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise; (iii) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Sections 5.01; (iv) the Company or any of its
Restricted Subsidiaries fails to comply for 30 days after notice to the Company
by the Senior Note Trustee with any of the provisions of Sections 4.07, 4.09,
4.10 or 4.15 of the Senior Note Indenture; (v) the Company or any of its
Restricted Subsidiaries fails to observe or perform any other covenant,
representation, warranty or other agreement in the Senior Note Indenture or the
Senior Notes for 60 days after notice to the Company by the Senior Note Trustee;
(vi) a default occurs under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (other than a Securitization Entity) (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries (other than a
Securitization Entity)) whether such Indebtedness or guarantee now exists, or is
created after the date of this Senior Note Indenture,
A1-4
<PAGE>
which default (a) is caused by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a "PAYMENT
DEFAULT") or (b) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates without duplication $20.0 million
or more; (vii) the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $20.0 million (excluding amounts
covered by insurance), which judgments are not paid, discharged or stayed for
a period of 60 days; (viii) certain events of bankruptcy or insolvency occur
with respect to the Company or any of its Significant Subsidiaries that are
Restricted Subsidiaries or any group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law; or (ix) except as permitted by the Senior Note
Indenture, any Senior Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be
in full force and effect or any Guarantor, or any Person acting on behalf of
any Guarantor, shall deny or disaffirm its obligations under such Guarantor's
Senior Subsidiary Guarantee.
If any Event of Default occurs and is continuing, the Senior Note Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior Notes
may declare all the Senior Notes to be due and payable. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Senior Notes will become due and
payable without further action or notice. Holders may not enforce the Senior
Note Indenture or the Senior Notes except as provided in the Senior Note
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Senior Notes may direct the Senior Note Trustee
in its exercise of any trust or power. The Senior Note Trustee may withhold
from Holders of the Senior Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Senior
Notes then outstanding by notice to the Senior Note Trustee may on behalf of the
Holders of all of the Senior Notes waive any existing Default or Event of
Default and its consequences under the Senior Note Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
the Senior Notes. The Company is required to deliver to the Senior Note Trustee
annually a statement regarding compliance with the Senior Note Indenture, and
the Company is required upon becoming aware of any Default or Event of Default,
to deliver to the Senior Note Trustee a statement specifying such Default or
Event of Default.
14. SENIOR NOTE TRUSTEE DEALINGS WITH COMPANY. The Senior Note Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Senior Note Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or
stockholder, of the Company or any of the Guarantors, as such, shall not have
any liability for any obligations of the Company or such Guarantor under the
Senior Notes, the Senior Subsidiary Guarantees or the Senior Note Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Senior Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Senior Notes.
16. AUTHENTICATION. This Senior Note shall not be valid until authenticated by
the manual signature of the Senior Note Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with
A1-5
<PAGE>
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL SENIOR NOTES AND
RESTRICTED DEFINITIVE SENIOR NOTES. In addition to the rights provided to
Holders of Senior Notes under the Senior Note Indenture, Holders of Restricted
Global Senior Notes and Restricted Definitive Senior Notes shall have all the
rights set forth in the Senior Registration Rights Agreement dated as of August
10, 1998, between the Company and the parties named on the signature pages
thereof (the "SENIOR REGISTRATION RIGHTS AGREEMENT").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Senior Notes and the Senior Note Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without charge a
copy of the Senior Note Indenture and/or the Senior Registration Rights
Agreement. Requests may be made to:
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
Attention: Chief Financial Officer
A1-6
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Senior Note on the books of the Company. The agent may
substitute another to act for him.
- -------------------------------------------------------------------------------
Date:
---------------
Your Signature:
---------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE OF
THIS SENIOR NOTE)
Tax Identification No:
--------------------------------
SIGNATURE GUARANTEE:
----------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-7
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Senior Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Senior Note Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Senior Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Senior Note Indenture,
state the amount you elect to have purchased: $_____________
Date:
---------------
Your Signature:
---------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE OF
THIS SENIOR NOTE)
Tax Identification No:
--------------------------------
SIGNATURE GUARANTEE:
----------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-8
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN
THE GLOBAL SENIOR NOTE (1)
The following exchanges of a part of this Global Senior Note for an interest in
another Global Senior Note or for a Definitive Senior Note, or exchanges of a
part of another Global Senior Note or Definitive Senior Note for an interest in
this Global Senior Note, have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of of this Global authorized
decrease in Amount of increase Senior Note signatory of
Principal Amount in Principal following such Senior Note
of this Global Amount of this decrease (or Trustee or
Date of Exchange Senior Note Global Senior Note increase) Custodian
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
- -------------------
(1) This should be included only if the Senior Note is issued in global form.
A1-9
<PAGE>
EXHIBIT A2
(FACE OF REGULATION S TEMPORARY GLOBAL SENIOR NOTE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SENIOR NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SENIOR NOTES,
ARE AS SPECIFIED IN THE SENIOR NOTE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SENIOR
NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN
DEFINITIVE FORM, THIS SENIOR NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
A2-1
<PAGE>
CUSIP/CINS
7 3/4% SERIES A SENIOR NOTES DUE 2006
NO. $
---------- ----------
BALL CORPORATION
promises to pay to ____________ or registered assigns, the principal sum of
________________________ Dollars on August 1, 2006.
Interest Payment Dates: February 1, and August 1
Record Dates: January 15 and July 15
BALL CORPORATION
By:
------------------------------------
Name:
Title:
This is one of the [Global]
Senior Notes referred to in the
within-mentioned Senior Note Indenture:
Dated: August 10, 1998
THE BANK OF NEW YORK,
as Senior Note Trustee
By:
-------------------------------
Name:
Title:
A2-2
<PAGE>
(BACK OF REGULATION S TEMPORARY GLOBAL SENIOR NOTE)
7 3/4% Series A Senior Notes due 2006
Capitalized terms used herein shall have the meanings assigned to them in the
Senior Note Indenture referred to below unless otherwise indicated.
1. INTEREST. Ball Corporation, an Indiana corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Senior Note at 7 3/4%
per annum from August 10, 1998 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Senior Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on February 1 and August 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"INTEREST PAYMENT DATE"). Interest on the Senior Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; PROVIDED that if there is no existing Default
in the payment of interest, and if this Senior Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be February
1, 1999. The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to the then applicable interest rate on the Senior Notes to the extent lawful;
it shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful Interest will be computed on the basis of a 360-day year of twelve
30-day months.
Until this Regulation S Temporary Global Senior Note is exchanged for one or
more Regulation S Permanent Global Senior Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Senior Note shall in all other respects be
entitled to the same benefits as other Senior Notes under the Senior Note
Indenture.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Senior Notes at the close of business on the January 15 or
July 15 next preceding the Interest Payment Date, even if such Senior Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Senior Note Indenture with respect to
defaulted interest. Principal, premium, if any, and interest and Liquidated
Damages on the Senior Notes will be payable at the office or agency of the
Company maintained for such purpose within the City and State of New York or, at
the option of the Company, payment of interest and Liquidated Damages may be
made by check mailed to the Holders of the Notes at their respective addresses
set forth in the register of Holders of Notes; PROVIDED that all payments of
principal, premium, interest and Liquidated Damages thereon, if any, with
respect to Notes the Holders of which have given wire transfer instructions to
the Trustee will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Senior
Note Trustee under the Senior Note Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. SENIOR NOTE INDENTURE. The Company issued the Senior Notes under an Senior
Note Indenture dated as of August 10, 1998 ("SENIOR NOTE INDENTURE") between the
Company and the Senior Note Trustee. The terms of the Senior Notes include
those stated in the Senior Note Indenture and those made part of the Senior Note
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code Sections
A2-3
<PAGE>
77aaa-77bbbb). The Senior Notes are subject to all such terms, and Holders
are referred to the Senior Note Indenture and such Act for a statement of
such terms. To the extent any provision of this Senior Note conflicts with
the express provisions of the Senior Note Indenture, the provisions of the
Senior Note Indenture shall govern and be controlling. The Senior Notes are
obligations of the Company limited to $300.0 million in aggregate principal
amount.
5. OPTIONAL REDEMPTION.
(a) The Senior Notes will be subject to redemption at any time at the
option of the Company, in whole but not in part, upon not less than 30 nor
more than 60 days' notice.
(b) The Senior Notes will be redeemable at a redemption price equal to
100% of the principal amount thereof plus the applicable Senior Make-Whole
Premium, plus, to the extent not included in the Senior Make-Whole Premium,
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption. For purposes of the foregoing, "SENIOR MAKE-WHOLE PREMIUM"
means, with respect to a Senior Note, an amount equal to the excess, if
any, of (i) the aggregate present value as of the date of such redemption
of each dollar of principal of such Senior Note being redeemed and the
amount of interest (exclusive of interest accrued to the date of
redemption) that would have been payable in respect of such dollar if such
redemption had not been made, determined by discounting, on a semiannual
basis, such principal and interest at a rate equal to the sum of the
Treasury Yield (determined on the Business Day immediately preceding the
date of such redemption) plus 0.5% per annum, from the respective dates on
which such principal and interest would have been payable if such
redemption had not been made, over (ii) the aggregate principal amount of
such Senior Note being redeemed.
(c) Any redemption pursuant to this Paragraph 5 shall be made pursuant to
the provisions of Article 3 of the Senior Note Indenture.
6. MANDATORY REDEMPTION. Except as set forth in Sections 3.09, 4.10 and 4.15
of the Senior Note Indenture, the Company shall not be required to make
mandatory redemption payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior Notes at
a purchase price equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to
the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 15 days
following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer
as required by the Senior Note Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales
and the aggregate amount of Excess Proceeds exceeds $20.0 million, the
Company shall commence an offer to all Holders of Senior Notes (a "SENIOR
ASSET SALE OFFER") pursuant to Section 3.09 of the Senior Note Indenture to
purchase the maximum principal amount of Senior Notes that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date fixed for the closing of
such offer, in accordance with the procedures set forth in the Senior Note
Indenture. To the extent that the aggregate amount of Senior Notes
tendered pursuant to a Senior Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such deficiency
A2-4
<PAGE>
for any purpose not prohibited by the Senior Note Indenture. If the
aggregate principal amount of Senior Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Senior Note Trustee
shall select the Senior Notes to be purchased on a PRO RATA basis.
Holders of Senior Notes that are the subject of an offer to purchase
will receive a Senior Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Senior Notes purchased
by completing the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Senior Notes.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder whose Senior
Notes are to be redeemed at its registered address. Senior Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Senior
Notes or portions thereof called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Senior Notes may be registered and Senior Notes may be exchanged
as provided in the Senior Note Indenture. The Registrar and the Senior Note
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Senior Note Indenture.
The Company need not exchange or register the transfer of any Senior Note or
portion of a Senior Note selected for redemption, except for the unredeemed
portion of any Senior Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Senior Notes for a period of 15 days
before a selection of Senior Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Senior Note is exchangeable in whole or in
part for one or more Global Senior Notes only (i) on or after the termination of
the 40-day restricted period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Senior Note Indenture. Upon exchange
of this Regulation S Temporary Global Senior Note for one or more Global Senior
Notes, the Senior Note Trustee shall cancel this Regulation S Temporary Global
Senior Note.
11. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Senior Note Indenture, the Senior Subsidiary Guarantees or the Senior Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Senior Notes voting as a
single class, and any existing default or compliance with any provision of the
Senior Note Indenture, the Senior Subsidiary Guarantees or the Senior Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Senior Notes voting as a single class. Without the consent
of any Holder of a Senior Note, the Senior Note Indenture, the Senior Subsidiary
Guarantees or the Senior Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Senior Notes
in addition to or in place of certificated Senior Notes, to provide for the
assumption of the Company's or Guarantor's obligations to Holders of the Senior
Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Senior Notes or
that does not adversely affect the legal rights under the Senior Note Indenture
of any such Holder, to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Senior Note Indenture under the
Trust Indenture Act or to allow any Guarantor to execute a supplemental Senior
Note Indenture to the Senior Note Indenture and/or a Senior Subsidiary Guarantee
with respect to the Senior Notes.
A2-5
<PAGE>
13. DEFAULTS AND REMEDIES. An "EVENT OF DEFAULT" occurs if: (i) the
Company defaults in the payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Senior Notes and such default continues
for a period of 30 days; (ii) the Company defaults in the payment when due of
principal of or premium, if any, on the Senior Notes when the same becomes
due and payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise; (iii) the Company or any of its Restricted
Subsidiaries fails to comply with the provisions of Sections 5.01; (iv) the
Company or any of its Restricted Subsidiaries fails to comply for 30 days
after notice to the Company by the Senior Note Trustee with any of the
provisions of Sections 4.07, 4.09, 4.10 or 4.15 of the Senior Note Indenture;
(v) the Company or any of its Restricted Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in
the Senior Note Indenture or the Senior Notes for 60 days after notice to the
Company by the Senior Note Trustee; (vi) a default occurs under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (other than a Securitization Entity) (or
the payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries (other than a Securitization Entity)) whether such Indebtedness
or guarantee now exists, or is created after the date of this Senior Note
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT") or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates without duplication $20.0 million
or more; (vii) the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $20.0 million (excluding amounts
covered by insurance), which judgments are not paid, discharged or stayed for
a period of 60 days; (viii) certain events of bankruptcy or insolvency occur
with respect to the Company or any of its Significant Subsidiaries that are
Restricted Subsidiaries or any group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law; or (ix) except as permitted by the Senior Note
Indenture, any Senior Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be
in full force and effect or any Guarantor, or any Person acting on behalf of
any Guarantor, shall deny or disaffirm its obligations under such Guarantor's
Senior Subsidiary Guarantee.
If any Event of Default occurs and is continuing, the Senior Note Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Senior Notes may declare all the Senior Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Senior Notes
will become due and payable without further action or notice. Holders may
not enforce the Senior Note Indenture or the Senior Notes except as provided
in the Senior Note Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Senior Notes may direct
the Senior Note Trustee in its exercise of any trust or power. The Senior
Note Trustee may withhold from Holders of the Senior Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Senior Notes then outstanding by notice to
the Senior Note Trustee may on behalf of the Holders of all of the Senior
Notes waive any existing Default or Event of Default and its consequences
under the Senior Note Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Senior Notes.
The Company is required to deliver to the Senior Note Trustee annually a
statement regarding compliance with the Senior Note Indenture, and the
Company is required upon becoming aware of any Default or Event of Default,
to deliver to the Senior Note Trustee a statement specifying such Default or
Event of Default.
14. SENIOR NOTE TRUSTEE DEALINGS WITH COMPANY. The Senior Note Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its
A2-6
<PAGE>
Affiliates, and may otherwise deal with the Company or its Affiliates, as if
it were not the Senior Note Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company or any of the Guarantors, as such, shall not
have any liability for any obligations of the Company or such Guarantor under
the Senior Notes, the Senior Subsidiary Guarantees or the Senior Note
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Senior Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes.
16. AUTHENTICATION. This Senior Note shall not be valid until authenticated
by the manual signature of the Senior Note Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL SENIOR NOTES AND
RESTRICTED DEFINITIVE SENIOR NOTES. In addition to the rights provided to
Holders of Senior Notes under the Senior Note Indenture, Holders of
Restricted Global Senior Notes and Restricted Definitive Senior Notes shall
have all the rights set forth in the Senior Registration Rights Agreement
dated as of August 10, 1998, between the Company and the parties named on
the signature pages thereof (the "SENIOR REGISTRATION RIGHTS AGREEMENT").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Notes and the Senior Note
Trustee may use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either
as printed on the Senior Notes or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Senior Note Indenture and/or the Senior Registration
Rights Agreement. Requests may be made to:
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
Attention: Chief Financial Officer
A2-7
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
- ------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-----------------------------------------------------
to transfer this Senior Note on the books of the Company. The agent may
substitute another to act for him.
------------------------------------------
Date:
--------------
Your Signature:
--------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE OF
THIS SENIOR NOTE)
Tax Identification No:
-------------------------------
SIGNATURE GUARANTEE:
---------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A2-8
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Senior Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Senior Note Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Senior Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Senior Note Indenture,
state the amount you elect to have purchased: $_____________
Date:
---------------
Your Signature:
---------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE OF
THIS SENIOR NOTE)
Tax Identification No:
--------------------------------
SIGNATURE GUARANTEE:
----------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A2-9
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN
THE REGULATION S TEMPORARY GLOBAL SENIOR NOTE
The following exchanges of a part of this Regulation S Temporary Global Senior
Note for an interest in another Global Senior Note, or of other Restricted
Global Senior Notes for an interest in this Regulation S Temporary Global Senior
Note, have been made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of of this Global authorized
decrease in Amount of increase Senior Note signatory of
Principal Amount in Principal following such Senior Note
of this Global Amount of this decrease (or Trustee or
Date of Exchange Senior Note Global Senior Note increase) Custodian
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
A2-10
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 7 3/4% Senior Notes due 2006 (CUSIP )
---------------------------------------------------------
Reference is hereby made to the Senior Note Indenture, dated as of August 10,
1998 (the "SENIOR NOTE INDENTURE"), between Ball Corporation, as issuer (the
"COMPANY"), and The Bank of New York, as Senior Note Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the Senior
Note Indenture.
____________________, (the "TRANSFEROR") owns and proposes to transfer the
Senior Note[s] or interest in such Senior Note[s] specified in Annex A hereto,
in the principal amount of $_____________ in such Senior Note[s] or interests
(the "TRANSFER"), to _________________ (the "TRANSFEREE"), as further specified
in Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL SENIOR NOTE OR A DEFINITIVE SENIOR NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "SECURITIES ACT"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Senior Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Senior Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Senior Note Indenture, the
transferred beneficial interest or Definitive Senior Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Senior Note and/or the Definitive Senior Note and in the Senior
Note Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
TEMPORARY REGULATION S GLOBAL SENIOR NOTE, THE REGULATION S GLOBAL SENIOR NOTE
OR A DEFINITIVE SENIOR NOTE PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person
B-1
<PAGE>
acting on its behalf knows that the transaction was prearranged with a buyer
in the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S under the Securities Act and, (iii) the transaction is not part of a plan
or scheme to evade the registration requirements of the Securities Act and
(iv) if the proposed transfer is being made prior to the expiration of the
Restricted Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the
Senior Note Indenture, the transferred beneficial interest or Definitive
Senior Note will be subject to the restrictions on Transfer enumerated in the
Private Placement Legend printed on the Regulation S Global Senior Note, the
Temporary Regulation S Global Senior Note and/or the Definitive Senior Note
and in the Senior Note Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL SENIOR NOTE OR A DEFINITIVE SENIOR NOTE PURSUANT TO
ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Senior Notes and
Restricted Definitive Senior Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) / / such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act; or
(b) / / such Transfer is being effected to the Company or a subsidiary
thereof; or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act; or
(d) / / such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the
Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Senior Note or Restricted
Definitive Senior Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Senior Note Indenture and (2) if
such Transfer is in respect of a principal amount of Senior Notes at the
time of transfer of less than $250,000, an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Senior Note Indenture, the
transferred beneficial interest or Definitive Senior Note will be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Senior Note and/or the Definitive Senior Notes
and in the Senior Note Indenture and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL SENIOR NOTE OR OF AN UNRESTRICTED DEFINITIVE SENIOR NOTE.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained
in the Senior Note Indenture and any applicable blue sky securities laws of
any state of the United States and (ii) the restrictions on transfer
contained in the Senior Note Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
B-2
<PAGE>
Senior Note Indenture, the transferred beneficial interest or Definitive
Senior Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Senior Notes, on Restricted Definitive Senior Notes and in the Senior Note
Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions
contained in the Senior Note Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions
on transfer contained in the Senior Note Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Senior Note Indenture, the transferred beneficial
interest or Definitive Senior Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Senior Notes, on Restricted Definitive Senior
Notes and in the Senior Note Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained
in the Senior Note Indenture and any applicable blue sky securities laws of
any State of the United States and (ii) the restrictions on transfer
contained in the Senior Note Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Senior Note Indenture, the transferred beneficial interest or Definitive
Senior Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Senior
Notes or Restricted Definitive Senior Notes and in the Senior Note
Indenture.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
------------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------------------
Name:
Title:
Dated: ,
------------ ------
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Senior Note (CUSIP ), or
(ii) / / Regulation S Global Senior Note (CUSIP ), or
(iii) / / IAI Global Senior Note (CUSIP ); or
(b) / / a Restricted Definitive Senior Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Senior Note (CUSIP ), or
(ii) / / Regulation S Global Senior Note (CUSIP ), or
(iii) / / IAI Global Senior Note (CUSIP ); or
(iv) / / Unrestricted Global Senior Note (CUSIP ); or
(b) / / a Restricted Definitive Senior Note; or
(c) / / an Unrestricted Definitive Senior Note,
in accordance with the terms of the Senior Note Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 7 3/4% Senior Notes due 2006 (CUSIP )
-----------------------------------------------
Reference is hereby made to the Senior Note Indenture, dated as of August 10,
1998 (the "SENIOR NOTE INDENTURE"), between Ball Corporation, as issuer (the
"COMPANY"), and The Bank of New York, as Senior Note Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the Senior
Note Indenture.
_________________________, (the "OWNER") owns and proposes to exchange the
Senior Note[s] or interest in such Senior Note[s] specified herein, in the
principal amount of $_______________ in such Senior Note[s] or interests (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE SENIOR NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL SENIOR NOTE FOR UNRESTRICTED DEFINITIVE SENIOR NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL SENIOR NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL SENIOR NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SENIOR
NOTE. In connection with the Exchange of the Owner's beneficial interest in
a Restricted Global Senior Note for a beneficial interest in an Unrestricted
Global Senior Note in an equal principal amount, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Senior Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as amended
(the "SECURITIES ACT"), (iii) the restrictions on transfer contained in the
Senior Note Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Senior Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
SENIOR NOTE TO UNRESTRICTED DEFINITIVE SENIOR NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Senior
Note for an Unrestricted Definitive Senior Note, the Owner hereby certifies
(i) the Definitive Senior Note is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Senior Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Senior Note Indenture and the Private Placement
Legend are not required in order to maintain compliance
C-1
<PAGE>
with the Securities Act and (iv) the Definitive Senior Note is being acquired
in compliance with any applicable blue sky securities laws of any state of
the United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SENIOR NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SENIOR NOTE. In connection
with the Owner's Exchange of a Restricted Definitive Senior Note for a
beneficial interest in an Unrestricted Global Senior Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Senior
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Senior Note Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SENIOR NOTE TO
UNRESTRICTED DEFINITIVE SENIOR NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Senior Note for an Unrestricted Definitive Senior
Note, the Owner hereby certifies (i) the Unrestricted Definitive Senior Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Senior Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Senior Note Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act and (iv)
the Unrestricted Definitive Senior Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE SENIOR NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL SENIOR NOTES FOR RESTRICTED DEFINITIVE SENIOR NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SENIOR NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL SENIOR NOTE TO RESTRICTED DEFINITIVE SENIOR NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Senior
Note for a Restricted Definitive Senior Note with an equal principal amount,
the Owner hereby certifies that the Restricted Definitive Senior Note is
being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of the
Senior Note Indenture, the Restricted Definitive Senior Note issued will
continue to be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Definitive Senior Note and
in the Senior Note Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SENIOR NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SENIOR NOTE. In connection with
the Exchange of the Owner's Restricted Definitive Senior Note for a
beneficial interest in the [CHECK ONE] / / 144A Global Senior Note,
/ / Regulation S Global Senior Note, / / IAI Global Senior Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Senior Notes and pursuant to and in
accordance with the Securities Act, and in compliance with any applicable blue
sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Senior Note Indenture,
the beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Senior Note and in the Senior Note Indenture and the Securities Act.
C-2
<PAGE>
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
---------------------------------------
[INSERT NAME OF OWNER]
By:
------------------------------------
Name:
Title:
Dated: ,
------------ ----
C-3
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 7 3/4% Senior Notes due 2006 (CUSIP )
--------------------------------------------------
Reference is hereby made to the Senior Note Indenture, dated as of August 10,
1998 (the "SENIOR NOTE INDENTURE"), between Ball Corporation, as issuer (the
"COMPANY"), and The Bank of New York, as Senior Note Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the Senior
Note Indenture.
In connection with our proposed purchase of $____________ aggregate principal
amount of:
(a) / / a beneficial interest in a Global Senior Note, or
(b) / / a Definitive Senior Note,
we confirm that:
1. We understand that any subsequent transfer of the Senior Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Senior Note Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Senior Notes or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Senior Notes have not been
registered under the Securities Act, and that the Senior Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Senior Notes or
any interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Senior Notes, at the time of
transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such transfer is in compliance with
the Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Senior Note or beneficial interest in a Global
Senior Note from us in a transaction
D-1
<PAGE>
meeting the requirements of clauses (A) through (E) of this paragraph a
notice advising such purchaser that resales thereof are restricted as stated
herein.
3. We understand that, on any proposed resale of the Senior Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Senior Notes
purchased by us will bear a legend to the foregoing effect. We further
understand that any subsequent transfer by us of the Senior Notes or beneficial
interest therein acquired by us must be effected through one of the Placement
Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Senior Notes, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Senior Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
------------------------------------------
[INSERT NAME OF ACCREDITED INVESTOR]
By:
---------------------------------------
Name:
Title:
Dated: ,
-------------- -----
D-2
<PAGE>
EXHIBIT E
FORM OF NOTATION OF SENIOR SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor Person
under the Senior Note Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Senior Note Indenture and subject to
the provisions in the Senior Note Indenture dated as of August 10, 1998 (the
"SENIOR NOTE INDENTURE") among Ball Corporation, the Guarantors listed on
Schedule I thereto and The Bank of New York, as Senior Note Trustee (the "SENIOR
NOTE TRUSTEE"), (a) the due and punctual payment of the principal of, premium,
if any, and interest on the Senior Notes (as defined in the Senior Note
Indenture), whether at maturity, by acceleration, redemption or otherwise, the
due and punctual payment of interest on overdue principal and premium, and, to
the extent permitted by law, interest, and the due and punctual performance of
all other obligations of the Company to the Holders or the Senior Note Trustee
all in accordance with the terms of the Senior Note Indenture and (b) in case of
any extension of time of payment or renewal of any Senior Notes or any of such
other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the
Guarantors to the Holders of Senior Notes and to the Senior Note Trustee
pursuant to the Senior Subsidiary Guarantee and the Senior Note Indenture are
expressly set forth in Article 10 of the Senior Note Indenture and reference is
hereby made to the Senior Note Indenture for the precise terms of the Senior
Subsidiary Guarantee. Each Holder of a Senior Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Senior Note Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Senior Note Indenture and (c) appoints the Senior Note Trustee attorney-in-fact
of such Holder for such purpose; PROVIDED, HOWEVER, that the Indebtedness
evidenced by this Senior Subsidiary Guarantee shall cease to be so subordinated
and subject in right of payment upon any defeasance of this Senior Note in
accordance with the provisions of the Senior Note Indenture.
[Name of Guarantor(s)]
By:
---------------------------------------
Name:
Title:
E-1
<PAGE>
EXHIBIT F
FORM OF SUPPLEMENTAL SENIOR NOTE INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL SENIOR NOTE INDENTURE (this "SUPPLEMENTAL SENIOR NOTE INDENTURE"),
dated as of ________________, among __________________ (the "GUARANTEEING
SUBSIDIARY"), a subsidiary of Ball Corporation (or its permitted successor), an
Indiana corporation (the "COMPANY"), the Company, the other Guarantors (as
defined in the Senior Note Indenture referred to herein) and The Bank of New
York, as Senior Note Trustee under the Senior Note Indenture referred to below
(the "SENIOR NOTE TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Senior Note
Trustee an Senior Note Indenture (the "SENIOR NOTE INDENTURE"), dated as of
August 10, 1998 providing for the issuance of an aggregate principal amount of
up to $300.0 million of 7 3/4% Senior Notes due 2006 (the "SENIOR NOTES");
WHEREAS, the Senior Note Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Senior Note Trustee a
supplemental Senior Note Indenture pursuant to which the Guaranteeing Subsidiary
shall unconditionally guarantee all of the Company's Obligations under the
Senior Notes and the Senior Note Indenture on the terms and conditions set forth
herein (the "SENIOR SUBSIDIARY GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Senior Note Indenture, the Senior Note
Trustee is authorized to execute and deliver this Supplemental Senior Note
Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing
Subsidiary and the Senior Note Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Senior Note Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Senior Note Indenture, to
jointly and severally Guarantee to each Holder of a Senior Note
authenticated and delivered by the Senior Note Trustee and to the
Senior Note Trustee and its successors and assigns, irrespective of
the validity and enforceability of the Senior Note Indenture, the
Senior Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and interest on the Senior Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Senior Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Senior Note Trustee
hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any
Senior Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
F-1
<PAGE>
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Senior Notes or the Senior
Note Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder of the Senior Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor.
(c) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever.
(d) This Senior Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Senior Notes and
the Senior Note Indenture.
(e) If any Holder or the Senior Note Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any custodian,
Senior Note Trustee, liquidator or other similar official acting in
relation to either the Company or the Guarantors, any amount paid by either
to the Senior Note Trustee or such Holder, this Senior Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby.
(g) As between the Guarantors, on the one hand, and the Holders and the
Senior Note Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the Senior
Note Indenture for the purposes of this Senior Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as
provided in Article 6 of the Senior Note Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by
the Guarantors for the purpose of this Senior Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair
the rights of the Holders under the Senior Subsidiary Guarantee.
(i) Pursuant to Section 10.04 of the Senior Note Indenture, after giving
effect to any maximum amount and any other contingent and fixed liabilities
that are relevant under any applicable Bankruptcy or fraudulent conveyance
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor
in respect of the obligations of such other Guarantor under Article 10 of
the Senior Note Indenture shall result in the obligations of such Guarantor
under its Senior Subsidiary Guarantee not constituting a fraudulent
transfer or conveyance.
F-2
<PAGE>
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Senior Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Note a notation of such
Senior Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:
(i) subject to Section 10.04 of the Senior Note Indenture, the Person
formed by or surviving any such consolidation or merger (if other than
a Guarantor or the Company) unconditionally assumes all the
obligations of such Guarantor, pursuant to a supplemental Senior Note
Indenture in form and substance reasonably satisfactory to the Senior
Note Trustee, under the Senior Notes, the Senior Note Indenture and
the Senior Subsidiary Guarantee on the terms set forth herein or
therein; and
(ii) immediately after giving effect to such transaction, no Default
or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor corporation, by supplemental Senior Note
Indenture, executed and delivered to the Senior Note Trustee and
satisfactory in form to the Senior Note Trustee, of the Senior Subsidiary
Guarantee endorsed upon the Senior Notes and the due and punctual
performance of all of the covenants and conditions of the Senior Note
Indenture to be performed by the Guarantor, such successor corporation
shall succeed to and be substituted for the Guarantor with the same effect
as if it had been named herein as a Guarantor. Such successor corporation
thereupon may cause to be signed any or all of the Senior Subsidiary
Guarantees to be endorsed upon all of the Senior Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered
to the Senior Note Trustee. All the Senior Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under the Senior
Note Indenture as the Senior Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of the Senior Note Indenture
as though all of such Senior Subsidiary Guarantees had been issued at the
date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Senior Note Indenture,
and notwithstanding clauses (a) and (b) above, nothing contained in the
Senior Note Indenture or in any of the Senior Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all to the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor)
or the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor)
will be released and relieved of any obligations under its Senior
Subsidiary Guarantee; PROVIDED that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of the
Senior Note Indenture, including without limitation Section 4.10 of the
Senior Note Indenture. Upon delivery by the Company to the Senior Note
Trustee of an Officers'
F-3
<PAGE>
Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the
provisions of the Senior Note Indenture, including without limitation
Section 4.10 of the Senior Note Indenture, the Senior Note Trustee
shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Senior
Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its Senior
Subsidiary Guarantee shall remain liable for the full amount of principal
of and interest on the Senior Notes and for the other obligations of any
Guarantor under the Senior Note Indenture as provided in Article 10 of the
Senior Note Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as
such, shall have any liability for any obligations of the Company or any
Guaranteeing Subsidiary under the Senior Notes, any Senior Subsidiary
Guarantees, the Senior Note Indenture or this Supplemental Senior Note Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of the Senior Notes by accepting a Senior Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Senior Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL SENIOR NOTE INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
8. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Senior Note Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.
10 THE SENIOR NOTE TRUSTEE. The Senior Note Trustee shall not be responsible
in any manner whatsoever for or in respect of the validity or sufficiency of
this Supplemental Senior Note Indenture or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Guaranteeing
Subsidiary and the Company.
F-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Senior
Note Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ,
-------------- -----
[GUARANTEEING SUBSIDIARY]
By:
--------------------------------------
Name:
Title:
BALL CORPORATION
By:
--------------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Senior Note Trustee
By:
--------------------------------------
Name:
Title:
F-5
<PAGE>
SCHEDULE I
SCHEDULE OF GUARANTORS
----------------------
The following schedule lists each Guarantor under the Senior Note Indenture as
of the Date of this Senior Note Indenture:
1. Ball Aerospace and Technologies Corp., a Delaware corporation.
2. Ball Asia Pacific Limited, a Colorado corporation
3. Ball Glass Container Corporation, a Delaware corporation
4. Ball Holdings Corp., a Delaware corporation
5. Ball Metal Beverage Container Corp., a Colorado corporation
6. Ball Metal Food Container Corp., a Delaware corporation
7. Ball Metal Packaging Sales Corp., a Colorado corporation
8. Ball Packaging Corp., a Colorado corporation
9. Ball Plastic Container Corp., a Colorado corporation
10. Ball Technologies Holdings Corp., a Colorado corporation
11. Ball Technology Services Corporation, a California corporation
12. BG Holdings I, Inc., a Delaware corporation
13. BG Holdings II, Inc., a Delaware corporation
14. Efratom Holding, Inc., a Colorado corporation
15. Latas de Aluminio Reynolds, Inc., a Delaware corporation
16. RCAL Cans, Inc., a Delaware corporation
17. RIND Cans, Inc., a Delaware corporation
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
BALL CORPORATION
And
GUARANTORS
Parties Hereto
---------------------------------------
$250,000,000
SERIES A AND SERIES B
8 1/4% SENIOR SUBORDINATED NOTES DUE 2008
---------------------------------------
----------------
SENIOR SUBORDINATED NOTE INDENTURE
DATED AS OF AUGUST 10, 1998
----------------
THE BANK OF NEW YORK
Senior Subordinated Note Trustee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
310 (a)(1).................................................... 7.10
(a)(2).................................................... 7.10
(a)(3).................................................... N.A.
(a)(4).................................................... N.A.
(a)(5).................................................... 7.10
(b)....................................................... 7.10
(c)....................................................... N.A.
311 (a)....................................................... 7.11
(b)....................................................... 7.11
(c)....................................................... N.A.
312 (a)....................................................... 2.05
(b)....................................................... 12.03
(c)....................................................... 12.03
313 (a)....................................................... 7.06
(b)(2).................................................... 7.07
(c)....................................................... 7.06;12.02
(d)....................................................... 7.06
314 (a)....................................................... 4.03;12.05
(b)....................................................... N.A.
(c)(1).................................................... 12.04
(c)(2).................................................... 12.04
(c)(3).................................................... N.A.
(e)....................................................... 12.05
(f)....................................................... N.A.
315 (a)....................................................... 7.01
(b)....................................................... 7.05,12.02
(c)....................................................... 7.01
(d)....................................................... 7.01
(e)....................................................... 6.11
316 (a)(last sentence)........................................ 2.09
(a)(1)(A)................................................. 6.05
(a)(1)(B)................................................. 6.04
(a)(2).................................................... N.A.
(b)....................................................... 6.07
(c)....................................................... 2.12
317 (a)(1).................................................... 6.08
(a)(2).................................................... 6.09
(b)....................................................... 2.04
318 (a)....................................................... 12.01
(b)....................................................... N.A.
(c)....................................................... 12.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of this Senior Subordinated Note
Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<S> <C> <C>
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . .18
Section 1.03. Incorporation by Reference of Trust Indenture Act . . . . . . .18
Section 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . .19
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . .19
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . . . .20
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . .21
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . .21
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . .22
Section 2.07. Replacement Senior Subordinated Notes . . . . . . . . . . . . .35
Section 2.08. Outstanding Senior Subordinated Notes . . . . . . . . . . . . .36
Section 2.09. Treasury Senior Subordinated Notes. . . . . . . . . . . . . . .36
Section 2.10. Temporary Senior Subordinated Notes . . . . . . . . . . . . . .36
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . .37
Section 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . . . .37
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Senior Subordinated Note Trustee . . . . . . . . . .37
Section 3.02. Selection of Senior Subordinated Notes to be Redeemed . . . . .38
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . .38
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . . . .39
Section 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . .39
Section 3.06. Senior Subordinated Notes Redeemed in Part. . . . . . . . . . .39
Section 3.07. Optional Redemption . . . . . . . . . . . . . . . . . . . . . .39
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . . . . . . . . . .40
Section 3.09. Offer to Purchase by Application of Excess Proceeds . . . . . .40
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Subordinated Notes. . . . . . . . . . . . . .42
Section 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . .42
Section 4.03. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . . . .43
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . . . .44
i
<PAGE>
Section 4.07. Restricted Payments . . . . . . . . . . . . . . . . . . . . . .44
Section 4.08. Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . .47
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock. . .48
Section 4.10. Assets Sales. . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 4.11. Transactions With Affiliates. . . . . . . . . . . . . . . . . .51
Section 4.12. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Section 4.13. Business Activities . . . . . . . . . . . . . . . . . . . . . .52
Section 4.14. Corporate Existence . . . . . . . . . . . . . . . . . . . . . .52
Section 4.15. Offer to Purchase Upon Change of Control. . . . . . . . . . . .52
Section 4.16. Additional Subordinated Subsidiary Guarantees . . . . . . . . .53
Section 4.17. Payment for Consents. . . . . . . . . . . . . . . . . . . . . .54
Section 4.18. Sale and Leaseback Transactions . . . . . . . . . . . . . . . .54
Section 4.19. Anti-Layering . . . . . . . . . . . . . . . . . . . . . . . . .54
Section 4.20. Certain Covenants to Be Suspended Under Certain Conditions. . .54
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets . . . . . . . . . . . .55
Section 5.02. Successor Corporation Substituted . . . . . . . . . . . . . . .56
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . .56
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . .57
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . .58
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . .58
Section 6.06. Control by Majority . . . . . . . . . . . . . . . . . . . . . .58
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . .59
Section 6.07. Rights of Holders of Senior Subordinated Notes to Receive
Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Section 6.08. Collection Suit by Senior Subordinated Note Trustee . . . . . .59
Section 6.09. Senior Subordinated Note Trustee May File Proofs of Claim . . .60
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . .60
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . .60
ARTICLE 7
SENIOR SUBORDINATED NOTE TRUSTEE
Section 7.01. Duties of Senior Subordinated Note Trustee. . . . . . . . . . .61
Section 7.02. Rights of Senior Subordinated Note Trustee. . . . . . . . . . .62
Section 7.03. Individual Rights of Senior Subordinated Note Trustee . . . . .62
Section 7.04. Senior Subordinated Note Trustee's Disclaimer . . . . . . . . .63
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . .63
Section 7.06. Reports by Senior Subordinated Note Trustee to Holders of
the Senior Subordinated Notes . . . . . . . . . . . . . . . . .63
Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . . .63
Section 7.08. Replacement of Senior Subordinated Note Trustee . . . . . . . .64
Section 7.09. Successor Senior Subordinated Note Trustee by Merger, Etc.. . .65
ii
<PAGE>
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . .65
Section 7.11. Preferential Collection of Claims Against Company . . . . . . .66
Section 7.12. Senior Subordinated Note Trustee's Application for
Instructions from the Company . . . . . . . . . . . . . . . . .66
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. . . .66
Section 8.02. Legal Defeasance and Discharge. . . . . . . . . . . . . . . . .66
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . .67
Section 8.04. Conditions to Legal or Covenant Defeasance. . . . . . . . . . .67
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions . . . . . . . . . . . . .68
Section 8.06. Repayment to Company. . . . . . . . . . . . . . . . . . . . . .69
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . .69
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Subordinated Notes . . . .70
Section 9.02. With Consent of Holders of Senior Subordinated Notes. . . . . .70
Section 9.03. Compliance with Trust Indenture Act . . . . . . . . . . . . . .72
Section 9.04. Revocation and Effect of Consents . . . . . . . . . . . . . . .72
Section 9.05. Notation on or Exchange of Senior Subordinated Notes. . . . . .72
Section 9.06. Senior Subordinated Note Trustee to Sign Amendments, etc. . . .73
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate. . . . . . . . . . . . . . . . . . . .73
Section 10.02. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . . .73
Section 10.03. Default on Designated Senior Debt . . . . . . . . . . . . . . .73
Section 10.04. Acceleration of Senior Subordinated Notes . . . . . . . . . . .74
Section 10.05. When Distribution Must Be Paid Over . . . . . . . . . . . . . .74
Section 10.06. Notice By Company . . . . . . . . . . . . . . . . . . . . . . .75
Section 10.07. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . .75
Section 10.08. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . .75
Section 10.09. Subordination May Not Be Impaired By Company. . . . . . . . . .76
Section 10.10. Distribution or Notice to Representative. . . . . . . . . . . .76
Section 10.11. Rights of Senior Subordinated Note Trustee and Paying Agent . .76
Section 10.12. Authorization to Effect Subordination . . . . . . . . . . . . .76
Section 10.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .77
ARTICLE 11
SUBORDINATED SUBSIDIARY GUARANTEES
Section 11.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . .77
Section 11.02. Subordination of Subordinated Subsidiary Guarantee. . . . . . .78
Section 11.03. Limitation on Guarantor Liability . . . . . . . . . . . . . . .78
Section 11.04. Execution and Delivery of Senior Subsidiary Guarantee . . . . .78
iii
<PAGE>
Section 11.05. Guarantors May Consolidate, etc. on Certain Terms . . . . . . .79
Section 11.06. Releases Following Sale of Assets . . . . . . . . . . . . . . .79
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . .80
Section 12.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
Section 12.03. Communication by Holders of Senior Subordinated Notes with
Other Holders of Senior Subordinated Notes. . . . . . . . . . .81
Section 12.04. Certificate and Opinion as to Conditions Precedent. . . . . . .81
Section 12.05. Statements Required in Certificate. . . . . . . . . . . . . . .81
Section 12.06. Rules by Senior Subordinated Note Trustee and Agents. . . . . .82
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 12.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 12.09. No Adverse Interpretation of Other Agreements . . . . . . . . .82
Section 12.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 12.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .82
Section 12.12. Counterpart Originals . . . . . . . . . . . . . . . . . . . . .83
Section 12.13. Table of Contents, Headings, etc. . . . . . . . . . . . . . . .83
EXHIBITS AND SCHEDULES
Exhibit A1 FORM OF SENIOR SUBORDINATED NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL SENIOR
SUBORDINATED NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
Exhibit E FORM OF NOTATION OF SENIOR SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL SENIOR SUBORDINATED NOTE
INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
Schedule I SCHEDULE OF GUARANTORS
</TABLE>
iv
<PAGE>
SENIOR SUBORDINATED NOTE INDENTURE dated as of August 10, 1998 by and
among Ball Corporation, an Indiana corporation (the "COMPANY"), Ball
Aerospace and Technologies Corp., a Delaware corporation, Ball Asia Pacific
Limited, a Colorado corporation, Ball Glass Container Corporation, a Delaware
corporation, Ball Holdings Corp., a Delaware corporation, Ball Metal Beverage
Container Corp., a Colorado corporation, Ball Metal Food Container Corp., a
Delaware corporation, Ball Metal Packaging Sales Corp., a Colorado
corporation, Ball Packaging Corp., a Colorado corporation, Ball Plastic
Container Corp., a Colorado corporation, Ball Technologies Holdings Corp., a
Colorado corporation, Ball Technology Services Corporation, a California
corporation, BG Holdings I, Inc., a Delaware corporation, BG Holdings II,
Inc., a Delaware corporation, Efratom Holding, Inc., a Colorado corporation,
Latas de Aluminio Reynolds, Inc., a Delaware corporation, RCAL Cans, Inc., a
Delaware corporation and RIND Cans, Inc., a Delaware corporation
(collectively, the "GUARANTORS") and The Bank of New York, a New York banking
corporation, as Senior Subordinated Note Trustee (the "SENIOR SUBORDINATED
NOTE TRUSTEE").
The Company and the Senior Subordinated Note Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 8 1/4% Series A Senior Subordinated Notes due 2008 (the "SERIES
A SENIOR SUBORDINATED NOTES") and the 8 1/4% Series B Senior Subordinated
Notes due 2008 (the "SERIES B SENIOR SUBORDINATED NOTES" and, together with
the Series A Senior Subordinated Notes, the "SENIOR SUBORDINATED NOTES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL SENIOR SUBORDINATED NOTE" means a global note in the form
of Exhibit A1 hereto bearing the Global Senior Subordinated Note Legend and
the Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee that will be issued
in a denomination equal to the outstanding principal amount of the Senior
Subordinated Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person (a) existing at the time such other Person
is merged with or into or became a Restricted Subsidiary of such specified
Person or is otherwise acquired by such specified Person or (b) assumed in
connection with the purchase of all or substantially all the assets of such
other Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or
into, acquiring or becoming a Restricted Subsidiary of such specified Person,
and (ii) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"ACQUISITION" means the acquisition by the Company and Ball Metal
Beverage Container Corp. of substantially all the assets of the North
American beverage can business of Reynolds Metals Company.
"ADDITIONAL ASSETS" means (i) any property or assets (other than Capital
Stock, Indebtedness or rights to receive payments over a period greater than
180 days) that is usable by the Company or a Restricted Subsidiary in a
Permitted Business or (ii) the Capital Stock of a Person that is at the time,
or becomes, a Restricted Subsidiary as a result of the acquisition of such
Capital Stock by the Company or another Restricted Subsidiary.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this
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definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement
or otherwise; PROVIDED that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Senior Subordinated Note, the
rules and procedures of the Depositary, Euroclear and Cedel that apply to
such transfer or exchange.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business consistent with past
practices (PROVIDED that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of Section
4.15 and/or Section 5.01 hereof and not by the provisions of Section 4.10
hereof, and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any the Company's Restricted
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $5.0 million or (b) for Net Proceeds in excess of $5.0
million. Notwithstanding the foregoing: (i) a transfer of assets by the
Company to a Restricted Subsidiary of the Company or by a Restricted
Subsidiary of the Company to the Company or to another Restricted Subsidiary
of the Company, (ii) an issuance or sale of Equity Interests by a Restricted
Subsidiary of the Company to the Company or to another Restricted Subsidiary
of the Company that is a Guarantor, (iii) a Restricted Payment that is not
prohibited by Section 4.07 hereof, (iv) sales of receivables of the type
specified in the definition of "Qualified Securitization Transaction" to a
Securitization Entity for the fair market value thereof, including
consideration in the amount specified in the proviso to the definition of
Qualified Securitization Transaction and (v) the sale or disposition of Cash
Equivalents or obsolete equipment, will not be deemed to be Asset Sales.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the
rate of interest implicit in such transaction, determined in accordance with
GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, all shares, interests,
participation, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or
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membership interests (whether general or limited) and (iv) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of not more than one
year from the date of acquisition, bankers' acceptances with maturities of
not more than one year from the date of acquisition and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million and a Thompson Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the qualifications
specified in clause (iii) above and (v) commercial paper having the highest
rating obtainable from Moody's Investors Service, Inc. or one of the two
highest ratings from Standard & Poor's with maturities of not more than six
months from the date of acquisition.
"CEDEL" means Cedel Bank, SA.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Company and its Restricted
Subsidiaries, taken as a whole to any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act; (ii) the adoption of a plan relating to
the liquidation or dissolution of the Company; (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above) becomes the
"beneficial owners" (as such term is defined in Rule 13d-3 and Rule l3d-5
under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition), directly or indirectly, of
more than 50% of the total of the Voting Stock of the Company (measured by
voting power rather than number of shares); (iv) the first day on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors; or (v) the Company consolidates with, or merges with or
into, any Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any
Person consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which any of the outstanding Voting Stock
of the Company is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting Stock of the
Company outstanding immediately prior to such transaction is converted into
or exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance).
"COMPANY" means Ball Corporation, and any and all successors thereto.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i)
an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based
on income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent that such provision for taxes was included in computing
such Consolidated Net Income, plus (iii) consolidated interest expense of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred
in respect of
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letter of credit or bankers' acceptance financings and receivables
financings, and net payments (if any) pursuant to Hedging Obligations), to
the extent that any such expense was deducted in computing such Consolidated
Net Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other noncash expenses
(excluding any such noncash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period) of such Person
and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other noncash expenses were deducted in
computing such Consolidated Net Income, minus (v) non-cash items increasing
such Consolidated Net Income for such period (other than items that were
accrued in the ordinary course of business), in each case, on a consolidated
basis and determined in accordance with GAAP. Notwithstanding the foregoing,
the provision for taxes on the income or profits of, and the depreciation and
amortization and other non-cash charges of, a Restricted Subsidiary of the
Company shall be added to Consolidated Net Income to compute Consolidated
Cash Flow of the Company only to the extent (and in same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount
would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to that Restricted Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries (for such period, on a consolidated basis, determined in
accordance with GAAP); PROVIDED that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary, (ii) the Net Income of any Restricted Subsidiary shall
be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded, and (iv) the cumulative effect of
a change in accounting principles shall be excluded.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Senior Subordinated Note Indenture or
(ii) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE SENIOR SUBORDINATED NOTE TRUSTEE" shall
be at the address of the Senior Subordinated Note Trustee specified in
Section 12.02 hereof or such other address as to which the Senior
Subordinated Note Trustee may give notice to the Company.
"CREDIT AGREEMENTS" means (i) the Long-Term Credit Agreement dated as of
August 10, 1998 among the Company, the financial institutions from time to
time a party thereto as lenders, The First National Bank of Chicago, in its
capacity as Administrative Agent, Bank of America National Trust and Savings
Association, in its capacity as Syndication Agent, and Lehman Commercial
Paper Inc., in its capacity as Documentation Agent (as the same may from time
to time be amended, modified, supplemented and/or restated, the "LONG-TERM
CREDIT AGREEMENT"), (ii) the Short-Term Credit Agreement dated as of August
10, 1998 among the Company, the financial institutions from time to time a
party thereto as lenders, The First National Bank of Chicago, in its capacity
as Administrative Agent, Bank of America National Trust and
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Savings Association, in its capacity as Syndication Agent, and Lehman
Commercial Paper Inc., in its capacity as Documentation Agent (as the same
may from time to time be amended, modified, supplemented and/or restated, the
"SHORT-TERM CREDIT AGREEMENT"), and (iii) the Canadian Revolving Credit
Agreement dated as of August 10, 1998 among the Company, Ball Packaging
Products Canada, Inc., and the Royal Bank of Canada.
"CREDIT FACILITIES" means, with respect to the Company, one or more debt
facilities (including, without limitation, the Credit Agreements) or
commercial paper facility with banks or other institutional lenders providing
for revolving credit loans, receivables financing (including through the sale
of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in
each case, as amended, restated, modified, renewed, refunded, replaced or
refinanced in whole or in part from time to time.
"CUSTODIAN" means the Senior Subordinated Note Trustee, as custodian
with respect to the Senior Subordinated Notes in global form, or any
successor entity thereto.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice (or both) would be an Event of Default.
"DEFINITIVE SENIOR SUBORDINATED NOTE" means a certificated Senior
Subordinated Note registered in the name of the Holder thereof and issued in
accordance with Section 2.06 hereof, in the form of Exhibit A1 hereto except
that such Senior Subordinated Note shall not bear the Global Senior
Subordinated Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Senior Subordinated Note" attached thereto.
"DEPOSITARY" means, with respect to the Senior Subordinated Notes
issuable or issued in whole or in part in global form, the Person specified
in Section 2.03 hereof as the Depositary with respect to the Senior
Subordinated Notes, and any and all successors thereto appointed as
depositary hereunder and having become such pursuant to the applicable
provision of this Senior Subordinated Note Indenture.
"DESIGNATED NONCASH CONSIDERATION" means the fair market value of
noncash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate,
setting forth the basis of such valuation, executed by the principal
executive officer and the principal financial officer of the Company, less
the amount of cash or Cash Equivalents received in connection with a sale of
such Designated Noncash Consideration.
"DESIGNATED SENIOR DEBT" means (i) any Indebtedness of the Company or
any of its Restricted Subsidiaries outstanding under Credit Facilities, (ii)
any Indebtedness outstanding under the Senior Note Indenture and (iii) any
other Senior Debt permitted under this Senior Subordinated Note Indenture the
principal amount of which is $25.0 million or more and that has been
designated by the Company as "Designated Senior Debt."
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date that is 91 days after the date
on which the Senior Subordinated Notes mature, except to the extent that such
Capital Stock is solely redeemable with, or solely exchangeable for, any
Capital Stock of such Person that is not Disqualified Stock.
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"DOMESTIC SUBSIDIARY" means a Subsidiary that is (i) formed under the
laws of the United States of America or a state or territory thereof or (ii)
as of the date of determination, treated as a domestic entity or a
partnership or a division of a domestic entity for United States federal
income tax purposes.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" has the meaning set forth in the Subordinated
Registration Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the
Subordinated Registration Rights Agreement.
"EXCHANGE SENIOR SUBORDINATED NOTES" means the Senior Subordinated Notes
issued in the Exchange Offer pursuant to Section 2.06(f) hereof.
"EXCLUDED SUBSIDIARY" means each of the following Subsidiaries of the
Company: Analytic Decisions, Incorporated, a Virginia corporation; Ball
Corporation, a Nevada corporation; Ball-Canada Holdings Inc., a Canadian
corporation; Ball Glass Containers, Inc., a Delaware corporation; Ball
International Sales Corporation, a Delaware corporation; Ball Metal Container
Corporation, an Indiana corporation; Ball Technology Licensing Corporation,
an Indiana corporation; Heekin Can, Inc., a Colorado corporation; Metropack
Containers Corporation, an Indiana corporation; Muncie & Western Railroad
Company, an Indiana corporation; Ball Pan Asia Ltd., a corporation organized
under the laws of Mauritius; and Ball Brazil Holdings Limited, a Company
Limited by Shares organized under the laws of the Cayman Islands; PROVIDED,
that each such Subsidiary shall be an Excluded Subsidiary only if and only
for so long as (i) each such Subsidiary is in existence solely for the
purposes of being a "name-holding" entity, (ii) each such Subsidiary engages
in no business, (iii) each such Subsidiary has no liabilities (including any
guarantee of Indebtedness of any other Person), and (iv) the aggregate of the
assets (including capitalization) of all such Subsidiaries shall not exceed
$5,000,000.00.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the date of this Senior Subordinated
Note Indenture.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, to the extent properly characterized
as interest expense in accordance with GAAP, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (ii) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period, (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets
of such Person or one of its Restricted Subsidiaries (whether, or not such
Guarantee or Lien is called upon) and (iv) all dividend payments, whether or
not in cash, on any series of preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests of the Company (other than Disqualified
Stock).
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"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event
that the Company or any of its Restricted Subsidiaries incurs, assumes,
Guarantees or redeems any Indebtedness (other than revolving credit
borrowings under any Credit Facility) or issues preferred stock subsequent to
the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "CALCULATION
DATE"), then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. In addition, for purposes of making the computation referred to
above, (i) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period shall be calculated without giving effect to clause (iii) of the
proviso set forth in the definition of Consolidated Net Income, (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to
the Calculation Date, shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the Calculation Date,
shall be excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the referent Person or any of
its Restricted Subsidiaries following the Calculation Date.
"FOREIGN SUBSIDIARIES" means Subsidiaries of the Company that are not
Domestic Subsidiaries.
"FTB" means FTB Packaging Limited, a Hong Kong corporation.
"FTB GROUP" means FTB and each of its Subsidiaries, including, without
limitation, MCP and each of its Subsidiaries and joint ventures.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the statements and
pronouncements of the Financial Accounting Standards Board and such other
statements by such other entities as have been approved by a significant
segment of the accounting profession, which are applicable at the date of
this Senior Subordinated Note Indenture.
"GLOBAL SENIOR SUBORDINATED NOTE LEGEND" means the legend set forth in
Section 2.06(g)(ii), which is required to be placed on all Global Senior
Subordinated Notes issued under this Senior Subordinated Note Indenture.
"GLOBAL SENIOR SUBORDINATED NOTES" means, individually and collectively,
each of the Restricted Global Senior Subordinated Notes and the Unrestricted
Global Senior Subordinated Notes, in the form of Exhibits A1 and A2 hereto
issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f)
hereof.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
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"GUARANTORS" means each Domestic Subsidiary of the Company as of the
date of this Senior Subordinated Note Indenture (other than Ball Capital
Corp. and the Excluded Subsidiaries) and each other Subsidiary that becomes a
party to a Senior Subsidiary Guarantee.
"HEDGING OBLIGATIONS" means, with respect to any Person, the net payment
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements in the ordinary course of business and pursuant to
past practices designed to protect such Person against fluctuations in
commodity prices, interest rates or currency exchange rates.
"HOLDER" means a Person in whose name a Senior Subordinated Note is
registered.
"IAI GLOBAL SENIOR SUBORDINATED NOTE" means the global Senior
Subordinated Note in the form of Exhibit A1 hereto bearing the Global Senior
Subordinated Note Legend and the Private Placement Legend and deposited with
or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal
amount of the Senior Subordinated Notes sold to Institutional Accredited
Investors.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well
as all Indebtedness of others secured by a Lien on any asset of such Person
(whether or not such Indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any
Indebtedness of any other Person, and any liability, whether or not
contingent and whether or not it appears on the balance sheet of such other
Person. The amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness that does not
require current payments of interest, and (ii) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in
a Global Senior Subordinated Note through a Participant.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other Obligations),
advances of assets or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business, prepaid expenses and accounts receivable),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any of its Restricted Subsidiaries sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a direct or indirect Restricted
Subsidiary of the Company, the Company or such Restricted Subsidiary, as the
case may be, shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the fair market value of the
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Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal office
of the Senior Subordinated Note Trustee is located or at a place of payment
are authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Senior Subordinated Notes for
use by such Holders in connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in any asset and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"LIMITED ORIGINATOR RECOURSE" means a reimbursement obligation to the
Company or a Restricted Subsidiary in connection with a drawing on a letter
of credit, revolving loan commitment, cash collateral account or other such
credit enhancement issued to support Indebtedness of a Securitization Entity
under a facility for the financing of trade receivables; PROVIDED that the
available amount of any such form of credit enhancement at any time shall not
exceed 10.0% of the principal amount of such Indebtedness at such time.
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to
Section 5 of the Subordinated Registration Rights Agreement.
"MARKETABLE SECURITIES" means, with respect to any Asset Sale, any
readily marketable equity securities that are (i) traded on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market;
and (ii) issued by a corporation having a total equity market capitalization
of not less than $250.0 million; PROVIDED that the excess of (A) the
aggregate amount of securities of any one such corporation held by the
Company and any Restricted Subsidiary over (B) ten times the average daily
trading volume of such securities during the 20 immediately preceding trading
days shall be deemed not to be Marketable Securities; as determined on the
date of the contract relating to such Asset Sale.
"MCP" means M.C. Packaging (Hong Kong) Limited, a Hong Kong corporation.
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or
loss together with any related provision for taxes on such gain or loss,
realized in connection with the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries, (ii) any
extraordinary gain or loss, together with any related provision for taxes on
such extraordinary gain or loss, and (iii) any one-time noncash charges
(including legal, accounting and debt issuance costs) resulting from the
Transactions.
"NET PROCEEDS" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of
any Asset Sale (including, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received in any Asset
Sale), net of all costs relating to such Asset Sale (including, without
limitation, legal, accounting, investment banking and
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brokers fees, and sales and underwriting commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions
and any tax sharing arrangements) and any reserve for adjustment in respect
of the sale price of such asset or assets established in accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender; and (ii) no default
with respect to which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other than the Senior Subordinated Notes being offered hereby) of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"OBLIGATIONS" means any principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or its Restricted Subsidiaries whether
or not a claim for post-filing interest is allowed in such proceeding),
penalties, fees, charges, expenses, indemnifications, reimbursement
obligations, damages (including Liquidated Damages), guarantees and other
liabilities or amounts payable under the documentation governing any
Indebtedness or in respect thereof.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be a vice-president,
the principal financial officer, the treasurer or the principal accounting
officer of the Company, that meets the requirements of Sections 12.04 and
12.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
acceptable to the Senior Subordinated Note Trustee, that meets the
requirements of Sections 12.04 and 12.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the Company or the
Senior Subordinated Note Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or Cedel,
a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall
include Euroclear and Cedel).
"PARTICIPATING BROKER-DEALER" means a broker-dealer participating in the
Exchange Offer.
"PERMITTED BUSINESS" means the lines of business conducted by the
Company and its Restricted Subsidiaries on the date of this Senior
Subordinated Note Indenture and businesses substantially similar, related or
incidental thereto or reasonable extensions thereof.
"PERMITTED INVESTMENTS" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary of the Company
in a Person engaged in a Permitted Business, if as a result of such
Investment (i)
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such Person becomes a Restricted Subsidiary of the Company and a Guarantor or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, the Company or a Restricted Subsidiary of the Company that is a
Guarantor; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereto; (e) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company; (f) other Investments by the Company or any of its Restricted
Subsidiaries in any Person having an aggregate fair market value (measured as
of the date made and without giving effect to subsequent changes in value),
when taken together with all other Investments made pursuant to this clause
(f) that are at the time outstanding, not to exceed $50.0 million; (g)
Investments arising in connection with Hedging Obligations that are incurred
in the ordinary course of business consistent with past practices, for the
purpose of fixing or hedging currency, commodity or interest rate risk
(including with respect to any floating rate Indebtedness that is permitted
by the terms of this Senior Subordinated Note Indenture to be outstanding) in
connection with the conduct of the business of the Company and its Restricted
Subsidiaries which are Guarantors; (h) any Investment by the Company or a
Subsidiary of the Company in a Securitization Entity or any Investment by a
Securitization Entity in any other Person in connection with a Qualified
Securitization Transaction; PROVIDED that any Investment in a Securitization
Entity is in the form of a Purchase Money Note or an equity interest; (i) any
Investment existing on the date of this Senior Subordinated Note Indenture
and any amendment, modification, restatement, supplement, extension, renewal,
refunding, replacement, refinancing, in whole or in part, thereof; (j) any
Investment in FTB Group, the proceeds of which are used to permanently repay
Indebtedness of FTB Group that was outstanding on the date of this Senior
Subordinated Note Indenture; and (k) Investments in Permitted Joint Ventures
of up to $25 million outstanding at any time.
"PERMITTED JOINT VENTURE" means a joint venture (however structured)
engaged in a Permitted Business and in which the Company or a Restricted
Subsidiary (a) owns at least 40% of the ownership interest or (b) has a right
to receive at least 40% of the profits or distributions; PROVIDED that such
joint venture is not a Subsidiary.
"PERMITTED JUNIOR SECURITIES" means Equity Interests in the Company or
debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same
extent as, or to a greater extent than, the Senior Subordinated Notes are
subordinated to Senior Debt pursuant to Article 10 of this Senior
Subordinated Note Indenture.
"PERMITTED LIENS" means (i) Liens on assets (including, without
limitation, the capital stock of a Subsidiary) of the Company or any of the
Guarantors to secure Indebtedness under the Credit Facilities that were
permitted by the terms of this Senior Subordinated Note Indenture to be
incurred; (ii) Liens on the assets of the Company or any of the Guarantors to
secure Hedging Obligations to any Person that is a holder of Senior Debt (or
an Affiliate thereof) with respect to Indebtedness under any Credit Facility
permitted by this Senior Subordinated Note Indenture to be incurred; (iii)
Liens on property of a Person existing at the time such Person is acquired
by, merged into or consolidated with the Company or any Restricted Subsidiary
of the Company; PROVIDED that such Liens were in existence prior to the
contemplation of such acquisition, merger or consolidation and do not extend
to any assets other than those of the Person acquired by, merged into or
consolidated with the Company; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the
Company, PROVIDED that such Liens were in existence prior to the
contemplation of such acquisition and only extend to the property so
acquired; (v) Liens existing on the date of this Senior Subordinated Note
Indenture (including a Lien incurred or to be incurred to secure outstanding
Indebtedness under the existing 8.46% Guaranteed ESOP Notes, Series A due
January 15, 1999 and 8.83% Guaranteed ESOP Notes, Series B due December 15,
2001 of the Ball Corporation Salary Conversion and Employee Stock Ownership
Plan Trust and the related guarantees thereof by the Company); (vi) Liens to
secure any Permitted Refinancing Indebtedness incurred to refinance any
Indebtedness secured by any Lien referred to in the foregoing clauses (i)
through (v), as the case may be, at the time the original
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Lien became a Permitted Lien; (vii) Liens in favor of the Company or any
Restricted Subsidiary that is a Guarantor; (viii) Liens to secure
Indebtedness permitted by clause (xiv) of the second paragraph of Section
4.09 hereof, (ix) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $25.0 million in the aggregate at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use thereof
in the operation of business by the Company or such Restricted Subsidiary;
(x) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds, deposits to secure the performance of bids,
trade contracts, government contracts, leases or licenses or other
obligations of a like nature incurred in the ordinary course of business
(including, without limitation, landlord Liens on leased properties); (xi)
Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings; PROVIDED that any reserve or other appropriate provision as
shall be required to conform with GAAP shall have been made therefor; (xii)
Liens to secure Indebtedness (including Capital Lease Obligations) permitted
by clause (v) of the second paragraph of Section 4.09 hereof, covering only
the assets acquired with such Indebtedness; (xiii) carriers', warehousemen's,
mechanics', landlords' materialmen's, repairmen's or other like Liens arising
in the ordinary course of business in respect of obligations not overdue for
a period in excess of 60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently prosecuted;
PROVIDED that any reserve or other appropriate provision as shall be required
to conform with GAAP shall have been made therefor; (xiv) easements,
rights-of-way, zoning and similar restrictions and other similar encumbrances
or title defects incurred, or leases or subleases granted to others, in the
ordinary course of business, which do not in any case materially detract from
the value of the property subject thereto or do not interfere with or
adversely affect in any material respect the ordinary conduct of the business
of the Company and its Restricted Subsidiaries taken as a whole; (xv) Liens
in favor of customs and revenue authorities to secure payment of customs
duties in connection with the importation of goods in the ordinary course of
business and other similar Liens arising in the ordinary course of business;
and (xvi) leases or subleases granted to third Persons not interfering with
the ordinary course of business of the Company or any of its Restricted
Subsidiaries, (xvii) Liens (other than any Lien imposed by ERISA or any rule
or regulation promulgated thereunder) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance, and other types of social security; (xviii) deposits
made in the ordinary course of business to secure liability to insurance
carriers; (xix) Liens for purchase money obligations (including refinancings
thereof permitted under Section 4.09 hereof, PROVIDED that (A) the
Indebtedness secured by any such Lien is permitted under Section 4.09 hereof,
and (B) any such Lien encumbers only the asset so purchased; (xx) any
attachment or judgment Lien not constituting an Event of Default under clause
(i) of the first paragraph of Section 6.01 hereof; (xxi) any interest or
title of a lessor or sublessor under any operating lease; (xxii) Liens on
assets transferred to a Securitization Entity or on assets of a
Securitization Entity, in either case incurred in connection with a Qualified
Securitization Transaction; and (xxiii) Liens under licensing agreements for
use of Intellectual Property entered into in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease
or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); PROVIDED that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued and unpaid interest and premium, if any,
on, any Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is
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subordinated in right of payment to the Senior Subordinated Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to the Senior
Subordinated Notes on terms at least as favorable to the Holders of Senior
Subordinated Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Indebtedness is incurred either by the Company or a
Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Senior Subordinated Notes issued under this
Senior Subordinated Note Indenture except where otherwise permitted by the
provisions of this Senior Subordinated Note Indenture.
"PUBLIC EQUITY OFFERING" means any underwritten primary public offering
of the Common Stock or other Voting Stock of the Company (other than
Disqualified Stock) pursuant to an effective registration statement (other
than a registration statement on Form S-4, Form S-8, or any successor or
similar form) under the Securities Act.
"PURCHASE MONEY NOTE" means a promissory note of a Securitization Entity
evidencing a line of credit, which may be irrevocable, from the Company or
any Restricted Subsidiary of the Company in connection with a Qualified
Securitization Transaction, which note shall be repaid from cash available to
the Securitization Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts
paid in connection with the purchase of newly generated receivables.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series
of transactions pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Entity (in the case of a transfer by the Company or any of its Restricted
Subsidiaries) and (b) any other Person (in case of a transfer by a
Securitization Entity), or may grant a security interest in, any receivables
(whether now existing or arising or acquired in the future) of the Company or
any of its Restricted Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such receivables, all contracts
and contract rights and all Guarantees or other obligations in respect of
such receivables, proceeds of such receivables and other assets (including
contract rights) which are customarily transferred or in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving receivables (collectively, "transferred
assets"); PROVIDED that in the case of any such transfer by the Company or
any of its Restricted Subsidiaries, the transferor receives cash or Purchase
Money Notes in an amount which (when aggregated with the cash and Purchase
Money Notes received by the Company and its Restricted Subsidiaries upon all
other such transfers of transferred assets during the ninety days preceding
such transfer) is at least equal to 75% of the aggregate face amount of all
receivables so transferred during such day and the ninety preceding days.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL SENIOR SUBORDINATED NOTE" means a Regulation S
Temporary Global Senior Subordinated Note or Regulation S Permanent Global
Senior Subordinated Note, as appropriate.
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"REGULATION S PERMANENT GLOBAL SENIOR SUBORDINATED NOTE" means a
permanent global Senior Subordinated Note in the form of Exhibit A1 hereto
bearing the Global Senior Subordinated Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Regulation S Temporary Global Senior Subordinated
Note upon expiration of the Restricted Period.
"REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE" means a
temporary global Senior Subordinated Note in the form of Exhibit A2 hereto
bearing the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Senior
Subordinated Notes initially sold in reliance on Rule 903 of Regulation S.
"REPRESENTATIVE" means the administrative agents under the Credit
Agreements or their respective successors thereunder.
"RESPONSIBLE OFFICER," when used with respect to the Senior Subordinated
Note Trustee, means any officer within the corporate trust department of the
Senior Subordinated Note Trustee, including any vice president, assistant
vice president, assistant secretary, assistant treasurer, trust officer or
any other officer of the Senior Subordinated Note Trustee who customarily
performs functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter
is referred because of such person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Senior Subordinated Note Indenture.
"RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTE" means a Definitive
Senior Subordinated Note bearing the Private Placement Legend.
"RESTRICTED GLOBAL SENIOR SUBORDINATED NOTE" means a Global Senior
Subordinated Note bearing the Private Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PERIOD" means the 40-day restricted period as defined in
Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary; PROVIDED that, on the date of
this Senior Subordinated Note Indenture, all Subsidiaries of the Company
other than FTB Group, Ball Capital Corp. and the Excluded Subsidiaries shall
be Restricted Subsidiaries of the Company.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Restricted Subsidiary of the
Company makes an Investment and to which the Company or any Restricted
Subsidiary of the Company transfers receivables and related assets) that
engages in no activities other than in connection with the financing of
receivables and that is designated by the Board of the Directors of the
Company (as provided below) as a Securitization Entity (a) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which (i)
is guaranteed by the Company or any Restricted Subsidiary of the Company
other than pursuant to Standard Securitization Undertakings or Limited
Originator Recourse, (ii) is recourse to or obligates the Company or any
Restricted Subsidiary of the Company (other than the Securitization Entity)
in any way other than pursuant to Standard Securitization Undertakings or
Limited Originator Recourse or (iii) subjects any property or asset of the
Company or any Restricted Subsidiary of the Company (other than the
Securitization Entity), directly or indirectly, contingently or otherwise, to
the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings or Limited Originator Recourse, (b) with which neither the
Company nor any Restricted Subsidiary of the Company has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to the Company or such Restricted Subsidiary than those that might
be obtained at the time from Persons that are not Affiliates of the Company,
other than fees payable in the ordinary course of business in connection with
servicing receivables of such entity and (c) to which neither the Company nor
any Restricted Subsidiary of the Company has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Senior Subordinated Note
Trustee by filing with the Senior Subordinated Note Trustee a certified copy
of the resolution of the Board of Directors of the Company giving effect to
such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"SENIOR DEBT" means (i) all Indebtedness outstanding under the Credit
Facility permitted under clauses (i) and (ii) of the second paragraph of
Section 4.09 hereof, (ii) any other Indebtedness permitted to be incurred by
the Company under the terms of this Senior Subordinated Note Indenture,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of payment to
the Senior Subordinated Notes and (iii) all Obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (w) any liability for federal, state, local or other
taxes owed or owing by the Company, (x) any Indebtedness of the Company to
any of its Subsidiaries or other Affiliates, (y) any trade payables or (z)
any Indebtedness that is incurred in violation of this Senior Subordinated
Note Indenture.
"SENIOR NOTE INDENTURE" means that certain Senior Note Indenture, dated
as of the date of this Senior Subordinated Note Indenture, between the
Company, the Guarantors and The Bank of New York as Senior Note Trustee, as
amended or supplemented from time to time, relating to the Senior Notes.
"SENIOR NOTES" means the Company's 7 3/4% Senior Subordinated Notes due
2006 issued concurrently pursuant to the Senior Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means this Senior Subordinated Note
Indenture, as amended or supplemented from time to time, relating to the
Senior Subordinated Notes.
"SENIOR SUBORDINATED NOTES" has the meaning assigned to it in the
preamble to this Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE TRUSTEE" means the party named as such above
until a successor replaces it in accordance with the applicable provisions of
this Senior Subordinated Note Indenture and thereafter means the successor
serving hereunder.
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"SENIOR SUBSIDIARY GUARANTEE" means the Guarantee of the Senior Notes by
each of the Guarantors pursuant to the Senior Note Indenture and any
additional Guarantee of the Senior Notes to be executed by any Restricted
Subsidiary of the Company pursuant to the Senior Note Indenture.
"SERIES A SENIOR SUBORDINATED NOTES" has the meaning assigned to it in
the preamble to this Senior Subordinated Note Indenture.
"SERIES B SENIOR SUBORDINATED NOTES" has the meaning assigned to it in
the preamble to this Senior Subordinated Note Indenture.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as
defined in the Subordinated Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the date of this Senior Subordinated Note Indenture.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company that are reasonably customary in receivables
securitization transactions.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the Credit Agreements or
other original documentation governing such Indebtedness, and shall not
include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.
"SUBORDINATED REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement with respect to the Senior Subordinated Notes, dated as of
August 10, 1998, by and among the Company and the other parties named on the
signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person and (ii) any partnership (a) the sole general
partner or the managing general partner of which is such Person or an entity
described in clause (i) and related to such Person or (b) the only general
partners of which are such Person or of one or more entities described in
clause (i) and related to such Person (or any combination thereof).
"SUBORDINATED SUBSIDIARY GUARANTEE" means the Guarantee of the Senior
Subordinated Notes by each of the Guarantors pursuant to Article 12 hereof
and in the form of Guarantee endorsed on the forms of Senior Subordinated
Note attached as Exhibits A1 and A2 hereto and any additional Guarantee of
the Senior Subordinated Notes to be executed by any Restricted Subsidiary of
the Company pursuant to Section 4.16 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Senior Subordinated Note
Indenture is qualified under the TIA.
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"TOTAL ASSETS" means the total assets of the Company and its Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP, as
shown on the most recently available consolidated balance sheet of the
Company and its Restricted Subsidiaries.
"TRANSACTIONS" means the entering into the Credit Agreements; the
issuance of the Senior Notes and the Senior Subordinated Notes; and the
Acquisition.
"UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTE" means one or more
Definitive Senior Subordinated Notes that do not bear and are not required to
bear the Private Placement Legend.
"UNRESTRICTED GLOBAL SENIOR SUBORDINATED NOTE" means a permanent global
Senior Subordinated Note in the form of Exhibit A1 attached hereto that bears
the Global Senior Subordinated Note Legend and that has the "Schedule of
Exchanges of Interests in the Global Senior Subordinated Note" attached
thereto, and that is deposited with or on behalf of and registered in the
name of the Depositary, representing a series of Senior Subordinated Notes
that do not bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means each of FTB Group, Ball Capital Corp.
and the Excluded Subsidiaries. In addition, "Unrestricted Subsidiary" means
(i) any Subsidiary that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution; but only to the
extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse
Debt; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company; (c) is a Person with respect to which neither
the Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to
maintain or preserve such Person's net worth; and (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness
of the Company or any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that
the Company and its Restricted Subsidiaries may guarantee the performance of
Unrestricted Subsidiaries in the ordinary course of business except for
guarantees of Obligations in respect of borrowed money. Any such designation
by the Board of Directors shall be evidenced to the Senior Subordinated Note
Trustee by filing with the Senior Subordinated Note Trustee a certified copy
of the board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.07 hereof.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by (ii)
the then outstanding principal amount of such Indebtedness.
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<PAGE>
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary, 100% of the
outstanding Capital Stock and other Equity Interests of which is directly or
indirectly owned by the Company.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"AFFILIATE TRANSACTION" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
"AUTHENTICATION ORDER". . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
"CALCULATION DATE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
"CHANGE OF CONTROL OFFER" . . . . . . . . . . . . . . . . . . . . . . . . . 4.15
"CHANGE OF CONTROL PAYMENT" . . . . . . . . . . . . . . . . . . . . . . . . 4.15
"CHANGE OF CONTROL PAYMENT DATE". . . . . . . . . . . . . . . . . . . . . . 4.15
"COVENANT DEFEASANCE" . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.03
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"EVENT OF DEFAULT". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"EXCESS PROCEEDS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
"INCUR" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"INVESTMENT GRADE RATINGS". . . . . . . . . . . . . . . . . . . . . . . . . 4.20
"LEGAL DEFEASANCE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
"LONG-TERM CREDIT AGREEMENT". . . . . . . . . . . . . . . . . . . . . . . . 1.01
"MOODY'S" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20
"OFFER AMOUNT". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
"OFFER PERIOD". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
"OTHER INDEBTEDNESS". . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.16
"PAYING AGENT". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"PAYMENT BLOCKAGE NOTICE" . . . . . . . . . . . . . . . . . . . . . . . . .10.03
"PAYMENT DEFAULT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"PERMITTED DEBT". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"PURCHASE DATE" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
"RATING AGENCIES" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20
"REGISTRAR" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"RESTRICTED PAYMENTS" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07
"S&P" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20
"SENIOR SUBORDINATED ASSET SALE OFFER". . . . . . . . . . . . . . . . . . . 4.10
"SHORT-TERM CREDIT AGREEMENT" . . . . . . . . . . . . . . . . . . . . . . . 1.01
"SUSPENDED COVENANTS" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20
"SUSPENSION PERIOD" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.20
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Senior Subordinated Note Indenture refers to a provision
of the TIA, the provision is incorporated by reference in and made a part of
this Senior Subordinated Note Indenture.
The following TIA terms used in this Senior Subordinated Note Indenture
have the following meanings:
"INDENTURE SECURITIES" means the Senior Subordinated Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Senior Subordinated
Note;
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<PAGE>
"INDENTURE TO BE QUALIFIED" means this Senior Subordinated Note
Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Senior
Subordinated Note Trustee; and
"OBLIGOR" on the Senior Subordinated Notes and the Subordinated
Subsidiary Guarantees means the Company and the Guarantors, respectively, and
any successor obligor upon the Senior Subordinated Notes and the Subordinated
Subsidiary Guarantees, respectively.
All other terms used in this Senior Subordinated Note Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with GAAP;
(3) "OR" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL. The Senior Subordinated Notes and the Senior Subordinated
Note Trustee's certificate of authentication shall be substantially in the
form of Exhibits A1 and A2 hereto. The Senior Subordinated Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Senior Subordinated Note shall be dated the date of its
authentication. The Senior Subordinated Notes shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Subordinated Notes
shall constitute, and are hereby expressly made, a part of this Senior
Subordinated Note Indenture and the Company, the Guarantors and the Senior
Subordinated Note Trustee, by their execution and delivery of this Senior
Subordinated Note Indenture, expressly agree to such terms and provisions and
to be bound thereby. However, to the extent any provision of any Senior
Subordinated Note conflicts with the express provisions of this Senior
Subordinated Note Indenture, the provisions of this Senior Subordinated Note
Indenture shall govern and be controlling.
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<PAGE>
(b) GLOBAL SENIOR SUBORDINATED NOTES. Senior Subordinated Notes issued
in global form shall be substantially in the form of Exhibits A1 or A2
attached hereto (including the Global Senior Subordinated Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Senior Subordinated
Note" attached thereto). Senior Subordinated Notes issued in definitive form
shall be substantially in the form of Exhibit A1 attached hereto (but without
the Global Senior Subordinated Note Legend thereon and without the "Schedule
of Exchanges of Interests in the Global Senior Subordinated Note" attached
thereto). Each Global Senior Subordinated Note shall represent such of the
outstanding Senior Subordinated Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Senior Subordinated Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Senior Subordinated Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a
Global Senior Subordinated Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Senior Subordinated
Notes represented thereby shall be made by the Senior Subordinated Note
Trustee or the Custodian, at the direction of the Senior Subordinated Note
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
(c) TEMPORARY GLOBAL SENIOR SUBORDINATED NOTES. Senior Subordinated
Notes offered and sold in reliance on Regulation S shall be issued initially
in the form of the Regulation S Temporary Global Senior Subordinated Note,
which shall be deposited on behalf of the purchasers of the Senior
Subordinated Notes represented thereby with the Senior Subordinated Note
Trustee, at its New York office, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Cedel
Bank, duly executed by the Company and authenticated by the Senior
Subordinated Note Trustee as hereinafter provided. The Restricted Period
shall be terminated upon the receipt by the Senior Subordinated Note Trustee
of (i) a written certificate from the Depositary, together with copies of
certificates from Euroclear and Cedel Bank certifying that they have received
certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Senior
Subordinated Note (except to the extent of any beneficial owners thereof who
acquired an interest therein during the Restricted Period pursuant to another
exemption from registration under the Securities Act and who will take
delivery of a beneficial ownership interest in a 144A Global Senior
Subordinated Note or an IAI Global Senior Subordinated Note bearing a Private
Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and
(ii) an Officers' Certificate from the Company. Following the termination of
the Restricted Period, beneficial interests in the Regulation S Temporary
Global Senior Subordinated Note shall be exchanged for beneficial interests
in Regulation S Permanent Global Senior Subordinated Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation
S Permanent Global Senior Subordinated Notes, the Senior Subordinated Note
Trustee shall cancel the Regulation S Temporary Global Senior Subordinated
Note. The aggregate principal amount of the Regulation S Temporary
Subordinated Note and the Regulation S Permanent Global Senior Subordinated
Notes may from time to time be increased or decreased by adjustments made on
the records of the Senior Subordinated Note Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(d) EUROCLEAR AND CEDEL PROCEDURES APPLICABLE. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel
Bank" and "Customer Handbook" of Cedel Bank shall be applicable to transfers
of beneficial interests in the Regulation S Temporary Global Senior
Subordinated Note and the Regulation S Permanent Global Senior Subordinated
Notes that are held by Participants through Euroclear or Cedel Bank.
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<PAGE>
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Senior Subordinated Notes for the Company by
manual or facsimile signature. If an Officer whose signature is on a Senior
Subordinated Note no longer holds that office at the time a Senior
Subordinated Note is authenticated, the Senior Subordinated Note shall
nevertheless be valid.
A Senior Subordinated Note shall not be valid until authenticated by the
manual signature of the Senior Subordinated Note Trustee. The signature
shall be conclusive evidence that the Senior Subordinated Note has been
authenticated under this Senior Subordinated Note Indenture.
The Senior Subordinated Note Trustee shall, upon a written order of the
Company signed by one Officer (an "AUTHENTICATION ORDER"), authenticate
Senior Subordinated Notes for original issue up to the aggregate principal
amount stated in paragraph 4 of the Senior Subordinated Notes. The aggregate
principal amount of Senior Subordinated Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Senior Subordinated Note Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Senior Subordinated Notes. An
authenticating agent may authenticate Senior Subordinated Notes whenever the
Senior Subordinated Note Trustee may do so. Each reference in this Senior
Subordinated Note Indenture to authentication by the Senior Subordinated Note
Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with Holders or an Affiliate of the
Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Senior Subordinated
Notes may be presented for registration of transfer or for exchange
("REGISTRAR") and an office or agency where Senior Subordinated Notes may be
presented for payment ("PAYING AGENT"). The Registrar shall keep a register
of the Senior Subordinated Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Senior Subordinated Note Trustee in writing of the name and
address of any Agent not a party to this Senior Subordinated Note Indenture.
If the Company fails to appoint or maintain another entity as Registrar or
Paying Agent, the Senior Subordinated Note Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Senior Subordinated Notes.
The Company initially appoints the Senior Subordinated Note Trustee to
act as the Registrar and Paying Agent and to act as Custodian with respect to
the Global Senior Subordinated Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Senior
Subordinated Note Trustee to agree in writing that the Paying Agent will hold
in trust for the benefit of Holders or the Senior Subordinated Note Trustee
all money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Senior Subordinated Notes, and
will notify the Senior Subordinated Note Trustee of any default by the
Company in making any such payment. While any such default continues, the
Senior Subordinated Note Trustee may require a Paying Agent to pay all money
held by it to the Senior Subordinated Note Trustee. The Company at any time
may require a Paying Agent to pay all money held
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<PAGE>
by it to the Senior Subordinated Note Trustee. Upon payment over to the
Senior Subordinated Note Trustee, the Paying Agent (if other than the Company
or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Senior Subordinated Note Trustee shall serve as Paying Agent
for the Senior Subordinated Notes.
SECTION 2.05. HOLDER LISTS.
The Senior Subordinated Note Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA
Section 312(a). If the Senior Subordinated Note Trustee is not the
Registrar, the Company shall furnish to the Senior Subordinated Note Trustee
at least seven Business Days before each interest payment date and at such
other times as the Senior Subordinated Note Trustee may request in writing, a
list in such form and as of such date as the Senior Subordinated Note Trustee
may reasonably require of the names and addresses of the Holders of Senior
Subordinated Notes and the Company shall otherwise comply with TIA Section
312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL SENIOR SUBORDINATED NOTES. A
Global Senior Subordinated Note may not be transferred as a whole except by
the Depositary to a nominee of the Depositary, by a nominee of the Depositary
to the Depositary or to another nominee of the Depositary, or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. All Global Senior Subordinated Notes will be exchanged
by the Company for Definitive Senior Subordinated Notes if (i) the Company
delivers to the Senior Subordinated Note Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it is
no longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Company within 120 days
after the date of such notice from the Depositary or (ii) the Company in its
sole discretion determines that the Global Senior Subordinated Notes (in
whole but not in part) should be exchanged for Definitive Senior Subordinated
Notes and delivers a written notice to such effect to the Senior Subordinated
Note Trustee; provided that in no event shall the Regulation S Temporary
Global Senior Subordinated Note be exchanged by the Company for Definitive
Senior Subordinated Notes prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the
occurrence of either of the preceding events in (i) or (ii) above, Definitive
Senior Subordinated Notes shall be issued in such names as the Depositary
shall instruct the Senior Subordinated Note Trustee. Global Senior
Subordinated Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. Every Senior Subordinated Note
authenticated and delivered in exchange for, or in lieu of, a Global Senior
Subordinated Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Senior Subordinated Note. A Global Senior
Subordinated Note may not be exchanged for another Senior Subordinated Note
other than as provided in this Section 2.06(a), however, beneficial interests
in a Global Senior Subordinated Note may be transferred and exchanged as
provided in Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL SENIOR
SUBORDINATED NOTES. The transfer and exchange of beneficial interests in the
Global Senior Subordinated Notes shall be effected through the Depositary, in
accordance with the provisions of this Senior Subordinated Note Indenture and
the Applicable Procedures. Beneficial interests in the Restricted Global
Senior Subordinated Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Senior Subordinated
Notes also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:
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(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL SENIOR
SUBORDINATED NOTE. Beneficial interests in any Restricted Global
Senior Subordinated Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same
Restricted Global Senior Subordinated Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Temporary
Regulation S Global Senior Subordinated Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Senior Subordinated Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Senior Subordinated Note. No
written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL SENIOR SUBORDINATED NOTES. In connection with all
transfers and exchanges of beneficial interests that are not
subject to Section 2.06(b)(i) above, the transferor of such
beneficial interest must deliver to the Registrar either (A) (1)
a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Senior
Subordinated Note in an amount equal to the beneficial interest
to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such
increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with
the Applicable Procedures directing the Depositary to cause to be
issued a Definitive Senior Subordinated Note in an amount equal
to the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive
Senior Subordinated Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided that in
no event shall Definitive Senior Subordinated Notes be issued
upon the transfer or exchange of beneficial interests in the
Regulation S Temporary Global Senior Subordinated Note prior to
(x) the expiration of the Restricted Period and (y) the receipt
by the Registrar of any certificates required pursuant to Rule
903 under the Securities Act. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by
the Holder of such beneficial interests in the Restricted Global
Senior Subordinated Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in
Global Senior Subordinated Notes contained in this Senior
Subordinated Note Indenture and the Senior Subordinated Notes or
otherwise applicable under the Securities Act, the Senior
Subordinated Note Trustee shall adjust the principal amount of
the relevant Global Senior Subordinated Note(s) pursuant to
Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL
SENIOR SUBORDINATED NOTE. A beneficial interest in any
Restricted Global Senior Subordinated Note may be transferred to
a Person who takes delivery thereof in the form of a beneficial
interest in another Restricted Global Senior Subordinated Note
if the transfer
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<PAGE>
complies with the requirements of Section 2.06(b)(ii) above and
the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Senior Subordinated
Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global
Senior Subordinated Note or the Regulation S Global Senior
Subordinated Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Senior Subordinated
Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications and
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
GLOBAL SENIOR SUBORDINATED NOTE FOR BENEFICIAL INTERESTS IN THE
UNRESTRICTED GLOBAL SENIOR SUBORDINATED NOTE. A beneficial
interest in any Restricted Global Senior Subordinated Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Senior Subordinated Note or transferred to a
Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Senior Subordinated Note if
the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Subordinated
Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal or via the
Depositary's book-entry system that it is not (1) a
broker-dealer, (2) a Person participating in the
distribution of the Exchange Senior Subordinated Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Subordinated Registration
Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Subordinated Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Senior Subordinated Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Senior Subordinated
Note, a certificate from such holder in the form of
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Exhibit C hereto, including the certifications in item
(1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Senior Subordinated Note proposes to
transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Senior Subordinated
Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and
state "blue sky" laws and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Senior
Subordinated Note has not yet been issued, the Company shall
issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Senior Subordinated Note Trustee
shall authenticate one or more Unrestricted Global Senior
Subordinated Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred
pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Senior
Subordinated Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Senior Subordinated Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE SENIOR
SUBORDINATED NOTES.
(i) Beneficial Interests in Restricted Global Senior Subordinated
Notes to Restricted Definitive Senior Subordinated Notes. If any
holder of a beneficial interest in a Restricted Global Senior
Subordinated Note proposes to exchange such beneficial interest
for a Restricted Definitive Senior Subordinated Note or to
transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Senior
Subordinated Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Senior Subordinated Note proposes to exchange such
beneficial interest for a Restricted Definitive Senior
Subordinated Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in
item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
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(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,
the Senior Subordinated Note Trustee shall cause the aggregate
principal amount of the applicable Global Senior Subordinated
Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and the Senior Subordinated
Note Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Senior Subordinated
Note in the appropriate principal amount. Any Definitive Senior
Subordinated Note issued in exchange for a beneficial interest in
a Restricted Global Senior Subordinated Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Senior Subordinated Note Trustee shall deliver
such Definitive Senior Subordinated Notes to the Persons in whose
names such Senior Subordinated Notes are so registered. Any
Definitive Senior Subordinated Note issued in exchange for a
beneficial interest in a Restricted Global Senior Subordinated
Note pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on
transfer contained therein.
Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Senior
Subordinated Note may not be exchanged for a Definitive Senior
Subordinated Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Senior Subordinated Note
prior to (x) the expiration of the Restricted Period and (y) the
receipt by the Registrar of any certificates required pursuant to
Rule 903(c)(3)(ii)(B) under the Securities Act, except in the
case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule
904.
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(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SENIOR SUBORDINATED
NOTES TO UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES. A
holder of a beneficial interest in a Restricted Global Senior
Subordinated Note may exchange such beneficial interest for an
Unrestricted Definitive Senior Subordinated Note or may transfer
such beneficial interest to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Senior Subordinated
Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Subordinated
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the
distribution of the Exchange Senior Subordinated Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Subordinated Registration
Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Subordinated Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Senior Subordinated Note proposes to
exchange such beneficial interest for a Definitive
Senior Subordinated Note that does not bear the Private
Placement Legend, a certificate from such holder in the
form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Senior Subordinated Note proposes to
transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a Definitive
Senior Subordinated Note that does not bear the Private
Placement Legend, a certificate from such holder in the
form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and
state "blue sky" laws and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL SENIOR
SUBORDINATED NOTES TO UNRESTRICTED DEFINITIVE SENIOR
SUBORDINATED NOTES. If any holder of a beneficial interest
in an Unrestricted Global Senior Subordinated Note proposes
to exchange such beneficial interest for a Definitive Senior
Subordinated Note or to transfer such
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beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Senior Subordinated
Note, then, upon satisfaction of the conditions set forth
in Section 2.06(b)(ii) hereof, the Senior Subordinated
Note Trustee shall cause the aggregate principal amount
of the applicable Global Senior Subordinated Note to be
reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Senior Subordinated
Note Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Senior
Subordinated Note in the appropriate principal amount.
Any Definitive Senior Subordinated Note issued in
exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall be registered in such name or
names and in such authorized denomination or
denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect
Participant. The Senior Subordinated Note Trustee shall
deliver such Definitive Senior Subordinated Notes to the
Persons in whose names such Senior Subordinated Notes are
so registered. Any Definitive Senior Subordinated Note
issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) shall not bear the Private
Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE SENIOR SUBORDINATED NOTES FOR
BENEFICIAL INTERESTS.
(i) RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES TO BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL SENIOR SUBORDINATED NOTES. If any
Holder of a Restricted Definitive Senior Subordinated Note
proposes to exchange such Senior Subordinated Note for a
beneficial interest in a Restricted Global Senior Subordinated
Note or to transfer such Restricted Definitive Senior
Subordinated Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Senior
Subordinated Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Senior
Subordinated Note proposes to exchange such Senior
Subordinated Note for a beneficial interest in a Restricted
Global Senior Subordinated Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Senior Subordinated Note is
being transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (1) thereof;
(C) if such Restricted Definitive Senior Subordinated Note is
being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Senior Subordinated Note is
being transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
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(E) if such Restricted Definitive Senior Subordinated Note is
being transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements
of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable;
(F) if such Restricted Definitive Senior Subordinated Note is
being transferred to the Company or any of its Subsidiaries,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Senior Subordinated Note is
being transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Senior Subordinated Note Trustee shall cancel the Restricted
Definitive Senior Subordinated Note, increase or cause to be
increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Senior
Subordinated Note, in the case of clause (B) above, the 144A
Global Senior Subordinated Note, in the case of clause (c) above,
the Regulation S Global Senior Subordinated Note, and in all
other cases, the IAI Global Senior Subordinated Note.
(ii) RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES TO BENEFICIAL
INTERESTS IN UNRESTRICTED GLOBAL SENIOR SUBORDINATED NOTES. A
Holder of a Restricted Definitive Senior Subordinated Note may
exchange such Senior Subordinated Note for a beneficial interest
in an Unrestricted Global Senior Subordinated Note or transfer
such Restricted Definitive Senior Subordinated Note to a Person
who takes delivery thereof in the form of a beneficial interest
in an Unrestricted Global Senior Subordinated Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Subordinated
Registration Rights Agreement and the Holder, in the case of
an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Senior Subordinated Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Subordinated Registration
Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Subordinated Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Senior Subordinated
Notes proposes to exchange such Senior Subordinated
Notes for a beneficial interest in the Unrestricted
Global Senior Subordinated
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<PAGE>
Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Definitive Senior Subordinated
Notes proposes to transfer such Senior Subordinated
Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted
Global Senior Subordinated Note, a certificate from
such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and
state "blue sky" laws and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.06(d)(ii), the Senior Subordinated Note Trustee
shall cancel the Definitive Senior Subordinated Notes and
increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Senior Subordinated Note.
(iii) UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES TO
BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL SENIOR
SUBORDINATED NOTES. A Holder of an Unrestricted Definitive
Senior Subordinated Note may exchange such Senior
Subordinated Note for a beneficial interest in an
Unrestricted Global Senior Subordinated Note or transfer
such Definitive Senior Subordinated Notes to a Person who
takes delivery thereof in the form of a beneficial interest
in an Unrestricted Global Senior Subordinated Note at any
time. Upon receipt of a request for such an exchange or
transfer, the Senior Subordinated Note Trustee shall cancel
the applicable Unrestricted Definitive Senior Subordinated
Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Senior
Subordinated Notes.
If any such exchange or transfer from a Definitive Senior
Subordinated Note to a beneficial interest is effected pursuant
to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when
an Unrestricted Global Senior Subordinated Note has not yet been
issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Senior Subordinated Note Trustee shall authenticate one or more
Unrestricted Global Senior Subordinated Notes in an aggregate
principal amount equal to the principal amount of Definitive
Senior Subordinated Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE SENIOR SUBORDINATED NOTES FOR
DEFINITIVE SENIOR SUBORDINATED NOTES. Upon request by a Holder of Definitive
Senior Subordinated Notes and such Holder's compliance with the provisions of
this Section 2.06(e), the Registrar shall register the transfer or exchange of
Definitive Senior Subordinated Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Senior Subordinated Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing. In addition, the
requesting Holder shall provide any
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<PAGE>
additional certifications, documents and information, as applicable, required
pursuant to the following provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES TO RESTRICTED
DEFINITIVE SENIOR SUBORDINATED NOTES. Any Restricted Definitive
Senior Subordinated Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Senior Subordinated Note if the Registrar
receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES TO UNRESTRICTED
DEFINITIVE SENIOR SUBORDINATED NOTES. Any Restricted Definitive
Senior Subordinated Note may be exchanged by the Holder thereof
for an Unrestricted Definitive Senior Subordinated Note or
transferred to a Person or Persons who take delivery thereof in
the form of an Unrestricted Definitive Senior Subordinated Note
if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Subordinated
Registration Rights Agreement and the Holder, in the case of
an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Senior Subordinated Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Subordinated
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Subordinated Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Senior
Subordinated Notes proposes to exchange such Senior
Subordinated Notes for an Unrestricted Definitive
Senior Subordinated Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
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(2) if the Holder of such Restricted Definitive Senior
Subordinated Notes proposes to transfer such Senior
Subordinated Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive
Senior Subordinated Note, a certificate from such
Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities
Act and state "blue sky" laws and that the restrictions on
transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES TO
UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES. A Holder
of Unrestricted Definitive Senior Subordinated Notes may
transfer such Senior Subordinated Notes to a Person who
takes delivery thereof in the form of an Unrestricted
Definitive Senior Subordinated Note. Upon receipt of a
request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Senior Subordinated
Notes pursuant to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Subordinated Registration Rights Agreement, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02, the Senior Subordinated Note Trustee shall authenticate (i) one or
more Unrestricted Subordinated Notes in an aggregate principal amount equal to
the principal amount of the beneficial interests in the Restricted Global Senior
Subordinated Notes tendered for acceptance by Persons that certify in the
applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they
are not participating in a distribution of the Exchange Senior Subordinated
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Senior
Subordinated Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Senior Subordinated Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such Senior
Subordinated Notes, the Senior Subordinated Note Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Senior
Subordinated Notes to be reduced accordingly, and the Company shall execute and
the Senior Subordinated Note Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Senior Subordinated Notes so
accepted Definitive Senior Subordinated Notes in the appropriate principal
amount.
(g) LEGENDS. The following legends shall appear on the face of all
Subordinated Notes and Definitive Senior Subordinated Notes issued under this
Senior Subordinated Note Indenture unless specifically stated otherwise in the
applicable provisions of this Senior Subordinated Note Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Senior Subordinated Note and each Definitive Senior
Subordinated Note (and all Senior Subordinated Notes issued
in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
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REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISION OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Senior
Subordinated Note or Definitive Senior Subordinated Note
issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Senior Subordinated Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) GLOBAL SENIOR SUBORDINATED NOTE LEGEND. Each Global Senior
Subordinated Note shall bear a legend in substantially the following form:
"THIS GLOBAL SENIOR SUBORDINATED NOTE IS HELD BY THE DEPOSITARY
(AS DEFINED IN THE SENIOR SUBORDINATED NOTE INDENTURE GOVERNING
THIS SENIOR SUBORDINATED NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE
TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE SENIOR
SUBORDINATED NOTE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE SENIOR SUBORDINATED
NOTE INDENTURE, (II) THIS GLOBAL SENIOR SUBORDINATED NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE SENIOR SUBORDINATED NOTE INDENTURE, (III) THIS GLOBAL SENIOR
SUBORDINATED NOTE
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MAY BE DELIVERED TO THE SENIOR SUBORDINATED NOTE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE SENIOR
SUBORDINATED NOTE INDENTURE AND (IV) THIS GLOBAL SENIOR
SUBORDINATED NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE
LEGEND. The Regulation S Temporary Global Senior Subordinated Note shall bear a
legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
SENIOR SUBORDINATED NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED SENIOR SUBORDINATED
NOTES, ARE AS SPECIFIED IN THE SENIOR SUBORDINATED NOTE INDENTURE
(AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL
OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED
NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SENIOR SUBORDINATED NOTES.
At such time as all beneficial interests in a particular Global Senior
Subordinated Note have been exchanged for Definitive Senior Subordinated Notes
or a particular Global Senior Subordinated Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Senior Subordinated Note
shall be returned to or retained and canceled by the Senior Subordinated Note
Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Senior Subordinated Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Senior Subordinated Note or for
Definitive Senior Subordinated Notes, the principal amount of Senior
Subordinated Notes represented by such Global Senior Subordinated Note shall be
reduced accordingly and an endorsement shall be made on such Global Senior
Subordinated Note by the Senior Subordinated Note Trustee or by the Depositary
at the direction of the Senior Subordinated Note Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Senior Subordinated Note, such other Global Senior
Subordinated Note shall be increased accordingly and an endorsement shall be
made on such Global Senior Subordinated Note by the Senior Subordinated Note
Trustee or by the Depositary at the direction of the Senior Subordinated Note
Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Senior Subordinated Note Trustee shall
authenticate Global Senior Subordinated Notes and Definitive
Senior Subordinated Notes upon the Company's order or at the
Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Senior Subordinated Note or to a Holder of
a Definitive Senior Subordinated Note for any registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09,
4.10, 4.15 and 9.05 hereof).
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(iii) The Registrar shall not be required to register the transfer
of or exchange any Senior Subordinated Note selected for
redemption in whole or in part, except the unredeemed
portion of any Senior Subordinated Note being redeemed in
part.
(iv) All Global Senior Subordinated Notes and Definitive Senior
Subordinated Notes issued upon any registration of transfer or
exchange of Global Senior Subordinated Notes or Definitive
Senior Subordinated Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Senior Subordinated Note Indenture, as the
Global Senior Subordinated Notes or Definitive Senior
Subordinated Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Senior Subordinated Notes during
a period beginning at the opening of business 15 days before the
day of any selection of Senior Subordinated Notes for redemption
under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to
exchange any Senior Subordinated Note so selected for redemption
in whole or in part, except the unredeemed portion of any Senior
Subordinated Note being redeemed in part or (C) to register the
transfer of or to exchange a Senior Subordinated Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Senior Subordinated Note, the Senior Subordinated Note
Trustee, any Agent and the Company may deem and treat the Person
in whose name any Senior Subordinated Note is registered as the
absolute owner of such Senior Subordinated Note for the purpose
of receiving payment of principal of and interest on such Senior
Subordinated Notes and for all other purposes, and none of the
Senior Subordinated Note Trustee, any Agent or the Company shall
be affected by notice to the contrary.
(vii) The Senior Subordinated Note Trustee shall authenticate
Global Senior Subordinated Notes and Definitive Senior
Subordinated Notes in accordance with the provisions of
Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.
SECTION 2.07. REPLACEMENT SENIOR SUBORDINATED NOTES.
If any mutilated Senior Subordinated Note is surrendered to the Senior
Subordinated Note Trustee or the Company and the Senior Subordinated Note
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Senior Subordinated Note, the Company shall issue and the Senior
Subordinated Note Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Senior Subordinated Note if the Senior Subordinated
Note Trustee's requirements are met. If required by the Senior Subordinated
Note Trustee or the Company, an indemnity bond must be supplied by the Holder
that is sufficient in the judgment of the Senior Subordinated Note Trustee and
the Company to protect the Company, the Senior Subordinated Note Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Senior Subordinated Note is replaced. The Company may charge for its expenses
in replacing a Senior Subordinated Note.
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Every replacement Senior Subordinated Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this Senior
Subordinated Note Indenture equally and proportionately with all other Senior
Subordinated Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING SENIOR SUBORDINATED NOTES.
The Senior Subordinated Notes outstanding at any time are all the Senior
Subordinated Notes authenticated by the Senior Subordinated Note Trustee except
for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Senior Subordinated Note effected by the
Senior Subordinated Note Trustee in accordance with the provisions hereof, and
those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Senior Subordinated Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Senior Subordinated
Note.
If a Senior Subordinated Note is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Senior Subordinated Note Trustee receives
proof satisfactory to it that the replaced Senior Subordinated Note is held by a
bona fide purchaser.
If the principal amount of any Senior Subordinated Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Senior Subordinated Notes payable on that date, then on and after that
date such Senior Subordinated Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest.
SECTION 2.09. TREASURY SENIOR SUBORDINATED NOTES.
In determining whether the Holders of the required principal amount of
Senior Subordinated Notes have concurred in any direction, waiver or consent,
Senior Subordinated Notes owned by the Company, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, shall be considered as though not outstanding, except
that for the purposes of determining whether the Senior Subordinated Note
Trustee shall be protected in relying on any such direction, waiver or consent,
only Senior Subordinated Notes that a Responsible Officer of the Senior
Subordinated Note Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SENIOR SUBORDINATED NOTES.
Until certificates representing Senior Subordinated Notes are ready for
delivery, the Company may prepare and the Senior Subordinated Note Trustee, upon
receipt of an Authentication Order, shall authenticate temporary Senior
Subordinated Notes. Temporary Senior Subordinated Notes shall be substantially
in the form of certificated Senior Subordinated Notes but may have variations
that the Company considers appropriate for temporary Senior Subordinated Notes
and as shall be reasonably acceptable to the Senior Subordinated Note Trustee.
Without unreasonable delay, the Company shall prepare and the Senior
Subordinated Note Trustee shall authenticate definitive Senior Subordinated
Notes in exchange for temporary Senior Subordinated Notes.
Holders of temporary Senior Subordinated Notes shall be entitled to all of
the benefits of this Senior Subordinated Note Indenture.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior Subordinated Notes to the Senior
Subordinated Note Trustee for cancellation. The Registrar and Paying Agent
shall forward to the Senior Subordinated Note Trustee any Senior Subordinated
Notes surrendered to them for registration of transfer, exchange or payment.
The Senior Subordinated Note Trustee and no one else shall cancel all Senior
Subordinated Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall return such canceled Senior Subordinated
Notes to the Company. The Company may not issue new Senior Subordinated Notes
to replace Senior Subordinated Notes that it has paid or that have been
delivered to the Senior Subordinated Note Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior Subordinated
Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Senior Subordinated Notes and in Section 4.01 hereof. The
Company shall notify the Senior Subordinated Note Trustee in writing of the
amount of defaulted interest proposed to be paid on each Senior Subordinated
Note and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, PROVIDED that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Senior
Subordinated Note Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Senior Subordinated Notes may use "CUSIP"
numbers (if then generally in use), and, if so, the Senior Subordinated Note
Trustee shall use CUSIP numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Senior
Subordinated Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Senior Subordinated Notes, and any such redemption shall not be affected by any
defect in or the omission of such numbers. The Company will promptly notify the
Senior Subordinated Note Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO SENIOR SUBORDINATED NOTE TRUSTEE.
If the Company elects to redeem Senior Subordinated Notes pursuant to the
redemption provisions of Section 3.07 hereof, it shall furnish to the Senior
Subordinated Note Trustee, at least 30 days but not more than 60 days before a
redemption date, an Officers' Certificate setting forth (i) the clause of this
Senior Subordinated Note Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Senior Subordinated
Notes to be redeemed, (iv) the redemption price and (v) the CUSIP numbers of the
Senior Subordinated Notes to be redeemed.
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SECTION 3.02. SELECTION OF SENIOR SUBORDINATED NOTES TO BE REDEEMED.
If less than all of the Senior Subordinated Notes are to be redeemed or
purchased in an offer to purchase at any time, the Senior Subordinated Note
Trustee shall select the Senior Subordinated Notes to be redeemed or purchased
among the Holders of the Senior Subordinated Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Senior Subordinated Notes are listed or, if the Senior Subordinated Notes are
not so listed, on a PRO RATA basis, by lot or in accordance with any other
method the Senior Subordinated Note Trustee shall deem fair and appropriate;
PROVIDED that no Senior Subordinated Notes of $1,000 or less shall be redeemed
in part. In the event of partial redemption by lot, the particular Senior
Subordinated Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Senior Subordinated Note Trustee from the outstanding Senior Subordinated
Notes not previously called for redemption.
The Senior Subordinated Note Trustee shall promptly notify the Company in
writing of the Senior Subordinated Notes selected for redemption and, in the
case of any Senior Subordinated Note selected for partial redemption, the
principal amount thereof to be redeemed. Senior Subordinated Notes and portions
of Senior Subordinated Notes selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Senior Subordinated Notes of a
Holder are to be redeemed, the entire outstanding amount of Senior Subordinated
Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.
Except as provided in the preceding sentence, provisions of this Senior
Subordinated Note Indenture that apply to Senior Subordinated Notes called for
redemption also apply to portions of Senior Subordinated Notes called for
redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Subordinated Notes are to be redeemed at its registered address.
The notice shall identify the Senior Subordinated Notes to be redeemed,
including the CUSIP numbers, and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Subordinated Note is being redeemed in part, the portion
of the principal amount of such Senior Subordinated Note to be redeemed and
that, after the redemption date upon surrender of such Senior Subordinated Note,
a new Senior Subordinated Note or Senior Subordinated Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Senior Subordinated Note;
(d) the name and address of the Paying Agent;
(e) that Senior Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Senior Subordinated Notes called for redemption ceases to accrue on
and after the redemption date;
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(g) the paragraph of the Senior Subordinated Notes and/or Section of this
Senior Subordinated Note Indenture pursuant to which the Senior Subordinated
Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Senior
Subordinated Notes.
At the Company's request, the Senior Subordinated Note Trustee shall give
the notice of redemption in the Company's name and at its expense; PROVIDED,
HOWEVER, that the Company shall have delivered to the Senior Subordinated Note
Trustee, at least 45 days prior to the redemption date, an Officers' Certificate
requesting that the Senior Subordinated Note Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Senior Subordinated Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Senior Subordinated Note Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Senior
Subordinated Notes to be redeemed on that date. The Senior Subordinated Note
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Senior Subordinated Note Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Senior Subordinated Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Senior
Subordinated Notes or the portions of Senior Subordinated Notes called for
redemption. If a Senior Subordinated Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such
Senior Subordinated Note was registered at the close of business on such record
date. If any Senior Subordinated Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Senior Subordinated Notes and in Section 4.01 hereof.
SECTION 3.06. SENIOR SUBORDINATED NOTES REDEEMED IN PART.
Upon surrender of a Senior Subordinated Note that is redeemed in part, the
Company shall issue and, upon the Company's written request, the Senior
Subordinated Note Trustee shall authenticate for the Holder at the expense of
the Company a new Senior Subordinated Note equal in principal amount to the
unredeemed portion of the Senior Subordinated Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) The Senior Subordinated Notes will not be subject to redemption at the
option of the Company prior to August 1, 2003. Thereafter, the Senior
Subordinated Notes will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
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notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the applicable redemption date, if redeemed during the twelve-month
period beginning on August 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2003 104.125%
2004 102.750%
2005 101.375%
2006 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
during the first 36 months after August 5, 1998, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Senior
Subordinated Notes issued under this Senior Subordinated Note Indenture at a
redemption price of 108.250% of the principal amount thereof, plus in such case
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date, with the net cash proceeds of any Public Equity Offering;
PROVIDED that at least 65% of the aggregate principal amount of Senior
Subordinated Notes issued remain outstanding immediately after the occurrence of
such redemption (excluding Senior Subordinated Notes held by the Company and its
Subsidiaries); and PROVIDED, further, that such redemption shall occur within 90
days of the date of the closing of such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth in Sections 3.09, 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Senior Subordinated Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence a Senior Subordinated Asset Sale Offer, it shall follow the
procedures specified below.
The Senior Subordinated Asset Sale Offer shall remain open for a period of
20 Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "OFFER PERIOD"). No
later than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Senior
Subordinated Notes required to be purchased pursuant to Section 4.10 hereof (the
"OFFER AMOUNT") or, if less than the Offer Amount has been tendered, all Senior
Subordinated Notes tendered in response to the Senior Subordinated Asset Sale
Offer. Payment for any Senior Subordinated Notes so purchased shall be made in
the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Senior Subordinated Note is registered at
the close of business on such record date, and no additional interest shall be
payable to Holders who tender Senior Subordinated Notes pursuant to the Senior
Subordinated Asset Sale Offer.
Upon the commencement of a Senior Subordinated Asset Sale Offer, the
Company shall send, by first class mail, a notice to the Senior Subordinated
Note Trustee and each of the Holders. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Senior Subordinated
Notes pursuant
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to the Senior Subordinated Asset Sale Offer. The Senior Subordinated Asset
Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Senior Subordinated Asset Sale Offer, shall state:
(a) that the Senior Subordinated Asset Sale Offer is being made pursuant
to this Section 3.09 and Section 4.10 hereof and the length of time the Senior
Subordinated Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Subordinated Note not tendered or accepted for payment
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any Senior
Subordinated Note accepted for payment pursuant to the Senior Subordinated Asset
Sale Offer shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Subordinated Note purchased
pursuant to a Senior Subordinated Asset Sale Offer may only elect to have all of
such Senior Subordinated Note purchased and may not elect to have only a portion
of such Senior Subordinated Note purchased;
(f) that Holders electing to have a Senior Subordinated Note purchased
pursuant to any Senior Subordinated Asset Sale Offer shall be required to
surrender the Senior Subordinated Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Senior Subordinated Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Senior Subordinated Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Senior
Subordinated Note purchased;
(h) that, if the aggregate principal amount of Senior Subordinated Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Senior Subordinated Notes to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only Senior
Subordinated Notes in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(i) that Holders whose Senior Subordinated Notes were purchased only in
part shall be issued new Senior Subordinated Notes equal in principal amount to
the unpurchased portion of the Senior Subordinated Notes surrendered (or
transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a PRO RATA basis to the extent necessary, the Offer
Amount of Senior Subordinated Notes or portions thereof tendered pursuant to the
Senior Subordinated Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Senior Subordinated Notes tendered, and shall deliver to the
Senior Subordinated Note Trustee an Officers' Certificate stating that such
Senior Subordinated Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09. The Company, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior
Subordinated Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Senior Subordinated Note,
and the Senior Subordinated Note Trustee, upon written request from the Company
shall authenticate and mail or deliver such new Senior Subordinated Note
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to such Holder, in a principal amount equal to any unpurchased portion of the
Senior Subordinated Note surrendered. Any Senior Subordinated Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Senior
Subordinated Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR SUBORDINATED NOTES.
The Company or a Guarantor shall pay or cause to be paid the principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Senior
Subordinated Notes on the dates and in the manner provided in the Senior
Subordinated Notes. Principal, premium, if any, and interest and Liquidated
Damages, if any, shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest and Liquidated Damages, if any, then due. The Company
shall pay all Liquidated Damages, if any, in the same manner on the dates and in
the amounts set forth in the Subordinated Registration Rights Agreement.
The Company or a Guarantor shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to the then applicable interest rate on the Senior Subordinated Notes
to the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Senior Subordinated
Note Trustee or an affiliate of the Senior Subordinated Note Trustee, Registrar
or co-registrar) where Senior Subordinated Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Senior Subordinated Notes and this Senior
Subordinated Note Indenture may be served. The Company shall give prompt
written notice to the Senior Subordinated Note Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Senior Subordinated Note Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Administration Office of the Senior Subordinated Note Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Senior Subordinated Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York for such purposes. The
Company shall give prompt written notice to the Senior Subordinated Note Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
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The Company hereby designates the Corporate Trust Office of the Senior
Subordinated Note Trustee as one such office or agency of the Company in
accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not the Company is required by the rules and regulations of
the SEC, so long as any Senior Subordinated Notes are outstanding, the Company
will furnish to each of the Holders of Senior Subordinated Notes and the Senior
Subordinated Note Trustee (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such financial information,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" that describes the financial condition and results of
operations of the Company and any consolidated Restricted Subsidiaries and, with
respect to the annual information only, reports thereon by the Company's
independent public accountants (which shall be firm(s) of established national
reputation) and (ii) all information that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports. All such
information and reports shall be filed with the SEC (unless the SEC will not
accept such a filing) on or prior to the dates on which such filings would have
been required to be made had the Company been subject to the rules and
regulations of the SEC. In addition, whether or not required by the rules and
regulations of the SEC, the Company shall file a copy of all such information
and reports with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. The Company shall at all times comply with
TIA Section 314(a). Delivery of such reports, information and documents to the
Senior Subordinated Note Trustee is for informational purposes only and the
Senior Subordinated Note Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Senior Subordinated Note Trustee is
entitled to rely exclusively on Officers' Certificates).
(b) For so long as any Senior Subordinated Notes remain outstanding, the
Company and the Guarantors shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Senior Subordinated Note
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Senior Subordinated Note Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Senior Subordinated Note Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions of this Senior
Subordinated Note Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Senior Subordinated Notes is prohibited
or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above
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shall be accompanied by a written statement of the Company's independent
public accountants (who shall be a firm of established national reputation)
that in making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article 4 or Article
5 hereof or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Subordinated Notes are
outstanding, deliver to the Senior Subordinated Note Trustee, as soon as
possible, but in no event later than five days after any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Senior Subordinated Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Senior Subordinated Note
Indenture; and the Company and each of the Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Senior Subordinated
Note Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company or other Affiliate of the Company; (iii) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire
or retire for value any subordinated Indebtedness, except a payment of interest
or principal at Stated Maturity; or (iv) make any Restricted Investment (all
such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of
and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period,
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have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company or any of its Restricted
Subsidiaries after the date of this Senior Subordinated Note Indenture
(excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (v) or
(x) of the next succeeding paragraph), is less than the sum, without
duplication, of (i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the first fiscal
quarter immediately following the date of this Senior Subordinated Note
Indenture to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus (ii) 100% of the aggregate Net Cash Proceeds or the
fair market value of property other than cash received by the Company as a
contribution to its common equity capital or from the issue or sale since the
date of this Senior Subordinated Note Indenture of Equity Interests of the
Company (other than Disqualified Stock), or of Disqualified Stock or debt
securities of the Company that have been converted into such Equity Interests
(other than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Restricted Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have been converted into
Disqualified Stock), plus (iii) to the extent not already included in
Consolidated Net Income of the Company for such period and without duplication,
any Restricted Investment that was made by the Company or any of its Restricted
Subsidiaries after the date of this Senior Subordinated Note Indenture is sold
for cash or otherwise liquidated or repaid for cash, or any Unrestricted
Subsidiary which is designated as an Unrestricted Subsidiary subsequent to the
date of this Senior Subordinated Note Indenture is sold for cash or otherwise
liquidated or repaid for cash, 100% of the cash return of capital with respect
to such Restricted Investment or Unrestricted Subsidiary (less the cost of
disposition, if any) and 50% of the excess of the fair market value of the
Company's Investment in such Unrestricted Subsidiary as of the date of such
redesignation over the amount of the Restricted Investment that reduced this
clause (c); PROVIDED FURTHER, that any amounts that increase this clause (c)
shall not duplicatively increase amounts available as Permitted Investments.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Senior Subordinated Note Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebtedness which is subordinated Indebtedness or
Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of, other Equity Interests of the Company (other
than any Disqualified Stock); PROVIDED that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (c) (ii) of
the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition
of Indebtedness which is subordinated Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend or distribution by a Restricted
Subsidiary of the Company to the holders of its common Equity Interests so
long as the Company or such Restricted Subsidiary receives at least its pro
rata share of such dividend or distribution in accordance with its Equity
Interests in such class or series of securities;
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(v) the payment of dividends on the Company's Common Stock and
Series B ESOP Convertible Preferred Stock of up to a combined amount of
$25.0 million per annum; PROVIDED that any amount not utilized by the
Company to pay dividends in any calendar year will not be carried
forward to any subsequent year;
(vi) (a) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company that are held
by any member of the Company's (or any of its Restricted Subsidiaries)
management pursuant to any management equity subscription agreement or
stock option agreement or (b) the repurchase of Equity Interests of the
Company or any Restricted Subsidiary of the Company held by employee
benefits plans (whether directly or for employees, directors or former
directors) pursuant to the terms of agreements (other than management
equity subscription agreements or stock option agreements) approved by the
Company's Board of Directors; PROVIDED that, in the case of foregoing
clause (a) the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $10.0 million in the
aggregate since the date of this Senior Subordinated Note Indenture and, in
the case of foregoing clause (b), the aggregate purchase price paid for all
such repurchased Equity Interests shall not exceed $15.0 million in any
twelve-month period;
(vii) repurchases of Equity Interests deemed to occur upon
exercise of stock options if such Equity Interests represent a portion of
the exercise price of such options;
(viii) other Restricted Payments in an aggregate amount since the
date of this Senior Subordinated Note Indenture not to exceed $50.0 million
under this clause (x);
PROVIDED that, with respect to clauses (ii), (iii), (v), (vi) and (viii) above,
no Default or Event of Default shall have occurred and be continuing immediately
after such transaction or as a consequence thereof.
As of the date of this Senior Subordinated Note Indenture, all of the
Company's Subsidiaries other than the FTB Group, Ball Capital Corp. and the
Excluded Subsidiaries will be Restricted Subsidiaries. The Board of Directors
may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. All such outstanding Investments will
be deemed to constitute Investments in an amount equal to the fair market value
of such Investments at the time of such designation. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
If, at any time, any Unrestricted Subsidiary would fail to meet the
requirements in the definition of "Unrestricted Subsidiary" as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Senior Subordinated Note Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant). The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
PROVIDED that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.09 hereof
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, (ii) if such Subsidiary is a
Domestic Subsidiary, such Subsidiary shall have executed and delivered a
supplemental indenture pursuant to which it will become a
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Guarantor under this Senior Subordinated Note Indenture, and (iii) no Default
or Event of Default would be in existence following such designation.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary of the Company, pursuant to the Restricted Payment. The fair market
value of any noncash Restricted Payment or any adjustment made pursuant to
paragraph (c) of this Section 4.07 shall be determined by the Board of Directors
of the Company whose resolution with respect thereto shall be delivered to the
Senior Subordinated Note Trustee, such determination to be based upon an opinion
or appraisal issued by an investment banking firm (or, if an investment banking
firm is generally not qualified to give such an opinion or appraisal, by an
appraisal firm) of national standing if such fair market value exceeds $25.0
million. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Senior Subordinated Note Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed,
together with a copy of any fairness opinion or appraisal required by this
Senior Subordinated Note Indenture.
If any Restricted Investment is sold or otherwise liquidated or repaid or
any dividend or payment is received by the Company or a Restricted Subsidiary
and such amounts may be credited to clause (c) above, then such amounts will be
credited only to the extent of amounts not otherwise included in Consolidated
Net Income and that do not otherwise increase the amount available as a
Permitted Investment.
SECTION 4.08. DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries that are not Guarantors to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary of the Company or the
Company to (i)(x) pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its profits,
or (y) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries, (ii) make loans or advances to the Company or any of its
Restricted Subsidiaries or (iii) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (a) Existing Indebtedness as in
effect on the date of this Senior Subordinated Note Indenture, (b) the Credit
Facility as in effect as of the date of this Senior Subordinated Note Indenture,
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, PROVIDED that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive with respect to
such dividend and other payment restrictions than those contained in the Credit
Facility as in effect on the date of this Senior Subordinated Note Indenture,
(c) the Senior Note Indenture, this Senior Subordinated Note Indenture, the
Senior Notes and the Senior Subordinated Notes, (d) applicable law or any
applicable rule, regulation or order, (e) any instrument governing Indebtedness
or Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, PROVIDED that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Senior
Subordinated Note Indenture to be incurred, (f) by reason of customary
non-assignment provisions in leases or other contracts entered into in the
ordinary course of business and consistent with past practices, (g) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (h) Indebtedness of Guarantors, PROVIDED that such
Indebtedness was permitted to be incurred pursuant to this Senior Subordinated
Note Indenture, (i) Permitted Refinancing Indebtedness,
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PROVIDED that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced, (j)
secured Indebtedness otherwise permitted to be incurred pursuant to the
provisions of Section 4.12 hereof that limits the right of the debtor to
dispose of assets securing such Indebtedness, (k) provisions with respect to
the disposition or distribution of assets or property in joint venture or
similar agreements entered into in the ordinary course of business or (l) any
Purchase Money Note, or other Indebtedness or other contractual requirements
of a Securitization Entity in connection with a Qualified Securitization
Transaction; PROVIDED that such restrictions apply only to such
Securitization Entity.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Indebtedness (including Acquired
Debt) and that the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; PROVIDED, HOWEVER, that the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock and any of the Company's
Restricted Subsidiaries may incur Indebtedness if the Company's Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.00 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this Section 4.09 shall not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"PERMITTED DEBT"):
(i) the incurrence by the Company or its Restricted Subsidiaries of
term Indebtedness under the Credit Facility, letters of credit (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted Subsidiaries
thereunder) and related Guarantees under the Credit Facility; PROVIDED that
the aggregate principal amount of all term Indebtedness and letters of
credit of the Company and its Restricted Subsidiaries (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and its Restricted Subsidiaries
thereunder) outstanding under the Credit Facility after giving effect to
such incurrence, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (i) does not exceed an amount equal to $550.0 million;
(ii) the incurrence by the Company or its Restricted Subsidiaries of
revolving credit Indebtedness under the Credit Facility, letters of credit
(with letters of credit being deemed to have a principal amount equal to
the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) and related Guarantees under the Credit Facility;
PROVIDED that the aggregate principal amount of all revolving Indebtedness
and letters of credit of the Company and its Restricted Subsidiaries (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted Subsidiaries
thereunder) outstanding under the Credit Facility after giving effect to
such incurrence, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (ii), does not exceed $700.0 million less the aggregate amount
of Asset Sale proceeds applied by the Company and its Restricted
Subsidiaries to permanently reduce the availability of revolving credit
Indebtedness under the Credit Agreements pursuant to the provisions of
Section 4.10 hereof;
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(iii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Senior Notes, the Senior Subordinated
Notes, the Senior Subsidiary Guarantees and the Subordinated Subsidiary
Guarantees limited in aggregate principal amount, without duplication,
to amounts outstanding under the Senior Note Indenture and this Senior
Subordinated Note Indenture as of their respective dates;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace Indebtedness incurred pursuant to this
clause (v), not to exceed 5% of Total Assets;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that (i) if the
Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all Obligations with
respect to the Senior Subordinated Note and this Senior Subordinated Note
Indenture, (ii) if a Restricted Subsidiary of the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of such Restricted Subsidiary's Senior Subsidiary
Guarantee and (iii)(A) any subsequent event or issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary of the Company and
(B) any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Restricted Subsidiary of the Company shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vii);
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the normal course
of business for the purpose of fixing or hedging currency, commodity or
interest rate risk (including with respect to any Indebtedness that is
permitted by the terms of this Senior Subordinated Note Indenture to be
outstanding in connection with the conduct of their respective businesses
and not for speculative purposes);
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in the ordinary course of business solely in
respect of performance, surety and similar bonds, completion or performance
guarantees or standby letters of credit issued for the purpose of
supporting workers' compensation liabilities of the Company or any of its
Restricted Subsidiaries, to the extent that such incurrence does not result
in the incurrence of any obligation for the payment of borrowed money to
others;
(x) the incurrence of Indebtedness arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary;
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(xi) the incurrence by a Restricted Subsidiary of the Company of
Indebtedness in connection with and in contemplation of, the concurrent
disposition of such Restricted Subsidiary to the stockholders of the
Company; PROVIDED that such disposition occurs concurrently with such
incurrence and following such disposition, neither the Company nor any of
its Restricted Subsidiaries has any liability with respect to such
Indebtedness;
(xii) the incurrence by a Securitization Entity of Indebtedness in
a Qualified Securitization Transaction that is Non-Recourse Debt with
respect to the Company and its other Restricted Subsidiaries (except for
Standard Securitization Undertakings and Limited Originator Recourse);
(xiii) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.09; and
(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (xiv), not to
exceed $75.0 million.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xiv) above as of
the date of incurrence thereof or is entitled to be incurred pursuant to the
first paragraph of this Section 4.09 as of the date of incurrence thereof, the
Company shall, in its sole discretion, classify or reclassify such item of
Indebtedness as of the date of incurrence thereof in any manner that complies
with this Section 4.09 and such item of Indebtedness shall be treated as having
been incurred pursuant to only one of such clauses or pursuant to the first
paragraph of this Section 4.09. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this Section
4.09.
SECTION 4.10. ASSETS SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the fair market value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Senior
Subordinated Note Trustee with respect to any Asset Sale determined to have a
fair market value greater than $25.0 million) of the assets or Equity Interests
issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents; PROVIDED that the following amounts
shall be deemed to be cash: (w) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary of the Company (other than contingent liabilities and
liabilities that are by their terms subordinated to the Senior Subordinated
Notes or any Guarantee thereof) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability, (x) any securities, notes or
other obligations received by the Company or any such Restricted Subsidiary from
such transferee that are converted by the Company or such Restricted Subsidiary
into cash within 180 days after the consummation of such Asset Sale (to the
extent of the cash received), (y) any Designated Noncash Consideration received
by the Company or any of its Restricted Subsidiaries in such Asset Sale;
PROVIDED that the aggregate fair market value (as determined above) of such
Designated Noncash Consideration, taken together with the fair market value at
the time of receipt of all other Designated Noncash Consideration received
pursuant to this clause (y) less the amount of Net Proceeds previously realized
in cash from prior Designated Noncash Consideration is less than 5% of Total
Assets at the time of the receipt of such
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Designated Noncash Consideration (with the fair market value of each item of
Designated Noncash Consideration being measured at the time received and
without giving effect to subsequent changes in value) and (z) Additional
Assets received in an exchange-of-assets transaction.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay Senior Debt
of the Company or any Restricted Subsidiary, including, without limitation,
Indebtedness under the Senior Notes and any Credit Facility (and to
correspondingly permanently reduce the commitments with respect thereto in the
case of revolving borrowings), (b) to the acquisition of a controlling interest
in another business, the making of a capital expenditure or the acquisition of
other long-term assets, in each case, in Permitted Businesses or (c) to an
Investment in Additional Assets; PROVIDED, that the Company will have complied
with clause (c) if, within 365 days of such Asset Sale, the Company shall have
entered into a definitive agreement covering such Investment which is thereafter
completed within 365 days after the first anniversary of such Asset Sale.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Indebtedness under any Credit Facility or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indentures. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the first sentence of this paragraph shall be deemed to constitute "EXCESS
PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $20.0 million,
the Company shall be required to make an offer to all Holders of Senior
Subordinated Notes and all holders of other Indebtedness that is not Senior Debt
that ranks PARI PASSU with the Senior Subordinated Notes containing provisions
similar to those set forth in the Senior Subordinated Note Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets (a
"SENIOR SUBORDINATED ASSET SALE OFFER") to purchase the maximum principal amount
of Senior Subordinated Notes and such other Indebtedness that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase, in accordance with the
procedures set forth in the Senior Subordinated Note Indenture and such other
Indebtedness. To the extent that any Excess Proceeds remain after consummation
of a Senior Subordinated Asset Sale Offer, the Company may use any remaining
Excess Proceeds for any purpose not otherwise prohibited by the Senior
Subordinated Note Indenture. If the aggregate principal amount of Senior
Subordinated Notes and such other Indebtedness tendered into such Senior
Subordinated Asset Sale Offer surrendered by Holders thereof exceeds the amount
of Excess Proceeds, the Senior Subordinated Note Trustee shall select the Senior
Subordinated Notes and such other Indebtedness to be purchased on a pro rata
basis. Upon completion of such offer to purchase, the amount of Excess Proceeds
shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any properties or assets to, or purchase any property or assets from,
or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate of any such Person (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (ii) the Company delivers to
the Senior Subordinated Note Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of its Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of its Board of Directors
and (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an investment banking firm (or, if an
investment banking firm is generally not qualified to give such an opinion, by
an
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appraisal firm) of national standing; PROVIDED that none of the following
shall be deemed to be Affiliate Transactions: (1) any employment, severance
or termination agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the past
practice of the Company or such Restricted Subsidiary, as the case may be,
(2) transactions between or among the Company and/or its Restricted
Subsidiaries that are Guarantors, (3) transactions between or among the
Company or its Restricted Subsidiaries that are Guarantors with its
Restricted Subsidiaries that are not Guarantors, FTB Group and Permitted
Joint Ventures on terms that are no less favorable to the Company and/or such
Subsidiary than those that would have been obtained in a comparable
transaction by the Company and/or such Subsidiary with an unrelated Person,
(4) any sale or other issuance of Equity Interests (other than Disqualified
Stock) of the Company, (5) Restricted Payments that are permitted by and
Investments that are not prohibited by Section 4.07 hereof, (6) fees and
compensation paid to members of the Board of Directors of the Company and of
its Restricted Subsidiaries in their capacity as such, to the extent such
fees and compensation are reasonable and customary, (7) advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business and consistent with past
practices, (8) fees and compensation paid to, and indemnity provided on
behalf of, officers, directors or employees of the Company or any of its
Restricted Subsidiaries, as determined by the Board of Directors of the
Company or of any such Restricted Subsidiary, to the extent such fees and
compensation are reasonable and customary, shall not be deemed to be
Affiliate Transactions and (9) transactions effected as part of a Qualified
Securitization Transaction.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness, Attributable Debt,
or trade payables (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under this
Senior Subordinated Note Indentures and the Senior Subordinated Notes are
secured on an equal and ratable basis with the obligations so secured until such
time as such obligations are no longer secured by a Lien.
SECTION 4.13. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Senior
Subordinated Notes.
SECTION 4.15. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Senior
Subordinated Notes will have the right to require the Company to repurchase all
or any part (equal to $1,000 or an integral multiple
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thereof) of such Holder's Senior Subordinated Notes pursuant to the offer
described below (the "CHANGE OF CONTROL OFFER") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
purchase (the "CHANGE OF CONTROL PAYMENT"). Within fifteen days following any
Change of Control, the Company will mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control and
offering to repurchase Senior Subordinated Notes on the date specified in
such notice, which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT
DATE"), pursuant to the procedures required by this Senior Subordinated Note
Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Senior Subordinated Notes
as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Senior Subordinated Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Senior Subordinated Notes or portions thereof so tendered and (3) deliver or
cause to be delivered to the Senior Subordinated Note Trustee the Senior
Subordinated Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Senior Subordinated Notes or portions thereof
being purchased by the Company. The Paying Agent will promptly mail to each
Holder of Senior Subordinated Notes so tendered the Change of Control Payment
for such Senior Subordinated Notes, and the Senior Subordinated Note Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Senior Subordinated Note equal in principal amount to any
unpurchased portion of the Senior Subordinated Notes surrendered, if any;
PROVIDED that each such new Senior Subordinated Note will be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this Section 4.15, but in any event within 60 days following a
Change of Control, the Company will either repay all outstanding Senior Debt or
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Senior Subordinated Notes
required by this Section 4.15. The Company will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Senior Subordinated Note Indenture
are applicable. Except as described above with respect to a Change of Control,
this Senior Subordinated Note Indenture does not contain provisions that permit
the Holders of the Senior Subordinated Notes to require that the Company
repurchase or redeem the Senior Subordinated Notes in the event of a takeover,
recapitalization or similar transaction.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this Senior
Subordinated Note Indenture applicable to a Change of Control Offer made by the
Company and purchases all Senior Subordinated Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.16. ADDITIONAL SUBORDINATED SUBSIDIARY GUARANTEES.
If the Company or any of its Domestic Subsidiaries (i) acquires or creates
any Domestic Subsidiary after the date of this Senior Subordinated Indenture
that is not a Guarantor or (ii) causes or permits any Foreign Subsidiary that is
not a Guarantor to, directly or indirectly, guarantee the payment of any
Indebtedness of the Company or any Restricted Subsidiary ("OTHER INDEBTEDNESS")
then, in each case the Company shall cause such Subsidiary to simultaneously
execute and deliver a supplemental indenture pursuant to which it will become a
Guarantor under the Senior Subordinated Note Indenture; PROVIDED,
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HOWEVER, that if such Other Indebtedness is (i) Indebtedness that is ranked
PARI PASSU in right of payment with the Senior Subordinated Notes or such
Subsidiary's Guarantee of the Senior Subordinated Notes, as the case may be,
such Subsidiary's Guarantee of the Senior Subordinated Notes shall be PARI
PASSU in right of payment with such Subsidiary's guarantee of the Other
Indebtedness; or (ii) Senior Debt, such Subsidiary's Guarantee of the Senior
Subordinated Notes shall be subordinated in right of payment to the guarantee
of Other Indebtedness (which guarantee of such Senior Debt shall provide that
the guarantee is senior to such Subsidiary's Guarantee of the Senior
Subordinated Notes to the same extent and in the same manner as the Other
Indebtedness is senior to the Senior Subordinated Notes or such Subsidiary's
Guarantee of the Senior Subordinated Notes, as the case may be).
SECTION 4.17. PAYMENT FOR CONSENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Senior Subordinated Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Senior Subordinated Note
Indenture or the Senior Subordinated Notes unless such consideration is offered
to be paid or is paid to all Holders of the Senior Subordinated Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
SECTION 4.18. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED that
the Company may enter into a sale and leaseback transaction if (i) the Company
could have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 4.09 hereof
and (ii) the gross cash proceeds of such sale and leaseback transaction are at
least equal to the fair market value (as determined in good faith by the Board
of Directors and set forth in an Officers' Certificate delivered to the Senior
Subordinated Note Trustee) of the property that is the subject of such sale and
leaseback transaction and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Section 4.10 hereof.
SECTION 4.19. ANTI-LAYERING.
Notwithstanding any other provision of this Senior Subordinated Note
Indenture, (i) the Company will not incur, create, issue, assume, guarantee or
otherwise become liable directly or indirectly for any Indebtedness (including
Acquired Debt) that is subordinate or junior in right of payment to any Senior
Debt and senior in any respect in right of payment to the Senior Subordinated
Notes and (ii) no Guarantor will incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness (including Acquired Debt) that is
subordinate or junior in right of payment to any Senior Debt of a Guarantor and
senior in any respect in right of payment to any Subordinated Subsidiary
Guarantee.
SECTION 4.20. CERTAIN COVENANTS TO BE SUSPENDED UNDER CERTAIN CONDITIONS.
The covenants set forth in Section 4.01 through Section 4.19, inclusive, of
this Senior Subordinated Note Indenture shall be applicable to the Company
(and/or its Restricted Subsidiaries, as appropriate) except that during any
period of time that (i) the ratings assigned to the Senior Subordinated Notes by
both Standard & Poor's Ratings Group ("S&P") and Moody's Investors Service, Inc.
("MOODY'S" and, together with S&P, the "RATING AGENCIES") are equal to or higher
than BBB-- and Baa3, or the equivalents thereof, respectively (the "INVESTMENT
GRADE RATINGS"), except subsequent to a Change of Control of the Company, and
(ii) no Default or Event of Default shall have occurred and be continuing, the
Company and its Subsidiaries will not
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be subject to the provisions of this Senior Subordinated Note Indenture
described in Sections 4.07 through 4.11, inclusive, and Section 4.18,
(collectively, the "SUSPENDED COVENANTS"). In the event that the Company is
not subject to the Suspended Covenants for any period of time as a result of
the preceding sentence (a "SUSPENSION PERIOD") and, subsequently, one or both
Rating Agencies withdraws its ratings or downgrades the ratings assigned to
the Senior Subordinated Notes below the required Investment Grade Ratings,
then, from and after the date of such withdrawal or downgrade, the Company
and its Subsidiaries will again be subject to the Suspended Covenants and
compliance with the Suspended Covenants with respect to Restricted Payments
made after the time of such withdrawal or downgrade will be calculated in
accordance with the terms of Section 4.07 as if such covenant had been in
effect during the entire period of time from the date of this Senior
Subordinated Note Indenture. Notwithstanding any other provision of this
Senior Subordinated Note Indenture, the continued existence, after the date
of such withdrawal or downgrade, of facts and circumstances that were
incurred or otherwise came into being during a Suspension Period shall not
constitute a breach of any covenant set forth in this Senior Subordinated
Note Indenture or a Default or Event of Default hereunder.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not, directly or indirectly, consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person
unless (i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia; (ii) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, conveyance or
other disposition shall have been made assumes all the obligations of the
Company under the Subordinated Registration Rights Agreement, the Senior
Subordinated Notes and this Senior Subordinated Note Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Senior
Subordinated Note Trustee; (iii) immediately before and after such transaction
no Default or Event of Default shall have occurred; and (iv) except in the case
of a merger of the Company with or into a Subsidiary, the Company or Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made will, immediately after such transaction after
giving pro forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter period, (A) be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 hereof or (B) the Fixed Charge Coverage Ratio for the Company or the entity
or Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made would, immediately after giving pro forma
effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, not be less than such Fixed Charge Coverage
Ratio for the Company and its Restricted Subsidiaries immediately prior to such
transaction. The Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 will not
be applicable to a sale, assignment, transfer, conveyance or other disposition
of assets between or among the Company and its Restricted Subsidiaries.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Senior Subordinated Note Indenture referring to the "Company"
shall refer instead to the successor corporation and not to the Company), and
may exercise every right and power of the Company under this Senior Subordinated
Note Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the predecessor Company shall not
be relieved from the obligation to pay the principal of and interest on the
Senior Subordinated Notes except in the case of a sale of all of the Company's
assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Senior Subordinated Notes and
such default continues for a period of 30 days (whether or not prohibited by the
subordination provisions of Article 10);
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Senior Subordinated Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an offer to
purchase) or otherwise (whether or not prohibited by the subordination
provisions of Article 10);
(c) the Company or any of its Restricted Subsidiaries fails to comply with
the provisions of Section 5.01;
(d) the Company or any of its Restricted Subsidiaries fails for 30 days
after notice to comply with the provisions of Sections 4.07, 4.09, 4.10 or 4.15
hereof;
(e) the Company or any of its Restricted Subsidiaries fails for 60 days
after notice to observe or perform any other covenant, representation, warranty
or other agreement in this Senior Subordinated Note Indenture or the Senior
Subordinated Notes;
(f) the Company or any of its Restricted Subsidiaries defaults under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (other than a Securitization
Entity) (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries (other than a Securitization Entity)) whether such
Indebtedness or guarantee now exists, or is created after the date of this
Senior Subordinated Note Indenture, which default (a) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "PAYMENT DEFAULT") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has
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been a Payment Default or the maturity of which has been so accelerated,
aggregates without duplication $20.0 million or more;
(g) the Company or any of its Restricted Subsidiaries fails to pay final
judgments aggregating in excess of $20.0 million (excluding amounts covered by
insurance), which judgments are not paid, discharged or stayed for a period of
60 days;
(h) the Company or any of its Significant Subsidiaries that are Restricted
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries that are Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
in an involuntary case;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries that are Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
or for all or substantially all of the property of the Company or any of its
Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
(j) except as permitted by this Senior Subordinated Note Indenture, any
Senior Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Senior Subsidiary Guarantee.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Company, any Significant
Subsidiary that is a Restricted Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary)
occurs and is continuing, the Senior Subordinated Note Trustee or the Holders of
at least 25% in principal amount of the
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then outstanding Senior Subordinated Notes may declare all the Senior
Subordinated Notes to be due and payable immediately. Upon any such
declaration, the Senior Subordinated Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified
in clause (g) or (h) of Section 6.01 hereof occurs with respect to the
Company, any of its Significant Subsidiaries that are Restricted Subsidiaries
or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, all outstanding Senior Subordinated
Notes shall be due and payable without further action or notice. Holders of
the Senior Subordinated Notes may not enforce this Senior Subordinated Note
Indenture or the Senior Subordinated Notes except as provided in this Senior
Subordinated Note Indenture.
If an Event of Default occurs prior to August 1, 2003 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Senior
Subordinated Notes prior to August 1, 2003, then the premium specified in this
Senior Subordinated Indenture shall also become immediately due and payable to
the extent permitted by law upon the acceleration of the Senior Subordinated
Notes.
The Company is required to deliver to the Senior Subordinated Note Trustee
annually a statement regarding compliance with this Senior Subordinated Note
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Senior Subordinated Note Trustee a statement
specifying such Default or Event of Default.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Senior Subordinated
Note Trustee may pursue any available remedy to collect the payment of
principal, premium, if any, and interest and Liquidated Damages, if any, on the
Senior Subordinated Notes or to enforce the performance of any provision of the
Senior Subordinated Notes or this Senior Subordinated Note Indenture.
The Senior Subordinated Note Trustee may maintain a proceeding even if it
does not possess any of the Senior Subordinated Notes or does not produce any of
them in the proceeding. A delay or omission by the Senior Subordinated Note
Trustee or any Holder of a Senior Subordinated Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding by notice to the Senior Subordinated Note
Trustee may on behalf of the Holders of all of the Senior Subordinated Notes
waive any existing Default or Event of Default and its consequences under this
Senior Subordinated Note Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Senior
Subordinated Notes (including in connection with an offer to purchase);
PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount
of the then outstanding Senior Subordinated Notes may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration. Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Senior Subordinated Note Indenture; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.06. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Senior
Subordinated Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the
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Senior Subordinated Note Trustee or exercising any trust or power conferred
on it. However, the Senior Subordinated Note Trustee may refuse to follow
any direction that conflicts with law or this Senior Subordinated Note
Indenture that the Senior Subordinated Note Trustee determines may be unduly
prejudicial to the rights of other Holders of Senior Subordinated Notes or
that may involve the Senior Subordinated Note Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Senior Subordinated Note may pursue a remedy with respect to
this Senior Subordinated Note Indenture or the Senior Subordinated Notes only
if:
(a) the Holder of a Senior Subordinated Note gives to the Senior
Subordinated Note Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes make a written request to the Senior
Subordinated Note Trustee to pursue the remedy;
(c) such Holder of a Senior Subordinated Note or Holders of Senior
Subordinated Notes offer and, if requested, provide to the Senior Subordinated
Note Trustee indemnity satisfactory to the Senior Subordinated Note Trustee
against any loss, liability or expense;
(d) the Senior Subordinated Note Trustee does not comply with the request
within 60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Subordinated Notes do not give the Senior
Subordinated Note Trustee a direction inconsistent with the request.
A Holder of a Senior Subordinated Note may not use this Senior Subordinated
Note Indenture to prejudice the rights of another Holder of a Senior
Subordinated Note or to obtain a preference or priority over another Holder of a
Senior Subordinated Note.
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR SUBORDINATED NOTES TO RECEIVE
PAYMENT.
Notwithstanding any other provision of this Senior Subordinated Note
Indenture, the right of any Holder of a Senior Subordinated Note to receive
payment of principal, premium and Liquidated Damages, if any, and interest on
the Senior Subordinated Note, on or after the respective due dates expressed in
the Senior Subordinated Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY SENIOR SUBORDINATED NOTE TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Senior Subordinated Note Trustee is authorized to recover
judgment in its own name and as Senior Subordinated Note Trustee of an express
trust against the Company for the whole amount of principal of, premium and
Liquidated Damages, if any, and interest remaining unpaid on the Senior
Subordinated Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Senior Subordinated Note Trustee, its agents
and counsel.
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SECTION 6.09. SENIOR SUBORDINATED NOTE TRUSTEE MAY FILE PROOFS OF CLAIM.
The Senior Subordinated Note Trustee is authorized to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Senior Subordinated Note Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Senior
Subordinated Note Trustee, its agents and counsel) and the Holders of the Senior
Subordinated Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Senior Subordinated Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Senior Subordinated Note Trustee, and in the event
that the Senior Subordinated Note Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Senior Subordinated Note Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Senior Subordinated Note Trustee, its agents and counsel,
and any other amounts due the Senior Subordinated Note Trustee under Section
7.07 hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Senior Subordinated Note Trustee, its agents
and counsel, and any other amounts due the Senior Subordinated Note Trustee
under Section 7.07 hereof out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Senior Subordinated Note Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Notes or the rights
of any Holder, or to authorize the Senior Subordinated Note Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Senior Subordinated Note Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
FIRST: to the Senior Subordinated Note Trustee, its agents and
attorneys for amounts due under Section 7.07 hereof, including payment of
all compensation, expense and liabilities incurred, and all advances made,
by the Senior Subordinated Note Trustee and the costs and expenses of
collection;
SECOND: to Holders of Senior Subordinated Notes for amounts due and
unpaid on the Senior Subordinated Notes for principal, premium and
Liquidated Damages, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Senior Subordinated Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
THIRD: to the Company.
The Senior Subordinated Note Trustee may fix a record date and payment date
for any payment to Holders of Senior Subordinated Notes pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Senior
Subordinated Note Indenture or in any suit against the Senior Subordinated Note
Trustee for any action taken or omitted by it as a Senior
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Subordinated Note Trustee, a court in its discretion may require the filing
by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Senior Subordinated Note Trustee, a suit by a Holder of a Senior
Subordinated Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Senior Subordinated
Notes.
ARTICLE 7
SENIOR SUBORDINATED NOTE TRUSTEE
SECTION 7.01. DUTIES OF SENIOR SUBORDINATED NOTE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Senior
Subordinated Note Trustee shall exercise such of the rights and powers vested in
it by this Senior Subordinated Note Indenture, and use the same degree of care
and skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Senior Subordinated Note Trustee shall be
determined solely by the express provisions of this Senior Subordinated
Note Indenture and the Senior Subordinated Note Trustee need perform only
those duties that are specifically set forth in this Senior Subordinated
Note Indenture and no others, and no implied covenants or obligations shall
be read into this Senior Subordinated Note Indenture against the Senior
Subordinated Note Trustee; and
(ii) in the absence of bad faith on its part, the Senior Subordinated
Note Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Senior Subordinated Note Trustee and conforming
to the requirements of this Senior Subordinated Note Indenture, but in the
case of any such certificates of opinions which by any provision hereof are
specifically required to be furnished to the Senior Subordinated Note
Trustee, the Senior Subordinated Note Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Senior Subordinated Note Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Senior Subordinated Note Trustee may not be relieved from
liabilities for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Senior Subordinated Note Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Senior Subordinated Note Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Senior Subordinated Note Trustee shall not be liable
with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05 hereof.
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(d) Whether or not therein expressly so provided, every provision of this
Senior Subordinated Note Indenture that in any way relates to the Senior
Subordinated Note Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of
this Section and Section 7.02.
(e) No provision of this Senior Subordinated Note Indenture shall require
the Senior Subordinated Note Trustee to expend or risk its own funds or incur
any liability. The Senior Subordinated Note Trustee shall be under no
obligation to exercise any of its rights and powers under this Senior
Subordinated Note Indenture at the request of any Holders, unless such Holder
shall have offered to the Senior Subordinated Note Trustee security and
indemnity satisfactory to it against any loss, liability or expense.
(f) The Senior Subordinated Note Trustee shall not be liable for interest
on any money received by it except as the Senior Subordinated Note Trustee may
agree in writing with the Company. Money held in trust by the Senior
Subordinated Note Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF SENIOR SUBORDINATED NOTE TRUSTEE.
(a) The Senior Subordinated Note Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Senior Subordinated Note Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Senior Subordinated Note Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of Counsel or
both. The Senior Subordinated Note Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Senior Subordinated Note Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Senior Subordinated Note Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Senior Subordinated Note Trustee shall not be liable for any
action it takes or omits to take in good faith that it believes to be authorized
or within the rights or powers conferred upon it by this Senior Subordinated
Note Indenture.
(e) Unless otherwise specifically provided in this Senior Subordinated
Note Indenture, any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or
Guarantor issuing such demand, request or notice.
(f) The Senior Subordinated Note Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Senior Subordinated
Note Indenture at the request or direction of any of the Holders unless such
Holders shall have offered to the Senior Subordinated Note Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF SENIOR SUBORDINATED NOTE TRUSTEE.
The Senior Subordinated Note Trustee in its individual or any other
capacity may become the owner or pledgee of Senior Subordinated Notes and may
otherwise deal with the Company or any Affiliate of the
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Company with the same rights it would have if it were not Senior Subordinated
Note Trustee. The Senior Subordinated Note Trustee is also subject to
Sections 7.10 and 7.11 hereof.
SECTION 7.04. SENIOR SUBORDINATED NOTE TRUSTEE'S DISCLAIMER.
The Senior Subordinated Note Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Senior Subordinated
Note Indenture or the Senior Subordinated Notes, it shall not be accountable for
the Company's use of the proceeds from the Senior Subordinated Notes or any
money paid to the Company or upon the Company's direction under any provision of
this Senior Subordinated Note Indenture, it shall not be responsible for the use
or application of any money received by any Paying Agent other than the Senior
Subordinated Note Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Senior Subordinated Notes or any other
document in connection with the sale of the Senior Subordinated Notes or
pursuant to this Senior Subordinated Note Indenture other than its certificate
of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Senior Subordinated Note Trustee,
the Senior Subordinated Note Trustee shall mail to Holders of Senior
Subordinated Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on any Senior Subordinated Note,
the Senior Subordinated Note Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Senior Subordinated Notes.
SECTION 7.06. REPORTS BY SENIOR SUBORDINATED NOTE TRUSTEE TO HOLDERS OF THE
SENIOR SUBORDINATED NOTES.
Within 60 days after each August 1 beginning with the August 1 following
the date of this Senior Subordinated Note Indenture, and for so long as Senior
Subordinated Notes remain outstanding, the Senior Subordinated Note Trustee
shall mail to the Holders of the Senior Subordinated Notes a brief report dated
as of such reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Senior Subordinated
Note Trustee also shall comply with TIA Section 313(b)(2). The Senior
Subordinated Note Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Subordinated Notes shall be mailed to the Company and filed with the SEC and
each stock exchange on which the Senior Subordinated Notes are listed in
accordance with TIA Section 313(d). The Company shall promptly notify the
Senior Subordinated Note Trustee when the Senior Subordinated Notes are listed
on any stock exchange or delisted therefrom.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Senior Subordinated Note
Trustee from time to time such compensation as agreed upon in writing for its
acceptance of this Senior Subordinated Note Indenture and services hereunder.
The Senior Subordinated Note Trustee's compensation shall not be limited by any
law on compensation of a Senior Subordinated Note Trustee of an express trust.
The Company and the Guarantors shall reimburse the Senior Subordinated Note
Trustee promptly upon request for all disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services.
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Such expenses shall include the reasonable compensation, disbursements and
expenses of the Senior Subordinated Note Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Senior Subordinated Note
Trustee against any and all losses, liabilities, claims, damages or expenses
(including taxes other than taxes based upon the income of the Senior Note
Trustee) incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Senior Subordinated Note Indenture,
including the costs and expenses of enforcing this Senior Subordinated Note
Indenture against the Company and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company and the
Guarantors or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or willful misconduct. The Senior Subordinated Note Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Senior Subordinated Note Trustee to so notify the Company shall
not relieve the Company and the Guarantors of its obligations hereunder. The
Company shall defend the claim and the Senior Subordinated Note Trustee shall
cooperate in the defense. The Senior Subordinated Note Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07
shall survive the satisfaction and discharge of this Senior Subordinated Note
Indenture.
To secure the Company's and the Guarantors' payment obligations in this
Section, the Senior Subordinated Note Trustee shall have a Lien prior to the
Senior Subordinated Notes on all money or property held or collected by the
Senior Subordinated Note Trustee, except that held in trust to pay principal and
interest on particular Senior Subordinated Notes. Such Lien shall survive the
satisfaction and discharge of this Senior Subordinated Note Indenture.
When the Senior Subordinated Note Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01(g) or (h) hereof
occurs, the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Senior Subordinated Note Trustee shall comply with the provisions of
TIA Section 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF SENIOR SUBORDINATED NOTE TRUSTEE.
A resignation or removal of the Senior Subordinated Note Trustee and
appointment of a successor Senior Subordinated Note Trustee shall become
effective only upon the successor Senior Subordinated Note Trustee's acceptance
of appointment as provided in this Section.
The Senior Subordinated Note Trustee may resign in writing at any time and
be discharged from the trust hereby created by so notifying the Company. The
Holders of Senior Subordinated Notes of a majority in principal amount of the
then outstanding Senior Subordinated Notes may remove the Senior Subordinated
Note Trustee by so notifying the Senior Subordinated Note Trustee and the
Company in writing. The Company may remove the Senior Subordinated Note Trustee
if:
(a) the Senior Subordinated Note Trustee fails to comply with Section 7.10
hereof;
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(b) the Senior Subordinated Note Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the Senior
Subordinated Note Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Senior Subordinated
Note Trustee or its property; or
(d) the Senior Subordinated Note Trustee becomes incapable of acting.
If the Senior Subordinated Note Trustee resigns or is removed or if a
vacancy exists in the office of Senior Subordinated Note Trustee for any reason,
the Company shall promptly appoint a successor Senior Subordinated Note Trustee.
Within one year after the successor Senior Subordinated Note Trustee takes
office, the Holders of a majority in principal amount of the then outstanding
Senior Subordinated Notes may appoint a successor Senior Subordinated Note
Trustee to replace the successor Senior Subordinated Note Trustee appointed by
the Company.
If a successor Senior Subordinated Note Trustee does not take office within
60 days after the retiring Senior Subordinated Note Trustee resigns or is
removed, the retiring Senior Subordinated Note Trustee, the Company, or the
Holders of Senior Subordinated Notes of at least 10% in principal amount of the
then outstanding Senior Subordinated Notes may petition any court of competent
jurisdiction for the appointment of a successor Senior Subordinated Note
Trustee.
If the Senior Subordinated Note Trustee, after written request by any
Holder of a Senior Subordinated Note who has been a Holder of a Senior
Subordinated Note for at least six months, fails to comply with Section 7.10,
such Holder of a Senior Subordinated Note may petition at the expense of the
Company any court of competent jurisdiction for the removal of the Senior
Subordinated Note Trustee and the appointment of a successor Senior Subordinated
Note Trustee.
A successor Senior Subordinated Note Trustee shall deliver a written
acceptance of its appointment to the retiring Senior Subordinated Note Trustee
and to the Company. Thereupon, the resignation or removal of the retiring
Senior Subordinated Note Trustee shall become effective, and the successor
Senior Subordinated Note Trustee shall have all the rights, powers and duties of
the Senior Subordinated Note Trustee under this Senior Subordinated Note
Indenture. The successor Senior Subordinated Note Trustee shall mail a notice
of its succession to Holders of the Senior Subordinated Notes. The retiring
Senior Subordinated Note Trustee shall promptly transfer all property held by it
as Senior Subordinated Note Trustee to the successor Senior Subordinated Note
Trustee, PROVIDED all sums owing to the Senior Subordinated Note Trustee
(including its agents and/or counsel) hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of
the Senior Subordinated Note Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Senior Subordinated Note Trustee.
SECTION 7.09. SUCCESSOR SENIOR SUBORDINATED NOTE TRUSTEE BY MERGER, ETC.
If the Senior Subordinated Note Trustee consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Senior Subordinated Note Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Senior Subordinated Note Trustee hereunder
that is a corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such laws to
exercise corporate Senior Subordinated Note Trustee power, that is subject to
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supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition.
This Senior Subordinated Note Indenture shall always have a Senior
Subordinated Note Trustee who satisfies the requirements of TIA Section
310(a)(1), (2) and (5). The Senior Subordinated Note Trustee is subject to TIA
Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Senior Subordinated Note Trustee is subject to TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). A Senior
Subordinated Note Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated therein.
SECTION 7.12. SENIOR SUBORDINATED NOTE TRUSTEE'S APPLICATION FOR INSTRUCTIONS
FROM THE COMPANY.
Any application by the Senior Subordinated Note Trustee for written
instructions from the Company may, at the option of the Senior Subordinated Note
Trustee, set forth in writing any action proposed to be taken or omitted by the
Senior Subordinated Note Trustee under this Senior Subordinated Note Indenture
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Senior Subordinated Note Trustee shall not be liable
for any action taken by, or omission of, the Senior Subordinated Note Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to the taking of such action (or the effective date
in the case of an omission), the Senior Subordinated Note Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior
Subordinated Notes upon compliance with the conditions set forth below in this
Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Senior
Subordinated Notes and to have each Guarantor's obligation discharged with
respect to its Senior Subsidiary Guarantee on the date the conditions set forth
below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Senior Subordinated
Notes, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Senior
Subordinated Note Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Senior Subordinated Notes and
this Senior Subordinated Note Indenture (and the Senior Subordinated Note
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged
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hereunder: (a) the rights of Holders of outstanding Senior Subordinated
Notes to receive solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest and Liquidated Damages, if any,
on such Senior Subordinated Notes when such payments are due, (b) the
Company's obligations with respect to such Senior Subordinated Notes under
Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and
immunities of the Senior Subordinated Note Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option applicable
to this Section 8.03, the Company and each Guarantor shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the
outstanding Senior Subordinated Notes on and after the date the conditions set
forth in Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and
the Senior Subordinated Notes shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Senior Subordinated Notes shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Senior Subordinated Notes, the
Company and each Guarantor may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Senior Subordinated Note
Indenture and such Senior Subordinated Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(d) through 6.01(f)
hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Senior Subordinated Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Senior Subordinated Note
Trustee, in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Senior Subordinated Notes on
the stated date for payment thereof or on the applicable redemption date, as the
case may be, and the Company must specify whether the Senior Subordinated Notes
are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Senior Subordinated Note Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Senior Subordinated
Note Trustee confirming that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of this Senior Subordinated Note Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that,
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and based thereon such Opinion of Counsel shall confirm that, the Holders of
the outstanding Senior Subordinated Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Senior Subordinated Note Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Senior Subordinated
Note Trustee confirming that the Holders of the outstanding Senior Subordinated
Notes will not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Senior Subordinated Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Senior Subordinated Note Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Senior Subordinated Note
Trustee an Opinion of Counsel (which may be subject to customary exceptions) to
the effect that after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Senior Subordinated Note
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other creditors of
the Company or with the intent of defeating, hindering, delaying or defrauding
any creditors of the Company or others; and
(h) the Company shall have delivered to the Senior Subordinated Note
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Senior
Subordinated Note Trustee (or other qualifying Senior Subordinated Note Trustee,
collectively for purposes of this Section 8.05, the "SENIOR SUBORDINATED NOTE
TRUSTEE") pursuant to Section 8.04 hereof in respect of the outstanding Senior
Subordinated Notes shall be held in trust and applied by the Senior Subordinated
Note Trustee, in accordance with the provisions of such Senior Subordinated
Notes and this Senior Subordinated Note Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Senior Subordinated Note Trustee may determine, to the Holders of
such Senior Subordinated Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
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The Company and the Guarantors shall pay and indemnify the Senior
Subordinated Note Trustee against any tax, fee or other charge imposed on or
assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Senior Subordinated Notes.
Anything in this Article 8 to the contrary notwithstanding, the Senior
Subordinated Note Trustee shall deliver or pay to the Company from time to time
upon the request of the Company any money or non-callable Government Securities
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Senior Subordinated Note Trustee
(which may be the opinion delivered under Section 8.04(a) hereof), are in excess
of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Senior Subordinated Note Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the principal
of, premium, if any, or interest on any Senior Subordinated Note and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Senior Subordinated Note shall thereafter, as a secured creditor, look only
to the Company for payment thereof, and all liability of the Senior Subordinated
Note Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as Senior Subordinated Note Trustee thereof, shall
thereupon cease; provided, however, that the Senior Subordinated Note Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Senior Subordinated Note Trustee or Paying Agent is unable to apply
any United States dollars or non-callable Government Securities in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Senior Subordinated Note Indenture and the Senior Subordinated Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Senior Subordinated Note Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Senior
Subordinated Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Senior Subordinated
Notes to receive such payment from the money held by the Senior Subordinated
Note Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SENIOR SUBORDINATED NOTES.
Notwithstanding Section 9.02 of this Senior Subordinated Note Indenture,
the Company, the Guarantors and the Senior Subordinated Note Trustee may amend
or supplement this Senior Subordinated Note Indenture, the Subordinated
Subsidiary Guarantees or the Senior Subordinated Notes without the consent of
any Holder of a Senior Subordinated Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Subordinated Notes in addition to
or in place of certificated Senior Subordinated Notes or to alter the provisions
of Article 2 hereof (including the related definitions) in a manner that does
not materially adversely affect any Holder;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Senior Subordinated Notes by a successor to
the Company or a Guarantor pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Subordinated Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Senior
Subordinated Note;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Senior Subordinated Note Indenture under the TIA; or
(f) to allow any Guarantor to execute a supplemental Senior Subordinated
Note Indenture and/or a Senior Subsidiary Guarantee with respect to the Senior
Subordinated Notes.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental Senior
Subordinated Note Indenture, and upon receipt by the Senior Subordinated Note
Trustee of the documents described in Section 7.02 hereof, the Senior
Subordinated Note Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Senior Subordinated Note Indenture
authorized or permitted by the terms of this Senior Subordinated Note Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Senior Subordinated Note Trustee shall not be
obligated to enter into such amended or supplemental Senior Subordinated Note
Indenture that affects its own rights, duties or immunities under this Senior
Subordinated Note Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR SUBORDINATED NOTES.
Except as provided below in this Section 9.02, the Company and the Senior
Subordinated Note Trustee may amend or supplement this Senior Subordinated Note
Indenture (including Sections 3.09, 4.10 and 4.15 hereof), the Subordinated
Subsidiary Guarantees and the Senior Subordinated Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Senior Subordinated Notes then outstanding voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Senior Subordinated Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium,
if any, or interest on the Senior Subordinated
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Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Senior Subordinated Note
Indenture, the Subordinated Subsidiary Guarantees or the Senior Subordinated
Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Senior Subordinated Notes voting as
a single class (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Senior Subordinated Notes).
Without the consent of at least 75% in principal amount of the Senior
Subordinated Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, such
Senior Subordinated Notes), no waiver or amendment to this Senior
Subordinated Note Indenture may make any change in the provisions of Article
10 hereof that adversely affects the rights of any Holder of Senior
Subordinated Notes. Section 2.08 hereof shall determine which Senior
Subordinated Notes are considered to be "outstanding" for purposes of this
Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental Senior
Subordinated Note Indenture, and upon the filing with the Senior Subordinated
Note Trustee of evidence satisfactory to the Senior Subordinated Note Trustee of
the consent of the Holders of Senior Subordinated Notes as aforesaid, and upon
receipt by the Senior Subordinated Note Trustee of the documents described in
Section 7.02 hereof, the Senior Subordinated Note Trustee shall join with the
Company in the execution of such amended or supplemental Senior Subordinated
Note Indenture unless such amended or supplemental Senior Subordinated Note
Indenture directly affects the Senior Subordinated Note Trustee's own rights,
duties or immunities under this Senior Subordinated Note Indenture or otherwise,
in which case the Senior Subordinated Note Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Senior
Subordinated Note Indenture.
It shall not be necessary for the consent of the Holders of Senior
Subordinated Notes under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Senior Subordinated Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental Senior Subordinated Note Indenture or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal
amount of the Senior Subordinated Notes then outstanding voting as a single
class may waive compliance in a particular instance by the Company with any
provision of this Senior Subordinated Note Indenture or the Senior Subordinated
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Senior Subordinated
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Senior Subordinated Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Senior
Subordinated Note or alter or waive any of the provisions with respect to the
redemption of the Senior Subordinated Notes except as provided above with
respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Subordinated Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on the Senior
Subordinated Notes (except a rescission of acceleration of the Senior
Subordinated Notes by the Holders of at least a majority in aggregate principal
amount of the
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then outstanding Senior Subordinated Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Senior Subordinated Note payable in money other than that
stated in the Senior Subordinated Notes;
(f) make any change in the provisions of this Senior Subordinated Note
Indenture relating to waivers of past Defaults or the rights of Holders of
Senior Subordinated Notes to receive payments of principal of or premium,
interest or Liquidated Damages, if any, on the Senior Subordinated Notes;
(g) waive a redemption payment with respect to any Senior Subordinated
Note (other than a payment required pursuant to Section 4.10 or 4.15);
(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(i) release any Guarantor from any of its obligations under its Senior
Subsidiary Guarantee or this Senior Subordinated Note Indenture, except in
accordance with the terms of this Senior Subordinated Note Indenture.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Senior Subordinated Note Indenture or
the Senior Subordinated Notes shall be set forth in a amended or supplemental
Senior Subordinated Note Indenture that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Senior Subordinated Note is a continuing consent by the Holder
of a Senior Subordinated Note and every subsequent Holder of a Senior
Subordinated Note or portion of a Senior Subordinated Note that evidences the
same debt as the consenting Holder's Senior Subordinated Note, even if notation
of the consent is not made on any Senior Subordinated Note. However, any such
Holder of a Senior Subordinated Note or subsequent Holder of a Senior
Subordinated Note may revoke the consent as to its Senior Subordinated Note if
the Senior Subordinated Note Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR SUBORDINATED NOTES.
The Senior Subordinated Note Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Senior Subordinated Note
thereafter authenticated. The Company in exchange for all Senior Subordinated
Notes may issue and the Senior Subordinated Note Trustee shall, upon receipt of
an Authentication Order, authenticate new Senior Subordinated Notes that reflect
the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Subordinated
Note shall not affect the validity and effect of such amendment, supplement or
waiver.
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SECTION 9.06. SENIOR SUBORDINATED NOTE TRUSTEE TO SIGN AMENDMENTS, ETC.
The Senior Subordinated Note Trustee shall sign any amended or supplemental
Senior Subordinated Note Indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Senior Subordinated Note Trustee. The Company
may not sign an amendment or supplemental Senior Subordinated Note Indenture
until the Board of Directors approves it. In executing any amended or
supplemental Senior Subordinated Note Indenture, the Senior Subordinated Note
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, in addition to the documents required by
Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental Senior Subordinated Note
Indenture is authorized or permitted by this Senior Subordinated Note Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company and the Guarantors agree, and each Holder by accepting a Senior
Subordinated Note agrees, that the Indebtedness evidenced by the Senior
Subordinated Notes is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment in full in cash or Cash
Equivalents of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(a) holders of Senior Debt shall be entitled to receive payment in full in
cash or Cash Equivalents of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the rate
specified in the agreement or instrument governing the applicable Senior Debt,
whether or not allowed or allowable as a claim in any such proceeding) before
Holders of the Senior Subordinated Notes shall be entitled to receive any
payment with respect to the Senior Subordinated Notes (except that Holders may
receive and retain (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof); and
(b) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full in cash or Cash Equivalents, any
distribution to which Holders would be entitled but for this Article 10 shall be
made to holders of Senior Debt (except that Holders of Senior Subordinated Notes
may receive (i) Permitted Junior Securities and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof), as their interests may appear.
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution to the Senior
Subordinated Note Trustee or any Holder in respect of Obligations upon or in
respect of the Senior Subordinated Notes and may not
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acquire from the Senior Subordinated Note Trustee or any Holder any Senior
Subordinated Notes for cash or property (other than (i) in Permitted Junior
Securities and (ii) from payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof) until all principal
and other Obligations with respect to the Senior Debt have been paid in full
in cash or Cash Equivalents if:
(a) a default in the payment of any principal or other Obligations with
respect to Designated Senior Debt occurs and is continuing; or
(b) any other default occurs and is continuing with respect to
Designated Senior Debt that permits holders of the Designated Senior Debt as
to which such default relates to accelerate its maturity (or that would
permit such holders to accelerate with the giving of notice or the passage of
time or both) and the Senior Subordinated Note Trustee receives a notice of
the default (a "PAYMENT BLOCKAGE NOTICE") from a Person who may give it
pursuant to Section 10.11 hereof. If the Senior Subordinated Note Trustee
receives any such Payment Blockage Notice, no subsequent Payment Blockage
Notice shall be effective for purposes of this Section unless and until (i)
360 days shall have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (ii) all scheduled payments of principal,
premium, if any, and interest and Liquidated Damages, if any, on the Senior
Subordinated Notes that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Senior Subordinated Note Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been waived for a period of not less than 180 days.
The Company may and shall resume payments on and distributions in
respect of the Senior Subordinated Notes and may acquire them upon the
earlier of:
(i) the date upon which the default is cured or waived, or
(ii) in the case of a default referred to in Section 10.03(b) hereof,
179 days after the date on which the applicable Payment Blockage
Notice is received, unless the maturity of any Designated Senior
Debt has been accelerated, if this Article 10 otherwise permits
the payment, distribution or acquisition at the time of such
payment or acquisition.
SECTION 10.04. ACCELERATION OF SENIOR SUBORDINATED NOTES.
If payment of the Senior Subordinated Notes is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
such acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Senior Subordinated Note Trustee or any Holder
receives any payment of any Obligations with respect to the Senior Subordinated
Notes at a time when the Senior Subordinated Note Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Article 10
hereof, such payment shall be held by the Senior Subordinated Note Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the Senior Subordinated Note
Indenture or other agreement (if any) pursuant to which Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of all Obligations with respect to Senior Debt remaining unpaid to the
extent necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
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With respect to the holders of Senior Debt, the Senior Subordinated Note
Trustee undertakes to perform only such obligations on the part of the Senior
Subordinated Note Trustee as are specifically set forth in this Article 10,
and no implied covenants or obligations with respect to the holders of Senior
Debt shall be read into this Senior Subordinated Note Indenture against the
Senior Subordinated Note Trustee. The Senior Subordinated Note Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall
not be liable to any such holders if the Senior Subordinated Note Trustee shall
pay over or distribute to or on behalf of Holders or the Company or any other
Person money or assets to which any holders of Senior Debt shall be entitled by
virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Senior Subordinated Note Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Senior Subordinated Note Trustee
and the Paying Agent of any facts known to the Company that would cause a
payment of any Obligations with respect to the Senior Subordinated Notes to
violate this Article 10, but failure to give such notice shall not affect the
subordination of the Senior Subordinated Notes to the Senior Debt as provided
in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full in cash and until the Senior
Subordinated Notes are paid in full, Holders of Senior Subordinated Notes
shall be subrogated (equally and ratably with all other Indebtedness PARI
PASSU with the Senior Subordinated Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Senior Subordinated Notes
have been applied to the payment of Senior Debt. A distribution made under
this Article 10 to holders of Senior Debt that otherwise would have been made
to Holders of Senior Subordinated Notes is not, as between the Company and
Holders, a payment by the Company on the Senior Subordinated Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Senior
Subordinated Notes and holders of Senior Debt. Nothing in this Senior
Subordinated Note Indenture shall:
(a) impair, as between the Company and Holders of Senior Subordinated
Notes, the obligation of the Company, which is absolute and unconditional, to
pay principal of and interest on the Senior Subordinated Notes in accordance
with their terms;
(b) affect the relative rights of Holders of Senior Subordinated Notes
and creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(c) prevent the Senior Subordinated Note Trustee or any Holder of
Senior Subordinated Notes from exercising its available remedies upon a
Default or Event of Default, subject to (i) the rights of holders and owners
of Senior Debt to receive distributions and payments otherwise payable to
Holders of Senior Subordinated Notes and (ii) the notice provisions of
Section 6.02 hereof.
If the Company fails because of this Article 10 to pay principal of or
interest on a Senior Subordinated Note on the due date, the failure is still a
Default or Event of Default.
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SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Senior Subordinated Notes shall be impaired
by any act or failure to act by the Company or any Holder or by the failure
of the Company or any Holder to comply with this Senior Subordinated Note
Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Senior Subordinated Note Trustee and the Holders of
Senior Subordinated Notes shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction or upon any certificate of such
Representative or of the liquidating Senior Subordinated Note Trustee or
agent or other Person making any distribution to the Senior Subordinated Note
Trustee or to the Holders of Senior Subordinated Notes for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF SENIOR SUBORDINATED NOTE TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision
of this Senior Subordinated Note Indenture, the Senior Subordinated Note
Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment or distribution by the Senior
Subordinated Note Trustee, and the Senior Subordinated Note Trustee and the
Paying Agent may continue to make payments on the Senior Subordinated Notes,
unless the Senior Subordinated Note Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any
Obligations with respect to the Senior Subordinated Notes to violate this
Article 10. Only the Company or a Representative may give the notice.
Nothing in this Article 10 shall impair the claims of, or payments to, the
Senior Subordinated Note Trustee under or pursuant to Section 7.07 hereof.
The Senior Subordinated Note Trustee in its individual or any other
capacity may hold Senior Debt with the same rights it would have if it were
not Senior Subordinated Note Trustee. Any Agent may do the same with like
rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Senior Subordinated Notes, by the Holder's acceptance
thereof, authorizes and directs the Senior Subordinated Note Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Senior Subordinated Note Trustee to act as such Holder's attorney-in-fact for
any and all such purposes. If the Senior Subordinated Note Trustee does not
file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the credit agents are hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Senior Subordinated Notes.
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SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified in a
manner that is adverse to the holders of all Senior Debt without the written
consent of the holders of all Senior Debt.
ARTICLE 11
SUBORDINATED SUBSIDIARY GUARANTEES
SECTION 11.01. GUARANTEE.
Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Senior Subordinated
Note authenticated and delivered by the Senior Subordinated Note Trustee and
to the Senior Subordinated Note Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Senior Subordinated
Note Indenture, the Senior Subordinated Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and interest on
the Senior Subordinated Notes will be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Senior Subordinated Notes, if any,
if lawful, and all other obligations of the Company to the Holders or the
Senior Subordinated Note Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of
any Senior Subordinated Notes or any of such other obligations, that same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and
not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Senior Subordinated Notes or this Senior Subordinated Note Indenture, the
absence of any action to enforce the same, any waiver or consent by any
Holder of the Senior Subordinated Notes with respect to any provisions hereof
or thereof, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenant that this Senior Subsidiary Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Senior Subordinated Notes and this Senior Subordinated Note
Indenture.
If any Holder or the Senior Subordinated Note Trustee is required by any
court or otherwise to return to the Company, the Guarantors or any custodian,
Senior Subordinated Note Trustee, liquidator or other similar official acting
in relation to either the Company or the Guarantors, any amount paid by
either to the Senior Subordinated Note Trustee or such Holder, this Senior
Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one
hand, and the Holders and the Senior Subordinated Note Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Senior
Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such
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obligations as provided in Article 6 hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by the Guarantors for
the purpose of this Senior Subsidiary Guarantee. The Guarantors shall have
the right to seek contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders under the
Senior Subsidiary Guarantee.
SECTION 11.02. SUBORDINATION OF SUBORDINATED SUBSIDIARY GUARANTEE.
The Obligations of each Guarantor under its Subordinated Subsidiary
Guarantee pursuant to this Article 11 shall be junior and subordinated to the
Senior Debt of such Guarantor on the same basis as the Senior Subordinated
Notes are junior and subordinated to Senior Debt of the Company. For the
purposes of the foregoing sentence, the Senior Subordinated Note Trustee and
the Holders shall have the right to receive and/or retain payments by any of
the Guarantors only at such times as they may receive and/or retain payments
in respect of the Senior Subordinated Notes pursuant to this Senior
Subordinated Note Indenture, including Article 11 hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Senior Subordinated Notes, each
Holder, hereby confirms that it is the intention of all such parties that the
Senior Subsidiary Guarantee of such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Senior Subsidiary Guarantee. To
effectuate the foregoing intention, the Senior Subordinated Note Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of
such Guarantor under its Senior Subsidiary Guarantee and this Article 11
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Senior Subsidiary Guarantee not constituting a fraudulent transfer
or conveyance.
SECTION 11.04. EXECUTION AND DELIVERY OF SENIOR SUBSIDIARY GUARANTEE.
To evidence its Senior Subsidiary Guarantee set forth in Section 11.01,
each Guarantor hereby agrees that a notation of such Senior Subsidiary
Guarantee substantially in the form included in Exhibit E shall be endorsed
by an Officer of such Guarantor on each Senior Subordinated Note
authenticated and delivered by the Senior Subordinated Note Trustee and that
this Senior Subordinated Note Indenture shall be executed on behalf of such
Guarantor by its President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Senior Subsidiary Guarantee set
forth in Section 11.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Senior Subordinated Note a notation of such
Senior Subsidiary Guarantee.
If an Officer whose signature is on this Senior Subordinated Note
Indenture or on the Senior Subsidiary Guarantee no longer holds that office
at the time the Senior Subordinated Note Trustee authenticates the Senior
Subordinated Note on which a Senior Subsidiary Guarantee is endorsed, the
Senior Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Senior Subordinated Note by the Senior Subordinated
Note Trustee, after the authentication thereof hereunder, shall constitute
due delivery of the Senior Subsidiary Guarantee set forth in this Senior
Subordinated Note Indenture on behalf of the Guarantors.
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<PAGE>
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Senior Subordinated Note Indenture, if
required by Section 4.16 hereof, the Company shall cause such Subsidiaries to
execute supplemental Senior Subordinated Note Indentures to this Senior
Subordinated Note Indenture and Subordinated Subsidiary Guarantees in
accordance with Section 4.16 hereof and this Article 11, to the extent
applicable.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
No Guarantor may consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person) another Person whether or not affiliated
with such Guarantor unless:
(a) subject to Section 11.04 hereof, the Person formed by or surviving
any such consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor, pursuant to a
supplemental Senior Subordinated Note Indenture in form and substance
reasonably satisfactory to the Senior Subordinated Note Trustee, under the
Senior Subordinated Notes, this Senior Subordinated Note Indenture, the
Subordinated Registration Rights Agreement and the Senior Subsidiary
Guarantee on the terms set forth herein or therein;
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(c) the Company would be permitted, immediately after giving effect to
such transaction, to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental Senior Subordinated
Note Indenture, executed and delivered to the Senior Subordinated Note
Trustee and satisfactory in form to the Senior Subordinated Note Trustee, of
the Senior Subsidiary Guarantee endorsed upon the Senior Subordinated Notes
and the due and punctual performance of all of the covenants and conditions
of this Senior Subordinated Note Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor Person thereupon may cause to be signed any or all of the
Subordinated Subsidiary Guarantees to be endorsed upon all of the Senior
Subordinated Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Senior Subordinated Note Trustee.
All the Subordinated Subsidiary Guarantees so issued shall in all respects
have the same legal rank and benefit under this Senior Subordinated Note
Indenture as the Subordinated Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of this Senior Subordinated
Note Indenture as though all of such Subordinated Subsidiary Guarantees had
been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Senior Subordinated Note
Indenture or in any of the Senior Subordinated Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS.
In the event of (a) a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, (b) a sale or
other disposition of all of the capital stock of any Guarantor or (c) the
designation of a Guarantor as an Unrestricted Subsidiary in accordance with
the terms of this Senior Subordinated Note Indenture, then such Guarantor (in
the event of a sale or other disposition, by way of
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<PAGE>
merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a sale
or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Senior
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of this
Senior Subordinated Note Indenture, including without limitation Section 4.10
hereof. Upon delivery by the Company to the Senior Subordinated Note Trustee
of an Officers' Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in accordance with the
applicable provisions of this Senior Subordinated Note Indenture, including
without limitation Section 4.10 hereof, the Senior Subordinated Note Trustee
shall execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Senior Subsidiary
Guarantee.
Any Guarantor not released from its obligations under its Senior Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Senior Subordinated Notes and for the other obligations of any Guarantor
under this Senior Subordinated Note Indenture as provided in this Article 11.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Senior Subordinated Note Indenture limits,
qualifies or conflicts with the duties imposed by TIA Section 318(c), the
imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the Senior
Subordinated Note Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address.
If to the Company and/or any Guarantor:
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Telecopier No.: (303) 460-2691
Attention: Treasurer
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606
Telecopier No.: (312) 407-0411
Attention: Brian W. Duwe
If to the Senior Subordinated Note Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Administration
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<PAGE>
The Company, any Guarantor or the Senior Subordinated Note Trustee, by
notice to the others may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail postage prepaid, certified or registered mail, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address
shown on the register kept by the Registrar. Any notice or communication
shall also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Senior Subordinated Note Trustee and each Agent at the same
time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF SENIOR SUBORDINATED NOTES WITH OTHER
HOLDERS OF SENIOR SUBORDINATED NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Senior Subordinated Note
Indenture or the Senior Subordinated Notes. The Company, the Senior
Subordinated Note Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Senior Subordinated
Note Trustee to take any action under this Senior Subordinated Note Indenture,
the Company shall furnish to the Senior Subordinated Note Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Senior Subordinated Note Trustee (which shall include the
statements set forth in Section 12.05 hereof) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any, provided for in
this Senior Subordinated Note Indenture relating to the proposed action have
been satisfied; and
(b) except with respect to the initial issuance of the Senior
Subordinated Notes, an Opinion of Counsel in form and substance reasonably
satisfactory to the Senior Subordinated Note Trustee (which shall include the
statements set forth in Section 12.05 hereof) stating that, in the opinion of
such counsel, all such conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Senior Subordinated Note Indenture (other
than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply
with the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
81
<PAGE>
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
SECTION 12.06. RULES BY SENIOR SUBORDINATED NOTE TRUSTEE AND AGENTS.
The Senior Subordinated Note Trustee may make reasonable rules for action
by or at a meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any
liability for any obligations of the Company or such Guarantor under the
Senior Subordinated Notes, the Subordinated Subsidiary Guarantees, this
Senior Subordinated Note Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by
accepting a Senior Subordinated Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the
Senior Subordinated Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS SENIOR SUBORDINATED NOTE INDENTURE, THE SENIOR SUBORDINATED
NOTES AND THE SUBORDINATED SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Senior Subordinated Note Indenture may not be used to interpret any
other Senior Subordinated Note Indenture, loan or debt agreement of the
Company or its Subsidiaries or of any other Person. Any such Senior
Subordinated Note Indenture, loan or debt agreement may not be used to
interpret this Senior Subordinated Note Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Senior Subordinated Note Indenture
and the Senior Subordinated Notes shall bind its successors. All agreements of
the Senior Subordinated Note Trustee in this Senior Subordinated Note Indenture
shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Senior Subordinated Note Indenture or in the
Senior Subordinated Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
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<PAGE>
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Senior Subordinated
Note Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Senior Subordinated Note Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Senior
Subordinated Note Indenture and shall in no way modify or restrict any of the
terms or provisions hereof.
[Signatures on following page]
83
<PAGE>
SIGNATURES
Dated as of August 10, 1998 BALL CORPORATION
By:
----------------------
Name:
Title:
BALL AEROSPACE AND TECHNOLOGIES CORP.
By:
----------------------
Name:
Title:
BALL ASIA PACIFIC LIMITED
By:
Name:
Title:
BALL GLASS CONTAINER CORPORATION
By:
----------------------
Name:
Title:
BALL HOLDINGS CORP.
By:
----------------------
Name:
Title:
<PAGE>
BALL METAL BEVERAGE CONTAINER CORP.
By:
----------------------
Name:
Title:
BALL METAL FOOD CONTAINER CORP.
By:
----------------------
Name:
Title:
BALL METAL PACKAGING SALES CORP.
By:
----------------------
Name:
Title:
BALL PACKAGING CORP.
By:
----------------------
Name:
Title:
BALL PLASTIC CONTAINER CORP.
By:
----------------------
Name:
Title:
<PAGE>
BALL TECHNOLOGIES HOLDING CORP.
By:
----------------------
Name:
Title:
BALL TECHNOLOGY SERVICES CORPORATION
By:
----------------------
Name:
Title:
BG HOLDINGS I, INC.
By:
----------------------
Name:
Title:
BG HOLDINGS II, INC.
By:
----------------------
Name:
Title:
EFRATOM HOLDING, INC.
By:
----------------------
Name:
Title:
<PAGE>
LATAS DE ALUMINIO REYNOLDS, INC.
By:
--------------------------
Name:
Title:
RCAL CANS, INC.
By:
---------------------------
Name:
Title:
RIND CANS, INC.
By:
--------------------------
Name:
Title:
<PAGE>
THE BANK OF NEW YORK,
as Senior Subordinated Note Trustee
By:
----------------------
Name:
Title:
<PAGE>
EXHIBIT A1
(FACE OF SENIOR SUBORDINATED NOTE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[INSERT THE GLOBAL SENIOR SUBORDINATED NOTE LEGEND, IF APPLICABLE PURSUANT TO
THE PROVISIONS OF THE SENIOR SUBORDINATED NOTE INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE SENIOR SUBORDINATED NOTE INDENTURE]
CUSIP/CINS
8 1/4% [SERIES A] [SERIES B] SENIOR SUBORDINATED NOTES DUE 2008
NO. $
------ -------
BALL CORPORATION
promises to pay to ____________ or registered assigns, the principal sum of
________________________ Dollars on August 1, 2008.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
BALL CORPORATION
By:
---------------------------
Name:
Title:
This is one of the [Global]
Senior Subordinated Notes referred to in the
within-mentioned Senior Subordinated Note Indenture:
Dated: August 10, 1998
THE BANK OF NEW YORK,
as Senior Subordinated Note Trustee
By:
--------------------------
Name:
Title:
A1-1
<PAGE>
(BACK OF SENIOR SUBORDINATED NOTE)
__% [Series A] [Series B] Senior Subordinated Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them in the
Senior Subordinated Note Indenture referred to below unless otherwise indicated.
1. INTEREST. Ball Corporation, an Indiana corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Senior Subordinated
Note at 81/4% per annum from August 10, 1998 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Subordinated
Registration Rights Agreement referred to below. The Company will pay
interest and Liquidated Damages semi-annually on February 1 and August 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "INTEREST PAYMENT DATE"). Interest on the Senior
Subordinated Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of issuance;
PROVIDED that if there is no existing Default in the payment of interest, and
if this Senior Subordinated Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date;
PROVIDED, FURTHER, that the first Interest Payment Date shall be February 1,
1999. The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to the then applicable interest rate on the Senior Subordinated Notes
to the extent lawful; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace
period) at the same rate to the extent lawful Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Liquidated Damages to the
Persons who are registered Holders of Senior Subordinated Notes at the close
of business on the January 15 or July 15 next preceding the Interest Payment
Date, even if such Senior Subordinated Notes are canceled after such record
date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Senior Subordinated Note Indenture with respect to
defaulted interest. Principal, premium, if any, and interest and Liquidated
Damages on the Senior Subordinated Notes will be payable at the office or
agency of the Company maintained for such purpose within the City and State
of New York or, at the option of the Company, payment of interest and
Liquidated Damages may be made by check mailed to the Holders of the Notes at
their respective addresses set forth in the register of Holders of Notes;
PROVIDED that all payments of principal, premium, interest and Liquidated
Damages thereon, if any, with respect to Notes the Holders of which have
given wire transfer instructions to the Trustee will be required to be made
by wire transfer of immediately available funds to the accounts specified by
the Holders thereof. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Senior
Subordinated Note Trustee under the Senior Subordinated Note Indenture, will
act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. SENIOR SUBORDINATED NOTE INDENTURE. The Company issued the Senior
Subordinated Notes under an Senior Subordinated Note Indenture dated as of
August 10, 1998 ("SENIOR SUBORDINATED NOTE INDENTURE") between the Company
and the Senior Subordinated Note Trustee. The terms of the Senior
Subordinated Notes include those stated in the Senior Subordinated Note
Indenture and those made part of the Senior Subordinated Note Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
Sections 77aaa-77bbbb). The Senior Subordinated Notes are subject to all
such terms, and Holders are referred to the Senior Subordinated Note
Indenture and such Act for a statement of such terms. To the extent any
provision of this Senior Subordinated Note conflicts with the express
provisions of the Senior Subordinated Note
A1-2
<PAGE>
Indenture, the provisions of the Senior Subordinated Note Indenture shall
govern and be controlling. The Senior Subordinated Notes are obligations of
the Company limited to $250.0 million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) The Senior Subordinated Notes will not be subject to redemption at the
option of the Company prior to August 1, 2003. Thereafter, the Senior
Subordinated Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on August 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003 104.125%
2004 102.750%
2005 101.375%
2006 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Paragraph 5,
during the first 36 months after August 5, 1998, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of
Senior Subordinated Notes issued under the Senior Subordinated Note
Indenture at a redemption price of 108.250% of the principal amount
thereof, plus in such case accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds
of any Public Equity Offering; PROVIDED that at least 65% of the aggregate
principal amount of Senior Subordinated Notes issued remain outstanding
immediately after the occurrence of such redemption (excluding Senior
Subordinated Notes held by the Company and its Subsidiaries); and PROVIDED,
further, that such redemption shall occur within 90 days of the date of the
closing of such Public Equity Offering.
(c) Any redemption pursuant to this Paragraph 5 shall be made pursuant to
the provisions of Article 3 of the Senior Subordinated Note Indenture.
6. MANDATORY REDEMPTION. Except as set forth in Sections 3.09, 4.10 and
4.15 of the Senior Subordinated Note Indenture, the Company shall not be
required to make mandatory redemption payments with respect to the Senior
Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Senior
Subordinated Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase (the "CHANGE OF CONTROL
PAYMENT"). Within 15 days following any Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing
the Change of Control Offer as required by the Senior Subordinated Note
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales
and the aggregate amount of Excess Proceeds exceeds $20.0 million, the
Company shall commence an offer to all Holders of Senior Subordinated Notes
(a "SENIOR SUBORDINATED ASSET SALE OFFER") pursuant to
A1-3
<PAGE>
Section 3.09 of the Senior Subordinated Note Indenture to purchase the
maximum principal amount of Senior Subordinated Notes that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date fixed for the closing of
such offer, in accordance with the procedures set forth in the Senior
Subordinated Note Indenture. To the extent that the aggregate amount of
Senior Subordinated Notes tendered pursuant to a Senior Subordinated Asset
Sale Offer is less than the Excess Proceeds, the Company (or such
Subsidiary) may use such deficiency for any purpose not prohibited by the
Senior Subordinated Note Indenture. If the aggregate principal amount of
Senior Subordinated Notes surrendered by Holders thereof exceeds the amount
of Excess Proceeds, the Senior Subordinated Note Trustee shall select the
Senior Subordinated Notes to be purchased on a PRO RATA basis. Holders of
Senior Subordinated Notes that are the subject of an offer to purchase will
receive a Senior Subordinated Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Senior Subordinated
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Subordinated Notes.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder whose Senior
Subordinated Notes are to be redeemed at its registered address. Senior
Subordinated Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Senior Subordinated
Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Senior Subordinated Notes or portions thereof
called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Subordinated Notes may be
registered and Senior Subordinated Notes may be exchanged as provided in the
Senior Subordinated Note Indenture. The Registrar and the Senior Subordinated
Note Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Senior Subordinated Note
Indenture. The Company need not exchange or register the transfer of any Senior
Subordinated Note or portion of a Senior Subordinated Note selected for
redemption, except for the unredeemed portion of any Senior Subordinated Note
being redeemed in part. Also, the Company need not exchange or register the
transfer of any Senior Subordinated Notes for a period of 15 days before a
selection of Senior Subordinated Notes to be redeemed or during the period
between a record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Senior Subordinated Note
may be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Senior Subordinated Note Indenture, the Subordinated Subsidiary Guarantees or
the Senior Subordinated Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Senior Subordinated Notes voting as a single class, and any existing default or
compliance with any provision of the Senior Subordinated Note Indenture, the
Subordinated Subsidiary Guarantees or the Senior Subordinated Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Senior Subordinated Notes voting as a single class. Without
the consent of any Holder of a Senior Subordinated Note, the Senior Subordinated
Note Indenture, the Subordinated Subsidiary Guarantees or the Senior
Subordinated Notes may be amended or supplemented to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Senior Subordinated Notes in
addition to or in place of certificated Senior Subordinated Notes, to provide
for the assumption of the Company's or Guarantor's obligations to Holders of the
Senior Subordinated Notes in case of a merger or consolidation, to make any
A1-4
<PAGE>
change that would provide any additional rights or benefits to the Holders of
the Senior Subordinated Notes or that does not adversely affect the legal
rights under the Senior Subordinated Note Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Senior Subordinated Note Indenture under the Trust
Indenture Act or to allow any Guarantor to execute a supplemental Senior
Subordinated Note Indenture to the Senior Subordinated Note Indenture and/or
a Senior Subsidiary Guarantee with respect to the Senior Subordinated Notes.
Without the consent of at least 75% in principal amount of the Senior
Subordinated Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, such
Senior Subordinated Notes), no waiver or amendment to this Senior
Subordinated Note Indenture may make any change in the provisions of Article
10 of the Senior Subordinated Note Indenture that adversely affects the
rights of any Holder of Senior Subordinated Notes.
13. DEFAULTS AND REMEDIES. An "EVENT OF DEFAULT" occurs if: (i) the
Company defaults in the payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Senior Subordinated Notes and such
default continues for a period of 30 days (whether or not prohibited by the
subordination provisions of Article 10 of the Senior Subordinated Note
Indenture); (ii) the Company defaults in the payment when due of principal of
or premium, if any, on the Senior Subordinated Notes when the same becomes
due and payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise (whether or not prohibited by the
subordination provisions of Article 10 of the Senior Subordinated Note
Indenture); (iii) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Sections 5.01; (iv) the Company or any of its
Restricted Subsidiaries fails to comply for 30 days after notice to the
Company by the Senior Subordinated Note Trustee with any of the provisions of
Sections 4.07, 4.09, 4.10 or 4.15 of the Senior Subordinated Note Indenture;
(v) the Company or any of its Restricted Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in
the Senior Subordinated Note Indenture or the Senior Subordinated Notes for
60 days after notice to the Company by the Senior Subordinated Note Trustee;
(vi) a default occurs under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (other than a Securitization Entity) (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries (other than a
Securitization Entity)) whether such Indebtedness or guarantee now exists, or
is created after the date of this Senior Subordinated Note Indenture, which
default (a) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "PAYMENT
DEFAULT") or (b) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates without duplication $20.0 million
or more; (vii) the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $20.0 million (excluding amounts
covered by insurance), which judgments are not paid, discharged or stayed for
a period of 60 days; (viii) certain events of bankruptcy or insolvency occur
with respect to the Company or any of its Significant Subsidiaries that are
Restricted Subsidiaries or any group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law; or (ix) except as permitted by the Senior
Subordinated Note Indenture, any Senior Subsidiary Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting
on behalf of any Guarantor, shall deny or disaffirm its obligations under
such Guarantor's Senior Subsidiary Guarantee.
If any Event of Default occurs and is continuing, the Senior Subordinated Note
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes may declare all the Senior Subordinated
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Senior Subordinated Notes will become due and payable without
further action or notice. Holders may not enforce the Senior Subordinated
A1-5
<PAGE>
Note Indenture or the Senior Subordinated Notes except as provided in the
Senior Subordinated Note Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Senior Subordinated
Notes may direct the Senior Subordinated Note Trustee in its exercise of any
trust or power. The Senior Subordinated Note Trustee may withhold from
Holders of the Senior Subordinated Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding notice is
in their interest. The Holders of a majority in aggregate principal amount
of the Senior Subordinated Notes then outstanding by notice to the Senior
Subordinated Note Trustee may on behalf of the Holders of all of the Senior
Subordinated Notes waive any existing Default or Event of Default and its
consequences under the Senior Subordinated Note Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal
of, the Senior Subordinated Notes. The Company is required to deliver to the
Senior Subordinated Note Trustee annually a statement regarding compliance
with the Senior Subordinated Note Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Senior
Subordinated Note Trustee a statement specifying such Default or Event of
Default.
14. SENIOR SUBORDINATED NOTE TRUSTEE DEALINGS WITH COMPANY. The Senior
Subordinated Note Trustee, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if
it were not the Senior Subordinated Note Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company or any of the Guarantors, as such, shall not
have any liability for any obligations of the Company or such Guarantor under
the Senior Subordinated Notes, the Subordinated Subsidiary Guarantees or the
Senior Subordinated Note Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by
accepting a Senior Subordinated Note waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the
Senior Subordinated Notes.
16. AUTHENTICATION. This Senior Subordinated Note shall not be valid until
authenticated by the manual signature of the Senior Subordinated Note Trustee
or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL SENIOR SUBORDINATED
NOTES AND RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES. In addition to
the rights provided to Holders of Senior Subordinated Notes under the Senior
Subordinated Note Indenture, Holders of Restricted Global Senior Subordinated
Notes and Restricted Definitive Senior Subordinated Notes shall have all the
rights set forth in the Subordinated Registration Rights Agreement dated as
of August 10, 1998, between the Company and the parties named on the
signature pages thereof (the "SUBORDINATED REGISTRATION RIGHTS AGREEMENT").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Senior Subordinated Notes and the Senior
Subordinated Note Trustee may use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Senior Subordinated Notes or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
A1-6
<PAGE>
The Company will furnish to any Holder upon written request and without
charge a copy of the Senior Subordinated Note Indenture and/or the
Subordinated Registration Rights Agreement. Requests may be made to:
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
Attention: Chief Financial Officer
A1-7
<PAGE>
ASSIGNMENT FORM
To assign this Senior Subordinated Note, fill in the form below: (I) or (we)
assign and transfer this Senior Subordinated Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Senior Subordinated Note on the books of the Company. The
agent may substitute another to act for him.
- -------------------------------------------------------------------------------
Date: Your Signature:
-------------------- ----------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE
FACE OF THIS SENIOR SUBORDINATED NOTE)
Tax Identification No:
---------------------------
SIGNATURE GUARANTEE:
-----------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-8
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Senior Subordinated Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Senior Subordinated Note
Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Senior Subordinated Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Senior
Subordinated Note Indenture, state the amount you elect to have purchased:
$_____________
Date: Your Signature:
----------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE
FACE OF THIS SENIOR SUBORDINATED NOTE)
Tax Identification No:
---------------------------
SIGNATURE GUARANTEE:
-----------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-9
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN
THE GLOBAL SENIOR SUBORDINATED NOTE (1)
The following exchanges of a part of this Global Senior Subordinated Note for
an interest in another Global Senior Subordinated Note or for a Definitive
Senior Subordinated Note, or exchanges of a part of another Global Senior
Subordinated Note or Definitive Senior Subordinated Note for an interest in
this Global Senior Subordinated Note, have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of of this Global Signature of
Amount of decrease increase in Senior authorized
in Principal Amount Principal Amount Subordinated Note signatory of Senior
of this Global of this Global following such Subordinated Note
Date of Senior Senior decrease (or Trustee or
Exchange Subordinated Note Subordinated Note increase) Custodian
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
- -------------------
(1) This should be included only if the Senior Subordinated Note is issued in
global form.
A1-10
<PAGE>
EXHIBIT A2
(FACE OF REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SENIOR
SUBORDINATED NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE
FOR CERTIFICATED SENIOR SUBORDINATED NOTES, ARE AS SPECIFIED IN THE SENIOR
SUBORDINATED NOTE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED
NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR SUBORDINATED
NOTES IN DEFINITIVE FORM, THIS SENIOR SUBORDINATED NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
A2-1
<PAGE>
CUSIP/CINS
8 1/4% SERIES A SENIOR SUBORDINATED NOTES DUE 2008
NO. $
---------- ------------
BALL CORPORATION
promises to pay to ____________ or registered assigns, the principal sum of
________________________ Dollars on August 1, 2008.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
BALL CORPORATION
By:
----------------------------------
Name:
Title:
This is one of the [Global]
Senior Subordinated Notes referred to in the
within-mentioned Senior Subordinated Note Indenture:
Dated: August 10, 1998
THE BANK OF NEW YORK,
as Senior Subordinated Note Trustee
By:
---------------------------------
Name:
Title:
A2-2
<PAGE>
(BACK OF REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE)
8 1/4% Series A Senior Subordinated Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them in the
Senior Subordinated Note Indenture referred to below unless otherwise
indicated.
1. INTEREST. Ball Corporation, an Indiana corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Senior Subordinated
Note at 81/4% per annum from August 10, 1998 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Subordinated
Registration Rights Agreement referred to below. The Company will pay
interest and Liquidated Damages semi-annually on February 1 and August 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "INTEREST PAYMENT DATE"). Interest on the Senior
Subordinated Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of issuance;
PROVIDED that if there is no existing Default in the payment of interest, and
if this Senior Subordinated Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date;
PROVIDED, FURTHER, that the first Interest Payment Date shall be February 1,
1999. The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to the then applicable interest rate on the Senior Subordinated Notes
to the extent lawful; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace
period) at the same rate to the extent lawful Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Senior Subordinated Note is
exchanged for one or more Regulation S Permanent Global Senior Subordinated
Notes, the Holder hereof shall not be entitled to receive payments of
interest hereon; until so exchanged in full, this Regulation S Temporary
Global Senior Subordinated Note shall in all other respects be entitled to
the same benefits as other Senior Subordinated Notes under the Senior
Subordinated Note Indenture.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Liquidated Damages to the
Persons who are registered Holders of Senior Subordinated Notes at the close
of business on the January 15 or July 15 next preceding the Interest Payment
Date, even if such Senior Subordinated Notes are canceled after such record
date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Senior Subordinated Note Indenture with respect to
defaulted interest. Principal, premium, if any, and interest and Liquidated
Damages on the Senior Subordinated Notes will be payable at the office or
agency of the Company maintained for such purpose within the City and State
of New York or, at the option of the Company, payment of interest and
Liquidated Damages may be made by check mailed to the Holders of the Notes at
their respective addresses set forth in the register of Holders of Notes;
PROVIDED that all payments of principal, premium, interest and Liquidated
Damages thereon, if any, with respect to Notes the Holders of which have
given wire transfer instructions to the Trustee will be required to be made
by wire transfer of immediately available funds to the accounts specified by
the Holders thereof. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Senior
Subordinated Note Trustee under the Senior Subordinated Note Indenture, will
act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
4. SENIOR SUBORDINATED NOTE INDENTURE. The Company issued the Senior
Subordinated Notes under an Senior Subordinated Note Indenture dated as of
August 10, 1998 ("SENIOR SUBORDINATED NOTE INDENTURE")
A2-3
<PAGE>
between the Company and the Senior Subordinated Note Trustee. The terms of
the Senior Subordinated Notes include those stated in the Senior Subordinated
Note Indenture and those made part of the Senior Subordinated Note Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
Sections 77aaa-77bbbb). The Senior Subordinated Notes are subject to all
such terms, and Holders are referred to the Senior Subordinated Note
Indenture and such Act for a statement of such terms. To the extent any
provision of this Senior Subordinated Note conflicts with the express
provisions of the Senior Subordinated Note Indenture, the provisions of the
Senior Subordinated Note Indenture shall govern and be controlling. The
Senior Subordinated Notes are obligations of the Company limited to $250.0
million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) The Senior Subordinated Notes will not be subject to redemption at
the option of the Company prior to August 1, 2003. Thereafter, the
Senior Subordinated Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
August 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2003 104.125%
2004 102.750%
2005 101.375%
2006 and thereafter 100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Paragraph 5,
during the first 36 months after August 5, 1998, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount
of Senior Subordinated Notes issued under the Senior Subordinated Note
Indenture at a redemption price of 108.250% of the principal amount
thereof, plus in such case accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, with the net cash
proceeds of any Public Equity Offering; PROVIDED that at least 65% of
the aggregate principal amount of Senior Subordinated Notes issued
remain outstanding immediately after the occurrence of such redemption
(excluding Senior Subordinated Notes held by the Company and its
Subsidiaries); and PROVIDED, further, that such redemption shall occur
within 90 days of the date of the closing of such Public Equity Offering.
(c) Any redemption pursuant to this Paragraph 5 shall be made pursuant
to the provisions of Article 3 of the Senior Subordinated Note Indenture.
6. MANDATORY REDEMPTION. Except as set forth in Sections 3.09, 4.10 and
4.15 of the Senior Subordinated Note Indenture, the Company shall not be
required to make mandatory redemption payments with respect to the Senior
Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's
Senior Subordinated Notes at a purchase price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase (the "CHANGE
OF CONTROL PAYMENT"). Within 15 days following any Change
A2-4
<PAGE>
of Control, the Company shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required
by the Senior Subordinated Note Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales and the aggregate amount of Excess Proceeds exceeds $20.0 million,
the Company shall commence an offer to all Holders of Senior
Subordinated Notes (a "SENIOR SUBORDINATED ASSET SALE OFFER") pursuant
to Section 3.09 of the Senior Subordinated Note Indenture to purchase
the maximum principal amount of Senior Subordinated Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date
fixed for the closing of such offer, in accordance with the procedures
set forth in the Senior Subordinated Note Indenture. To the extent that
the aggregate amount of Senior Subordinated Notes tendered pursuant to a
Senior Subordinated Asset Sale Offer is less than the Excess Proceeds,
the Company (or such Subsidiary) may use such deficiency for any purpose
not prohibited by the Senior Subordinated Note Indenture. If the
aggregate principal amount of Senior Subordinated Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Senior
Subordinated Note Trustee shall select the Senior Subordinated Notes to
be purchased on a PRO RATA basis. Holders of Senior Subordinated Notes
that are the subject of an offer to purchase will receive a Senior
Subordinated Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Senior Subordinated Notes
purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Subordinated Notes.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder
whose Senior Subordinated Notes are to be redeemed at its registered address.
Senior Subordinated Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the
Senior Subordinated Notes held by a Holder are to be redeemed. On and after
the redemption date interest ceases to accrue on Senior Subordinated Notes or
portions thereof called for redemption.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Subordinated Notes may be
registered and Senior Subordinated Notes may be exchanged as provided in the
Senior Subordinated Note Indenture. The Registrar and the Senior
Subordinated Note Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by
the Senior Subordinated Note Indenture. The Company need not exchange or
register the transfer of any Senior Subordinated Note or portion of a Senior
Subordinated Note selected for redemption, except for the unredeemed portion
of any Senior Subordinated Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Senior Subordinated Notes
for a period of 15 days before a selection of Senior Subordinated Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
This Regulation S Temporary Global Senior Subordinated Note is exchangeable
in whole or in part for one or more Global Senior Subordinated Notes only (i)
on or after the termination of the 40-day restricted period (as defined in
Regulation S) and (ii) upon presentation of certificates (accompanied by an
Opinion of Counsel, if applicable) required by Article 2 of the Senior
Subordinated Note Indenture. Upon exchange of this Regulation S Temporary
Global Senior Subordinated Note for one or more Global Senior Subordinated
Notes, the Senior Subordinated Note Trustee shall cancel this Regulation S
Temporary Global Senior Subordinated Note.
A2-5
<PAGE>
11. PERSONS DEEMED OWNERS. The registered Holder of a Senior Subordinated
Note may be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Senior Subordinated Note Indenture, the Subordinated Subsidiary Guarantees or
the Senior Subordinated Notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Senior Subordinated Notes voting as a single class, and any
existing default or compliance with any provision of the Senior Subordinated
Note Indenture, the Subordinated Subsidiary Guarantees or the Senior
Subordinated Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Senior Subordinated
Notes voting as a single class. Without the consent of any Holder of a
Senior Subordinated Note, the Senior Subordinated Note Indenture, the
Subordinated Subsidiary Guarantees or the Senior Subordinated Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Senior Subordinated Notes in addition to or in
place of certificated Senior Subordinated Notes, to provide for the
assumption of the Company's or Guarantor's obligations to Holders of the
Senior Subordinated Notes in case of a merger or consolidation, to make any
change that would provide any additional rights or benefits to the Holders of
the Senior Subordinated Notes or that does not adversely affect the legal
rights under the Senior Subordinated Note Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Senior Subordinated Note Indenture under the Trust
Indenture Act or to allow any Guarantor to execute a supplemental Senior
Subordinated Note Indenture to the Senior Subordinated Note Indenture and/or
a Senior Subsidiary Guarantee with respect to the Senior Subordinated Notes.
Without the consent of at least 75% in principal amount of the Senior
Subordinated Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, such
Senior Subordinated Notes), no waiver or amendment to this Senior
Subordinated Note Indenture may make any change in the provisions of Article
10 of the Senior Subordinated Note Indenture that adversely affects the
rights of any Holder of Senior Subordinated Notes.
13. DEFAULTS AND REMEDIES. An "EVENT OF DEFAULT" occurs if: (i) the
Company defaults in the payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Senior Subordinated Notes and such
default continues for a period of 30 days (whether or not prohibited by the
subordination provisions of Article 10 of the Senior Subordinated Note
Indenture); (ii) the Company defaults in the payment when due of principal of
or premium, if any, on the Senior Subordinated Notes when the same becomes
due and payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise (whether or not prohibited by the
subordination provisions of Article 10 of the Senior Subordinated Note
Indenture); (iii) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Sections 5.01; (iv) the Company or any of its
Restricted Subsidiaries fails to comply for 30 days after notice to the
Company by the Senior Subordinated Note Trustee with any of the provisions of
Sections 4.07, 4.09, 4.10 or 4.15 of the Senior Subordinated Note Indenture;
(v) the Company or any of its Restricted Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in
the Senior Subordinated Note Indenture or the Senior Subordinated Notes for
60 days after notice to the Company by the Senior Subordinated Note Trustee;
(vi) a default occurs under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (other than a Securitization Entity) (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries (other than a
Securitization Entity)) whether such Indebtedness or guarantee now exists, or
is created after the date of this Senior Subordinated Note Indenture, which
default (a) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "PAYMENT
DEFAULT") or (b) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates without duplication $20.0 million
or more; (vii) the Company or any of its
A2-6
<PAGE>
Restricted Subsidiaries fails to pay final judgments aggregating in excess of
$20.0 million (excluding amounts covered by insurance), which judgments are
not paid, discharged or stayed for a period of 60 days; (viii) certain events
of bankruptcy or insolvency occur with respect to the Company or any of its
Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law;
or (ix) except as permitted by the Senior Subordinated Note Indenture, any
Senior Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under such Guarantor's Senior
Subsidiary Guarantee.
If any Event of Default occurs and is continuing, the Senior Subordinated
Note Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes may declare all the Senior Subordinated
Notes to be due and payable. Notwithstanding the foregoing, in the case of
an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Senior Subordinated Notes will become due and payable without
further action or notice. Holders may not enforce the Senior Subordinated
Note Indenture or the Senior Subordinated Notes except as provided in the
Senior Subordinated Note Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Senior Subordinated
Notes may direct the Senior Subordinated Note Trustee in its exercise of any
trust or power. The Senior Subordinated Note Trustee may withhold from
Holders of the Senior Subordinated Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding notice is
in their interest. The Holders of a majority in aggregate principal amount
of the Senior Subordinated Notes then outstanding by notice to the Senior
Subordinated Note Trustee may on behalf of the Holders of all of the Senior
Subordinated Notes waive any existing Default or Event of Default and its
consequences under the Senior Subordinated Note Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal
of, the Senior Subordinated Notes. The Company is required to deliver to the
Senior Subordinated Note Trustee annually a statement regarding compliance
with the Senior Subordinated Note Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Senior
Subordinated Note Trustee a statement specifying such Default or Event of
Default.
14. SENIOR SUBORDINATED NOTE TRUSTEE DEALINGS WITH COMPANY. The Senior
Subordinated Note Trustee, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if
it were not the Senior Subordinated Note Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company or any of the Guarantors, as such, shall not
have any liability for any obligations of the Company or such Guarantor under
the Senior Subordinated Notes, the Subordinated Subsidiary Guarantees or the
Senior Subordinated Note Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by
accepting a Senior Subordinated Note waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the
Senior Subordinated Notes.
16. AUTHENTICATION. This Senior Subordinated Note shall not be valid until
authenticated by the manual signature of the Senior Subordinated Note Trustee
or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
A2-7
<PAGE>
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL SENIOR SUBORDINATED
NOTES AND RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES. In addition to
the rights provided to Holders of Senior Subordinated Notes under the Senior
Subordinated Note Indenture, Holders of Restricted Global Senior Subordinated
Notes and Restricted Definitive Senior Subordinated Notes shall have all the
rights set forth in the Subordinated Registration Rights Agreement dated as
of August 10, 1998, between the Company and the parties named on the
signature pages thereof (the "SUBORDINATED REGISTRATION RIGHTS AGREEMENT").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Subordinated Notes and the
Senior Subordinated Note Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Senior Subordinated Notes
or as contained in any notice of redemption and reliance may be placed only
on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Senior Subordinated Note Indenture and/or the
Subordinated Registration Rights Agreement. Requests may be made to:
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
Attention: Chief Financial Officer
A2-8
<PAGE>
ASSIGNMENT FORM
To assign this Senior Subordinated Note, fill in the form below: (I) or (we)
assign and transfer this Senior Subordinated Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________ to
transfer this Senior Subordinated Note on the books of the Company. The
agent may substitute another to act for him.
- -------------------------------------------------------------------------------
Date:
----------------------
Your Signature:
------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE
OF THIS SENIOR SUBORDINATED NOTE)
Tax Identification No:
-----------------------
SIGNATURE GUARANTEE:
-------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A2-9
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Senior Subordinated Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Senior Subordinated Note
Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Senior Subordinated Note
purchased by the Company pursuant to Section 4.10 or Section 4.15 of the
Senior Subordinated Note Indenture, state the amount you elect to have
purchased: $_____________
Date:
----------------------
Your Signature:
------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE FACE
OF THIS SENIOR SUBORDINATED NOTE)
Tax Identification No:
-----------------------
SIGNATURE GUARANTEE:
-------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A2-10
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN
THE REGULATION S TEMPORARY GLOBAL SENIOR SUBORDINATED NOTE
The following exchanges of a part of this Regulation S Temporary Global
Senior Subordinated Note for an interest in another Global Senior
Subordinated Note, or of other Restricted Global Senior Subordinated Notes
for an interest in this Regulation S Temporary Global Senior Subordinated
Note, have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of of this Global Signature of
Amount of decrease increase in Senior authorized
in Principal Amount Principal Amount Subordinated Note signatory of Senior
of this Global of this Global following such Subordinated Note
Date of Senior Senior decrease (or Trustee or
Exchange Subordinated Note Subordinated Note increase) Custodian
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
a2-11
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ball Corporation
Colorado Office Center
9300 West 108th Circle
Broomfield, CO 80021-3682
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 8 1/4% SENIOR SUBORDINATED NOTES DUE 2008 (CUSIP )
Reference is hereby made to the Senior Subordinated Note Indenture, dated as
of August __, 1998 (the "SENIOR SUBORDINATED NOTE INDENTURE"), between Ball
Corporation, as issuer (the "COMPANY"), and The Bank of New York, as Senior
Subordinated Note Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Senior Subordinated Note
Indenture.
____________________, (the "TRANSFEROR") owns and proposes to transfer the
Senior Subordinated Note[s] or interest in such Senior Subordinated Note[s]
specified in Annex A hereto, in the principal amount of $_____________ in
such Senior Subordinated Note[s] or interests (the "TRANSFER"), to
_________________ (the "TRANSFEREE"), as further specified in Annex A hereto.
In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL SENIOR SUBORDINATED NOTE OR A DEFINITIVE SENIOR SUBORDINATED
NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and
in accordance with Rule 144A under the United States Securities Act of 1933,
as amended (the "SECURITIES ACT"), and, accordingly, the Transferor hereby
further certifies that the beneficial interest or Definitive Senior
Subordinated Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Senior Subordinated Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Senior Subordinated Note Indenture, the transferred beneficial interest or
Definitive Senior Subordinated Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A
Global Senior Subordinated Note and/or the Definitive Senior Subordinated
Note and in the Senior Subordinated Note Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE TEMPORARY REGULATION S GLOBAL SENIOR SUBORDINATED NOTE, THE REGULATION S
GLOBAL SENIOR SUBORDINATED NOTE OR A DEFINITIVE SENIOR SUBORDINATED NOTE
PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer is
not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y)
B-1
<PAGE>
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting
on its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S under the Securities Act and, (iii) the transaction is not part of a plan
or scheme to evade the registration requirements of the Securities Act and
(iv) if the proposed transfer is being made prior to the expiration of the
Restricted Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the
Senior Subordinated Note Indenture, the transferred beneficial interest or
Definitive Senior Subordinated Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation
S Global Senior Subordinated Note, the Temporary Regulation S Global Senior
Subordinated Note and/or the Definitive Senior Subordinated Note and in the
Senior Subordinated Note Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL SENIOR SUBORDINATED NOTE OR A DEFINITIVE SENIOR
SUBORDINATED NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN
RULE 144A OR REGULATION S. The Transfer is being effected in compliance with
the transfer restrictions applicable to beneficial interests in Restricted
Global Senior Subordinated Notes and Restricted Definitive Senior
Subordinated Notes and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United
States, and accordingly the Transferor hereby further certifies that (check
one):
(a) such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act; or
(b) such Transfer is being effected to the Company or a subsidiary
thereof; or
(c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act; or
(d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and
the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Senior
Subordinated Note or Restricted Definitive Senior Subordinated Notes and
the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of
Exhibit D to the Senior Subordinated Note Indenture and (2) if such
Transfer is in respect of a principal amount of Senior Subordinated
Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of
the Senior Subordinated Note Indenture, the transferred beneficial
interest or Definitive Senior Subordinated Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Senior Subordinated Note and/or the Definitive
Senior Subordinated Notes and in the Senior Subordinated Note Indenture
and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL SENIOR SUBORDINATED NOTE OR OF AN UNRESTRICTED DEFINITIVE
SENIOR SUBORDINATED NOTE.
(a) CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer
B-2
<PAGE>
restrictions contained in the Senior Subordinated Note Indenture and any
applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Senior
Subordinated Note Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms
of the Senior Subordinated Note Indenture, the transferred beneficial
interest or Definitive Senior Subordinated Note will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Senior Subordinated
Notes, on Restricted Definitive Senior Subordinated Notes and in the
Senior Subordinated Note Indenture.
(b) CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer
restrictions contained in the Senior Subordinated Note Indenture and any
applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Senior
Subordinated Note Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of
the Senior Subordinated Note Indenture, the transferred beneficial
interest or Definitive Senior Subordinated Note will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Senior Subordinated
Notes, on Restricted Definitive Senior Subordinated Notes and in the
Senior Subordinated Note Indenture.
(c) CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other
than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Senior Subordinated Note Indenture and any
applicable blue sky securities laws of any State of the United States
and (ii) the restrictions on transfer contained in the Senior
Subordinated Note Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of
the Senior Subordinated Note Indenture, the transferred beneficial
interest or Definitive Senior Subordinated Note will not be subject to
the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Senior Subordinated Notes or Restricted
Definitive Senior Subordinated Notes and in the Senior Subordinated Note
Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------
Name:
Title:
Dated: ,
---------------- -----
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Senior Subordinated Note (CUSIP ), or
(ii) / / Regulation S Global Senior Subordinated Note (CUSIP
), or
(iii) / / IAI Global Senior Subordinated Note (CUSIP ); or
(b) / / a Restricted Definitive Senior Subordinated Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Senior Subordinated Note (CUSIP ), or
(ii) / / Regulation S Global Senior Subordinated Note (CUSIP
), or
(iii) / / IAI Global Senior Subordinated Note (CUSIP ); or
(iv) / / Unrestricted Global Senior Subordinated Note (CUSIP
); or
(b) / / a Restricted Definitive Senior Subordinated Note; or
(c) / / an Unrestricted Definitive Senior Subordinated Note, in
accordance with the terms of the Senior Subordinated Note
Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 8 1/4% SENIOR SUBORDINATED NOTES DUE 2008 (CUSIP __________)
Reference is hereby made to the Senior Subordinated Note Indenture, dated as
of August 10, 1998 (the "SENIOR SUBORDINATED NOTE INDENTURE"), between Ball
Corporation, as issuer (the "COMPANY"), and The Bank of New York, as Senior
Subordinated Note Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Senior Subordinated Note
Indenture.
_________________________, (the "OWNER") owns and proposes to exchange the
Senior Subordinated Note[s] or interest in such Senior Subordinated Note[s]
specified herein, in the principal amount of $_______________ in such Senior
Subordinated Note[s] or interests (the "EXCHANGE"). In connection with the
Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES OR
BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL SENIOR SUBORDINATED NOTE FOR
UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES OR BENEFICIAL INTERESTS IN
AN UNRESTRICTED GLOBAL SENIOR SUBORDINATED NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL SENIOR SUBORDINATED NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL SENIOR SUBORDINATED NOTE. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Senior Subordinated Note
for a beneficial interest in an Unrestricted Global Senior Subordinated Note
in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Senior Subordinated Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), (iii) the restrictions on transfer contained in the Senior
Subordinated Note Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Senior Subordinated Note is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL SENIOR SUBORDINATED NOTE TO UNRESTRICTED DEFINITIVE SENIOR
SUBORDINATED NOTE. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Senior Subordinated Note for an Unrestricted
Definitive Senior Subordinated Note, the Owner hereby certifies (i) the
Definitive Senior Subordinated Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Senior
C-1
<PAGE>
Subordinated Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Senior Subordinated Note
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Senior
Subordinated Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SENIOR SUBORDINATED
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SENIOR SUBORDINATED
NOTE. In connection with the Owner's Exchange of a Restricted Definitive
Senior Subordinated Note for a beneficial interest in an Unrestricted Global
Senior Subordinated Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Senior Subordinated Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Senior Subordinated Note Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act and (iv) the beneficial interest is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SENIOR SUBORDINATED
NOTE TO UNRESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Senior Subordinated Note for
an Unrestricted Definitive Senior Subordinated Note, the Owner hereby
certifies (i) the Unrestricted Definitive Senior Subordinated Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Senior Subordinated Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Senior Subordinated Note Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act and (iv) the Unrestricted Definitive Senior Subordinated Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SENIOR SUBORDINATED NOTES FOR
RESTRICTED DEFINITIVE SENIOR SUBORDINATED NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL SENIOR SUBORDINATED NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL SENIOR SUBORDINATED NOTE TO RESTRICTED DEFINITIVE SENIOR SUBORDINATED
NOTE. In connection with the Exchange of the Owner's beneficial interest in
a Restricted Global Senior Subordinated Note for a Restricted Definitive
Senior Subordinated Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Senior Subordinated Note is being
acquired for the Owner's own account without transfer. Upon consummation of
the proposed Exchange in accordance with the terms of the Senior Subordinated
Note Indenture, the Restricted Definitive Senior Subordinated Note issued
will continue to be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Definitive Senior
Subordinated Note and in the Senior Subordinated Note Indenture and the
Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SENIOR SUBORDINATED
NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SENIOR SUBORDINATED NOTE.
In connection with the Exchange of the Owner's Restricted Definitive Senior
Subordinated Note for a beneficial interest in the [CHECK ONE] / / 144A
Global Senior Subordinated Note, / / Regulation S Global Senior Subordinated
Note, / / IAI Global Senior Subordinated Note with an equal principal amount,
the Owner hereby certifies (i) the beneficial interest is being acquired for
the Owner's own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Senior Subordinated Notes and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in
C-3
<PAGE>
accordance with the terms of the Senior Subordinated Note Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Senior Subordinated Note and in the Senior Subordinated Note Indenture
and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[INSERT NAME OF OWNER]
By:
-------------------------------------
Name:
Title:
Dated: ,
-------------- ------
C-3
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Ball Corporation
10 Longs Peak Drive
Broomfield, Colorado 80021-2510
Attention: Treasurer
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 8 1/4% SENIOR SUBORDINATED NOTES DUE 2008 (CUSIP __________)
Reference is hereby made to the Senior Subordinated Note Indenture, dated as
of August 10, 1998 (the "SENIOR SUBORDINATED NOTE INDENTURE"), between Ball
Corporation, as issuer (the "COMPANY"), and The Bank of New York, as Senior
Subordinated Note Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Senior Subordinated Note
Indenture.
In connection with our proposed purchase of $____________ aggregate principal
amount of:
(a) / / a beneficial interest in a Global Senior Subordinated Note, or
(b) / / a Definitive Senior Subordinated Note,
we confirm that:
1. We understand that any subsequent transfer of the Senior Subordinated
Notes or any interest therein is subject to certain restrictions and
conditions set forth in the Senior Subordinated Note Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Senior Subordinated Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Senior Subordinated Notes
have not been registered under the Securities Act, and that the Senior
Subordinated Notes and any interest therein may not be offered or sold except
as permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that if
we should sell the Senior Subordinated Notes or any interest therein, we will
do so only (A) to the Company or any subsidiary thereof, (B) in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer"
(as defined therein), (c) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on
its behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect
of a principal amount of Senior Subordinated Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Senior Subordinated Note or beneficial
interest in a Global Senior Subordinated Note from us in a transaction
meeting the requirements
D-1
<PAGE>
of clauses (A) through (E) of this paragraph a notice advising such purchaser
that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Senior Subordinated
Notes or beneficial interest therein, we will be required to furnish to you
and the Company such certifications, legal opinions and other information as
you and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the
Senior Subordinated Notes purchased by us will bear a legend to the foregoing
effect. We further understand that any subsequent transfer by us of the
Senior Subordinated Notes or beneficial interest therein acquired by us must
be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Senior
Subordinated Notes, and we and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
5. We are acquiring the Senior Subordinated Notes or beneficial interest
therein purchased by us for our own account or for one or more accounts (each
of which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to
the matters covered hereby.
----------------------------------------
[INSERT NAME OF ACCREDITED INVESTOR]
By:
-----------------------------------
Name:
Title:
Dated: ,
--------------- -----
D-2
<PAGE>
EXHIBIT E
FORM OF NOTATION OF SENIOR SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor Person
under the Senior Subordinated Note Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Senior
Subordinated Note Indenture and subject to the provisions in the Senior
Subordinated Note Indenture dated as of August 10, 1998 (the "SENIOR
SUBORDINATED NOTE INDENTURE") among Ball Corporation, the Guarantors listed
on Schedule I thereto and The Bank of New York, as Senior Subordinated Note
Trustee (the "SENIOR SUBORDINATED NOTE TRUSTEE"), (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Senior
Subordinated Notes (as defined in the Senior Subordinated Note Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal and premium, and, to the
extent permitted by law, interest, and the due and punctual performance of
all other obligations of the Company to the Holders or the Senior
Subordinated Note Trustee all in accordance with the terms of the Senior
Subordinated Note Indenture and (b) in case of any extension of time of
payment or renewal of any Senior Subordinated Notes or any of such other
obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. The obligations of the
Guarantors to the Holders of Senior Subordinated Notes and to the Senior
Subordinated Note Trustee pursuant to the Senior Subsidiary Guarantee and the
Senior Subordinated Note Indenture are expressly set forth in Article 11 of
the Senior Subordinated Note Indenture and reference is hereby made to the
Senior Subordinated Note Indenture for the precise terms of the Senior
Subsidiary Guarantee. Each Holder of a Senior Subordinated Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Senior Subordinated Note Trustee, on behalf of
such Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Senior Subordinated Note
Indenture and (c) appoints the Senior Subordinated Note Trustee
attorney-in-fact of such Holder for such purpose; PROVIDED, HOWEVER, that the
Indebtedness evidenced by this Senior Subsidiary Guarantee shall cease to be
so subordinated and subject in right of payment upon any defeasance of this
Senior Subordinated Note in accordance with the provisions of the Senior
Subordinated Note Indenture.
[Name of Guarantor(s)]
By:
------------------------------------
Name:
Title:
E-1
<PAGE>
EXHIBIT F
FORM OF SUPPLEMENTAL SENIOR SUBORDINATED NOTE INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL SENIOR SUBORDINATED NOTE INDENTURE (this "SUPPLEMENTAL SENIOR
SUBORDINATED NOTE INDENTURE"), dated as of ________________, among
__________________ (the "GUARANTEEING SUBSIDIARY"), a subsidiary of Ball
Corporation (or its permitted successor), an Indiana corporation (the
"COMPANY"), the Company, the other Guarantors (as defined in the Senior
Subordinated Note Indenture referred to herein) and The Bank of New York, as
Senior Subordinated Note Trustee under the Senior Subordinated Note Indenture
referred to below (the "SENIOR SUBORDINATED NOTE TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Senior
Subordinated Note Trustee an Senior Subordinated Note Indenture (the "SENIOR
SUBORDINATED NOTE INDENTURE"), dated as of August 10, 1998 providing for the
issuance of an aggregate principal amount of up to $250.0 million of 8 1/4%
Senior Subordinated Notes due 2008 (the "SENIOR SUBORDINATED NOTES");
WHEREAS, the Senior Subordinated Note Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Senior Subordinated Note Trustee a supplemental Senior Subordinated Note
Indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Senior Subordinated
Notes and the Senior Subordinated Note Indenture on the terms and conditions
set forth herein (the "SENIOR SUBSIDIARY GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Senior Subordinated Note Indenture,
the Senior Subordinated Note Trustee is authorized to execute and deliver
this Supplemental Senior Subordinated Note Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Senior Subordinated Note Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the
Senior Subordinated Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Senior Subordinated Note
Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Senior Subordinated Note
Indenture, to jointly and severally Guarantee to each Holder of a Senior
Subordinated Note authenticated and delivered by the Senior Subordinated
Note Trustee and to the Senior Subordinated Note Trustee and its
successors and assigns, irrespective of the validity and enforceability
of the Senior Subordinated Note Indenture, the Senior Subordinated Notes
or the obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest on the Senior Subordinated Notes
will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Senior Subordinated Notes, if any,
if lawful, and all other obligations of the Company to the Holders
or the Senior Subordinated Note Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and
F-1
<PAGE>
(ii) in case of any extension of time of payment or renewal of any
Senior Subordinated Notes or any of such other obligations, that
same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment
when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and
severally obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Senior Subordinated
Notes or the Senior Subordinated Note Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the
Senior Subordinated Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor.
(c) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever.
(d) This Senior Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Senior
Subordinated Notes and the Senior Subordinated Note Indenture.
(e) If any Holder or the Senior Subordinated Note Trustee is required
by any court or otherwise to return to the Company, the Guarantors, or
any custodian, Senior Subordinated Note Trustee, liquidator or other
similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Senior Subordinated Note
Trustee or such Holder, this Senior Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby.
(g) As between the Guarantors, on the one hand, and the Holders and the
Senior Subordinated Note Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in
Article 6 of the Senior Subordinated Note Indenture for the purposes of
this Senior Subsidiary Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration
of acceleration of such obligations as provided in Article 6 of the
Senior Subordinated Note Indenture, such obligations (whether or not due
and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Senior Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Senior Subsidiary Guarantee.
(i) Pursuant to Section 11.04 of the Senior Subordinated Note
Indenture, after giving effect to any maximum amount and any other
contingent and fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving effect to any
collections from, rights to receive contribution from or payments made
by or on behalf of any other Guarantor in respect of the obligations of
such other Guarantor under Article 11 of the Senior Subordinated Note
F-2
<PAGE>
Indenture shall result in the obligations of such Guarantor under its
Senior Subsidiary Guarantee not constituting a fraudulent transfer
or conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Subordinated Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Subordinated Note a
notation of such Senior Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such
Guarantor unless:
(i) subject to Section 11.04 of the Senior Subordinated Note
Indenture, the Person formed by or surviving any such consolidation
or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor,
pursuant to a supplemental Senior Subordinated Note Indenture in
form and substance reasonably satisfactory to the Senior
Subordinated Note Trustee, under the Senior Subordinated Notes, the
Senior Subordinated Note Indenture and the Senior Subsidiary
Guarantee on the terms set forth herein or therein; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, by supplemental Senior
Subordinated Note Indenture, executed and delivered to the Senior
Subordinated Note Trustee and satisfactory in form to the Senior
Subordinated Note Trustee, of the Senior Subsidiary Guarantee endorsed
upon the Senior Subordinated Notes and the due and punctual performance
of all of the covenants and conditions of the Senior Subordinated Note
Indenture to be performed by the Guarantor, such successor corporation
shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the
Subordinated Subsidiary Guarantees to be endorsed upon all of the Senior
Subordinated Notes issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Senior Subordinated Note
Trustee. All the Subordinated Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under the Senior
Subordinated Note Indenture as the Subordinated Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of the
Senior Subordinated Note Indenture as though all of such Subordinated
Subsidiary Guarantees had been issued at the date of the execution
hereof.
(c) Except as set forth in Articles 4 and 5 of the Senior Subordinated
Note Indenture, and notwithstanding clauses (a) and (b) above, nothing
contained in the Senior Subordinated Note Indenture or in any of the
Senior Subordinated Notes shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or shall
prevent any sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or another
Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all to the capital stock of any
F-3
<PAGE>
Guarantor, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the
capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and
relieved of any obligations under its Senior Subsidiary Guarantee;
PROVIDED that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Senior
Subordinated Note Indenture, including without limitation Section 4.10
of the Senior Subordinated Note Indenture. Upon delivery by the Company
to the Senior Subordinated Note Trustee of an Officers' Certificate and
an Opinion of Counsel to the effect that such sale or other disposition
was made by the Company in accordance with the provisions of the Senior
Subordinated Note Indenture, including without limitation Section 4.10
of the Senior Subordinated Note Indenture, the Senior Subordinated Note
Trustee shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its
Senior Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its Senior
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Senior Subordinated Notes and for the
other obligations of any Guarantor under the Senior Subordinated Note
Indenture as provided in Article 11 of the Senior Subordinated Note
Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the
Company or any Guaranteeing Subsidiary under the Senior Subordinated Notes,
any Subordinated Subsidiary Guarantees, the Senior Subordinated Note
Indenture or this Supplemental Senior Subordinated Note Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Senior Subordinated Notes by accepting a Senior
Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Senior Subordinated
Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the SEC that such a waiver is
against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL SENIOR SUBORDINATED
NOTE INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Senior Subordinated Note Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE SENIOR SUBORDINATED NOTE TRUSTEE. The Senior Subordinated Note
Trustee shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this Supplemental Senior Subordinated Note
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Senior Subordinated Note Indenture to be duly executed and attested, all as
of the date first above written.
Dated: ,
--------------- -----
[GUARANTEEING SUBSIDIARY]
By:
-----------------------------------
Name:
Title:
BALL CORPORATION
By:
-----------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Senior Subordinated Note Trustee
By:
-----------------------------------
Name:
Title:
F-5
<PAGE>
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Senior Subordinated
Note Indenture as of the date of this Senior Subordinated Note Indenture:
1. Ball Aerospace and Technologies Corp., a Delaware corporation
2 Ball Asia Pacific Limited, a Colorado corporation
3. Ball Glass Container Corporation, a Delaware corporation
4. Ball Holdings Corp., a Delaware corporation
5. Ball Metal Beverage Container Corp., a Colorado corporation
6. Ball Metal Food Container Corp., a Delaware corporation
7. Ball Metal Packaging Sales Corp., a Colorado corporation
8. Ball Packaging Corp., a Colorado corporation
9. Ball Plastic Container Corp., a Colorado corporation
10. Ball Technologies Holdings Corp., a Colorado corporation
11. Ball Technology Services Corporation, a California corporation
12. BG Holdings I, Inc., a Delaware corporation
13. BG Holdings II, Inc., a Delaware corporation
14. Efratom Holding, Inc., a Colorado corporation
15. Latas de Aluminio Reynolds, Inc., a Delaware corporation
16. RCAL Cans, Inc., a Delaware corporation
17. RIND Cans, Inc., a Delaware corporation
<PAGE>
EXECUTION COPY
SHORT-TERM CREDIT AGREEMENT
DATED AS OF AUGUST 10, 1998
among
BALL CORPORATION,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT
and
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
AS SYNDICATION AGENT
and
LEHMAN COMMERCIAL PAPER INC.,
AS DOCUMENTATION AGENT
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION PAGE
<S> <C>
ARTICLE I: DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.3 Currency Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II: THE REVOLVING LOAN FACILITIES . . . . . . . . . . . . . . . . . . . . 28
2.1. [Reserved].. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2 Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.3 Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4 Rate Options for all Advances. . . . . . . . . . . . . . . . . . . . . . 31
2.5 Optional Payments; Mandatory Prepayments . . . . . . . . . . . . . . . . 31
(A) Optional Payments . . . . . . . . . . . . . . . . . . . . . . . . . 31
(B) Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . 31
2.6 Reduction of Revolving Loan Commitments. . . . . . . . . . . . . . . . . 32
2.7 Method of Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.8 Method of Selecting Types and Interest Periods for Advances. . . . . . . 32
2.9 Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . . . . 33
2.10 Method of Selecting Types and Interest Periods for
Conversion and Continuation of Advances . . . . . . . . . . . . . . . . 33
(A) Right to Convert. . . . . . . . . . . . . . . . . . . . . . . . . . 33
(B) Automatic Conversion and Continuation . . . . . . . . . . . . . . . 33
(C) No Conversion Post-Default or Post-Unmatured Default. . . . . . . . 33
(D) Borrowing/Conversion/Continuation Notice. . . . . . . . . . . . . . 33
2.11 Default Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.12 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.13 Evidence of Debt, Telephonic Notices. . . . . . . . . . . . . . . . . . 34
2.14 Promise to Pay; Interest and Commitment Fees; Interest
Payment Dates; Interest and Fee Basis; Taxes; Loan and
Control Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(A) Promise to Pay. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(B) Interest Payment Dates. . . . . . . . . . . . . . . . . . . . . . . 35
(C) Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(D) Interest and Fee Basis; Applicable Floating Rate Margins;
Applicable Eurodollar Margins and Applicable Commitment Fee
Percentage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(E) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(F) Control Account . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(G) Entries Binding . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.15 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions. . . . . . . . . . . . . . . . . . 42
2.16 Lending Installations . . . . . . . . . . . . . . . . . . . . . . . . . 42
ii
<PAGE>
SECTION PAGE
<S> <C>
2.17 Non-Receipt of Funds by the Administrative Agent. . . . . . . . . . . . 42
2.18 Termination Date; Extension of Termination Date . . . . . . . . . . . . 43
2.19 Replacement of Certain Lenders. . . . . . . . . . . . . . . . . . . . . 43
ARTICLE III: THE LETTER OF CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . 44
3.1 Obligation to Issue. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.2 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.3 Types and Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.4 Conditions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.5 Procedure for Issuance of Letters of Credit. . . . . . . . . . . . . . . 45
3.6 Letter of Credit Participation . . . . . . . . . . . . . . . . . . . . . 46
3.7 Reimbursement Obligation . . . . . . . . . . . . . . . . . . . . . . . . 46
3.8 Cash Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.9 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.10 Issuing Bank Reporting Requirements.. . . . . . . . . . . . . . . . . . 47
3.11 Indemnification; Exoneration. . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE IV: CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . 49
4.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 Changes in Capital Adequacy Regulations. . . . . . . . . . . . . . . . . 50
4.3 Availability of Types of Advances. . . . . . . . . . . . . . . . . . . . 50
4.4 Funding Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 50
4.5 Lender Statements; Survival of Indemnity . . . . . . . . . . . . . . . . 51
ARTICLE V: CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.1 Initial Advances and Letters of Credit . . . . . . . . . . . . . . . . . 51
5.2 Each Advance and Letter of Credit. . . . . . . . . . . . . . . . . . . . 53
ARTICLE VI: REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 54
6.1 Organization; Corporate Powers . . . . . . . . . . . . . . . . . . . . . 54
6.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.3 No Conflict; Governmental Consents . . . . . . . . . . . . . . . . . . . 55
6.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . 56
6.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(A) Tax Examinations. . . . . . . . . . . . . . . . . . . . . . . . . . 57
(B) Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.7 Litigation; Loss Contingencies and Violations. . . . . . . . . . . . . . 57
6.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
iii
<PAGE>
SECTION PAGE
<S> <C>
6.9 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.10 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . 59
6.11 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.12 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.14 Assets and Properties . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.15 Statutory Indebtedness Restrictions . . . . . . . . . . . . . . . . . . 60
6.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.17 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.18 Reynolds Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.19 Environmental Matters.. . . . . . . . . . . . . . . . . . . . . . . . . 61
6.20 Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.21 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.22 Year 2000 Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.23 Foreign Employee Benefit Matters. . . . . . . . . . . . . . . . . . . . 63
ARTICLE VII: COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.1 Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(A) Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . 63
(B) Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . 64
(C) Lawsuits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(D) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(E) ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(F) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(G) Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 67
(H) Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(I) Environmental Notices . . . . . . . . . . . . . . . . . . . . . . . 68
(J) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.2 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . 68
(A) Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . 68
(B) Corporate Powers; Conduct of Business . . . . . . . . . . . . . . . 68
(C) Compliance with Laws, Etc.. . . . . . . . . . . . . . . . . . . . . 68
(D) Payment of Taxes and Claims; Tax Consolidation. . . . . . . . . . . 68
(E) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(F) Inspection of Property; Books and Records; Discussions. . . . . . . 69
(G) ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . 69
(H) Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . 70
(I) Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . 70
(J) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(K) Additional Guarantors/Pledge of Capital Stock. . . . . . . . . . . . 70
(L) Year 2000 Issues. . . . . . . . . . . . . . . . . . . . . . . . . . 71
iv
<PAGE>
SECTION PAGE
<S> <C>
(M) Foreign Employee Benefit Compliance . . . . . . . . . . . . . . . . 71
(N) Foreign Governmental Consents and Approvals . . . . . . . . . . . . 72
7.3 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(A) Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(B) Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(C) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(D) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
(E) Guarantied Obligations. . . . . . . . . . . . . . . . . . . . . . . 77
(F) Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . 78
(G) Conduct of Business; Restrictions on Excluded Subsidiaries;
Subsidiaries; Acquisitions. . . . . . . . . . . . . . . . . . . . . 79
(H) Transactions with Shareholders and Affiliates . . . . . . . . . . . 81
(I) Restriction on Fundamental Changes. . . . . . . . . . . . . . . . . 81
(J) Sales and Leasebacks. . . . . . . . . . . . . . . . . . . . . . . . 81
(K) Margin Regulations. . . . . . . . . . . . . . . . . . . . . . . . . 82
(L) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(M) Issuance of Disqualified Stock. . . . . . . . . . . . . . . . . . . 82
(N) Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . 83
(O) Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
(P) Subsidiary Covenants. . . . . . . . . . . . . . . . . . . . . . . . 83
(Q) Hedging Obligations . . . . . . . . . . . . . . . . . . . . . . . . 83
(R) Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 83
(S) Amendment of Receivables Purchase Documents . . . . . . . . . . . . 84
7.4 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(A) Defined Terms for Financial Covenants . . . . . . . . . . . . . . . 85
(B) Minimum Consolidated Net Worth. . . . . . . . . . . . . . . . . . . 87
(C) Total Debt to EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . 87
(D) Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . 88
ARTICLE VIII: DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.1 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.1 Termination of Revolving Loan Commitments; Acceleration. . . . . . . . . 92
9.2 Defaulting Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.4 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE X: GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 95
v
<PAGE>
SECTION PAGE
<S> <C>
10.1 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . 95
10.2 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . 95
10.3 Performance of Obligations. . . . . . . . . . . . . . . . . . . . . . . 95
10.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.5 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.6 Several Obligations; Benefits of this Agreement . . . . . . . . . . . . 96
10.7 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . 96
(A) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
(B) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
(C) Waiver of Certain Claims; Settlement of Claims. . . . . . . . . . . 98
(D) Survival of Agreements. . . . . . . . . . . . . . . . . . . . . . . 98
10.8 Numbers of Documents. . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.9 Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.10 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . 98
10.11 Nonliability of Lenders. . . . . . . . . . . . . . . . . . . . . . . . 98
10.12 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL. . . . . . . . 99
(A) EXCLUSIVE JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . 99
(B) OTHER JURISDICTIONS . . . . . . . . . . . . . . . . . . . . . . . . 99
(C) SERVICE OF PROCESS; VENUE . . . . . . . . . . . . . . . . . . . . . 99
(D) WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . .100
(E) ADVICE OF COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . .100
10.14 Subordination of Intercompany Indebtedness . . . . . . . . . . . . . .100
10.15 Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . .101
ARTICLE XI: THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . .102
11.1 Appointment; Nature of Relationship . . . . . . . . . . . . . . . . . .102
11.2 Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
11.3 General Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . .102
11.4 No Responsibility for Loans, Creditworthiness, Collateral,
Recitals, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
11.5 Action on Instructions of Lenders . . . . . . . . . . . . . . . . . . .103
11.6 Employment of Agents and Counsel. . . . . . . . . . . . . . . . . . . .103
11.7 Reliance on Documents; Counsel. . . . . . . . . . . . . . . . . . . . .103
11.8 The Administrative Agent's Reimbursement and Indemnification. . . . . .103
11.9 Rights as a Lender. . . . . . . . . . . . . . . . . . . . . . . . . . .104
11.10 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . .104
11.11 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . .104
11.12 Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . .105
11.13. No Duties Imposed Upon Syndication Agent, Documentation
Agent or Arrangers. . . . . . . . . . . . . . . . . . . . . . . . . .106
vi
<PAGE>
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<S> <C>
ARTICLE XII: SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . . . .106
12.1 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
12.2 Ratable Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . .106
12.3 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . .106
12.4 Relations Among Lenders . . . . . . . . . . . . . . . . . . . . . . . .108
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . . .108
13.1 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . .108
13.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
(A) Permitted Participants; Effect. . . . . . . . . . . . . . . . . . .109
(B) Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . .109
(C) Benefit of Setoff . . . . . . . . . . . . . . . . . . . . . . . . .109
13.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
(A) Permitted Assignments . . . . . . . . . . . . . . . . . . . . . . .109
(B) Effect; Effective Date. . . . . . . . . . . . . . . . . . . . . . .110
(C) The Register. . . . . . . . . . . . . . . . . . . . . . . . . . . .110
13.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
13.5 Dissemination of Information. . . . . . . . . . . . . . . . . . . . . .111
ARTICLE XIV: NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
14.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
14.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . .112
ARTICLE XV: COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
15.1 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
</TABLE>
vii
<PAGE>
EXHIBITS AND SCHEDULES
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
EXHIBIT A -- Revolving Loan Commitments
(Definitions)
EXHIBIT B -- Form of Borrowing/Conversion/Continuation Notice (Section
2.8)
EXHIBIT C -- Form of Request for Letter of Credit (Section 3.4)
EXHIBIT D -- Form of Assignment and Acceptance Agreement
(Sections 2.19 and 13.3)
EXHIBIT E -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT F -- List of Closing Documents
(Section 5.1)
EXHIBIT G -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT H -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
</TABLE>
viii
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES
<S> <C>
Schedule 1.1.2 -- Permitted Existing Guarantied Obligations (Definitions)
Schedule 1.1.3 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.4 -- Permitted Existing Investments (Definitions)
Schedule 1.1.5 -- Permitted Existing Liens (Definitions)
Schedule 3.1 -- Issuing Banks' Maximum Amounts (Section 3.1)
Schedule 5.1 -- Note Purchase Agreements
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.8 -- Excluded Subsidiaries, Material Foreign Subsidiaries,
Subsidiaries (Definitions, Section 6.8)
Schedule 6.9 -- ERISA
Schedule 6.16 -- Insurance (Sections 6.16 and 7.2(E))
Schedule 6.17 -- Labor Matters; Compensation Agreements
(Section 6.17)
Schedule 6.19 -- Environmental Matters (Section 6.19)
</TABLE>
ix
<PAGE>
SHORT-TERM CREDIT AGREEMENT
This Short-Term Credit Agreement dated as of August 10, 1998 is entered
into among Ball Corporation, an Indiana corporation, the institutions from
time to time parties hereto as Lenders, whether by execution of this
Agreement or an Assignment Agreement pursuant to SECTION 13.3, The First
National Bank of Chicago, in its capacity as Administrative Agent for itself
and the other Lenders, Bank of America National Trust and Savings
Association, in its capacity as Syndication Agent, and Lehman Commercial
Paper Inc., in its capacity as Documentation Agent. The parties hereto agree
as follows:
ARTICLE I: DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only
by reason of the happening of a contingency) or a majority (by percentage of
voting power) of the outstanding Equity Interests of another Person.
"ADMINISTRATIVE AGENT" means First Chicago, in its capacity as
contractual representative for itself and the Lenders pursuant to ARTICLE XI
hereof, and any successor Administrative Agent appointed pursuant to ARTICLE
XI hereof.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
of the several Loans made by the Lenders to the Borrower of the same Type
and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.19 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A
Person shall be deemed to control another Person if the controlling Person is
the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of greater than ten percent (10%) or more of any class
of voting securities (or other voting interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of Capital Stock, by contract or otherwise.
<PAGE>
"AGENTS" means each of the Administrative Agent, the Syndication Agent
and the Documentation Agent.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as may be reduced from time to
time pursuant to the terms hereof. The initial Aggregate Revolving Loan
Commitment is One Hundred Fifty Million and 00/100 Dollars ($150,000,000.00).
"AGREEMENT" means this Short-Term Credit Agreement, as it may be
amended, restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in SECTION
6.4(B)(1) hereof, PROVIDED, HOWEVER, that with respect to the calculation of
financial ratios and other financial tests required by this Agreement,
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect as of the date of this Agreement, applied in a manner
consistent with that used in preparing the financial statements referred to
in SECTION 6.4(B)(1) hereof; PROVIDED, FURTHER, HOWEVER, all PRO FORMA
financial statements reflecting Acquisitions shall be prepared in accordance
with the requirements established by the SEC for acquisition accounting for
reporting acquisitions by public companies (whether or not such Acquisitions
are required to be publicly reported).
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.14(C)(I) hereof determined in accordance with
the provisions of SECTION 2.14(D)(II) hereof.
"APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination,
the rate per annum then applicable to Eurodollar Rate Loans which are
Revolving Loans, determined in accordance with the provisions of SECTION
2.14(D)(II) hereof.
"APPLICABLE FLOATING RATE MARGIN" means, as at any date of
determination, the rate per annum then applicable to Floating Rate Loans
which are Revolving Loans, determined in accordance with the provisions of
SECTION 2.14(D)(II) hereof.
"APPLICABLE L/C FEE PERCENTAGE" means, as at any date of determination,
a rate per annum equal to the Applicable Eurodollar Margin for Revolving
Loans in effect on such date.
"APPROVED FUND" means, with respect to any Lender that is a fund or
commingled investment vehicle that invests in commercial loans, any other
fund that invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor.
2
<PAGE>
"ARRANGERS" means each of First Chicago Capital Markets, Inc.,
BancAmerica Robertson Stephens, Inc. and Lehman Brothers Inc., in their
respective capacities as arrangers for the loan transaction evidenced by this
Agreement.
"ASSET PURCHASE AGREEMENT" is defined in the definition of "Reynolds
Acquisition" below.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including, without limitation, by way of a sale-leaseback transaction and
including, without limitation, the sale or other transfer of any of the
Equity Interests of any Subsidiary of such Person).
"ASSIGNMENT AGREEMENT" shall mean an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof
in substantially the form of EXHIBIT D.
"AUTHORIZED OFFICER" means any of the President, any Vice President, the
Chief Financial Officer or the Treasurer of the Borrower acting singly.
"BALL CANADA" means Ball Packaging Products Canada, Inc., a corporation
organized under the federal Laws of Canada, together with its successors and
assigns, including a debtor-in-possession on behalf of Ball Canada.
"BALL CAPITAL CORP." means Ball Capital Corp., a Delaware corporation,
together with its successors and assigns, including a debtor-in-possession on
behalf of Ball Capital Corp.
"BALL CORPORATE GROUP" means the Borrower, each of its Subsidiaries, the
Excluded Subsidiaries and the members of the FTB Group.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan or a Foreign Employee Benefit Plan)
in respect of which the Borrower or any other member of the Controlled Group
is, or within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA.
"BMBCC" means Ball Metal Beverage Container Corp., a Colorado
corporation.
"BORROWER" means Ball Corporation, an Indiana corporation, together with
its successors and permitted assigns, including a debtor-in-possession on
behalf of the Borrower.
"BORROWING/CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8
hereof.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than
a Saturday or Sunday) on which banks are open for business in Chicago,
Illinois and New York, New York and on which dealings in Dollars are
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carried on in the London interbank market and (ii) for all other purposes a
day (other than a Saturday or Sunday) on which banks are open for business in
Chicago, Illinois and New York, New York.
"CANADIAN CREDIT FACILITY" means that certain Letter Agreement, dated as
of May 21, 1998, by and among Ball Canada, the Borrower, and Royal Bank of
Canada as in effect on the Closing Date, and as the same may be modified and
restated pursuant to the terms of that certain Commitment Letter and Term
Sheet, dated July 16, 1998, by and among Ball Canada the Borrower and Royal
Bank of Canada.
"CANADIAN SUBORDINATION AGREEMENT" means that certain Subsidiary
Subordination Agreement, dated as of August 10, 1998, by and among Ball
Canada and the Borrower, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
"CAPITAL EXPENDITURES" is defined in SECTION 7.4(A) hereof.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets
of, the issuing Person.
"CAPITALIZED LEASE" is defined in SECTION 7.4(A) hereof.
"CAPITALIZED LEASE OBLIGATIONS" is defined in SECTION 7.4(A) hereof.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances
and floating rate certificates of deposit issued by any commercial bank
organized under the laws of the United States, any state thereof or the
District of Columbia, any foreign bank, or its branches or agencies (fully
protected against currency fluctuations for any such deposits with a term of
more than ten (10) days); (iii) shares of money market, mutual or similar
funds having assets in excess of $100,000,000 and the investments of which
are limited to investment grade securities (i.e., securities rated at least
Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's
Ratings Group) and repurchase agreements with respect thereto; and (iv)
commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance,
commercial, industrial or utility companies which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or
P-1 (or better) by Moody's Investors Services, Inc.; PROVIDED that the
maturities of such Cash Equivalents shall not exceed 365 days.
"CASH FLOW PERIOD" means the twelve-month period from January 1, 1999
through the end of the Borrower's fiscal year ending December 31, 1999 and,
thereafter, as separate periods, each fiscal year of the Borrower.
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"CHANGE IN CAPITAL ADEQUACY" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934), becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of fifty percent (50%) or more of the Voting
Stock of the Borrower;
(b) a majority of the members of the board of directors of the
Borrower cease to be Continuing Directors;
(c) the Borrower consolidates with or merges into another corporation
or conveys, transfers or leases all or substantially all of its property to
any Person, or any corporation consolidates with or merges into the
Borrower, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other property;
(d) except as otherwise permitted under the terms of this Agreement,
the Borrower shall cease to own and control, directly or indirectly, at
least (i) such percentage of the economic and voting rights of the Capital
Stock of each of its Domestic Incorporated Subsidiaries and Material
Foreign Subsidiaries (other than FTB) as is owned as of the Closing Date or
such later date as such Person became a Domestic Incorporated Subsidiary or
Material Foreign Subsidiary, as applicable, or (ii) ninety percent (90%) of
the economic and voting rights of the Capital Stock of FTB;
(e) any "Change of Control" (as such term is defined in the Senior
Note Indenture) shall have occurred; or
(f) any "Change of Control" (as such term is defined in the
Subordinated Note Indenture) shall have occurred.
"CLOSING DATE" means the date on which the initial Revolving Loans are
advanced hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"COLI INDEBTEDNESS" of any Person shall mean, with respect to any
Company Owned Life Insurance Program in which such Person is a participant,
Indebtedness of such Person consisting of (i) loans to such Person under life
insurance policies taken or made against the available cash surrender values
of such policies, which loans are made pursuant to the contract terms of life
insurance policies issued in connection with a Company Owned Life Insurance
Program or (ii) other obligations for borrowed money of such Person, if and
only if the proceeds of such obligations are used solely to pay
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policy premiums on life insurance policies issued in connection with a
Company Owned Life Insurance Program.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon
which a security interest is granted to the Administrative Agent, for the
benefit of the Holders of Secured Obligations under the Pledge Agreements or
under any of the other Loan Documents.
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Secured Obligations, including, without
limitation, the Pledge Agreements, together with all agreements and documents
referred to therein or contemplated thereby.
"COMPANY OWNED LIFE INSURANCE PROGRAM" means a life insurance program in
which the Borrower is a participant, pursuant to which the Borrower is the
owner of whole life policies insuring the lives of certain of its employees.
"CONSOLIDATED ASSETS" means, for any Person, the total assets of such
Person and its Subsidiaries on a consolidated basis, but excluding therefrom
all items that are treated as intangibles under Agreement Accounting
Principles.
"CONSOLIDATED NET INCOME" is defined in SECTION 7.4(A) hereof.
"CONSOLIDATED NET WORTH is defined in SECTION 7.4(A) hereof.
"CONTAMINANT" means any waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, as defined in, or used in,
Environmental, Health or Safety Requirements of Law.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Borrower who (i) was a member of such
Board of Directors on the Closing Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to
which that Person is a party or by which it or any of its properties is
bound, or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
(iii) a member
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of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in CLAUSE (i) above or
any partnership or trade or business described in CLAUSE (ii) above; or (iv)
any other Person which is required to be aggregated with the Borrower or any
of its Subsidiaries pursuant to regulations promulgated under Section 414(o)
of the Code.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) ninety percent (90%) or more of the total Equity Interests or other
ownership interests of which (other than directors' qualifying shares) shall
at the time be owned by such Person or by one or more wholly-owned
Subsidiaries of such Person and (ii) of which such Person possesses, directly
or indirectly, the power to direct or cause the direction of the management
or policies, whether through the ownership of voting securities, by agreement
or otherwise.
"CORPORATE BASE RATE" means the corporate base rate of interest
announced by First Chicago from time to time, changing when and as said
corporate base rate changes.
"CURE LOAN" is defined in SECTION 9.2(iii) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced)
which are being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance
with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance
or other types of social security benefits or to secure the performance of
bids, tenders, sales, contracts (other than for the repayment of borrowed
money), surety, appeal and performance bonds; PROVIDED that (A) all such
Liens do not in the aggregate materially detract from the value of the
Borrower's or such Subsidiary's assets or property taken as a whole or
materially impair the use thereof in the operation of the businesses taken
as a whole, and (B) all Liens securing bonds to stay judgments or in
connection with appeals do not secure at any time an aggregate amount
exceeding $10,000,000;
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(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not in any case materially detract from the value
of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any
of its Subsidiaries which do not constitute a Default under SECTION 8.1(h)
hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its Subsidiaries
in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the Revolving Loan Termination Date.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOCUMENTATION AGENT" means Lehman Commercial Paper Inc., in its
capacity as documentation agent for the loan transaction evidenced by this
Agreement, together with its successors and assigns.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
"DOLLAR AMOUNT" of any currency other than Dollars at any date shall
mean the equivalent amount of Dollars, calculated on the basis of the then
applicable Exchange Rate.
"DOMESTIC INCORPORATED SUBSIDIARY" means a Subsidiary of the Borrower
organized under the laws of a jurisdiction located in the United States of
America.
"EBITDA" is defined in SECTION 7.4(A) hereof.
"ENVIRONMENTAL AUDIT" means the Phase I and Phase II Environmental
Property Assessment reports dated between February 12, 1998, and June 16,
1998 prepared for the Borrower by McLaren Hart, and listed in SCHEDULE 6.19.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state, provincial
and local laws or regulations relating to or addressing pollution or
protection of the environment, or protection of worker health or safety,
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including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 ET SEQ., the
Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 ET SEQ.,
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 ET SEQ., in each case including any amendments thereto, any successor
statutes, and any regulations or guidance promulgated thereunder, and any
state, provincial or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of
Law, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, the "Industrial Site Recovery Act,"
NJSA 13:1K-6 ET SEQ., the "Responsible Property Transfer Act," 765 ILCS 90/1
ET SEQ., or similar laws.
"EQUIPMENT" means all of the Borrower's and its Subsidiaries' present
and future (i) equipment, including, without limitation, machinery,
manufacturing, distribution, selling, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, vessels, aircraft, aircraft engines, and trade
fixtures, (ii) other tangible personal property (other than the Borrower's
and its Subsidiaries' Inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires)
any rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
any specified Interest Period, either (i) the rate of interest per annum
equal to the rate for deposits in U.S. Dollars with a maturity approximately
equal to such Interest Period which appears on Telerate Page 3750 as of 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period or (ii) if no such rate of interest appears on Telerate Page 3750 for
such specified Interest Period, the rate of interest per annum equal to the
rate for deposits in U.S. Dollars with a maturity occurring immediately
before or immediately after such specified Interest Period, whichever is
higher, as determined by the Administrative Agent from Telerate Page 3750 at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or (iii) if no such rate of interest appears on
Telerate Page 3750 for any specified Interest Period, the rate of interest
per annum equal to the rate at which deposits in U.S. Dollars are offered by
First Chicago to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such
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Interest Period, in the approximate amount of the Revolving Loan Pro Rata
Share of First Chicago of such Eurodollar Rate Loan and having a maturity
approximately equal to such Interest Period, in each case, as adjusted for
Reserves. The term "Telerate Page 3750" means the display designated as
"Page 3750" on the Associated Press-Dow Jones Telerate Service (or such other
page as may replace Page 3750 on the Associated Press-Dow Jones Telerate
Service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association interest rate settlement rates for U.S. Dollars). Any
Eurodollar Base Rate determined on the basis of the rate displayed on
Telerate Page 3750 in accordance with the foregoing provisions of this
subparagraph shall be subject to corrections, if any, made in such rate and
displayed by the Associated Press-Dow Jones Telerate Service within one hour
of the time when such rate is first displayed by such service.
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period PLUS the Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
"EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"EXCESS CASH FLOW" means, for any Cash Flow Period, an amount equal to the
Borrower's and its Subsidiaries' consolidated:
(i) EBITDA for such period,
MINUS (ii) foreign, federal, state and local taxes paid in cash for
such period,
MINUS (iii) Capital Expenditures paid in cash during such period,
MINUS (iv) cash dividends paid by the Borrower during such period to
the extent permitted under SECTION 7.3(F) hereof and
payable in compliance with applicable corporate law,
MINUS (v) Interest Expense paid in cash during such period,
MINUS (vi) scheduled amortization of the principal portion of the
"Term Loans" (as defined under the Long-Term Credit
Agreement) and of the principal portion of all other
Indebtedness of the Borrower and its Subsidiaries paid in
cash during such period,
MINUS (vii) for the Cash Flow Periods ending on December 31, 1999,
December 31, 2000 and December 31, 2001, the cash portion
of Rationalization Costs in an amount not to exceed
$70,000,000 in the aggregate for the period commencing on
the
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Closing Date through and including December 31, 2001
only to the extent such Rationalization Costs are not
reflected on the Borrower's consolidated income statement
as prepared in accordance with Agreement Accounting
Principles,
MINUS (viii) voluntary prepayments of the principal portion of the
"Term Loans" (as defined under the Long-Term Credit
Agreement), in each case calculated in accordance with
Agreement Accounting Principles.
All such amounts shall be calculated assuming that the Borrower and its
Subsidiaries have conducted their respective business in the ordinary course and
in accordance with past practices; PROVIDED, that (without duplication) there
shall be excluded from the calculation of Excess Cash Flow all amounts related
to the FTB Group.
"EXCHANGE RATE" means, the rate at which any currency other than Dollars
may be exchanged into Dollars, calculated on the basis of the arithmetical mean
of the buy and sell spot rates of exchange as quoted in the electronic media
publication of Bloomberg L.P. for such other currency at or about 11:00 a.m.
(Chicago time), on such date of determination for the purchase of Dollars with
such other currency for delivery two (2) Business Days later; PROVIDED, HOWEVER,
that if at the time of any such determination, for any reason, no such spot rate
is being quoted, the Borrower may with the consent of the Administrative Agent
use any reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error. For purposes of this
agreement, the applicable Exchange Rate shall be determined (x) for any
Investment, as of the date of incurrence thereof, (y) for any sale of assets, as
of the date of the consummation of the transaction pursuant to which such sale
of assets shall occur, and (z) in all other cases, as of such date of
determination.
"EXCLUDED SUBSIDIARY" means, each Subsidiary of the Borrower identified on
SCHEDULE 6.8 as an Excluded Subsidiary; PROVIDED, that each such Subsidiary
shall be an Excluded Subsidiary only if (i) each such Subsidiary is in existence
solely for the purposes of being a "name-holding" entity, (ii) each such
Subsidiary engages in no business, (iii) each such Subsidiary has no
liabilities, and (iv) the aggregate of the assets (including capitalization) of
all such Subsidiaries shall not exceed $5,000,000.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FINANCING" means, with respect to any Person, the issuance or sale by such
Person of any Equity Interests, or any Indebtedness consisting of debt
securities of such Person pursuant to a registered offering or private
placement.
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"FIRST CHICAGO" means The First National Bank of Chicago, in its individual
capacity, and its successors.
"FIXED CHARGE COVERAGE RATIO" is defined in SECTION 7.4(D) hereof.
"FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day, changing as and when the Alternate Base
Rate changes, PLUS the then Applicable Floating Rate Margin.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears interest
at the Floating Rate.
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined
in Section 3(3) of ERISA which is maintained or contributed to for the benefit
of the employees of the Borrower, any of its Subsidiaries or any members of its
Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"FOREIGN INCORPORATED SUBSIDIARY" means a Subsidiary of the Borrower which
is not a Domestic Incorporated Subsidiary.
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
Section 3(3) of ERISA for which the Borrower or any member of its Controlled
Group is a sponsor or administrator and which (i) is maintained or contributed
to for the benefit of employees of the Borrower, any of its Subsidiaries or any
member of its Controlled Group, (ii) is not covered by ERISA pursuant to
Section 4(b)(4) of ERISA, and (iii) under applicable local law, is required to
be funded through a trust or other funding vehicle.
"FOREIGN SUBSIDIARY INVESTMENT" means the sum of (a) all intercompany loans
made on or after the Closing Date from either the Borrower or any Domestic
Incorporated Subsidiary to any Foreign Incorporated Subsidiary (other than Ball
Canada pursuant to the Manufacturing Supply Agreement and the FTB Group);
(b) all Investments made on or after the Closing Date by either the Borrower or
any Domestic Incorporated Subsidiary in any Foreign Incorporated Subsidiary
(other than Ball Canada pursuant to the Manufacturing Supply Agreement and the
FTB Group); and (c) an amount equal to the net benefit derived by the Foreign
Incorporated Subsidiaries (other than Ball Canada pursuant to the Manufacturing
Supply Agreement and the FTB Group) resulting from any non-arms length
transactions between the Borrower and/or any Domestic Incorporated Subsidiary,
on the one hand, and such Foreign Incorporated Subsidiaries (other than Ball
Canada pursuant to the Manufacturing Supply Agreement and the FTB Group), on the
other hand.
"FTB" means FTB Packaging Limited, a Hong Kong corporation, and its
successors and assigns.
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"FTB GROUP" means FTB and each of its Subsidiaries, including, without
limitation, MCP and each of its Subsidiaries and joint ventures.
"GOVERNMENTAL ACTS" is defined in SECTION 3.11(a) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, provincial, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GROSS NEGLIGENCE" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence"
is used with respect to any Agent, any Arranger or any Lender or any indemnitee
in any of the other Loan Documents, it shall have the meaning set forth herein.
"GUARANTIED OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person (i) guaranteeing, directly
or indirectly, in any manner (including, without limitation, letters of credit
and reimbursement agreements in respect thereof) Indebtedness of another
including, without limitation, any Contractual Obligations arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness, or
any security therefor, or to provide funds for the payment or discharge thereof
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or (ii) to maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value received (all such
Contractual Obligations under this CLAUSE (ii) being "SUPPORT OBLIGATIONS");
PROVIDED, HOWEVER, notwithstanding anything herein to the contrary, any
Contractual Obligation of a Person relating to a take-or-pay obligation or
supply contract of such Person shall not constitute a Guarantied Obligation.
"GUARANTORS" means each Domestic Incorporated Subsidiary (other than Ball
Capital Corp.) as of the Closing Date, and each other Domestic Incorporated
Subsidiary which becomes a party to the Subsidiary Guaranty pursuant to the
terms of SECTIONS 7.2(K) or 7.3(G), and in each case its successors and assigns.
"GUARANTY AGREEMENT" means that certain Guaranty Agreement of the Borrower
dated as of June 15, 1989 Re: $44,938,000 8.46% Guaranteed ESOP Notes, Series A,
due June 15, 1999 and $25,062,000 8.83% Guaranteed ESOP Notes, Series B, due
December 15, 2001.
"HEDGING AGREEMENTS" is defined in SECTION 7.3(Q) hereof.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate
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cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any of the foregoing.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall include (i) each Lender in respect of
its Loans, (ii) the Issuing Bank in respect of Reimbursement Obligations, (iii)
the Agents, the Lenders, the Swing Line Bank and the Issuing Bank in respect of
all other present and future obligations and liabilities of the Borrower or any
of its Subsidiaries of every type and description arising under or in connection
with this Agreement or any other Loan Document, (iv) each Indemnitee in respect
of the obligations and liabilities of the Borrower to such Person hereunder, (v)
each Lender (or affiliate thereof), in respect of all Hedging Obligations of the
Borrower or any of its Subsidiaries to such Lender (or such affiliate) as
exchange party or counterparty under any Hedging Agreement, and (vi) their
respective successors, transferees and assigns.
"INDEBTEDNESS" of any Person means, without duplication, such Person's (a)
obligations for borrowed money (other than the COLI Indebtedness), (b)
obligations representing the deferred purchase price of property or services
(other than accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade), (c) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production from
property or assets now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances or other instruments, (e)
Capitalized Lease Obligations, (f) Guarantied Obligations, (g) obligations with
respect to letters of credit, (h) Off-Balance Sheet Liabilities and (i)
Disqualified Stock as provided in SECTION 7.3(M). The amount of Indebtedness of
any Person at any date shall be without duplication (i) the outstanding balance
at such date of all unconditional obligations as described above and the maximum
liability of any such Guarantied Obligations at such date and (ii) in the case
of Indebtedness of others secured by a Lien to which the property or assets
owned or held by such Person is subject, the lesser of the fair market value at
such date of any asset subject to a Lien securing the Indebtedness of others and
the amount of the Indebtedness secured. In the case of Ball Capital Corp.,
Indebtedness shall include the unrecovered investment of purchasers of
Receivables from Ball Capital Corp. pursuant to the Receivables Purchase
Documents, and such Indebtedness shall be deemed to be funded Indebtedness for
purposes of SECTION 7.1(G).
"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INITIAL ADJUSTMENT DATE" is defined in SECTION 2.14(D)(ii) hereof.
"INTERCOMPANY INDEBTEDNESS" is defined in SECTION 10.14 hereof.
"INTEREST EXPENSE" is defined in SECTION 7.4(A) hereof.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3) or six (6) months or such other period as the
Borrower may request and the Lenders, in their
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discretion, shall agree to, commencing on a Business Day selected by the
Borrower pursuant to this Agreement; PROVIDED, HOWEVER, notwithstanding
anything in this Agreement to the contrary and only at the Administrative
Agent's sole option, for the period from the Closing Date to the earlier of
(y) the date that is 90 days after the Closing Date and (z) the date upon
which the Arrangers confirm that the loan syndication process has been
completed (the "SYNDICATION PERIOD"), "Interest Period" means, with respect
to a Eurodollar Rate Loan, a period of seven (7) days, provided that during
the Syndication Period all Interest Periods shall end on the same day. Other
than during the Syndication Period, such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three
or six months thereafter (or as agreed); PROVIDED, HOWEVER, that if there is
no such numerically corresponding day in such next, second, third or sixth
succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest
Period shall end on the next succeeding Business Day, PROVIDED, HOWEVER, that
if said next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business Day.
"INVENTORY" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by the Borrower or any of its Subsidiaries, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the business of the
Borrower or any of its Subsidiaries, and shall include all right, title and
interest of the Borrower or any of its Subsidiaries in any property the sale or
other disposition of which has given rise to Receivables and which has been
returned to or repossessed or stopped in transit by the Borrower or any of its
Subsidiaries.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person and (ii) any loan, advance (other
than deposits with financial institutions available for withdrawal on demand,
prepaid expenses, accounts receivable, advances to employees and similar items
made or incurred in the ordinary course of business) or capital contribution by
that Person to any other Person, including all Indebtedness to such Person
arising from a sale of property by such Person other than in the ordinary course
of its business; PROVIDED, HOWEVER, notwithstanding anything herein to the
contrary, any Contractual Obligation of a Person relating to a take-or-pay
obligation or supply contract of such Person shall not constitute an Investment
by such Person in the other party to such contract.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUING BANKS" means First Chicago; Bank of America National Trust and
Savings Association; ABN AMRO Bank, N.V.; Bank of Tokyo -- Mitsubishi Ltd.,
Chicago Branch; Wachovia Bank; and any other Lender which, at the Borrower's
request, agrees, in each such Lender's sole discretion, to become an Issuing
Bank for the purpose of issuing Letters of Credit, and their respective
successors and assigns, in each case in such Lender's separate capacity as an
issuer of Letters of Credit pursuant to ARTICLE III hereof. The designation of
any Lender as an Issuing Bank after the date hereof shall be subject to the
prior written consent of the Administrative Agent.
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"LATASA" means Latas de Alumino, S.A., a corporation organized under the
laws of Brazil.
"LATASA ACQUISITION" means the Acquisition of the "Latasa Assets" (as
defined in the Asset Purchase Agreement).
"L/C DOCUMENTS" is defined in SECTION 3.4 hereof.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"L/C INTEREST" is defined in SECTION 3.6 hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, and (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time.
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or Agent, any
office, branch, subsidiary or affiliate of such Lender or Agent.
"LETTER OF CREDIT" means the letters of credit to be issued by the Issuing
Banks pursuant to SECTION 3.1 hereof.
"LEVERAGE RATIO" is defined in SECTION 7.4(C) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.2 hereof and in the case of the Swing Line
Bank, any Swing Line Loan made pursuant to SECTION 2.3 hereof, and collectively
all Revolving Loans and Swing Line Loans, whether made or continued as or
converted to Floating Rate Loans or Eurodollar Rate Loans.
"LOAN ACCOUNT" is defined in SECTION 2.13(a) hereof.
"LOAN DOCUMENTS" means this Agreement, the L/C Documents, the Collateral
Documents, the Subsidiary Guaranty, the Canadian Subordination Agreement and all
other documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.
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"LONG-TERM CREDIT AGREEMENT" means that certain Long-Term Credit Agreement,
dated as of August 10, 1998 among the borrower, the agents, the arrangers and
the financial institutions from time to time parties thereto as lenders, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"MANUFACTURING SUPPLY AGREEMENT" means that certain Manufacturing Supply
Agreement, dated as of January 1, 1994, by and between Ball Canada and Ball
Metal Packaging Sales Corp., a Colorado corporation and successor by assignment
to the Borrower, as amended, restated, supplemented and otherwise modified as of
the date hereof.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties, results of operations or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower or any of its
Subsidiaries to perform their respective obligations under the Loan Documents,
or (c) the ability of the Lenders or the Agents to enforce the Obligations or
their rights with respect to the Collateral.
"MATERIAL FOREIGN SUBSIDIARY" means (i)Ball Canada, (ii) FTB (but not any
other member of the FTB Group), (iii) upon the consummation of the Latasa
Acquisition, Latasa and (iv) any other direct or indirect Foreign Incorporated
Subsidiary of the Borrower (but not any member of the FTB Group other than FTB),
the Consolidated Assets (directly and together with its Subsidiaries) of which
are, at any time, greater than $50,000,000.
"MATERIAL SUBSIDIARY" means any Domestic Incorporated Subsidiary or
Material Foreign Subsidiary.
"MCP" means M.C. Packaging (Hong Kong) Limited, a Hong Kong corporation,
and its successors and assigns.
"MINORITY INTEREST" shall mean owning or holding less than a majority of
the outstanding Voting Stock of any Person.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by either the Borrower or any member of the
Controlled Group.
"NET CASH PROCEEDS" means, with respect to any Asset Sale or Financing by
any Person, (a) cash (freely convertible into Dollars) received by such Person
or any Subsidiary of such Person from such Asset Sale (including cash received
as consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale) or Financing, after (i)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (ii) payment of all brokerage commissions and other fees and expenses
related to such Asset Sale or Financing, and (iii) all amounts used to repay
Indebtedness secured by a Lien on any asset disposed of in such Asset Sale or
which is or may be required (by the express terms of the instrument governing
such Indebtedness) to be repaid
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in connection with such Asset Sale (including payments made to obtain or
avoid the need for the consent of any holder of such Indebtedness) or
Financing consisting of Permitted Refinancing Indebtedness; and (b) cash
payments in respect of any Indebtedness, Equity Interest or other
consideration received by such Person or any Subsidiary of such Person from
such Asset Sale upon receipt of such cash payments by such Person or such
Subsidiary.
"NEW SUBSIDIARY" is defined in SECTION 7.3(G) hereof.
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
"OBLIGATIONS" means all Loans, Letters of Credit, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Agent, any Lender, any affiliate of any Agent or any Lender, the Swing Line
Bank, any Arranger, any Issuing Bank, or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement, the L/C Documents, the
Collateral Documents or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document.
"OFF-BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
including, without limitation, under the Receivables Purchase Documents, (b) any
liability of such Person or any of its Subsidiaries under any sale and leaseback
transactions which do not create a liability on the consolidated balance sheet
of such Person, (c) any liability of such Person or any of its Subsidiaries
under any financing lease or so-called "synthetic" lease transaction, including,
without limitation, the Synthetic Leases, or (d) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the
consolidated balance sheets of such Person and its Subsidiaries.
"OTHER TAXES" is defined in SECTION 2.14(E)(ii) hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each fiscal quarter of the
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in SECTION 7.3(G)(iii) hereof.
"PERMITTED ADDITIONAL SUBORDINATED INDEBTEDNESS" is defined in SECTION
7.3(A)(vii) hereof.
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"PERMITTED EXISTING GUARANTIED OBLIGATIONS" means the Guarantied
Obligations of the Borrower and its Subsidiaries identified as such on SCHEDULE
1.1.2 to this Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.4 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.5 to this Agreement,
together with Liens on the assets of the Borrower and its Subsidiaries arising
out of the replacement, extension or renewal of any Permitted Existing Lien,
upon or in the same property and securing the same amount of Indebtedness, in
each case, in connection with any Permitted Refinancing Indebtedness incurred in
respect of the original Indebtedness secured thereby.
"PERMITTED FOREIGN SUBSIDIARY INVESTMENT AMOUNT" means the sum of (i)
$25,000,000 PLUS (ii) Investments in Foreign Incorporated Subsidiaries made in
compliance with SECTION 7.3(D)(xv).
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A)(xii)
hereof.
"PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by Ball
Metal Food Container Corp., a Delaware corporation, Ball Plastic Container
Corp., a Colorado corporation, and BMBCC to Ball Capital Corp. of "Receivables"
and "Related Security" under and as such terms are defined in the Receivables
Sale Agreement, in accordance with the terms of the Receivables Sale Agreement
and/or (ii) a sale by Ball Capital Corp. to purchasers in accordance with the
terms of the Receivables Purchase Agreement.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness (other than the Subordinated Notes)
permitted by this Agreement that (i) does not exceed the aggregate principal
amount (plus accrued interest and any applicable premium and associated fees and
expenses) of the Indebtedness being replaced, renewed, refinanced or extended,
(ii) does not have a Weighted Average Life to Maturity at the time of such
replacement, renewal, refinancing or extension that is less than the Weighted
Average Life to Maturity of the Indebtedness being replaced, renewed, refinanced
or extended, (iii) does not rank at the time of such replacement, renewal,
refinancing or extension senior to the Indebtedness being replaced, renewed,
refinanced or extended, and (iv) does not contain terms (including, without
limitation, terms relating to security, amortization, interest rate, premiums,
fees, covenants, subordination, events of default and remedies) materially less
favorable to the Borrower and its Subsidiaries, taken as a whole, or to the
Lenders, taken as a whole, than those applicable to the Indebtedness being
replaced, renewed, refinanced or extended.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity
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of any kind, or any government or political subdivision or any agency,
department or instrumentality thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means each of (a) those certain Pledge Agreements of
even date herewith executed by the Borrower in favor of the Administrative
Agent, (b) that certain Share Security Deed of even date herewith executed by
the Borrower in favor of the Administrative Agent, (c) that certain Pledge
Agreement of even date herewith executed by Ball Packaging Corp., a Colorado
corporation, in favor of the Administrative Agent, (d) that certain Pledge
Agreement of even date herewith executed by Ball Glass Container Corporation, a
Delaware corporation, in favor of the Administrative Agent, (e) that certain
Pledge Agreement of even date herewith executed by BMBCC, in favor of the
Administrative Agent, (f) that certain Pledge Agreement of even date herewith
executed by Ball Technologies Holdings Corp., a Colorado corporation, in favor
of the Administrative Agent, (g) that certain Pledge Agreement of even date
herewith executed by Ball Aerospace & Technologies Corp., a Delaware
corporation, in favor of the Administrative Agent, (h) that certain Pledge
Agreement of even date herewith executed by RCAL Cans, Inc., a Delaware
corporation, in favor of the Administrative Agent and (i) each other Pledge
Agreement executed pursuant to the terms of SECTION 7.2(K), in each case, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"PRELIMINARY FINANCIALS" is defined in SECTION 2.14(D)(ii) hereof.
"PRELIMINARY FINANCIAL COMPLIANCE CERTIFICATE" is defined in SECTION
2.14(D)(ii) hereof.
"PRELIMINARY FINANCIAL PACKAGE" is defined in SECTION 2.14(D)(ii) hereof.
"PRO RATA SHARE" means, with respect to any Lender, the percentage obtained
by dividing (A) such Lender's Revolving Loan Commitment at such time (as
adjusted from time to time in accordance with the provisions of this Agreement)
by (B) the Aggregate Revolving Loan Commitment at such time; PROVIDED, HOWEVER,
if all of the Revolving Loan Commitments are terminated pursuant to the terms of
this Agreement, then "Pro Rata Share" means the percentage obtained by dividing
(x) the sum of (A) such Lender's Revolving Loans, PLUS (B) such Lender's share
of the obligations to purchase participations in Swing Line Loans and Letters of
Credit, by (y) the sum of (A) the aggregate outstanding amount of all Revolving
Loans, PLUS (B) the aggregate outstanding amount of all Swing Line Loans and all
Letters of Credit.
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
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"RATIONALIZATION COST" means any cash rationalization cost with respect to
the Reynolds Acquisition as evidenced by the reduction of the relevant balance
sheet liability of the Borrower in accordance with Agreement Accounting
Principles.
"RECEIVABLE(S)" means and includes all of the Borrower's and its
Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit; PROVIDED, HOWEVER, that Receivables that are
transferred to Ball Capital Corp. pursuant to a Permitted Receivables Transfer
shall be deemed not to be Receivables hereunder, until such time, if any, as any
such Receivables are repurchased by or otherwise transferred to Ball Metal Food
Container Corp., Ball Plastic Container Corp., and BMBCC pursuant to the terms
of the Receivables Sale Agreement or otherwise.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchase
Agreement dated as of December 29, 1997, among Ball Capital Corp., as seller,
the Borrower, as servicer, Old Line Funding Corp., a Delaware corporation, as
buyer, and Royal Bank of Canada, as agent, as such agreement may be amended,
restated or otherwise modified from time to time in accordance with the terms
hereof, or any replacement or substitution therefor.
"RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Sale Agreement and
the Receivables Purchase Agreement.
"RECEIVABLES SALE AGREEMENT" means that certain Originator Purchase
Agreement dated as of December 29, 1997, between Ball Metal Food Container
Corp., a Delaware corporation, Ball Plastic Container Corp., a Colorado
corporation, and BMBCC and Ball Capital Corp., pursuant to which Ball Metal Food
Container Corp., a Delaware corporation, Ball Plastic Container Corp., a
Colorado corporation, and BMBCC shall sell to Ball Capital Corp. all of its
"Receivables" and "Related Security" (as such terms are defined therein), as
such agreement may be amended, restated or otherwise modified from time to time
in accordance with the terms hereof, or any replacement or substitution
therefor.
"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks and nonbank, nonbroker lenders for the purpose of
purchasing or carrying Margin Stock.
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"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.7 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"REMEDIAL ACTION" means any action required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(ii) prevent the Release or threat of Release or minimize the further Release of
Contaminants; or (iii) perform pre-remedial studies and investigations and post
remedial care.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"REPLACEMENT LENDER" is defined in SECTION 2.19 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are greater than fifty percent (50%); PROVIDED, HOWEVER, that, if any of the
Lenders shall have failed to fund its Revolving Loan Pro Rata Share of any
Revolving Loan requested by the Borrower, or any Swing Line Loan as requested by
the Administrative Agent, which such Lenders are obligated to fund under the
terms of this Agreement and any such failure has not been cured, then for so
long as such failure continues, "REQUIRED LENDERS" means Lenders (excluding all
Lenders whose failure to fund their respective Revolving Loan Pro Rata Shares of
such Revolving Loans or Swing Line Loans has not been so cured) whose Pro Rata
Shares represent greater than fifty percent (50%) of the aggregate Pro Rata
Shares of such Lenders; PROVIDED FURTHER, HOWEVER, that, if the Revolving Loan
Commitments have been terminated pursuant to the terms of this Agreement,
"REQUIRED LENDERS" means Lenders (without regard to such Lenders' performance of
their respective obligations hereunder) whose aggregate ratable shares (stated
as a percentage) of the aggregate outstanding principal balance of all Loans and
L/C Obligations are greater than fifty percent (50%).
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"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"RESTRICTED INVESTMENT" means any Investment other than an Investment
permitted by SECTION 7.3(D) (other than CLAUSE (xii) thereof).
"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower now or hereafter outstanding, other than in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a Subsidiary of
the Borrower) of other Equity Interests of the Borrower (other than Disqualified
Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or
other acquisition for value, direct or indirect, of any Indebtedness prior to
the stated maturity thereof, other than the Obligations and other than with the
proceeds of Permitted Refinancing Indebtedness, and (iv) any Restricted
Investment.
"RESTRICTED SUBSIDIARY" is defined in SECTION 10.14 hereof.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Aggregate Revolving Loan Commitment at such time exceeds the
Revolving Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Revolving Loans at such time, PLUS
(ii) the outstanding principal amount of the Swing Line Loans at such time, PLUS
(iii) the L/C Obligations at such time.
"REVOLVING LOAN" is defined in SECTION 2.2(a) hereof.
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"REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make Revolving Loans and to purchase participations in Letters of
Credit not exceeding the amount set forth on EXHIBIT A to this Agreement
opposite its name thereon under the heading "Revolving Loan Commitment" or on
Schedule 1 of the assignment and acceptance by which it became a Lender, as such
amount may be modified from time to time pursuant to the terms of this Agreement
or to give effect to any applicable assignment and acceptance.
"REVOLVING LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by dividing (A) the then aggregate amount of such Lender's
Revolving Loan Commitment (as adjusted from time to time in accordance with the
provisions of this Agreement) by (B) the Aggregate Revolving Loan Commitment at
such time; PROVIDED, HOWEVER, if all of the Revolving Loan Commitments are
terminated pursuant to the terms of this Agreement, then "Revolving Loan Pro
Rata Share" means the percentage obtained by dividing (x) the sum of (A) such
Lender's Revolving Loans, PLUS (B) such Lender's share of the obligations to
purchase participations in Swing Line Loans and Letters of Credit, by (y) the
sum of (A) the aggregate outstanding amount of all Revolving Loans, PLUS (B) the
aggregate outstanding amount of all Swing Line Loans and all Letters of Credit.
"REVOLVING LOAN TERMINATION DATE" means August 8, 1999, or any subsequent
date to which the Revolving Loan Termination Date may have been extended
pursuant to the terms of SECTION 2.18.
"REYNOLDS" means Reynolds Metals Company, a Delaware corporation.
"REYNOLDS ACQUISITION" means the acquisition by the Borrower and certain of
its Subsidiaries of certain of the assets and liabilities of the aluminum
beverage-can manufacturing business of Reynolds and its Affiliates on the terms
and conditions set forth in that certain Asset Purchase Agreement ("ASSET
PURCHASE AGREEMENT") dated as of April 22, 1998, as amended through the Closing
Date, by and among the Borrower, BMBCC and Reynolds.
"REYNOLDS ACQUISITION DOCUMENTS" means the Asset Purchase Agreement and all
other documents, instruments and agreements entered into by the Borrower or any
of its Subsidiaries in connection with the Reynolds Acquisition.
"REYNOLDS GROUP" is defined in SECTION 6.4(B).
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2.
"SEC" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Hedging Obligations owing under Hedging Agreements to any Lender or any
Affiliate of any Lender.
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"SENIOR NOTE INDENTURE" means that certain Indenture dated as of August 10,
1998, between the Borrower and The Bank of New York, as Trustee, as amended,
supplemented or modified in accordance with SECTION 7.3(R) hereof.
"SENIOR NOTES" means those certain Senior Notes due 2006, issued by the
Borrower in the aggregate principal amount of $300,000,000 pursuant to the
Senior Note Indenture, as amended, supplemented or modified in accordance with
SECTION 7.3(R) hereof, which term shall include and shall constitute the notes
issued in exchage therefor as contemplated by the Senior Note Indenture.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group that is not a Multiemployer Plan.
"SOLVENT" shall mean, when used with respect to any Person, that at the
time of determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total amount
of its liabilities, including, without limitation, contingent liabilities;
and
(ii) it is then able and expects to be able to pay its debts as they
mature; and
(iii) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can reasonably be expected to become an actual or
matured liability.
"SUBORDINATED INDEBTEDNESS" means, (i) the Subordinated Notes and (ii) any
Permitted Additional Subordinated Indebtedness.
"SUBORDINATED NOTE INDENTURE" means that certain Indenture dated as of
August 10, 1998, between the Borrower and The Bank of New York, as Trustee, as
amended, supplemented or modified in accordance with SECTION 7.3(R) hereof.
"SUBORDINATED NOTES" means those certain Senior Subordinated Notes due
2008, issued by the Borrower in the aggregate principal amount of $250,000,000
pursuant to the Subordinated Note Indenture, as amended, supplemented or
modified in accordance with SECTION 7.3(R) hereof, which term shall include and
shall constitute the notes issued in exchage therefor as contemplated by the
Subordinated Note Indenture.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding Voting Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any
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partnership, association, joint venture or similar business organization more
than 50% of the Voting Stock of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower and any references to
Subsidiaries of the Borrower shall not include: (a) any member of the FTB
Group or (b) any Excluded Subsidiary.
"SUBSIDIARY GUARANTY" means the Guarantee Agreement of even date herewith
entered into by each of the Guarantors in favor of the Administrative Agent, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
"SUPPORT OBLIGATIONS" is defined in the definition of "GUARANTIED
OBLIGATIONS".
"SWING LINE BANK" means First Chicago or any other Lender as a successor
Swing Line Bank.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to make
Swing Line Loans up to a maximum principal amount of $15,000,000 at any one time
outstanding.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Bank pursuant to SECTION 2.3 hereof.
"SYNDICATION AGENT" means Bank of America National Trust and Savings
Association, in its capacity as syndication agent for the loan transaction
evidenced by this Agreement, together with its successors and assigns.
"SYNDICATION PERIOD" is defined in the definition of "Interest Period".
"SYNTHETIC LEASES" means each of (i) that certain Participation Agreement,
dated as of September 27, 1996, among Ball Plastic Container Corp., and Ball
1996-A Equipment Trust, the guarantors parties thereto, the certificate
purchasers parties thereto, Royal Bank of Canada, as agent, and PNC Bank, Ohio,
National Association, as bank and certificate trustee, and the Lease Agreement
related thereto, (ii) that certain Participation Agreement, dated as of
September 27, 1996, among Ball Aerospace & Technologies Corp., as lessee, Lease
Plan North America, Inc., as lessor, ABN AMRO Bank N.V., Chicago Branch, as
participant, and ABN AMRO Bank N.V., Chicago Branch, as agent, and the Master
Lease related thereto, and (iii) that certain Participation Agreement, dated as
of November 15, 1996, among Ball Plastic Container Corp., as lessee, Lease Plan
North America, Inc., as lessor, ABN AMRO Bank N.V., Chicago Branch, as agent and
participant, and the Master Lease related thereto, in each case, as amended as
of the date hereof.
"TAX ALLOCATION AGREEMENT" means the State Tax Sharing Agreement among the
Borrower and its Subsidiaries, dated as of December 1, 1990, as amended,
modified, supplemented or restated from time to time in compliance with the
terms of this Agreement.
"TAXES" is defined in SECTION 2.14(E)(i) hereof.
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"TERMINATION DATE" means the earlier of (a) the Revolving Loan Termination
Date, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to SECTION 2.6 hereof or the Revolving Loan Commitments
pursuant to SECTION 9.1 hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC or any similar
foreign governmental authority of proceedings to terminate a Benefit Plan or
Foreign Pension Plan; (v) any event or condition which would constitute grounds
under Section 4042 of ERISA (other than subparagraph (a)(4) of such Section) for
the termination of, or the appointment of a trustee to administer, any Benefit
Plan; (vi) that a foreign governmental authority shall appoint or institute
proceedings to appoint a trustee to administer any Foreign Pension Plan in place
of the existing administrator; or (vii) the partial or complete withdrawal of
the Borrower or any member of the Controlled Group from a Multiemployer Plan or
Foreign Pension Plan.
"THIRD-PARTY PAYMENTS" is defined in SECTION 7.3(F)(iii) hereof.
"TOTAL DEBT" is defined in SECTION 7.4(a) hereof.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower or any of its Subsidiaries in connection with the execution, delivery
and performance of the Transaction Documents, the issuance of the Senior Notes
and the Subordinated Notes, the extinguishment of term Indebtedness existing
immediately prior to the Closing Date, and the consummation of the Reynolds
Acquisition.
"TRANSACTION DOCUMENTS" means the Loan Documents, the Reynolds Acquisition
Documents, and the documents executed in connection with the Subordinated Notes
and the Senior Notes.
"TRANSFEREE" is defined in SECTION 13.5 hereof.
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.
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"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"VOTING STOCK" means stock or similar interests of any class or classes
(however designated), the holders of which are generally and ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
Persons performing similar functions) of a corporation or other Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"WHOLLY-OWNED SUBSIDIARY" means any member of the Ball Corporate Group 100%
of the Capital Stock and other Equity Interests of which is directly or
indirectly owned by the Borrower (other than director's qualifying shares).
"YEAR 2000 ISSUES" means, with respect to any Person, anticipated costs,
problems and uncertainties associated with the inability of certain computer
applications and imbedded systems to effectively handle data, including dates,
prior to, on and after January 1, 2000, as it affects the business, operations,
and financial condition of such Person, and such Person's customers, suppliers
and vendors.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with Agreement Accounting Principles.
1.2 REFERENCES. Any references to Subsidiaries of the Borrower set forth
herein shall (i) with respect to representations and warranties which deal with
historical matters be deemed to include the Borrower and its Subsidiaries,
together with the businesses acquired pursuant to the Reynolds Acquisition; and
(ii) shall not in any way be construed as consent by any Agent or any Lender to
the establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
1.3 CURRENCY EQUIVALENTS. If at the time of determination of any amount
hereunder, such amount shall be in a currency other than U.S. Dollars, such
amount shall be deemed to be equal to the Dollar Amount thereof.
ARTICLE II: THE REVOLVING LOAN FACILITIES
2.1. [RESERVED].
2.2 REVOLVING LOANS. (a) Upon the satisfaction of the conditions
precedent set forth in SECTIONS 5.1 and 5.2, as applicable, from and including
the date of this Agreement and prior to the
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Termination Date, each Lender severally and not jointly agrees, on the terms
and conditions set forth in this Agreement, to make revolving loans to the
Borrower from time to time, in Dollars, in an amount not to exceed such
Lender's Revolving Loan Pro Rata Share of Revolving Credit Availability at
such time (each individually, a "REVOLVING LOAN" and, collectively, the
"REVOLVING LOANS"); PROVIDED, HOWEVER, at no time shall the Revolving Credit
Obligations exceed the Aggregate Revolving Loan Commitment. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow
Revolving Loans at any time prior to the Termination Date. The Revolving
Loans made on the Closing Date or on or before the third (3rd) Business Day
thereafter shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in
the manner provided in SECTION 2.10 and subject to the other conditions and
limitations therein set forth, set forth in this ARTICLE II and set forth in
the definition of Interest Period. Revolving Loans made after the third
(3rd) Business Day after the Closing Date shall be, at the option of the
Borrower, selected in accordance with SECTION 2.10, either Floating Rate
Loans or Eurodollar Rate Loans. On the Termination Date, the Borrower shall
repay in full the outstanding principal balance of the Revolving Loans. Each
Advance under this SECTION 2.2 shall consist of Revolving Loans made by each
Lender ratably in proportion to such Lender's respective Revolving Loan Pro
Rata Share.
(b) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall deliver
to the Administrative Agent a Borrowing/Conversion/Continuation Notice, signed
by it, in accordance with the terms of SECTION 2.8. The Administrative Agent
shall promptly notify each Lender with a Revolving Loan Commitment greater than
zero of such request.
(c) MAKING OF REVOLVING LOANS. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under SECTION 2.8 in respect of
Revolving Loans, the Administrative Agent shall notify each Lender with a
Revolving Loan Commitment greater than zero by telex or telecopy, or other
similar form of transmission, of the requested Revolving Loan. Each Lender with
a Revolving Loan Commitment greater than zero shall make available its Revolving
Loan in accordance with the terms of SECTION 2.7. The Administrative Agent will
promptly make the funds so received from the Lenders available to the Borrower
at the Administrative Agent's office in Chicago, Illinois on the applicable
Borrowing Date and shall disburse such proceeds in accordance with the
Borrower's disbursement instructions set forth in such
Borrowing/Conversion/Continuation Notice. The failure of any Lender to deposit
the amount described above with the Administrative Agent on the applicable
Borrowing Date shall not relieve any other Lender of its obligations hereunder
to make its Revolving Loan on such Borrowing Date.
2.3 SWING LINE LOANS. (a) AMOUNT OF SWING LINE LOANS. Upon the
satisfaction of the conditions precedent set forth in SECTION 5.1 and 5.2, as
applicable, from and including the date of this Agreement and prior to the
Termination Date, the Swing Line Bank agrees, on the terms and conditions set
forth in this Agreement, to make swing line loans to the Borrower from time to
time, in Dollars, in an amount not to exceed the Swing Line Commitment (each,
individually, a "SWING LINE LOAN" and collectively, the "SWING LINE LOANS");
PROVIDED, HOWEVER, at no time shall the Revolving Credit Obligations exceed the
Aggregate Revolving Loan Commitment; and PROVIDED, FURTHER, that at no time
shall the sum of (a) the outstanding amount of the Swing Line Loans, PLUS (b)
the outstanding amount of Revolving Loans made by the Swing Line Bank pursuant
to SECTION 2.2 (after giving effect to any concurrent repayment of Loans),
exceed the Swing Line Bank's Revolving Loan Commitment at
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such time. Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow Swing Line Loans at any time prior to the Termination Date.
(b) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall deliver
to the Administrative Agent and the Swing Line Bank a
Borrowing/Conversion/Continuation Notice, signed by it, not later than 1:00 p.m.
(Chicago time) on the Borrowing Date of each Swing Line Loan, specifying (i) the
applicable Borrowing Date (which date shall be a Business Day and which may be
the same date as the date the Borrowing/Conversion/Continuation Notice is
given), (ii) the aggregate amount of the requested Swing Line Loan which shall
be an amount not less than $1,000,000 and (iii) instructions for the
disbursement of the proceeds of such Swing Line Loan. The Swing Line Loans
shall at all times be Floating Rate Loans. The Administrative Agent shall
promptly notify the Swing Line Bank of such request.
(c) MAKING OF SWING LINE LOANS. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under SECTION 2.3(b) in respect of
Swing Line Loans, the Administrative Agent shall notify the Swing Line Bank by
telex or telecopy, or other similar form of transmission, of the requested Swing
Line Loan. Not later than 3:00 p.m. (Chicago time) on the applicable Borrowing
Date, the Swing Line Bank shall make available its Swing Line Loan, in funds
immediately available in Chicago, Illinois to the Administrative Agent at its
address specified pursuant to ARTICLE XIV. The Administrative Agent will
promptly make the funds so received from the Swing Line Bank available to the
Borrower on the Borrowing Date at the Administrative Agent's aforesaid address
and shall disburse such funds in accordance with the Borrower's disbursement
instructions set forth in the related Borrowing/Conversion/Continuation Notice.
(d) REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan shall be paid in
full by the Borrower on or before the fifth Business Day after the Borrowing
Date for such Swing Line Loan. The Borrower may at any time pay, without
penalty or premium, all outstanding Swing Line Loans or, in a minimum amount of
$1,000,000 and increments of $100,000 in excess thereof, any portion of the
outstanding Swing Line Loans, upon notice to the Administrative Agent and the
Swing Line Bank. In addition, the Administrative Agent (i) may at any time in
its sole discretion with respect to any outstanding Swing Line Loan, or (ii)
shall on the fifth Business Day after the Borrowing Date of any Swing Line Loan,
require each Lender (including the Swing Line Bank) to make a Revolving Loan in
the amount of such Lender's Revolving Loan Pro Rata Share of such Swing Line
Loan, for the purpose of repaying such Swing Line Loan. Not later than 2:00
p.m. (Chicago time) on the date of any notice from the Administrative Agent to
the Lenders received pursuant to this SECTION 2.3(d), each Lender shall make
available its required Revolving Loan or Revolving Loans, in funds immediately
available in Chicago, Illinois to the Administrative Agent at its address
specified pursuant to ARTICLE XIV. Revolving Loans made pursuant to this
SECTION 2.3(d) shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in SECTION 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this ARTICLE II. Unless a Lender
shall have notified the Swing Line Bank, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in SECTIONS 5.1 and 5.2
had not then been satisfied, such Lender's obligation to make Revolving Loans
pursuant to this SECTION 2.3(d) to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be affected by
any circumstances, including, without limitation, (A) any set-off, counterclaim,
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recoupment, defense or other right which such Lender may have against the
Administrative Agent, the Swing Line Bank or any other Person, (B) the
occurrence and continuance of a Default or Unmatured Default, (C) any adverse
change in the condition (financial or otherwise) of the Borrower, or (D) any
other circumstance, happening or event whatsoever. In the event that any Lender
fails to make payment to the Administrative Agent of any amount due under this
SECTION 2.3(d), the Administrative Agent shall be entitled to receive, retain
and apply against such obligation the principal and interest otherwise payable
to such Lender hereunder until the Administrative Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied. In addition
to the foregoing, if for any reason any Lender fails to make payment to the
Administrative Agent of any amount due under this SECTION 2.3(d), such Lender
shall be deemed, at the option of the Administrative Agent, to have
unconditionally and irrevocably purchased from the Swing Line Bank, without
recourse or warranty, an undivided interest and participation in the applicable
Swing Line Loan in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together with interest thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of demand and ending on the date such amount is received. On the
Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Swing Line Loans.
2.4 RATE OPTIONS FOR ALL ADVANCES. The Swing Line Loans shall be Floating
Rate Loans at all times. The Revolving Loans may be Floating Rate Loans or
Eurodollar Rate Loans, or a combination thereof, selected by the Borrower in
accordance with SECTION 2.10; PROVIDED, HOWEVER, notwithstanding anything herein
to the contrary, the Borrower may not without the Administrative Agent's consent
select, convert or continue any Loans as Eurodollar Rate Loans during the
Syndication Period; and, PROVIDED, FURTHER, that, in the event that the
Administrative Agent consents to the selection, conversion or continuation of
any Loans as Eurodollar Rate Loans during the Syndication Period, the Borrower
may not select Interest Periods for Eurodollar Rate Advances made during the
Syndication Period which exceed seven (7) days and all Interest Periods with
respect to all such Eurodollar Rate Advances made, converted or continued during
the Syndication Period shall be required to expire on the same date. The
Borrower may select, in accordance with SECTION 2.10, Rate Options and Interest
Periods applicable to portions of the Revolving Loans; PROVIDED that there shall
be no more than twelve (12) Interest Periods in effect with respect to all of
the Loans at any time.
2.5 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time and at any time
repay or prepay, without penalty or premium all or any part of outstanding
Floating Rate Advances. Eurodollar Rate Advances may be voluntarily repaid or
prepaid prior to the last day of the applicable Interest Period, subject to the
indemnification provisions contained in SECTION 4.4, PROVIDED, that the Borrower
may not so prepay Eurodollar Rate Advances unless it shall have provided at
least one (1) Business Day's prior written notice to the Administrative Agent of
such prepayment. Voluntary prepayments of the Revolving Loans shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in
excess of that amount.
(B) MANDATORY PREPAYMENTS.
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(i) MANDATORY PREPAYMENTS OF REVOLVING LOANS. If at any time and for any
reason the Revolving Credit Obligations are greater than the Aggregate Revolving
Loan Commitment, the Borrower shall immediately make a mandatory prepayment of
the Revolving Credit Obligations in an amount equal to such excess.
(ii) Subject to the preceding provisions of this SECTION 2.5(B), all of
the mandatory prepayments made under this SECTION 2.5(B) shall be applied first
to the applicable Floating Rate Loans and to any Eurodollar Rate Loans maturing
on such date and then to subsequently maturing Eurodollar Rate Loans in order of
maturity.
2.6 REDUCTION OF REVOLVING LOAN COMMITMENTS. The Borrower may permanently
reduce the Aggregate Revolving Loan Commitment in whole, or in part ratably
among the Lenders, in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount (unless the Aggregate Revolving
Loan Commitment is reduced in whole), upon at least one (1) Business Day's
written notice to the Administrative Agent, which notice shall specify the
amount of any such reduction; PROVIDED, HOWEVER, that the amount of the
Aggregate Revolving Loan Commitment may not be reduced below the aggregate
outstanding principal amount of the outstanding Revolving Credit Obligations.
All accrued commitment fees due and payable pursuant to SECTION 2.15(c) shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Revolving Loans hereunder.
2.7 METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan, in funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to ARTICLE XIV.
2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Administrative Agent irrevocable notice in
substantially the form of EXHIBIT B hereto (a "BORROWING/CONVERSION/CONTINUATION
NOTICE") not later than 11:00 a.m. (Chicago time) (a) on or before the Borrowing
Date of each Floating Rate Advance and (b) three Business Days before the
Borrowing Date for each Eurodollar Rate Advance, specifying: (i) the Borrowing
Date (which shall be a Business Day) of such Advance; (ii) the aggregate amount
of such Advance; (iii) the Type of Advance selected; and (iv) in the case of
each Eurodollar Rate Advance, the Interest Period applicable thereto. Each
Floating Rate Advance and all Obligations other than Loans shall bear interest
from and including the date of the making of such Advance, in the case of Loans,
and the date such Obligation is due and owing in the case of such other
Obligations, to (but not including) the date of repayment thereof at the
Floating Rate, changing when and as such Floating Rate changes. Changes in the
rate of interest on that portion of any Advance maintained as a Floating Rate
Loan will take effect simultaneously with each change in the Alternate Base
Rate. Each Eurodollar Rate Advance shall bear interest from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined as applicable
to such Eurodollar Rate Advance; PROVIDED, that the Eurodollar Rate applicable
to any Eurodollar Rate Advance shall change when and as the Applicable
Eurodollar Rate Margin changes.
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2.9 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance (other than an Advance
to repay Swing Line Loans pursuant to SECTION 2.3(d) or a Reimbursement
Obligation pursuant to SECTION 3.7) shall be in the minimum amount of $5,000,000
(and in multiples of $1,000,000 if in excess thereof), PROVIDED, HOWEVER, that
any Floating Rate Advance may be in the amount of the unused Aggregate Revolving
Loan Commitment.
2.10 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(A) RIGHT TO CONVERT. The Borrower may elect from time to time, subject
to the provisions of SECTION 2.4 and this SECTION 2.10, to convert all or any
part of a Loan of any Type into any other Type or Types of Loans; PROVIDED that
any conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Administrative Agent notice in accordance with SECTION 2.10(D) requesting that,
at the end of such Interest Period, such Eurodollar Rate Loans continue as a
Eurodollar Rate Loan.
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT. Notwithstanding
anything to the contrary contained in SECTION 2.10(A) or SECTION 2.10(B), no
Loan may be converted into or continued as a Eurodollar Rate Loan (except with
the consent of the Required Lenders) when any Default or Unmatured Default has
occurred and is continuing.
(D) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall give the
Administrative Agent irrevocable notice, in substantially the form of a
Borrowing/Conversion/Continuation Notice, of each conversion of a Floating Rate
Loan into a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan not
later than 11:00 a.m. (Chicago time) three Business Days prior to the date of
the requested conversion or continuation, specifying: (1) the requested date
(which shall be a Business Day) of such conversion or continuation; (2) the
amount and Type of the Loan to be converted or continued; and (3) the amount of
Eurodollar Rate Loan(s) into which such Loan is to be converted or continued and
the duration of the Interest Period applicable thereto.
2.11 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Administrative Agent or at the direction of the
Required Lenders, the interest rate(s) applicable to the Obligations and the
fees payable under SECTION 3.9 with respect to Letters of Credit shall be
increased by two percent (2.0%) per annum above the Floating Rate or Eurodollar
Rate, as applicable, or, if such increase results in the violation of applicable
usury law, shall be increased to the maximum interest rate allowed under such
usury law.
2.12 METHOD OF PAYMENT. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Administrative
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<PAGE>
Agent at the Administrative Agent's address specified pursuant to ARTICLE
XIV, or at any other Lending Installation of the Administrative Agent
specified in writing by the Administrative Agent to the Borrower, by (x) 1:00
p.m. (Chicago time) with respect to each Swing Line Loan and (y) 12:00 noon
(Chicago time) with respect to all other Loans, in each case, on the date
when due and shall be made ratably among the Swing Line Banks and the
Lenders, as applicable (unless such amount is not to be shared ratably in
accordance with the terms hereof). Each payment delivered to the
Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds
which the Administrative Agent received at its address specified pursuant to
ARTICLE XIV or at any Lending Installation specified in a notice received by
the Administrative Agent from such Lender. The Borrower authorizes the
Administrative Agent to charge the account of the Borrower maintained with
First Chicago for each payment of principal, interest and fees as it becomes
due hereunder.
2.13 EVIDENCE OF DEBT, TELEPHONIC NOTICES.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts (a "LOAN ACCOUNT") evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(b) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period, if any, applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to SUBSECTIONS
(a) or (b) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(d) Any Lender may request that the Revolving Loans made by it each be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note for such Loans payable to
the order of such Lender and in a form approved by the Administrative Agent and
consistent with the terms of this Agreement. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to SECTION 13.3) be represented by one or more promissory
notes in such form payable to the order of the payee named therein.
(e) The Borrower authorizes the Lenders and the Administrative Agent to
extend, convert or continue Advances, effect selections of Types of Advances and
to transfer funds based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be an Authorized
Officer acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Administrative Agent a written confirmation of each telephonic
notice signed by an
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<PAGE>
Authorized Officer of the Borrower. If the written confirmation differs in
any material respect from the action taken by the Administrative Agent and
the Lenders, the records of the Administrative Agent and the Lenders shall
govern absent manifest error. In case of disagreement concerning such
notices, if the Administrative Agent has recorded telephonic borrowing
notices, such recordings will be made available to the Borrower upon the
Borrower's request therefor.
2.14 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay when due all unpaid interest accrued thereon, in accordance with the
terms of this Agreement and the other Loan Documents.
(B) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which the Floating Rate Loan is
prepaid, whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Rate Loan shall
be payable on the last day of its applicable Interest Period, on any date on
which the Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise,
and at maturity. Interest accrued on each Eurodollar Rate Loan having an
Interest Period longer than three months shall also be payable on the last day
of each three-month interval during such Interest Period. Interest accrued on
the principal balance of all other Obligations shall be payable in arrears
(i) on the last day of each calendar month, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment thereof in full
or in part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) COMMITMENT FEES. (i) The Borrower shall pay to the Administrative
Agent, for the account of the Lenders in accordance with their Revolving Loan
Pro Rata Shares, from and after the Closing Date until the date on which the
Aggregate Revolving Loan Commitment shall be terminated in whole, a commitment
fee accruing at the rate of the Applicable Commitment Fee Percentage, on the
average daily closing amount (as of 2:00 p.m. (Chicago time)) by which (A) the
Aggregate Revolving Loan Commitment in effect from time to time exceeds (B) the
Revolving Credit Obligations (excluding the outstanding principal amount of the
Swing Line Loans) in effect from time to time. All such commitment fees payable
under this CLAUSE (C) shall be payable quarterly in arrears on the last day of
each fiscal quarter of the Borrower occurring after the Closing Date (with the
first such payment being calculated for the period from the Closing Date and
ending on September 30, 1998), and, in addition, on the date on which the
Aggregate Revolving Loan Commitment shall be terminated in whole.
(ii) The Borrower agrees to pay to the Administrative Agent for the sole
account of the Agents and the Arrangers (unless otherwise agreed between the
Administrative Agent, the other Agents and the Arrangers and any Lender) the
fees set forth in the letter agreement between the Agents, the Arrangers and the
Borrower, dated April 22, 1998, payable at the times and in the amounts set
forth therein.
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<PAGE>
(iii) The Borrower agrees to pay to the Administrative Agent for its sole
account the fees set forth in the letter agreement between the Administrative
Agent and the Borrower, dated April 22, 1998, payable at the times and in the
amounts set forth therein.
(D) INTEREST AND FEE BASIS; APPLICABLE FLOATING RATE MARGINS; APPLICABLE
EURODOLLAR MARGINS AND APPLICABLE COMMITMENT FEE PERCENTAGE.
(i) Interest on Floating Rate Loans and the commitment fee payable under
SECTION 2.14(C) shall be calculated for actual days elapsed on the basis of a
365/366-day year. All other interest and fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Obligation is incurred but not for the day of any payment on the amount
paid if payment is received prior to 2:00 p.m. (Chicago time) at the place of
payment. If any payment of principal of or interest on a Loan or any payment of
any other Obligations shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
(ii) The Applicable Floating Rate Margins, Applicable Eurodollar Margins
and Applicable Commitment Fee Percentage shall be determined from time to time
by reference to the table set forth below, on the basis of the then applicable
Leverage Ratio as described in this SECTION 2.14(D)(ii):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPLICABLE
COMMITMENT
APPLICABLE FLOATING APPLICABLE EURODOLLAR FEE
RATE MARGINS MARGINS PERCENTAGE
----------------------------------------------
REVOLVING LOANS REVOLVING LOANS
LEVERAGE RATIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Greater than or
equal to 4.75 to 0.75% 1.75% 0.325%
1.0
- --------------------------------------------------------------------------------
Greater than or
equal to 4.25 to 0.50% 1.50% 0.325%
1.0 and less
than 4.75 to
1.0
- --------------------------------------------------------------------------------
Greater than or
equal to 3.75 to 0.25% 1.25% 0.250%
1.0 and less
than 4.25 to 1.0
- --------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPLICABLE
COMMITMENT
APPLICABLE FLOATING APPLICABLE EURODOLLAR FEE
RATE MARGINS MARGINS PERCENTAGE
----------------------------------------------
REVOLVING LOANS REVOLVING LOANS
LEVERAGE RATIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Greater than or
equal to 3.25 to 0.00% 1.00% 0.250%
1.0 and less
than 3.75 to 1.0
- --------------------------------------------------------------------------------
Greater than or
equal to 2.75 to 0.00% .875% 0.200%
1.0 and less
than 3.25 to 1.0
- --------------------------------------------------------------------------------
Less than 2.75
to 1.0 0.00% .750% 0.150%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
For purposes of this SECTION 2.14(D)(ii), the Leverage Ratio shall be determined
as of the last day of each fiscal quarter based upon (a) for Total Debt, Total
Debt as of the last day of each such fiscal quarter; and (b) for EBITDA, the
actual amount for the four-quarter period ending on such day, calculated, with
respect to Permitted Acquisitions, on a PRO FORMA basis using historical audited
and reviewed unaudited financial statements obtained from the seller, broken
down by fiscal quarter in the Borrower's reasonable judgment. Except as
provided in CLAUSE (iii) below, upon receipt of (x)(i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of each fiscal quarter
for each fiscal year and the related consolidated statements of income,
stockholder's equity and cash flows of the Borrower and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, together with consolidating
schedules, in form and substance sufficient to calculate the financial covenants
set forth in SECTIONS 7.3(A) through (G), 7.3(L), 7.3(T) and 7.4; and (ii) the
consolidating balance sheet of the Borrower and its Subsidiaries as at the end
of such period and the related consolidating statements of income of the
Borrower and its Subsidiaries for such fiscal quarter and for the period from
the beginning of the then current fiscal year to the end of such fiscal quarter,
in each case, prepared in a manner consistent with past practice (collectively,
the "PRELIMINARY FINANCIALS"), and (y) a compliance certificate signed by the
chief financial officer or treasurer of the Borrower substantially in the form
of EXHIBIT H attached hereto and made a part hereof, which demonstrates
compliance with the provisions of SECTION 7.4 (a "PRELIMINARY FINANCIAL
COMPLIANCE CERTIFICATE", and together with the Preliminary Financials, the
"PRELIMINARY FINANCIAL PACKAGE") for each quarter of each fiscal year, the
Applicable Floating Rate Margins, Applicable Eurodollar Margins and Applicable
Commitment Fee Percentage shall be adjusted, such adjustment being effective
five (5) Business Days following the Administrative Agent's receipt of such
Preliminary Financial Package (the "INITIAL ADJUSTMENT DATE"); PROVIDED, that,
if upon receipt of the
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<PAGE>
Borrower's financial statements delivered pursuant to SECTION 7.1(A)(i) for
the first three quarters of each fiscal year and pursuant to SECTION
7.1(A)(ii) for the fourth quarter of each fiscal year, such financial
statements indicate that the Leverage Ratio as of such fiscal quarter end or
fiscal year end, as applicable, was higher or lower, as applicable, than the
Leverage Ratio set forth in the Preliminary Financial Compliance Certificate
for such fiscal quarter or fiscal year, as applicable, then an appropriate
adjustment to the Applicable Floating Rate Margins, Applicable Eurodollar
Margins and Applicable Commitment Fee Percentage shall be made (x) in the
case of an adjustment upward, retroactively to the Initial Adjustment Date
and the Borrower shall pay adjusted interest and commitment fees to the
Administrative Agent for the account of the applicable Lenders for the period
from the effective date of such initial adjustment based upon such
Preliminary Financial Compliance Certificate to the date of such subsequent
adjustment based upon such financial statements, such payment to be made not
later than five (5) Business Days following delivery of such financial
statements, and (y) in the case of an adjustment downward, retroactively to
the Initial Adjustment Date, and an appropriate reduction to the Applicable
Floating Rate Margins, Applicable Eurodollar Margins and Applicable
Commitment Fee Percentage for the next succeeding fiscal quarter shall be
made such that the Borrower shall pay adjusted interest and commitment fees
to the Administrative Agent for the account of the applicable Lenders for
such next succeeding fiscal quarter in an amount equal to (i) the then due
and payable interest and commitment fees for such next succeeding fiscal
quarter MINUS (ii) the excess payment made during the period from the
effective date of such initial adjustment based upon such Preliminary
Financial Compliance Certificate to the date of such subsequent adjustment
based upon such financial statements; PROVIDED, FURTHER, that if the Borrower
shall not have timely delivered its financial statements in accordance with
SECTION 7.1(A)(i) or SECTION 7.1(A)(ii), as applicable, then commencing on
the date upon which such financial statements should have been delivered and
continuing until such financial statements are actually delivered, it shall
be assumed for purposes of determining the Applicable Floating Rate Margins,
Applicable Eurodollar Margins and Applicable Commitment Fee Percentage that
the Leverage Ratio was greater than 4.75 to 1.0.
(iii) Notwithstanding anything herein to the contrary, from the Closing
Date to but not including the later of (i) the fifth Business Day following
receipt of a Preliminary Financial Package in respect of the fiscal quarter
ending December 31, 1998 and (ii) the six month anniversary of the Closing Date,
the Applicable Floating Rate Margin, Applicable Eurodollar Margin and Applicable
Commitment Fee Percentage shall be determined as though the Leverage Ratio is
greater than 4.75 to 1.00. The Applicable Floating Rate Margins, Applicable
Eurodollar Margins and Applicable Commitment Fee Percentage shall be initially
adjusted based upon the Preliminary Financial Package in respect of the fiscal
quarter ending December 31, 1998, such initial adjustment being effective on the
later of (i) five (5) Business Days following the Administrative Agent's receipt
of such Preliminary Financial Package and (ii) the six month anniversary of the
Closing Date; PROVIDED, that, if upon receipt of the Borrower's audited
financial statements delivered pursuant to SECTION 7.1(A)(ii) for the fiscal
year ending December 31, 1998, such audited financial statements indicate that
the Leverage Ratio for the fiscal quarter ending December 31, 1998 was higher
than the Leverage Ratio set forth in the Preliminary Financial Compliance
Certificate for such fiscal quarter, then an appropriate adjustment to the
Applicable Floating Rate Margins, Applicable Eurodollar Margins and Applicable
Commitment Fee Percentage shall be made retroactively to the applicable Initial
Adjustment Date and the Borrower shall pay adjusted interest and commitment fees
to the Administrative Agent for the account of the applicable Lenders for the
period from such Initial Adjustment Date based upon such Preliminary
38
<PAGE>
Financial Compliance Certificate to the date of such subsequent adjustment
based upon the audited financial statements, such payment to be made not
later than five (5) Business Days following the delivery of such audited
financial statements.
(E) TAXES.
(i) Except as otherwise provided herein, any and all payments by the
Borrower hereunder shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings or any liabilities with respect thereto including
those arising after the date hereof as a result of the adoption of or any
change in any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or application
thereof by a Governmental Authority but excluding, in the case of each
Lender and each Agent, such taxes (including, without limitation, income
taxes, franchise taxes and branch profit taxes) as are imposed on or
measured by such Lender's or Agent's, as the case may be, income by the
United States of America or any political subdivision thereof or any
Governmental Authority of the jurisdiction under the laws of which such
Lender or Agent, as the case may be, is organized or maintains a Lending
Installation (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities applicable to this Agreement, the
other Loan Documents, the Revolving Loan Commitments, the Loans or the
Letters of Credit being hereinafter referred to as "TAXES"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the other Loan Documents to any Lender
or Agent that has fully complied with all provisions of SECTION 2.14(E)(vi)
and has delivered a certificate described in SECTION 2.14(E)(vi)(a) or (c),
(i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.14(E)) such Lender or Agent
(as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any other
Loan Documents to any Lender or Agent that has not fully complied with all
provisions of SECTION 2.14(E)(vi) or has complied with such provisions by
delivering a certificate described in SECTION 2.14(E)(vi)(b), (i) the sum
payable shall not be increased as a result of any required deductions, (ii)
the Borrower shall make such deductions, and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. If a withholding tax of the
United States of America or any other Governmental Authority shall be or
become applicable (y) after the date of this Agreement, to such payments by
the Borrower made to the Lending Installation or any other office that a
Lender may claim as its Lending Installation, or (z) after such Lender's
selection and designation of any other Lending Installation, to such
payments made to such other Lending Installation, such Lender shall use
reasonable efforts to make, fund and maintain its Loans through another
Lending Installation of such Lender in another jurisdiction so as to reduce
the Borrower's liability hereunder, if the making, funding or maintenance
of such Loans through such other Lending Installation of such Lender does
not, in the good faith judgment of
39
<PAGE>
such Lender, otherwise adversely affect such Loans, or obligations under
the Revolving Loan Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges,
goods and services tax, or similar levies which arise from any payment made
hereunder, from the issuance of Letters of Credit hereunder, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, the Revolving Loan Commitments, the
Loans or the Letters of Credit (hereinafter referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any Governmental Authority on amounts payable
under this SECTION 2.14(E)) paid by such Lender or Agent (as the case may
be) and any liability (including penalties, interest, and out-of-pocket
expenses) arising therefrom or with respect thereto. This indemnification
shall be made within thirty (30) days after the date such Lender or Agent
(as the case may be) makes written demand therefor. A certificate as to
any additional amount payable to any Lender or Agent under this
SECTION 2.14(E) submitted to the Borrower and the Administrative Agent (if
a Lender is so submitting) by such Lender or Agent shall show in reasonable
detail the amount payable and the calculations used to determine such
amount and shall, absent manifest error, be final, conclusive and binding
upon all parties hereto. With respect to such deduction or withholding for
or on account of any Taxes and to confirm that all such Taxes have been
paid to the appropriate Governmental Authorities, the Borrower shall
promptly (and in any event not later than thirty (30) days after receipt)
furnish to each Lender and Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender or Agent) to
establish any tax credit to which such Lender or Agent may be entitled.
(iv) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes by the Borrower, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 2.14(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit
and the termination of this Agreement and shall continue to survive until
the expiration of the applicable statute of limitations for collection of
the relevant Tax or Other Tax.
(vi) Each Lender and Agent that is not created or organized under the
laws of the United States of America or a political subdivision thereof
shall deliver to the Borrower and the Administrative Agent on or before the
Closing Date, or, in the case of any Person that becomes a Lender or an
Agent after the date hereof, on or before the date on which such Person
becomes a Lender or an Agent, as applicable, after the date hereof, a true
and accurate certificate executed in duplicate by a duly authorized officer
of such Lender or Agent, in a form satisfactory to the Borrower and the
Administrative Agent, to the effect that such Lender or
40
<PAGE>
Agent is eligible under the provisions of an applicable tax treaty
concluded by the United States of America or other exemption (in which
case the certificate shall be accompanied by two executed copies of Form
1001 of the IRS or successor applicable form) or under Section 1442 of
the Code (in which case the certificate shall be accompanied by two
copies of Form 4224 of the IRS or successor applicable form) or, if such
Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, two completed signed copies of IRS Form W-8 or W-9 or successor
applicable form, to receive payments of interest hereunder without
deduction or withholding of United States federal income tax. Each such
Lender and Agent further agrees to deliver to the Borrower and the
Administrative Agent from time to time a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender or
Agent substantially in a form satisfactory to the Borrower and the
Administrative Agent, before or promptly upon the occurrence of any
event requiring a change in the most recent certificate previously
delivered by it to the Borrower and the Administrative Agent pursuant to
this SECTION 2.14(E)(vi). Further, each Lender or Agent which delivers
a certificate accompanied by Form 1001 of the IRS covenants and agrees
to deliver to the Borrower and the Administrative Agent within fifteen
(15) days prior to January 1, 1999, and every third (3rd) anniversary of
such date thereafter on which this Agreement is still in effect, another
such certificate and two accurate and complete original signed copies of
Form 1001 (or any successor form or forms required under the Code or the
applicable regulations promulgated thereunder to establish an exemption
from or reduction in the rate of withholding), and each Lender or Agent
that delivers a Form W-8 or W-9 as prescribed above or a certificate
accompanied by Form 4224 of the IRS covenants and agrees to deliver to
the Borrower and the Administrative Agent within fifteen (15) days prior
to the beginning of each subsequent taxable year of such Lender or Agent
during which this Agreement is still in effect, another such Form W-8 or
W-9 or another such certificate and two accurate and complete original
signed copies of IRS Form 4224 (or any successor form or forms required
under the Code or the applicable regulations promulgated thereunder to
establish an exemption from withholding). Each such certificate shall
certify as to one of the following:
(a) that such Lender or Agent is eligible to receive
payments of interest hereunder without deduction or withholding
of United States of America federal income tax;
(b) that such Lender or Agent is not eligible to receive
payments of interest hereunder without deduction or withholding
of United States of America federal income tax as specified
therein but is capable of recovering the full amount of any such
deduction or withholding from a source other than the Borrower
and will not seek any such recovery from the Borrower; or
(c) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Lender became a party hereto, such Lender is not eligible to
receive payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is
41
<PAGE>
not capable of recovering the full amount of the same from a source
other than the Borrower.
Each Lender and Agent shall promptly furnish to the Borrower and the
Administrative Agent such additional documents as may be reasonably
required by the Borrower or the Administrative Agent to establish any
exemption from or reduction of any Taxes or Other Taxes required to be
deducted or withheld and which may be obtained without undue expense to
such Lender.
(F) CONTROL ACCOUNT. The Register maintained by the Administrative Agent
pursuant to SECTION 13.3(C) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Advance made hereunder, the type of Loan
comprising such Advance and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment Agreement delivered to and accepted
by it and the parties thereto pursuant to SECTION 13.3, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder, (iv) the amount of any sum received by the
Administrative Agent from the Borrower hereunder and each Lender's share
thereof, and (v) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges, expenses and
interest.
(G) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.15 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
REVOLVING LOAN COMMITMENT REDUCTIONS. Promptly after receipt thereof, the
Administrative Agent will notify each Lender of the contents of each Aggregate
Revolving Loan Commitment reduction notice, Borrowing/Conversion/Continuation
Notice, and repayment notice received by it hereunder. The Administrative Agent
will notify each Lender of the interest rate applicable to each Eurodollar Rate
Loan promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate.
2.16 LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation. Each Lender may, by written or facsimile notice to the
Administrative Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.17 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated
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to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If such Lender or the Borrower, as the case
may be, has not in fact made such payment to the Administrative Agent, the
recipient of such payment shall, on demand by the Administrative Agent, repay
to the Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Administrative Agent until the
date the Administrative Agent recovers such amount at a rate per annum equal
to (i) in the case of payment by a Lender, the Federal Funds Effective Rate
for such day or (ii) in the case of payment by the Borrower, the interest
rate applicable to the relevant Loan.
2.18 TERMINATION DATE; EXTENSION OF TERMINATION DATE. (i) This Agreement
shall be effective until the Termination Date. Notwithstanding the termination
of this Agreement, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders shall have been
terminated (other than under Hedging Agreements or other agreements with respect
to Hedging Obligations) and all of the Letters of Credit shall have expired,
been canceled or terminated, all of the rights and remedies under this Agreement
and the other Loan Documents shall survive.
(ii) The Aggregate Revolving Loan Commitment shall expire on the
Termination Date. Within the period beginning 59 days and ending 30 days before
the then effective Termination Date, the Borrower may request in writing that
the Termination Date be extended for an additional period of 364 days, including
the then effective Termination Date as one of the days in the calculation of
days elapsed. Within 30 days after such request (such 30th day being the
"Consent Date"), each Lender may, in its sole discretion, agree to such
extension to a new Termination Date not more than 364 days following such
Consent Date by giving written notice of such agreement to the Borrower and the
Administrative Agent (and the failure to provide such notice shall be deemed to
be a decision not to extend). The Revolving Loan Commitment of each Lender that
declines to extend with respect to the Aggregate Revolving Loan Commitment may,
at the option of the Borrower, be replaced in accordance with SECTION 13.3 (but
only to the extent a replacement Lender is then available) or the Aggregate
Revolving Loan Commitment reduced. The Required Lenders must agree to any
extension with respect to the Termination Date for any such extension to become
effective.
2.19 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Revolving Loan Pro Rata Share of
any Advance requested by the Borrower, or to fund a Revolving Loan in order to
repay Swing Line Loans pursuant to SECTION 2.3(d), which such Lender is
obligated to fund under the terms of this Agreement and which failure has not
been cured, (ii) requested compensation from the Borrower under SECTIONS
2.14(E), 4.1 or 4.2 to recover Taxes, Other Taxes or other additional costs
incurred by such Lender which are not being incurred generally by the other
Lenders, (iii) delivered a notice pursuant to SECTION 4.3 claiming that such
Lender is unable to extend Eurodollar Rate Loans to the Borrower for reasons not
generally applicable to the other Lenders or (iv) has invoked SECTION 10.2,
then, in any such case, the Borrower or the Administrative Agent may make
written demand on such Affected Lender (with a copy to the Administrative Agent
in the case of a demand by the Borrower and a copy to the Borrower in the case
of a demand by the Administrative Agent) for the Affected Lender to assign, and
such Affected Lender shall use commercially reasonable efforts to assign
pursuant to one or more duly executed Assignment Agreements five (5) Business
Days after the date of such demand, to one or more financial institutions
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that comply with the provisions of SECTION 13.3(A) which the Borrower or the
Administrative Agent, as the case may be, shall have engaged for such purpose
("REPLACEMENT LENDER"), all of such Affected Lender's rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Revolving Loan Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit, and its obligation to
participate in additional Letters of Credit hereunder) in accordance with
SECTION 13.3. The Administrative Agent agrees, upon the occurrence of such
events with respect to an Affected Lender and upon the written request of the
Borrower, to use its reasonable efforts to obtain the commitments from one or
more financial institutions to act as a Replacement Lender. The
Administrative Agent is authorized to execute one or more of such assignment
agreements as attorney-in-fact for any Affected Lender failing to execute and
deliver the same within five (5) Business Days after the date of such demand.
Further, with respect to such assignment the Affected Lender shall have
concurrently received, in cash, all amounts due and owing to the Affected
Lender hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the Loans owed to
such Lender, together with accrued interest thereon through the date of such
assignment, amounts payable under SECTIONS 2.14(E), 4.1, and 4.2 with respect
to such Affected Lender and compensation payable under SECTION 2.14(C) in the
event of any replacement of any Affected Lender under CLAUSE (ii) or CLAUSE
(iii) of this SECTION 2.19; PROVIDED that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of SECTIONS 2.14(E), 4.1, 4.2, 4.4,
and 10.7 accrued with respect to the period prior to the date such Affected
Lender is replaced, as well as to any fees accrued through the date of such
assignment for its account hereunder and not yet paid, and shall continue to
be obligated under SECTION 11.8. Upon the replacement of any Affected Lender
pursuant to this SECTION 2.19, the provisions of SECTION 9.2 shall continue
to apply with respect to Borrowings which are then outstanding with respect
to which the Affected Lender failed to fund its Revolving Loan Pro Rata
Share, and which failure has not been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue upon
Borrower's request, for the account of the Borrower or any Guarantor through
such Issuing Bank's branches as it and the Borrower may jointly agree, one or
more Letters of Credit in accordance with this ARTICLE III, from time to time
during the period, commencing on the date hereof and ending on the Business Day
prior to the Termination Date; PROVIDED, HOWEVER, that no Issuing Bank shall
have any obligation to issue any Letter of Credit if, after taking into account
such issuance, the aggregate L/C Obligations outstanding under Letters of Credit
issued by such Issuing Bank would exceed the amount set forth on SCHEDULE 3.1
opposite such Issuing Bank's name. SCHEDULE 3.1 may be updated at any time and
from time to time by the Administrative Agent in connection with the addition of
any Issuing Bank.
3.2 [RESERVED].
3.3 TYPES AND AMOUNTS. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:
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(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Aggregate Revolving Loan Commitment at such time, or (b)
the aggregate outstanding amount of the L/C Obligations would exceed
$100,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the Revolving Loan Termination Date.
3.4 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered or caused the applicable
Guarantor applicant to deliver to the applicable Issuing Bank at such
times and in such manner as such Issuing Bank may reasonably
prescribe, a request for issuance of such Letter of Credit in
substantially the form of EXHIBIT C hereto, duly executed applications
for such Letter of Credit, and such other customary documents,
instructions and agreements as may be required pursuant to the terms
thereof (all such applications, documents, instructions, and
agreements being referred to herein as the "L/C Documents"), and the
proposed Letter of Credit shall be reasonably satisfactory to such
Issuing Bank as to form and content; and
(ii) as of the date of issuance of such Letter of Credit, no
order, judgment or decree of any court, arbitrator or Governmental
Authority shall purport by its terms to enjoin or restrain the
applicable Issuing Bank from issuing such Letter of Credit and no law,
rule or regulation applicable to such Issuing Bank and no request or
directive (whether or not having the force of law) from a Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit or
request that such Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of that Letter of Credit.
To the extent that any provision of any L/C Document cannot reasonably be
construed to be consistent with this Agreement, requires greater collateral
security or imposes additional obligations not reasonably related to customary
letter of credit arrangements, such provision shall be invalid and this
Agreement shall control.
3.5 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) Subject to the
terms and conditions of this ARTICLE III and provided that the applicable
conditions set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower or Guarantor, as applicable, in accordance with such
Issuing Bank's usual and customary business practices and, in this connection,
such Issuing Bank may assume that the applicable conditions set forth in
SECTION 5.2 hereof have been satisfied unless it shall have received notice to
the contrary from the Administrative Agent or a Lender or has knowledge that the
applicable conditions have not been met.
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(b) The applicable Issuing Bank shall give the Administrative Agent
written or telex notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of a Letter of Credit, PROVIDED, HOWEVER, that the
failure to provide such notice shall not result in any liability on the part of
such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this SECTION 3.5 are met as though a new Letter of Credit was
being requested and issued.
3.6 LETTER OF CREDIT PARTICIPATION. Immediately upon the issuance of each
Letter of Credit hereunder, each Lender with a Revolving Loan Pro Rata Share
shall be deemed to have automatically, irrevocably and unconditionally purchased
and received from the applicable Issuing Bank an undivided interest and
participation in and to such Letter of Credit, the obligations of the Borrower
and/or Guarantor, as applicable, in respect thereof, and the liability of such
Issuing Bank thereunder (collectively, an "L/C INTEREST") in an amount equal to
the amount available for drawing under such Letter of Credit multiplied by such
Lender's Revolving Loan Pro Rata Share. Each Issuing Bank will notify each
Lender promptly upon presentation to it of an L/C Draft or upon any other draw
under a Letter of Credit. On or before the Business Day on which an Issuing
Bank makes payment of each such L/C Draft or, in the case of any other draw on a
Letter of Credit, on demand by the Administrative Agent or the applicable
Issuing Bank, each Lender shall make payment to the Administrative Agent, for
the account of the applicable Issuing Bank, in immediately available funds in an
amount equal to such Lender's Revolving Loan Pro Rata Share of the amount of
such payment or draw. The obligation of each Lender to reimburse the Issuing
Banks under this SECTION 3.6 shall be unconditional, continuing, irrevocable and
absolute. In the event that any Lender fails to make payment to the
Administrative Agent of any amount due under this SECTION 3.6, the
Administrative Agent shall be entitled to receive, retain and apply against such
obligation the principal and interest otherwise payable to such Lender hereunder
until the Administrative Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; PROVIDED, HOWEVER, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the applicable Issuing Bank for such amount in accordance with this
SECTION 3.6.
3.7 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay promptly upon demand therefor to the
Administrative Agent, for the account of the Lenders, the amount of each advance
which may be drawn under or pursuant to a Letter of Credit (whether such Letter
of Credit was issued for the account of the Borrower or any Guarantor) or an L/C
Draft related thereto (such obligation of the Borrower to reimburse the
Administrative Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to
such Letter of Credit or L/C Draft). If the Borrower at any time fails to repay
when due a Reimbursement Obligation pursuant to this SECTION 3.7, the Borrower
shall be deemed to have elected to borrow Revolving Loans from the Lenders, as
of the date of the advance giving rise to the Reimbursement Obligation, equal in
amount to the amount of the unpaid Reimbursement Obligation. Such Revolving
Loans shall be made as of the date of the payment giving rise to such
Reimbursement Obligation, automatically, without notice and without any
requirement to satisfy the conditions precedent otherwise applicable to an
Advance of Revolving Loans. Such Revolving Loans shall constitute a Floating
Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails
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to repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises and, for any reason, the Lenders are unable to make or have no
obligation to make Revolving Loans, then such Reimbursement Obligation shall
bear interest from and after such day, until paid in full, at the interest
rate applicable to a Floating Rate Advance.
3.8 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of a Default, the Borrower shall, upon the Administrative Agent's
demand, deliver to the Administrative Agent for the benefit of the Lenders and
the Issuing Banks, cash, or other collateral of a type reasonably satisfactory
to the Required Lenders, having a value, as determined by such Lenders, equal to
the aggregate outstanding L/C Obligations. Any such collateral shall be held by
the Administrative Agent in a separate interest bearing account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Administrative Agent for the benefit of
the Lenders and the Issuing Banks as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Issuing Banks for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such reimbursement is required, to payment of such of the other Obligations
as the Administrative Agent shall determine. If no Default shall be continuing
all amounts (including interest income), or, to the extent that L/C Obligations
have been paid in full in cash or have otherwise been reduced to $0 amounts
(including interest income) equal to the reduction in such L/C Obligations, in
each case, remaining in any cash collateral account established pursuant to this
SECTION 3.8 which are not to be applied to reimburse an Issuing Bank for amounts
actually paid or to be paid by such Issuing Bank in respect of a Letter of
Credit or L/C Draft, shall be returned to the Borrower (after deduction of the
Administrative Agent's expenses incurred in connection with such cash collateral
account).
3.9 LETTER OF CREDIT FEES. The Borrower agrees to pay (i) on each Payment
Date and on the Termination Date, in arrears, to the Administrative Agent for
the ratable benefit of the Lenders, except as set forth in SECTION 9.2, a letter
of credit fee at a rate per annum equal to the Applicable L/C Fee Percentage on
the average daily outstanding face amount available for drawing under all
Letters of Credit, (ii) on each Payment Date and on the Termination Date, in
arrears, to the Administrative Agent for the sole account of each Issuing Bank,
a letter of credit fronting fee at such percentage rate as may be agreed between
the Borrower or Guarantor, as applicable, and each Issuing Bank on the average
daily outstanding face amount available for drawing under all Letters of Credit
issued by such Issuing Bank, and (iii) to the Administrative Agent for the
benefit of each Issuing Bank, all customary fees and other issuance, amendment,
document examination, negotiation and presentment expenses and related charges
in connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by such Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.
3.10 ISSUING BANK REPORTING REQUIREMENTS. Each Issuing Bank shall, no
later than the tenth Business Day following the last day of each month, provide
to the Administrative Agent, upon the Administrative Agent's request, schedules,
in form and substance reasonably satisfactory to the Administrative Agent,
showing the date of issue, account party, amount, expiration date and the
reference number of each Letter of Credit issued by it outstanding at any time
during such month and
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the aggregate amount payable by the Borrower and/or any Guarantor during such
month. In addition, upon the request of the Administrative Agent, each
Issuing Bank shall furnish to the Administrative Agent copies of any Letter
of Credit and any application for or reimbursement agreement with respect to
a Letter of Credit to which the Issuing Bank is party and such other
documentation as may reasonably be requested by the Administrative Agent.
Upon the request of any Lender, the Administrative Agent will provide to such
Lender information concerning such Letters of Credit.
3.11 INDEMNIFICATION; EXONERATION. (a) In addition to amounts payable as
elsewhere provided in this ARTICLE III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Administrative Agent, each Issuing Bank and
each Lender from and against any and all liabilities and costs which the
Administrative Agent, such Issuing Bank or such Lender may incur or be subject
to as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit other than, in the case of the applicable Issuing Bank, as a result of
its Gross Negligence or willful misconduct, or (ii) the failure of the
applicable Issuing Bank to honor a drawing under a Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
DE JURE or DE FACTO Governmental Authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Administrative Agent and the
Issuing Banks, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter of Credit by, the beneficiary of any Letters of Credit.
In furtherance and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit applications and Letter of Credit reimbursement
agreements executed by the Borrower or any Guarantor at the time of request for
any Letter of Credit, neither the Administrative Agent, any Issuing Bank nor any
Lender shall be responsible (in the absence of Gross Negligence or willful
misconduct in connection therewith): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of technical
trade terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Administrative Agent, the Issuing Banks and the Lenders, including, without
limitation, any Governmental Acts. None of the above shall affect, impair, or
prevent the vesting of any Issuing Bank's rights or powers under this
SECTION 3.11.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank,
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the Administrative Agent or any Lender under any resulting liability to the
Borrower or any Guarantor or relieve the Borrower of any of its obligations
hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.11 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding federal taxation of the overall net income of any Lender or
applicable Lending Installation), or changes the basis of taxation of
payments to any Lender in respect of its Loans, its L/C Interests, the
Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurodollar Rate Loans) with respect to its Loans, L/C
Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining the Loans, the L/C Interests or the Letters of
Credit or reduces any amount received by any Lender or any applicable
Lending Installation in connection with Loans or Letters of Credit, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit,
by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to SECTION
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making,
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funding and maintaining its Loans, L/C Interests, Letters of Credit and its
Revolving Loan Commitment.
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change in Capital Adequacy" (as defined below),
and (ii) such increase in capital will result in an increase in the cost to such
Lender of maintaining its Loans, L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder, then, within 15 days after receipt by the
Borrower of written demand by such Lender pursuant to SECTION 4.5, the Borrower
shall pay such Lender the amount necessary to compensate for any shortfall in
the rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Loans, its L/C Interests, the
Letters of Credit or its obligation to make Loans hereunder (after taking into
account such Lender's policies as to capital adequacy). "CHANGE IN CAPITAL
ADEQUACY" means (i) any change after the date of this Agreement in the
"Risk-Based Capital Guidelines" (as defined below) excluding, for the avoidance
of doubt, the effect of any phasing in of such Risk-Based Capital Guidelines or
any other capital requirements passed prior to the date hereof, or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement and having general
applicability to all banks and financial institutions within the jurisdiction in
which such Lender operates which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (i)
the risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
4.3 AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Administrative Agent shall suspend the availability of the
affected Type of Advance and, in the case of any occurrence set forth in clause
(i) require any Advances of the affected Type to be repaid.
4.4 FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower in any
Borrowing/Conversion/Continuation Notice for any reason other than default by
the Lenders, the Borrower agrees to indemnify each Lender upon such Lender's
delivery of written demand therefor to the Borrower in accordance with the terms
of SECTION 4.5 for any reasonable loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Rate Advance. In
connection with any assignment by any
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Lender of any portion of the Loans made pursuant to SECTION 13.3 and made
during the Syndication Period, the Borrower shall be deemed to have repaid
all outstanding Eurodollar Rate Advances as of such date and reborrowed such
amounts as Floating Rate Advances and the indemnification provisions under
this SECTION 4.4 shall apply.
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under SECTION 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to SECTION 2.14(E) or to
this ARTICLE IV shall use its best efforts to notify the Borrower and the
Administrative Agent in writing of any Change in Capital Adequacy, law, policy,
rule, guideline or directive giving rise to such demand for compensation not
later than ninety (90) days following the date upon which the responsible
account officer of such Lender knows or should have known of such Change in
Capital Adequacy, law, policy, rule, guideline or directive. Any demand for
compensation pursuant to this ARTICLE IV shall be in writing and shall state the
amount due, if any, under SECTION 4.1, 4.2 or 4.4 and shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under SECTION 4.4 in connection
with a Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. The
obligations of the Borrower under SECTIONS 4.1, 4.2 and 4.4 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit or purchase
any participations therein, in each case, on the Closing Date, unless (i) such
initial Loans are made not later than December 31, 1998; (ii) the Subordinated
Notes and Senior Notes have been issued and the Borrower has received the net
proceeds thereof; (iii) the Reynolds Acquisition has been consummated; and (iv)
the Borrower has furnished to the Administrative Agent each of the following,
with sufficient copies for the Lenders, all in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders:
(1) Copies of the Articles of Incorporation (or equivalent
organizational document) of the Borrower, and each of the Guarantors, each
of the Material Foreign Subsidiaries which is a party to any of the Loan
Documents or the Capital Stock of which is subject to a Pledge Agreement,
together with all amendments and a certificate of good standing (in the
case of the Material Foreign Subsidiaries, to the extent applicable), both
certified by the appropriate governmental officer in its respective
jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of each
of the Borrower, each Guarantor, and each of the Material Foreign
Subsidiaries which is a party to any of the Loan Documents or the Capital
Stock of which is subject to a Pledge Agreement of its
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respective By-Laws (or equivalent organizational document) and, for each
such Person which is a party to any of the Loan Documents, of its
respective Board of Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for any Lender)
authorizing its execution of such Loan Documents;
(3) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each member of the Ball Corporate Group which is a party to
any of the Loan Documents, which shall identify by name and title and bear
the signature of the officers of such Person authorized to sign the Loan
Documents to which it is a party and, in the case of the Borrower, to make
borrowings hereunder, upon which certificate the Lenders shall be entitled
to rely until informed of any change in writing by the Borrower;
(4) A certificate, in form and substance reasonably satisfactory to
the Administrative Agent, signed by the chief financial officer or
treasurer of the Borrower, stating that on the Closing Date all the
representations in this Agreement are true and correct and no Default or
Unmatured Default has occurred and is continuing;
(5) A written opinion of the Borrower's domestic and foreign counsel,
addressed to the Agents, the Arrangers and the Lenders, substantially in
the form of EXHIBIT E hereto;
(6) Evidence reasonably satisfactory to the Administrative Agent that
(i) all conditions precedent to the consummation of the Reynolds
Acquisition (other than the failure to obtain the consents of Paco, Inc.
and Independent Beverage Corporation to the consummation of the Reynolds
Acquisition) have been satisfied or waived with the approval of the Agents
(such approval not to be unreasonably withheld), (ii) the Reynolds
Acquisition shall have been consummated in accordance with the Asset
Purchase Agreement, as in effect on April 22, 1998, without giving effect
to any amendment, modification or waiver thereto which (x) is deemed
material by the Agents and (y) to which the Agents shall not have consented
in writing, (iii) the Asset Purchase Agreement has been approved by all
necessary corporate action of Reynold's and the Borrower's respective Board
of Directors and/or shareholders, and (iv) there has not occurred any
material breach or default under the Asset Purchase Agreement;
(7) Evidence reasonably satisfactory to the Administrative Agent that
there exists no injunction or temporary restraining order which, in the
reasonable judgment of the Administrative Agent, would prohibit the making
of the Loans or the consummation of the Reynolds Acquisition and the other
transactions contemplated by the Transaction Documents or any litigation
seeking such an injunction or restraining order;
(8) Written money transfer instructions reasonably requested by the
Administrative Agent, addressed to the Administrative Agent and signed by
an Authorized Officer of the Borrower;
(9) (x) the audited financial statements of the Reynolds Group for
the fiscal years ending December 31, 1996 and December 31, 1997 and (y) the
PRO FORMA opening consolidated financial statements of the Borrower and its
Subsidiaries, after giving effect to the
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Reynolds Acquisition, which financial statements shall demonstrate, in
the reasonable judgement of the Agents and the Required Lenders,
together with all other information then available to the Agents and the
Required Lenders, the ability of the Borrower and its Subsidiaries to
repay their debts and satisfy their respective other obligations as and
when due, and to comply with the financial covenants set forth in
SECTION 7.4 hereof, has not changed in any material respect from the PRO
FORMA financial statements furnished to the Agents on March 5, 1998;
(10) Evidence reasonably satisfactory to the Administrative Agent
that (x) all required U.S. governmental approvals related to the Reynolds
Acquisition have been obtained and all related filings made and any
applicable waiting periods shall have expired or been terminated, including
those prescribed by the Hart-Scott-Rodino Antitrust Improvements Act, as
amended, and (y) prior to the consummation of that portion of the Reynolds
Acquisition relating to the foreign assets of the Reynolds Group, all
material consents (other than governmental approvals) shall have been
obtained;
(11) Evidence satisfactory to the Administrative Agent of the payment
of all principal, interest, fees and premiums, if any, on all loans
outstanding under all outstanding funded debt and credit facilities of the
Borrower and each of its Domestic Incorporated Subsidiaries (other than
Permitted Existing Indebtedness) and the termination of the applicable
agreements, including, without limitation, BMBCC's Long-Term Credit
Agreement and Short-Term Credit Agreement, each dated as of February 5,
1996, and the Borrower's and its Subsidiaries' Indebtedness identified on
SCHEDULE 5.1 attached hereto;
(12) Evidence reasonably satisfactory to the Agents that the Borrower
and each of its Subsidiaries, and the Reynolds Group (a) has made a full
and complete assessment of the Year 2000 Issues; (b) has a realistic and
achievable program for remediating the Year 2000 Issues, including a
timetable and budget of anticipated costs; and (c) has a source of funds as
required in such budget;
(13) Such other documents as the Administrative Agent or any Lender
or its counsel may have reasonably requested, including, without
limitation, all of the documents reflected on the List of Closing Documents
attached as EXHIBIT F to this Agreement; and
(14) Evidence satisfactory to the Administrative Agent that the
Borrower has paid or caused to be paid (x) to the Agents and the Arrangers
the fees agreed to and then due and payable in the fee letter dated April
22, 1998, among the Agents, the Arrangers and the Borrower and (y) to the
Administrative Agent the fees agreed to and then due and payable in the
letter agreement dated April 22, 1998 among the Administrative Agent and
the Borrower.
5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be required
to make any Advance or issue any Letter of Credit, unless on the applicable
Borrowing Date, or in the case of a Letter of Credit, the date on which the
Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
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(ii) The representations and warranties contained in ARTICLE VI are
true and correct in all material respects as of such Borrowing Date except
for changes in the Schedules to this Agreement reflecting events,
conditions or transactions permitted by or not in violation of this
Agreement and except to the extent any such representation or warranty
speaks expressly only as of a different date.
Each Borrowing/Conversion/Continuation Notice with respect to each such
Advance and the letter of credit application with respect to each Letter of
Credit shall constitute a representation and warranty by the Borrower that the
conditions contained in SECTIONS 5.2(i) and (ii) have been satisfied. Any
Lender may require a duly completed officer's certificate in substantially the
form of EXHIBIT G hereto and/or a duly completed compliance certificate in
substantially the form of EXHIBIT H hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and Agent as of the Closing Date, giving
effect to the Reynolds Acquisition and the consummation of the other
transactions contemplated by the Transaction Documents on the Closing Date, and
thereafter on each date as required by SECTION 5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing will have a Material Adverse Effect, and (iii) has all requisite
corporate power and authority to own, operate and (to the extent contemplated
hereby) encumber its property and to conduct its business as presently conducted
and as proposed to be conducted.
6.2 AUTHORITY.
(A) The Borrower and each of its Subsidiaries has the requisite corporate
power and authority (i) to execute, deliver and perform each of the Transaction
Documents which are to be executed by it in connection with the Reynolds
Acquisition or which have been executed by it as required by this Agreement and
the other Loan Documents on or prior to Closing Date and (ii) to file the
Transaction Documents which must be filed by it in connection with the Reynolds
Acquisition or which have been filed by it as required by this Agreement, the
other Loan Documents or otherwise on or prior to the Closing Date with any
Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may be,
of each of the Transaction Documents which must be executed or filed by the
Borrower or any of its Subsidiaries in connection with the Reynolds Acquisition
or which have been executed or filed as required by this Agreement, the other
Loan Documents or otherwise on or prior to the Closing Date and to which the
Borrower or any of its Subsidiaries is party, and the consummation of the
transactions contemplated
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thereby, have been duly approved by the respective boards of directors and,
if necessary, the shareholders of the Borrower and its Subsidiaries, and such
approvals have not been rescinded. No other corporate action or proceedings
on the part of the Borrower or its Subsidiaries are necessary to consummate
such transactions.
(C) Each of the Transaction Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity,
regardless of whether such enforcement is sought at equity or at law), is in
full force and effect and no material term or condition thereof has been
amended, modified or waived from the terms and conditions contained in the
Transaction Documents delivered to the Administrative Agent pursuant to SECTION
5.1 without the prior written consent of the Required Lenders.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not
(i) conflict with the certificate or articles of incorporation or by-laws of
the Borrower or any such Subsidiary, (ii) conflict with, result in a breach
of or constitute (with or without notice or lapse of time or both) a default
under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or material Contractual Obligation of
the Borrower or any such Subsidiary, or require termination of any material
Contractual Obligation, (iii) with respect to the Loan Documents, conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law (including, without
limitation, any Environmental Property Transfer Act) or material Contractual
Obligation of the Borrower or any such Subsidiary, or require termination of
any material Contractual Obligation, except such breach, default or
termination which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, or (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or
assets of the Borrower or any such Subsidiary, other than Liens permitted by
the Loan Documents. Except as set forth on SCHEDULE 6.3 to this Agreement,
the execution, delivery and performance of each of the Transaction Documents
to which the Borrower or any of its Subsidiaries is a party do not and will
not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except (a) filings, consents or notices
which have been made, obtained or given, or which, if not made, obtained or
given, individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect, and (b) filings necessary to create or
perfect security interests in the Collateral.
6.4 FINANCIAL STATEMENTS.
(A) The PRO FORMA financial statements of the Borrower and its
Subsidiaries, copies of which are attached hereto as SCHEDULE 6.4 to this
Agreement, present on a PRO FORMA basis the financial condition of the Borrower
and such Subsidiaries as of such date, and reflect on a PRO FORMA basis those
liabilities reflected in the notes thereto as of such date and resulting from
consummation of the Reynolds Acquisition and the other transactions contemplated
by this Agreement, and the payment or
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accrual of all Transaction Costs payable on the Closing Date with respect to
any of the foregoing and demonstrate that, after giving effect to the
Reynolds Acquisition, the ability of the Borrower and its Subsidiaries to
repay their debts and satisfy their respective other obligations as and when
due, and to comply with the requirements of this Agreement has not changed in
any material respect from the PRO FORMA financial statements furnished to the
Agents on March 5, 1998. The projections and assumptions expressed in the
PRO FORMA financials referenced in this SECTION 6.4(A) were prepared in good
faith and represent management's opinion based on the information available
to the Borrower at the time so furnished.
(B) Complete and accurate copies of the following financial statements and
the following related information have been delivered to the Administrative
Agent: (1) the consolidated balance sheets of the Borrower and its Subsidiaries
as at December 31, 1996 and December 31, 1997, and the related consolidated
statements of income, changes in stockholders' equity and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and the audit
report related thereto, and the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as at March 31, 1998 and the related unaudited,
consolidated statements of operations, changes in stockholder's equity and cash
flows of the Borrower and its Subsidiaries for the three (3) months then ended;
and (2) the consolidated balance sheet of the aluminum beverage-can
manufacturing business of Reynolds purchased under the Asset Purchase Agreement
(the "REYNOLDS GROUP") as at December 31, 1996 and December 31, 1997, and the
related consolidated statements of operations, changes in stockholder's equity
and cash flows of the Reynolds Group for the fiscal years then ended, and the
audit report related thereto. Each of the financial statements delivered
pursuant to this SECTION 6.4(B) present fairly the financial condition of the
Borrower and its Subsidiaries and the Reynolds Group, as applicable.
6.5 NO MATERIAL ADVERSE CHANGE. (a) Since December 31, 1997 up to the
Closing Date, there has been no material adverse change in the operations,
business, properties, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its consolidated Subsidiaries taken as a whole,
and since December 31, 1997 up to the Closing Date no condition, event, change
or occurrence, or any series of the foregoing, exists or has occurred which,
individually or in the aggregate, has had or is reasonably likely to have, a
"Material Adverse Effect" as defined in the draft Asset Purchase Agreement
delivered to the Agents on April 14, 1998 (identified as document 116230.14
Draft of April 6, 1998 - 10:52 AM) and which definition is as follows:
"MATERIAL ADVERSE EFFECT" means an individual or cumulative adverse
change in, or effect on, the business, customers, operations,
properties, condition (financial or otherwise), assets or liabilities
of the Business taken as a whole that is reasonably expected to be
materially adverse to the business, customers, operations, properties,
condition (financial or otherwise), assets or liabilities of the
Business taken as a whole.
(b) Since the Closing Date, there has occurred no change in the operations,
business, properties, condition (financial or otherwise), results of operations
or prospects of the Borrower, or the Borrower and its Subsidiaries taken as a
whole, which has had or would reasonably be expected to have a Material Adverse
Effect (as defined in SECTION 1.1 hereof).
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6.6 TAXES.
(A) TAX EXAMINATIONS. All deficiencies which have been asserted in
writing against the Borrower or any of its Subsidiaries as a result of any
federal, provincial, state, local or foreign tax examination for each taxable
year in respect of which an examination has been conducted have been fully paid
or finally settled or are being contested in good faith, and as of the Closing
Date no issue has been raised in writing by any taxing authority in any such
examination which, by application of similar principles, reasonably can be
expected to result in assertion by such taxing authority of a material
deficiency for any other year not so examined which has not been reserved for in
the Borrower's consolidated financial statements to the extent, if any, required
by Agreement Accounting Principles. Except as permitted pursuant to SECTION
7.2(D), neither the Borrower nor any of its Subsidiaries anticipates any
material tax liability with respect to the years which have not been closed
pursuant to applicable law.
(B) PAYMENT OF TAXES. All material tax returns and reports of the
Borrower and its Subsidiaries required to be filed have been timely filed, and
all taxes, assessments, fees and other governmental charges thereupon and upon
their respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. There is no action,
suit, proceeding, arbitration or (to the Borrower's knowledge) investigation
before or by any Governmental Authority or private arbitrator pending or, to the
Borrower's knowledge, threatened against the Borrower or any of its Subsidiaries
or any property of any of them (i) challenging the validity or the
enforceability of any material provision of the Transaction Documents or
(ii) which will have or would reasonably be expected to have a Material Adverse
Effect. There is no material loss contingency within the meaning of Agreement
Accounting Principles which has not been reflected in the consolidated financial
statements of the Borrower prepared and delivered pursuant to SECTION 7.1(A) for
the fiscal period during which such material loss contingency was incurred.
Neither the Borrower nor any of its Subsidiaries is (A) in violation of any
applicable Requirements of Law which violation will have or would reasonably be
expected to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will have or would reasonably be expected to have a Material Adverse
Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description of the corporate structure of the Borrower, its Subsidiaries
(including for purposes of this clause (i) its Excluded Subsidiaries and the FTB
Group) and any other Person in which the Borrower or any of its Subsidiaries
holds an Equity Interest (both narratively and in chart form); (ii) accurately
sets forth as of the Closing Date (A) the correct legal name, the jurisdiction
of incorporation and the jurisdictions in which each of the Borrower and the
direct and indirect Subsidiaries of the Borrower is qualified to transact
business as a foreign corporation, (B) the authorized, issued and outstanding
shares of each
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class of Capital Stock of the Borrower, each of its Subsidiaries and FTB and,
for such Subsidiaries and FTB, the owners of such shares (both as of the
Closing Date and on a fully-diluted basis), and (C) a summary of the direct
and indirect partnership, joint venture, or other Equity Interests, if any,
of the Borrower and each Subsidiary of the Borrower in any Person that is not
a corporation; and (iii) accurately sets forth which of the Persons
identified in clause (i) is (A) a member of the FTB Group or (B) an Excluded
Subsidiary. Except as set forth on SCHEDULE 6.8, none of the issued and
outstanding Capital Stock of the Borrower or any of its Subsidiaries is
subject to any vesting, mandatory redemption, or mandatory repurchase
agreement. Except as set forth on SCHEDULE 6.8, as of the Closing Date,
there are no warrants or options outstanding with respect to the Capital
Stock of any of the Borrower's Material Subsidiaries. The outstanding
Capital Stock of the Borrower, each of its Subsidiaries and, as of the
Closing Date, FTB is duly authorized, validly issued, fully paid and
nonassessable and is not Margin Stock. Except as set forth on SCHEDULE 6.8,
as of the Closing Date, the Borrower has no Subsidiaries or Excluded
Subsidiaries and there are no other members of the FTB Group.
6.9 ERISA. (a) Except as set forth on SCHEDULE 6.9, neither the Borrower
nor any member of the Controlled Group maintains or contributes to any Benefit
Plan or Multiemployer Plan. Except as set forth on SCHEDULE 6.9, no Benefit
Plan has incurred any material accumulated funding deficiency (as defined in
Sections 302(a)(2) of ERISA and 412(a) of the Code) whether or not waived.
Neither the Borrower nor any member of the Controlled Group has incurred any
material liability to the PBGC which remains outstanding. Schedule B to the
most recent annual report filed with the IRS with respect to each Benefit Plan
and furnished to the lenders is complete and accurate in all material respects.
Since the date of each such Schedule B, there has been no material adverse
change in the funding status or financial condition of the Benefit Plan relating
to such Schedule B. Within the previous six years, neither the Borrower nor any
member of the Controlled Group has (i) failed to make a required contribution or
payment to a Multiemployer Plan or (ii) made a complete or partial withdrawal
under Sections 4203 or 4205 of ERISA from a Multiemployer Plan for which the
required withdrawal liability has not been satisfied. Within the previous six
years, neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment to any
Benefit Plan. Neither the Borrower nor any member of the Controlled Group is
required to provide security to a Benefit Plan under Section 401(a)(29) of the
Code due to a Plan amendment that results in an increase in current liability
for the plan year. Each Single Employer Plan which is intended to be qualified
under Section 401(a) of the Code as currently in effect is so qualified, and
each trust related to any such Plan is exempt from federal income tax under
Section 501(a) of the Code as currently in effect. The Borrower and all
Subsidiaries are in compliance in all material respects with the
responsibilities, obligations and duties imposed on them by ERISA and the Code
with respect to all Single Employer Plans. Neither the Borrower nor any of its
Subsidiaries nor any fiduciary of any Plan has engaged in a material nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the Code.
Neither the Borrower nor any member of the Controlled Group has taken or failed
to take any action which would constitute or result in a material Termination
Event. Neither the Borrower nor any member of the Controlled Group is subject
to any material liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA. Neither the Borrower nor any of its Subsidiaries has, by reason of the
transactions contemplated hereby, any obligation to make any material payment to
any employee pursuant to any Plan or existing contract or arrangement.
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(b) For purposes of this SECTION 6.9 and SECTION 6.23 only,
"material" means any noncompliance or basis for liability which, together with
all other noncompliance or grounds for liability under this SECTION 6.9, or
SECTION 6.23, as applicable, would be reasonably likely to subject Ball or any
of its Subsidiaries to liability individually or in the aggregate in excess of
$25,000,000.
6.10 ACCURACY OF INFORMATION. (a) The written information, exhibits and
reports furnished by or on behalf of the Borrower and any of its Subsidiaries to
the Agents or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, the representations and warranties of the Borrower and
its Subsidiaries contained in the Loan Documents, and all certificates and
documents delivered to the Agents and the Lenders pursuant to the terms thereof,
including, without limitation, the Confidential Information Memorandum, dated
May 1998, taken as a whole, do not contain as of the date furnished any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
(b) The projections supplied in connection with the factual
information referred to in CLAUSE (a) above were or are based on good faith
estimates and assumptions believed to be fair and reasonable at the time made,
given historical financial performance and current and reasonably foreseeable
business conditions, and, to the Borrower's knowledge, there are no facts or
circumstances presently existing which singly or in the aggregate would cause a
material change in such projections, it being recognized and agreed by the
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results and that the differences may
be material.
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a
party to any Contractual Obligation which individually or in the aggregate will
have or would reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any of its Subsidiaries has received notice or has knowledge
that (i) it is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any Contractual
Obligation applicable to it, or (ii) any condition exists which, with the giving
of notice or the lapse of time or both, would constitute a default with respect
to any such Contractual Obligation, in each case, except where such default or
defaults, if any, individually or in the aggregate will not have or would not
reasonably be expected to have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all of its material assets and properties (tangible
and intangible, real or personal) owned by it or a valid leasehold interest in
all of its material leased assets (except insofar as
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marketability may be limited by any laws or regulations of any Governmental
Authority affecting such assets), and all such assets and property are free
and clear of all Liens, except Liens permitted under SECTION 7.3(C).
Substantially all of the assets and properties used or useful to the business
of the Borrower or any Subsidiary of the Borrower are in adequate operating
condition and repair, ordinary wear and tear excepted.
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other foreign, federal or state statute
or regulation which limits its ability to incur indebtedness as contemplated
hereby or its ability to consummate the transactions contemplated hereby or in
connection with the Reynolds Acquisition.
6.16 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all of its respective properties in at least such
amounts, against at least such risks and with such risk retention as are usually
maintained, insured against or retained, as the case may be, in the same general
area by companies of established repute engaged in the same or a similar
business; PROVIDED, that the Borrower and its Subsidiaries may self-insure to
the same extent as other companies of established repute engaged in the same or
a similar business in the same general area in which the Borrower or such
Subsidiary operates and to the extent consistent with prudent business practice.
The Borrower will furnish to the Lenders, upon request from the Administrative
Agent, information presented in reasonable detail as to the insurance so
carried.
6.17 LABOR MATTERS.
(A) Except as listed on SCHEDULE 6.17 to this Agreement, there are on the
Closing Date: (1) no collective bargaining agreements to which the Borrower or
any of its Subsidiaries is a party covering any of the employees of the Borrower
or any of its Subsidiaries; (2) to the Borrower's knowledge no attempts to
organize the employees of the Borrower or any of its Subsidiaries; and (3) no
material labor disputes at any facility of the Borrower or any of its
Subsidiaries, including without limitation any walkouts disrupting the
operations of the Borrower or any of its Subsidiaries, any strikes or any
lockouts, pending, or, to the Borrower's knowledge, threatened.
(B) Set forth in SCHEDULE 6.17 to this Agreement is a list, as of the
Closing Date, of all material consulting agreements, employment contracts and
service agreements with temporary employment agencies that individually are of
value in excess of $1,000,000 per year and are not otherwise disclosed pursuant
to this Agreement.
(C) Set forth in SCHEDULE 6.17 to this Agreement is a list, as of the
Closing Date, of all employment arbitration awards, judgments, consent decrees,
findings, settlement agreements, or other final resolutions rendered against the
Borrower or any of its Subsidiaries during the preceding five years that,
individually or in the aggregate, exceed $10,000,000 or which, regardless of
when rendered, individually or in the aggregate impose continuing obligations on
the Borrower or any of its Subsidiaries in excess of $10,000,000.
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6.18 REYNOLDS ACQUISITION. As of the Closing Date and immediately prior to
(or contemporaneous with) the making of the initial Loans:
(i) the Reynolds Acquisition Documents are in full force and effect,
no material breach, default or waiver of any term or provision thereof by
the Borrower or any of its Subsidiaries or, to the best of the Borrower's
knowledge, the other parties thereto, has occurred (except for such
breaches, defaults and waivers, if any, consented to in writing by the
Agents) and no action has been taken by any competent authority which
restrains, prevents or imposes any material adverse condition upon, or
seeks to restrain, prevent or impose any material adverse condition upon,
the Reynolds Acquisition;
(ii) the representations and warranties of the Borrower contained in
the Reynolds Acquisition Documents, if any, are true and correct in all
material respects;
(iii) except as set forth in SCHEDULE 6.18 to this Agreement, all
material conditions precedent to, and all material consents necessary to
permit, the Reynolds Acquisition pursuant to the Reynolds Acquisition
Documents have been satisfied or waived, the Reynolds Acquisition has been
consummated in accordance with the Reynolds Acquisition Documents, and the
Borrower has obtained good and marketable title to the "Business Assets"
(as defined in the Asset Purchase Agreement) free and clear of any Liens
other than Liens permitted under SECTION 7.3(C).
6.19 ENVIRONMENTAL MATTERS. (a) Except as disclosed on SCHEDULE 6.19 to
this Agreement, or otherwise in the Environmental Audit (a copy of which was
delivered by the Borrower to the Administrative Agent and made available by the
Administrative Agent to each Lender prior to the Closing Date):
(i) the operations of the Borrower and its Subsidiaries comply in all
material respects with Environmental, Health or Safety Requirements of Law;
(ii) the Borrower and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health or
Safety Requirements of Law (or have filed timely applications for renewal
of such permits, licenses or authorizations) and are in material compliance
with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, the
Borrower's or any of its Subsidiaries' knowledge, any of their respective
past property or operations, are subject to or the subject of, any
investigation known to the Borrower or any of its Subsidiaries, any
judicial or administrative proceeding, order, judgment, decree, settlement
or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material
Remedial Action; or (C) any material claims or liabilities arising from the
Release or threatened Release of a Contaminant;
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(iv) there is not now, nor to the best of the Borrower's or any of
its Subsidiaries' knowledge has there ever been, on or in the property of
the Borrower or any of its Subsidiaries any landfill, hazardous waste
storage facility in which Contaminants are or were stored for more than
ninety (90) days, waste pile, or surface impoundment that may reasonably be
expected to result in a material claim, loss or Remedial Action obligation;
(v) there is not now, nor to the best of the Borrower's or any of its
Subsidiaries' knowledge has there ever been, on or in the property of the
Borrower's or any of its Subsidiaries any underground storage tanks, above
ground storage tanks, polychlorinated biphenyls (PCBs) used in hydraulic
oils, electric transformers or other equipment, or any asbestos containing
material that may reasonably be expected to result in a material claim,
loss or Remedial Action obligation; and
(vi) neither the Borrower nor any of its Subsidiaries has any
material contingent obligation or liability in connection with any Release
or threatened Release of a Contaminant.
(b) For purposes of this SECTION 6.19 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
or any of its Subsidiaries to liability individually or in the aggregate in
excess of $25,000,000 (exclusive of costs, expenses, claims covered by insurance
policies of the Borrower or any of its Subsidiaries unless the insurers of such
costs, expenses or claims have disclaimed coverage or reserved the right to
disclaim coverage thereof and exclusive of costs, expenses or claims covered by
the indemnity of a financially responsible indemnitor in favor of the Borrower
or any of its Subsidiaries unless the indemnitor has disclaimed or reserved the
right to disclaim coverage thereof).
6.20 OTHER INDEBTEDNESS.
(i) As of the Closing Date and immediately prior to the making of the
initial Loans, the Borrower has issued the Subordinated Notes in an
aggregate original principal amount of $250,000,000 and received the net
proceeds thereof, and the subordination provisions of the Subordinated Note
Indenture are enforceable against the holders of the Subordinated Notes.
(ii) As of the Closing Date and immediately prior to the making of
the initial Loans, the Borrower has issued the Senior Notes in an aggregate
original principal amount of $300,000,000 and received the net proceeds
thereof.
6.21 SOLVENCY. After giving effect to (i) the Loans to be made on the
Closing Date or such other date as Loans requested hereunder are made, (ii) the
issuance of the Senior Notes and the Subordinated Notes, (iii) the consummation
of the Reynolds Acquisition and the payment of the "Purchase Price" under and as
defined in the Asset Purchase Agreement and (iv) the payment and accrual of all
Transaction Costs, the Borrower and its Subsidiaries taken as a whole is
Solvent.
6.22 YEAR 2000 ISSUES. Each of the Borrower and its Subsidiaries has made
a full and complete assessment of the Year 2000 Issues and has a realistic and
achievable program for remediating the Year 2000 Issues on a timely basis.
Based on this assessment and program, the
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Borrower does not reasonably anticipate any Material Adverse Effect on its or
its Subsidiaries' operations, business or financial condition as a result of
Year 2000 Issues.
6.23 FOREIGN EMPLOYEE BENEFIT MATTERS. (a) Each Foreign Employee Benefit
Plan is in compliance in all material respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such Plan; (b) the aggregate of the accumulated benefit
obligations under all Foreign Pension Plans does not exceed to any material
extent the current fair market value of the assets held in the trusts or similar
funding vehicles for such Plans; (c) with respect to any Foreign Employee
Benefit Plan maintained or contributed to by the Borrower or any Subsidiary or
any member of its Controlled Group (other than a Foreign Pension Plan),
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the jurisdiction
in which such Plan is maintained; and (d) there are no material actions, suits
or claims (other than routine claims for benefits) pending or, to the knowledge
of the Borrower and its Subsidiaries, threatened against the Borrower or any
Subsidiary or any member of its Controlled Group with respect to any Foreign
Employee Benefit Plan. For purposes of this SECTION 6.23, "material" shall have
the meaning set forth in SECTION 6.9(b).
ARTICLE VII: COVENANTS
The Borrower covenants and agrees that so long as any Revolving Loan
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than contingent indemnity obligations), unless the Required
Lenders shall otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Administrative Agent (and the
Administrative Agent shall promptly provide copies of the following to each of
the other Agents and the Lenders):
(i) QUARTERLY REPORTS. As soon as practicable, and in any event
within fifty (50) days after the end of the first three fiscal quarters in
each fiscal year, (a) the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such period and the related consolidated
statements of income, stockholder's equity and cash flows of the Borrower
and its Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, together with schedules, in form and substance sufficient to
calculate the financial covenants set forth in Sections 7.3(A) through (G),
7.3(L), 7.3(T) and 7.4; and (b) the consolidating balance sheet of the
Borrower and its Subsidiaries as at the end of such period and the related
consolidating statements of income of the Borrower and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, in each case,
prepared in a manner consistent with past practice and certified by the
chief financial officer or treasurer of the Borrower on behalf of the
Borrower as fairly presenting the consolidated (and, to the extent
presented, the consolidating) financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations
for the periods indicated in accordance with Agreement Accounting
Principles, subject to normal year end adjustments.
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(ii) ANNUAL REPORTS. As soon as practicable, and in any event within
ninety-five (95) days after the end of each fiscal year, (a) the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such fiscal year and the related consolidated
and consolidating statements of income of the Borrower and its Subsidiaries
for such fiscal year, consolidated stockholders' equity and cash flow of
the Borrower and its Subsidiaries for such fiscal year, and in comparative
form the corresponding figures for the previous fiscal year, with schedules
in form and substance sufficient to calculate the financial covenants set
forth in SECTIONS 7.3(A) through (G), 7.3(L), 7.3(T) and 7.4; and (b) an
audit report on the consolidated financial statements listed in CLAUSE (a)
hereof of independent certified public accountants of recognized national
standing, which audit report shall be unqualified and shall state that such
financial statements fairly present the consolidated financial position of
the Borrower and its Subsidiaries, as at the dates indicated and the
results of their operations and cash flows for the periods indicated in
conformity with Agreement Accounting Principles and that the examination by
such accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards. The deliveries
made pursuant to this CLAUSE (ii) shall be accompanied by any management
letter prepared by the above-referenced accountants (or, if such management
letter is later prepared by such accountants it shall be delivered to the
Agent promptly after receipt by the Borrower).
(iii) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement pursuant to CLAUSES (i) and (ii) of this SECTION
7.1(A), (a) an Officer's Certificate of the Borrower, substantially in the
form of EXHIBIT G attached hereto and made a part hereof, stating that as
of the date of such Officer's Certificate no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the nature
and status thereof and (b) a compliance certificate, substantially in the
form of EXHIBIT H attached hereto and made a part hereof, signed by the
Borrower's chief financial officer or treasurer, which demonstrate
compliance, when applicable, with the provisions of SECTION 7.4, and which
calculate the Leverage Ratio for purposes of determining the then
Applicable Floating Rate Margin, Applicable Eurodollar Margin and
Applicable Commitment Fee Percentage.
(iv) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than forty-five (45) days after the
beginning of each fiscal year, a copy of the plan and forecast (including a
projected balance sheet, income statement and a statement of cash flow) of
the Borrower and its Subsidiaries for the upcoming fiscal year, prepared on
a quarterly basis for such fiscal year, and otherwise prepared in such
detail as shall be reasonably satisfactory to the Administrative Agent.
(B) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of the
Borrower obtaining knowledge (i) of any condition or event which constitutes a
Default or Unmatured Default, or becoming aware that any Lender or Agent has
given any written notice with respect to a claimed Default or Unmatured Default
under this Agreement, or (ii) that any Person has given any written notice to
the Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
SECTION 8.1(e), deliver to the Administrative Agent an Officer's Certificate (a
copy of which the Administrative Agent shall promptly deliver to the other
Agents and
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the Lenders) specifying (a) the nature and period of existence of any
such claimed default, Default, Unmatured Default, condition or event, (b) the
notice given or action taken by such Person in connection therewith, and
(c) what action the Borrower and/or its Subsidiaries has taken, is taking and
proposes to take with respect thereto.
(C) LAWSUITS. (i) Promptly upon the Borrower or any Subsidiary of the
Borrower obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against or
affecting the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries not previously disclosed pursuant to SECTION
6.7, which action, suit, proceeding, governmental investigation or arbitration
exposes, or in the case of multiple actions, suits, proceedings, governmental
investigations or arbitrations arising out of the same general allegations or
circumstances which expose, in the Borrower's reasonable judgment, the Borrower
or any of its Subsidiaries to liability in an amount aggregating $20,000,000 or
more (exclusive of claims covered by insurance policies of the Borrower or any
of its Subsidiaries unless the insurers of such claims have disclaimed coverage
or reserved the right to disclaim coverage on such claims and exclusive of
claims covered by the indemnity of a financially responsible indemnitor in favor
of the Borrower or any of its Subsidiaries unless the indemnitor has disclaimed
or reserved the right to disclaim coverage thereof), give written notice thereof
to the Administrative Agent and provide such other information as may be
reasonably available to enable each Lender and the Administrative Agent and its
counsel to evaluate such matters; and (ii) in addition to the requirements set
forth in CLAUSE (i) of this SECTION 7.1(C), upon request of the Administrative
Agent or the Required Lenders, promptly give written notice of the status of any
action, suit, proceeding, governmental investigation or arbitration covered by a
report delivered pursuant to CLAUSE (i) above and provide such other information
as may be reasonably available to it that would not violate any attorney-client
privilege by disclosure to the Lenders to enable each Lender and the
Administrative Agent and its counsel to evaluate such matters.
(D) INSURANCE. As soon as practicable and in any event within ninety (90)
days of the end of each fiscal year commencing with the fiscal year ending
December 31, 1998, deliver to the Administrative Agent a report in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders
outlining all material insurance coverage maintained as of the date of such
report by the Borrower and its Subsidiaries and the duration of such coverage.
(E) ERISA NOTICES. Deliver or cause to be delivered to the Administrative
Agent, at the Borrower's expense, the following information and notices as soon
as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower or any
member of the Controlled Group obtains knowledge that a Termination Event
has occurred which would be reasonably likely to subject the Borrower or
any of its Subsidiaries to liability, individually or in the aggregate in
excess of $10,000,000, a written statement of the appropriate financial
officer or treasurer of the Borrower describing such Termination Event and
the action, if any, which the Borrower or the applicable Subsidiary has
taken, is taking or proposes to take with respect thereto, and if and when
known, any action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
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(ii) within ten (10) Business Days after any officer of the Borrower
or any of its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred which would be reasonably likely to subject the Borrower or any of
its Subsidiaries to liability, individually or in the aggregate in excess
of $10,000,000, a statement of the chief financial officer or treasurer of
the Borrower describing such transaction and the action which the Borrower
or such Subsidiary has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days after any material increase in
the benefits of any existing Benefit Plan or the establishment of any new
Benefit Plan or the commencement of, or obligation to commence,
contributions to any Benefit Plan or Multiemployer Plan to which the
Borrower or any member of the Controlled Group was not previously
contributing, where the aggregate annual contributions to such Plan(s)
resulting therefrom are or could reasonably be expected to exceed
$10,000,000, notification of such increase, establishment, commencement or
obligation to commence and the amount of such contributions;
(iv) within ten (10) Business Days after the Borrower or any of its
Subsidiaries receives notice of any unfavorable determination letter from
the IRS regarding the qualification of a Plan under Section 401(a) of the
Code which would be reasonably likely to subject the Borrower or any of its
Subsidiaries to liability, individually or in the aggregate in excess of
$10,000,000, copies of each such letter;
(v) within ten (10) Business Days after the establishment of any
Foreign Employee Benefit Plan or the commencement of, or obligation to
commence, contributions to any Foreign Employee Benefit Plan to which the
Borrower or any Subsidiary was not previously contributing, where the
aggregate annual contributions to such Plan(s) resulting therefrom are or
would reasonably be expected to exceed $10,000,000, notification of such
establishment, commencement or obligation to commence and the amount of
such contributions;
(vi) upon the request of the Administrative Agent or any Lender,
copies of each annual report (form 5500 series), including Schedule B
thereto, filed with respect to each Benefit Plan;
(vii) upon the request of the Administrative Agent or any Lender,
copies of each available actuarial report for any Benefit Plan or
Multiemployer Plan and each available annual report for any Multiemployer
Plan;
(viii) within ten (10) Business Days after the filing thereof with
the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by the Borrower or a member of
the Controlled Group with respect to such request;
(ix) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit Plan,
copies of each such notice;
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(x) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability which would be reasonably
likely to subject the Borrower or any of its Subsidiaries to liability,
individually or in the aggregate in excess of $10,000,000, copies of each
such notice;
(xi) within ten (10) Business Days after the Borrower or any member
of the Controlled Group fails to make a required installment or any other
required payment under Section 412 of the Code on or before the due date
for such installment or payment which would be reasonably likely to subject
the Borrower or any of its Subsidiaries to liability, individually or in
the aggregate in excess of $10,000,000, a notification of such failure;
and
(xii) within ten (10) Business Days after any officer of the Borrower
or any member of the Controlled Group knows or has reason to know that
(a) a Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (c) the PBGC has instituted proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
For purposes of this SECTION 7.1(E), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Plan Administrator (as defined in Section 3(16)(A) of ERISA) of any Plan of
which the Borrower or any member of the Controlled Group or such Subsidiary is
the plan sponsor.
(F) LABOR MATTERS. Notify the Administrative Agent within a reasonable
period of time following the Borrower's knowledge thereof of (i) any material
labor dispute at any facility of the Borrower or any of its Subsidiaries,
including without limitation, any authorized or unauthorized strike or any
lockout, and (ii) any attempt to organize the employees of the Borrower or any
of its Subsidiaries.
(G) OTHER INDEBTEDNESS. Deliver to the Administrative Agent (i) a copy of
each regular report, notice or other written communication regarding potential
or actual defaults (including any accompanying officer's certificate) delivered
by or on behalf of the Borrower and/or any of its Subsidiaries to the holders of
funded Indebtedness pursuant to the terms of the agreements governing such
Indebtedness, such delivery to be made at the same time and by the same means as
such notice or other communication is delivered to such holders, and (ii) a copy
of each notice or other written communication received by the Borrower and/or
any of its Subsidiaries from the holders of funded Indebtedness pursuant to the
terms of such Indebtedness, such delivery to be made promptly after such notice
or other communication is received by the Borrower and/or such Subsidiary.
(H) OTHER REPORTS. Deliver or cause to be delivered to the Administrative
Agent copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the SEC by the Borrower, all press releases made available generally by the
Borrower or any of the Borrower's Subsidiaries to the public concerning material
developments in the business of the Borrower or any such Subsidiary and all
notifications received from the SEC by the
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Borrower or its Subsidiaries pursuant to the Securities Exchange Act of 1934,
as amended, and the rules promulgated thereunder.
(I) ENVIRONMENTAL NOTICES. As soon as possible and in any event within ten
(10) days after receipt by the Borrower or any of its Subsidiaries, a copy of
(i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by the
Borrower, any of its Subsidiaries, or any other Person of any Contaminant, and
(ii) any notice alleging any violation of any Environmental, Health or Safety
Requirements of Law by the Borrower or any of its Subsidiaries if, in either
case, such notice or claim relates to an event which could reasonably be
expected to subject the Borrower or any of its Subsidiaries to liability
individually or in the aggregate in excess of $10,000,000.
(J) OTHER INFORMATION. Promptly upon receiving a request therefor from
the Administrative Agent, prepare and deliver to the Administrative Agent and
the Lenders such other information with respect to the Borrower, any of its
Subsidiaries, or the Collateral, including, without limitation, schedules
identifying any Asset Sale or Financing (and the use of the Net Cash Proceeds
thereof), as from time to time may be reasonably requested by the Administrative
Agent.
7.2 AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. Except in connection with a transaction
otherwise permitted under the terms of this Agreement, the Borrower shall, and
shall cause each of its Subsidiaries to, at all times maintain its corporate
existence and preserve and keep, or cause to be preserved and kept, in full
force and effect its rights and franchises material to its businesses.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. Except in connection with a
transaction otherwise permitted under the terms of this Agreement, the Borrower
shall, and shall cause each of its Subsidiaries to, qualify and remain qualified
to do business in each jurisdiction in which the nature of its business requires
it to be so qualified and where the failure to be so qualified will have or
would reasonably be expected to have a Material Adverse Effect. The Borrower
will, and will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (i) comply in all material respects with all Requirements of
Law and all restrictive covenants affecting such Person or the business,
properties, assets or operations of such Person, and (ii) obtain as needed all
material permits necessary for its operations and maintain such permits in good
standing unless, in either such case under clause (i) or (ii), failure to comply
or obtain would not reasonably be expected to have a Material Adverse Effect.
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all material taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income or
property before any penalty or interest accrues thereon, and (ii) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and
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payable and which by law have or may become a material Lien (other than a
Lien permitted by SECTION 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any material penalty
or fine shall be incurred with respect thereto; PROVIDED, HOWEVER, that no
such taxes, assessments and governmental charges referred to in CLAUSE (i)
above or claims referred to in CLAUSE (ii) above (and interest, penalties or
fines relating thereto) need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with Agreement Accounting Principles shall have been made therefor.
(E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, insurance policies and programs as reflect coverage that is
reasonably consistent with prudent industry practice for similarly situated
companies.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit and cause each of the Borrower's Subsidiaries, the FTB Group and
the Excluded Subsidiaries to permit, any authorized representative(s) designated
by either the Administrative Agent or any Lender to visit and inspect any of the
properties of the Borrower or any of such Subsidiaries, members of the FTB Group
or Excluded Subsidiaries, to examine, audit, check and make copies of their
respective financial and accounting records, books, journals, orders, receipts
and any correspondence and other data relating to their respective businesses or
the transactions contemplated hereby or by the Reynolds Acquisition (including,
without limitation, in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants (and such accountants are
hereby authorized to disclose to the Administrative Agent any and all financial
statements and other supporting financial documents with respect to the
business, financial condition and other affairs of the Borrower and its
Subsidiaries, the FTB Group and the Excluded Subsidiaries), all upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested; PROVIDED, HOWEVER, that the Borrower's obligation
to reimburse the Administrative Agent and the Lenders for reasonable costs and
expenses incurred in connection with such inspections shall be limited to no
more than one (1) inspection during any calendar year if such inspections are
conducted at a time when no Default or Unmatured Default shall have occurred and
is continuing. The Borrower shall keep and maintain, and cause each of its
Subsidiaries, FTB and the Excluded Subsidiaries to keep and maintain, in all
material respects, proper books of record and account in which entries in
conformity with Agreement Accounting Principles shall be made of all dealings
and transactions in relation to their respective businesses and activities. If
a Default has occurred and is continuing, the Borrower, upon the Administrative
Agent's request, shall turn over or make available copies of any such records to
the Administrative Agent or its representatives; PROVIDED, that if no Default
shall have occurred and is continuing, the Administrative Agent or its
representatives, as applicable, shall return such records to the Borrower.
(G) ERISA COMPLIANCE. The Borrower shall, and shall cause each other
member of the Ball Corporate Group to, establish, maintain and operate all Plans
to comply in all respects with the provisions, if applicable, of ERISA, the
Code, all other applicable laws, and the regulations and interpretations
thereunder and the respective requirements of the governing documents for such
Plans, except where such noncompliance would not reasonably be expected to
subject the Borrower or any of its Subsidiaries to liability individually or in
the aggregate in excess of $25,000,000.
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(H) MAINTENANCE OF PROPERTY. The Borrower shall cause all material
property used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
(normal wear and tear excepted) and supplied with all necessary equipment and
shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this SECTION 7.2(H) shall prevent the Borrower from discontinuing the
operation or maintenance of any of such property if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Administrative Agent or the Lenders.
(I) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower or any Subsidiary to liability individually or in the aggregate in
excess of $25,000,000.
(J) USE OF PROCEEDS. The Borrower shall use the proceeds of the Revolving
Loans to (i) facilitate the Reynolds Acquisition, (ii) repay existing
Indebtedness, (iii) pay the Transaction Costs, and (iv) provide funds for the
additional working capital needs and other general corporate purposes of the
Borrower and its Subsidiaries. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry any
Margin Stock or to make any Acquisition, other than the Reynolds Acquisition and
any other Permitted Acquisition pursuant to SECTION 7.3(G).
(K) ADDITIONAL GUARANTORS/PLEDGE OF CAPITAL STOCK. (i) The Borrower will
(a) deliver and cause each of its Domestic Incorporated Subsidiaries to deliver
an agreement evidencing the pledge, to the Administrative Agent, for the benefit
of the Holders of Secured Obligations, of all of the Capital Stock of each
Domestic Incorporated Subsidiary, within thirty (30) days after such Subsidiary
has become a Subsidiary of the Borrower and (b) cause each Domestic Incorporated
Subsidiary, within twenty (20) days after becoming a Subsidiary of the Borrower,
to execute and deliver to the Administrative Agent an assumption agreement
pursuant to which it agrees to be bound by the terms and provisions of the
Subsidiary Guaranty (whereupon such Subsidiary shall become a "Guarantor" under
this Agreement), and (c) deliver and cause such Subsidiaries to deliver
corporate resolutions, opinions of counsel, stock certificates, stock powers,
UCC financing statements with respect to the Capital Stock Collateral and such
other corporate documentation as the Administrative Agent may reasonably
request, all in form and substance reasonably satisfactory to the Administrative
Agent.
(ii) The Borrower shall deliver an agreement evidencing the pledge, to the
Administrative Agent, for the benefit of the Holders of Secured Obligations, of
(A) all of the Capital Stock of Latasa owned by any member of the Ball Corporate
Group (but not in excess of 65% of all of the outstanding Capital Stock thereof)
on the date of the consummation of the Latasa Acquisition; and (B) 65% of the
Capital Stock of each other Material Foreign Subsidiary, within sixty (60) days
after such Subsidiary has become a Material Foreign Subsidiary, together, in
each such case, with corporate resolutions, opinions of counsel, stock
certificates, stock powers and such other corporate documentation as the
Administrative Agent may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent; provided, however, in the
event that any such Material Foreign Subsidiary is
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wholly-owned by a Domestic Incorporated Subsidiary, in connection with which
all of the requirements of CLAUSE (i) above have been satisfied and the
activities of which are limited to owning the Capital Stock of its
Subsidiaries, then, the Administrative Agent, at its option, may waive the
requirement for the pledge of such Material Foreign Subsidiary's Capital
Stock under this CLAUSE (ii); and PROVIDED FURTHER, HOWEVER, in the event
that more than one Subsidiary within a commonly controlled group of
Subsidiaries constitutes a Material Foreign Subsidiary, then only the Capital
Stock of the "parent" or "controlling" Subsidiary shall be required to be
pledged.
(iii) If at any time any Material Foreign Subsidiary shall issue or cause
to be issued Capital Stock, or warrants or options with respect to its Capital
Stock, such that the aggregate amount of the Capital Stock of such Material
Foreign Subsidiary pledged to the Administrative Agent for the benefit of the
Holders of Secured Obligations is less than 65% of all of the outstanding
Capital Stock thereof, the Borrower shall (A) promptly notify the Administrative
Agent of such deficiency and (B) deliver or cause to be delivered any
agreements, instruments, certificates and other documents as the Administrative
Agent may reasonably request all in a form and substance reasonably satisfactory
to the Administrative Agent in order to cause all of the Capital Stock of such
Material Foreign Subsidiary owned by any member of the Ball Corporate Group (but
not in excess of 65% of all of the outstanding Capital Stock thereof) to be
pledged to the Agent for the benefit of the Holders of Secured Obligations;
PROVIDED, that any Material Subsidiary may issue or cause to be issued any
Capital Stock or warrants or options in respect of such Capital Stock only so
long as no Change of Control shall result therefrom.
(iv) In the event that the Borrower or any Guarantor causes or permits any
Foreign Incorporated Subsidiary that is not a Guarantor to, directly or
indirectly, guarantee the payment of any Indebtedness of the Borrower or any
Guarantor then the Borrower will (a) simultaneously deliver, or cause to be
delivered, an agreement evidencing the pledge, to the Administrative Agent, for
the benefit of the Holders of Secured Obligations, of all of the Capital Stock
of such Foreign Incorporated Subsidiary, (b) simultaneously cause such Foreign
Incorporated Subsidiary to execute and deliver to the Administrative Agent an
assumption agreement pursuant to which it agrees to be bound by the terms and
provisions of the Subsidiary Guaranty (whereupon such Subsidiary shall become a
"Guarantor" under this Agreement), and (c) deliver and cause such Subsidiaries
to deliver corporate resolutions, opinions of counsel, stock certificates, stock
powers, UCC financing statements with respect to the Capital Stock Collateral
and such other corporate documentation as the Administrative Agent may
reasonably request, all in form and substance reasonably satisfactory to the
Administrative Agent.
(L) YEAR 2000 ISSUES. The Borrower shall, and shall cause each of its
Subsidiaries to, take all actions reasonably necessary to assure that the Year
2000 Issues will not have a Material Adverse Effect. The Borrower shall provide
the Administrative Agent and each of the Lenders a copy of the Borrower's
program to address Year 2000 Issues, including updates and progress reports upon
request. The Borrower shall advise the Administrative Agent if any Year 2000
Issues will have or would reasonably be expected to have a Material Adverse
Effect.
(M) FOREIGN EMPLOYEE BENEFIT COMPLIANCE. The Borrower shall, and shall
cause each of its Subsidiaries and each member of the Controlled Group to,
establish, maintain and operate all Foreign Employee Benefit Plans to comply in
all material respects with all laws, regulations and rules
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applicable thereto and the respective requirements of the governing documents
for such Plans, except for failures to comply which, in the aggregate, would
not be reasonably likely to subject the Borrower or any of its Subsidiaries
to liability, individually or in the aggregate in excess of $25,000,000.
(N) FOREIGN GOVERNMENTAL CONSENTS AND APPROVALS. Within fifteen (15) days
after the date upon which the Latasa Acquisition is consummated, the Borrower
shall, or shall cause its Subsidiaries to, make all required filings or
registrations with, give appropriate notice to, and otherwise seek any required
authorization, consent and approval of the Administrative Council for Economic
Defense in Brazil in respect of the Reynolds Acquisition.
7.3 NEGATIVE COVENANTS.
(A) INDEBTEDNESS. Neither the Borrower nor any other member of the Ball
Corporate Group shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness,
except:
(i) the Obligations;
(ii) Indebtedness incurred in connection with the Long-Term Credit
Agreement in a principal amount not to exceed $1,050,000,000 at any time;
(iii) Indebtedness incurred in connection with the Receivables
Purchase Documents;
(iv) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(v) Indebtedness evidenced by the Canadian Credit Facility and
Permitted Refinancing Indebtedness in respect thereof, in each case, in a
principal amount not to exceed $50,000,000;
(vi) Indebtedness evidenced by the Senior Notes and the
Subordinated Notes;
(vii) subordinated indebtedness the terms (including, without
limitation, those with respect to amount, maturity, amortization, interest
rate, premiums, fees, covenants, subordination, events of default and
remedies) of which are acceptable to the Required Lenders when issued, but
in each case not any increase in the principal amount thereof and not any
refinancing, modification, refunding or extension of maturity thereof, in
whole or in part, unless such refinancing, modification, refunding or
extension is not materially less favorable to the Borrower or any of its
Subsidiaries, including, without limitation, with respect to amount,
maturity, amortization, interest rate, premiums, fees, covenants,
subordination, events of default and remedies (such Indebtedness being
referred to herein as "PERMITTED ADDITIONAL SUBORDINATED INDEBTEDNESS");
(viii) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
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(ix) Indebtedness constituting Guarantied Obligations permitted by
SECTION 7.3(E);
(x) Indebtedness arising from intercompany loans from the Borrower
to any Controlled Subsidiary, or from any Subsidiary to the Borrower or any
Controlled Subsidiary, PROVIDED that if the Borrower or any Guarantor is
the obligor on such Indebtedness, such Indebtedness shall be expressly
subordinate to the payment in full of the Secured Obligations; PROVIDED,
FURTHER, that the aggregate of all Foreign Subsidiary Investments does not
exceed the Permitted Foreign Subsidiary Investment Amount at any time;
(xi) guaranties by the Borrower of Indebtedness permitted to be
incurred by any Subsidiary or Indebtedness of any Person in which the
Borrower makes an Investment pursuant to SECTION 7.3(D)(ix) (provided the
amount of Indebtedness so guarantied shall be included for purposes of
calculating the Investment in such Person as provided under SECTION
7.3(D)(ix));
(xii) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date to finance the acquisition of assets used in the
business, if (1) at the time of such incurrence, no Default or Unmatured
Default has occurred and is continuing or would result from such
incurrence, (2) such Indebtedness has a scheduled maturity and is not due
on demand, (3) such Indebtedness does not exceed the lower of the fair
market value or the cost of the applicable fixed assets on the date
acquired, (4) such Indebtedness does not exceed $50,000,000 in aggregate
principal amount outstanding at any time, and (5) any Lien securing such
Indebtedness is permitted under SECTION 7.3(C) (such Indebtedness being
referred to herein as "PERMITTED PURCHASE MONEY INDEBTEDNESS");
(xiii) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
course of business;
(xiv) Indebtedness incurred by the Borrower or any of its
Subsidiaries (whether assumed by the Borrower or such Subsidiary or issued
to the seller) in any Permitted Acquisition as part of the consideration
therefor, PROVIDED that such Indebtedness is unsecured and is subordinated
to the Obligations on terms reasonably acceptable to the Administrative
Agent (including, without limitation, those with respect to amount,
maturity, amortization, interest rate, premiums, fees, covenants,
subordination, events of default and remedies);
(xv) Indebtedness in respect of the Synthetic Leases;
(xvi) all Indebtedness of the FTB Group only to the extent that
neither the Borrower nor any Guarantor shall incur or suffer to exist any
Guarantied Obligations in respect thereof (unless and to the extent such
Guarantied Obligation would otherwise be permitted under SECTION 7.3(T))
and;
(xvii) Indebtedness incurred by the Borrower or any Guarantor in
addition to that referred to elsewhere in this SECTION 7.3(A) in a
principal amount not to exceed in the
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aggregate (a) $25,000,000 if the Leverage Ratio (calculated as of the
last day of the immediately preceding fiscal quarter) shall be greater
than 3.0 to 1.0 as of the date of incurrence thereof, and (b)
$75,000,000 if the Leverage Ratio (calculated as of the last day of the
immediately preceding fiscal quarter) shall be less than or equal to 3.0
to 1.0 as of the date of incurrence thereof.
(B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) Permitted Receivables Transfers;
(iii) the disposition in the ordinary course of business of
Equipment that is obsolete, excess or no longer useful in the Borrower's
and its Subsidiaries' business;
(iv) transfers of assets between the Borrower and any Controlled
Subsidiary or between Controlled Subsidiaries of the Borrower not otherwise
prohibited by this Agreement; PROVIDED, that the aggregate of all Foreign
Subsidiary Investments does not exceed the Permitted Foreign Subsidiary
Investment Amount at any time;
(v) transfers of assets pursuant to Investments permitted by
SECTION 7.3(D) and Restricted Payments permitted by SECTION 7.3(F);
(vi) the sale of the PET business unit of the Borrower and its
Subsidiaries; PROVIDED, that such transaction (a) is for consideration
consisting at least seventy-five percent (75%) of cash, (b) is for not less
than fair market value (as determined by the board of directors of the
Borrower in good faith, whose determination shall be conclusive evidence
thereof and shall be evidenced by a resolution of such board of directors
set forth in an Authorized Officer of the Borrower's certificate delivered
to the Administrative Agent), and (c) is consummated when no Default has
occurred and is continuing or would result therefrom;
(vii) the sale of all or part of the assets or business constituting
the Aerospace business unit of the Borrower and its Subsidiaries in one or
more transactions; PROVIDED, that (a) each such transaction (x) is for
consideration consisting at least seventy-five percent (75%) of cash, (y)
is for not less than fair market value (as determined by the board of
directors of the Borrower in good faith, whose determination shall be
conclusive evidence thereof and shall be evidenced by a resolution of such
board of directors set forth in an Authorized Officer of the Borrower's
certificate delivered to the Administrative Agent), and (z) is consummated
when no Default has occurred and is continuing or would result therefrom,
and (b) the PRO FORMA opening consolidated financial statements of the
Borrower and its Subsidiaries shall demonstrate that the Leverage Ratio of
the Borrower and its Subsidiaries as of the last day of the Borrower's most
recently completed fiscal quarter (assuming the effectiveness of such sale
on such last day of the Borrower's most recently completed fiscal quarter)
shall be less than or
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equal to the greater of (A) 3.0 to 1.0 and (B) the Leverage Ratio of the
Borrower and its Subsidiaries as of the last day of the Borrower's most
recently completed fiscal quarter as set forth on the compliance
certificate delivered together with the financial statements for such
fiscal quarter pursuant to SECTION 7.1(A)(iii);
(viii) leases that are operating leases under which the Borrower or
any of its Subsidiaries is the lessor in the ordinary course of its
business that are not substantially equivalent to sales; and
(ix) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets, PROVIDED that any such transaction (a) is for
consideration consisting at least seventy-five percent (75%) of cash, (b)
is for not less than fair market value (as determined by the board of
directors of the Borrower in good faith, whose determination shall be
conclusive evidence thereof and shall be evidenced by a resolution of such
board of directors set forth in an Authorized Officer of the Borrower's
certificate delivered to the Administrative Agent), and (c) when combined
with all such other transactions pursuant to this CLAUSE (ix) (each such
transaction being valued at book value) (i) during the immediately
preceding twelve-month period, represents the disposition of not greater
than $100,000,000, and (ii) during the period from the Closing Date to the
date of such proposed transaction, represents the disposition of not
greater than $300,000,000.
Not less than five (5) Business Days prior to the consummation of any
transaction permitted by CLAUSE (vi), (vii), or (ix) above, the Borrower shall
deliver to the Administrative Agent a certificate of an Authorized Officer of
the Borrower certifying compliance with the requirements of CLAUSE (vi), (vii)
or (ix), as applicable, and showing in reasonable detail the calculations on
which such certification is based.
(C) LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Liens created by the Loan Documents or otherwise securing the
Secured Obligations;
(ii) Liens arising under the Receivables Purchase Documents;
(iii) Permitted Existing Liens;
(iv) Customary Permitted Liens;
(v) purchase money Liens (including the interest of a lessor under
a Capitalized Lease and Liens to which any property is subject at the time
of the Borrower's acquisition thereof) securing Permitted Purchase Money
Indebtedness; PROVIDED that such Liens shall not apply to any property of
the Borrower or its Subsidiaries other than that purchased or subject to
such Capitalized Lease;
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(vi) Liens with respect to property acquired by the Borrower or any
Subsidiary after the Closing Date (and not created in contemplation of such
acquisition) to the extent any such acquisitions are permitted pursuant to
the terms hereof;
(vii) Liens incurred in connection with sale-leaseback transactions
permitted under SECTION 7.3(J); and
(viii) Liens on any of the Collateral which are incurred in
connection with the Guaranty Agreement to the extent (a) such Collateral
secures the Secured Obligations at such time and (b) the beneficiaries of
the Guaranty Agreement have entered into an intercreditor agreement with
the Administrative Agent in form and substance reasonably acceptable to the
Agents; and
(ix) Liens securing other obligations not exceeding $25,000,000 in
the aggregate at any time outstanding.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Administrative Agent for the benefit of itself and
the Holders of Secured Obligations, as additional collateral for the
Obligations; PROVIDED that any agreement, note, indenture or other instrument in
connection with Permitted Purchase Money Indebtedness (including Capitalized
Leases) may prohibit the creation of a Lien in favor of the Administrative Agent
for the benefit of itself and the Holders of the Secured Obligations on the
items of property obtained with the proceeds of such Permitted Purchase Money
Indebtedness.
(D) INVESTMENTS. Other than Investments permitted pursuant to PARAGRAPH
(G) below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than
the amount thereof on the Closing Date;
(iii) Investments in Ball Capital Corp. required in connection with
the Receivables Purchase Documents;
(iv) Investments, if any, resulting from transactions under the
Manufacturing Supply Agreement;
(v) Investments in trade receivables or received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement (including settlements of litigation) of delinquent obligations
of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
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(vi) Investments consisting of deposit accounts maintained by the
Borrower and its Subsidiaries in the ordinary course of business in
connection with its cash management system;
(vii) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by SECTION 7.3(B);
(viii) Investments consisting of intercompany loans from the Borrower
or any Subsidiary to the Borrower or any other Subsidiary permitted by
SECTION 7.3(A)(x); PROVIDED, that the aggregate of all Foreign Subsidiary
Investments made pursuant to this SECTION 7.3(D)(viii) shall not exceed
$25,000,000 at any time;
(ix) Investments which do not constitute Acquisitions, made in cash
and in any Person having similar lines of business to those of the
Borrower, PROVIDED that the total amount of all such Investments made after
the Closing Date (including the amount of all cash invested, the fair
market value of assets or property contributed and the principal amount of
any Indebtedness guaranteed in connection therewith, but excluding, to the
extent that any such Investment permitted hereunder shall be sold for cash,
the lesser of (x) the cash return of capital with respect to such
Investment (net of the cost of disposition) and (y) the initial amount of
such Investment) shall not exceed $25,000,000 during the term of this
Agreement; and
(x) Investments in any Subsidiary that is a Controlled Subsidiary
of the Borrower;
(xi) Investments constituting Permitted Acquisitions;
(xii) Restricted Investments permitted by SECTION 7.3(F)(viii);
(xiii) Investments, in addition to the Permitted Existing Investment,
in any member of the FTB Group; PROVIDED, HOWEVER, such additional
Investments which when aggregated with the amount of Indebtedness which is
credit enhanced pursuant to the provisions of SECTION 7.3(T) shall not
exceed, in the aggregate an amount equal to Two Hundred Seven Million
Dollars ($207,000,000);
(xiv) Investments constituting Indebtedness permitted by SECTION
7.3(A) or Guarantied Obligations permitted by SECTION 7.3(E); and
(xv) Investments in addition to those permitted elsewhere in this
SECTION 7.3(D), in an amount not to exceed $40,000,000 in the aggregate at
any time outstanding;
PROVIDED, HOWEVER, that the Investments described in CLAUSES (ix), (xi), (xii)
and (xiii) above shall not be permitted if either a Default or an Unmatured
Default shall have occurred and be continuing on the date thereof or would
result therefrom.
(E) GUARANTIED OBLIGATIONS. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Guarantied Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
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of business; (ii) Permitted Existing Guarantied Obligations; (iii) obligations,
warranties, and indemnities, not relating to Indebtedness of any Person, which
have been or are undertaken or made in the ordinary course of business and not
for the benefit of or in favor of an Affiliate of the Borrower or such
Subsidiary which is not a Guarantor; (iv) Guarantied Obligations arising under
the Transaction Documents; (v) guaranties of Indebtedness permitted by SECTION
7.3(A), PROVIDED, that to the extent such Indebtedness shall be subordinated to
the Obligations, each such guarantee shall be subordinated to the Obligations on
terms reasonably acceptable to the Administrative Agent; (vi) obligations under
the Guaranty Agreement; (vii) Guarantied Obligations with respect to surety,
appeal and performance bonds obtained by the Borrower or any Subsidiary in the
ordinary course of business; and (viii) additional Guarantied Obligations which
do not exceed $10,000,000 in the aggregate at any time.
(F) RESTRICTED PAYMENTS. Neither the Borrower nor any of its Subsidiaries
shall declare or make any Restricted Payment, except:
(i) the defeasance, redemption or repurchase of any Indebtedness
with the Net Cash Proceeds of Permitted Refinancing Indebtedness;
(ii) mandatory payments of interest, principal or premium, if any,
due on the Indebtedness in accordance with mandatory redemption or
repayment provisions in effect with respect to such Indebtedness as of the
Closing Date, unless in each case such payments are prohibited by the terms
of such Indebtedness or the subordination provisions applicable thereto;
(iii) dividends or other distributions (including, without
limitation liquidating distributions) payable or made by (a) any
Wholly-Owned Subsidiary of the Borrower in compliance with applicable
corporation law; and (b) any other Subsidiary of the Borrower in compliance
with applicable corporation law; PROVIDED, that the amount of such
dividends or distributions under this CLAUSE (b) which are paid or made to
any Person not a member of the Ball Corporate Group (the "THIRD-PARTY
PAYMENTS") shall be included for purposes of calculating compliance with
CLAUSE (viii) below and shall be permitted only to the extent they are
permitted under CLAUSE (viii) below;
(iv) dividends or other payments from any Subsidiary of the
Borrower to the Borrower pursuant to the Tax Allocation Agreement;
(v) any public offering or other offering qualified under Rule
144A under the Securities Act of 1933, as amended, of all or part of the
Equity Interests of a Person constituting the Aerospace business unit of
the Borrower and/or any dividend or other distribution by the Borrower,
direct or indirect, of any Equity Interests of a Person constituting the
Aerospace business unit of the Borrower; PROVIDED that (x) the PRO FORMA
opening consolidated financial statements of the Borrower and its
Subsidiaries shall demonstrate that the Leverage Ratio of the Borrower and
its Subsidiaries as of the last day of the Borrower's most recently
completed fiscal quarter (assuming the effectiveness of such Restricted
Payment on such last day of the Borrower's most recently completed fiscal
quarter) shall be less than or equal to the greater of (A) 3.0 to 1.0 and
(B) the Leverage Ratio of the Borrower and its Subsidiaries as of the last
day of the Borrower's most recently completed fiscal quarter as set
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forth on the compliance certificate delivered together with the financial
statements for such fiscal quarter pursuant to SECTION 7.1(A)(iii), and (y)
the Borrower would not otherwise be in Default after giving effect thereto;
(vi) in connection with the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Borrower
owned by any member of the Borrower's or any of its Subsidiaries'
management, pursuant to a management equity subscription agreement or stock
option agreement in effect on the Closing Date or entered into after the
Closing Date with members of the management of any Person acquired after
the Closing Date, PROVIDED, that the aggregate purchase price of all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $15,000,000 in the aggregate since the Closing Date;
(vii) in connection with the repurchase of Equity Interests of the
Borrower or any Subsidiary of the Borrower held by employees, former
employees, directors or former directors pursuant to the terms of
agreements (including employment agreements) approved by the Borrower's
board of directors, PROVIDED, that the aggregate purchase price of all such
repurchased Equity Interests net of Equity Interests sold to employees and
directors shall not exceed $5,000,000 during any twelve-month period; and
(viii) Third-Party Payments under CLAUSE (iii) above and additional
Restricted Payments (including Restricted Investments but excluding any
Restricted Payment made in compliance with CLAUSE (v) above) which do not
in the aggregate exceed, for the period commencing with the Borrower's
fiscal quarter ending December 31, 1998, and ending on the last day of the
last quarter ending prior to such Third-Party Payment or Restricted
Payment, the greater of (A) the sum of $60,000,000 MINUS the amount of all
Third-Party Payments and Restricted Payments made under this CLAUSE (A),
and (B) the sum of (a) fifty percent (50%) of Consolidated Net Income for
such period (or, if Consolidated Net Income for such period is a deficit,
less 100% of such deficit), PLUS (b) the aggregate Net Cash Proceeds from
the sale or issuance of Equity Interests (other than Disqualified Stock) of
the Borrower for such period, PLUS (c) to the extent that any Restricted
Investment permitted hereunder and made after the Closing Date shall be
sold for cash during such period, the lesser of (x) the cash return of
capital with respect to such Restricted Investment (net of the cost of
disposition) and (y) the initial amount of such Restricted Investment;
PROVIDED, HOWEVER, that the Restricted Payments described in CLAUSES (iv),
(v), (vi), (vii) and (viii) above shall not be permitted if either a
Default or an Unmatured Default shall have occurred and be continuing at
the date of declaration or payment thereof or would result therefrom.
(G) CONDUCT OF BUSINESS; RESTRICTIONS ON EXCLUDED SUBSIDIARIES;
SUBSIDIARIES; ACQUISITIONS. (i) Neither the Borrower nor any of its
Subsidiaries or Excluded Subsidiaries shall engage in any business other than
the businesses engaged in by the Borrower and such Subsidiaries and Excluded
Subsidiaries on the date hereof, the businesses engaged in by the Reynolds Group
which is being acquired pursuant to the Reynolds Acquisition and any business or
activities which are substantially
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similar, related or incidental thereto. Without first entering into
documentation reasonably acceptable to the Administrative Agent and
consistent with the requirements set forth in SECTION 7.2(K), pursuant to
which the Capital Stock of such entity is pledged pursuant to a Pledge
Agreement and pursuant to which such entity becomes a Guarantor (at which
time such entity shall be a "Subsidiary" hereunder and shall no longer
constitute an "Excluded Subsidiary"), no Excluded Subsidiary shall engage in
any business enterprise other than being a "name-holding" entity and shall
have no assets (other than the statutorily required minimum capitalization)
or liabilities.
(ii) THE BORROWER MAY CREATE, ACQUIRE AND/OR CAPITALIZE ANY
SUBSIDIARY (A "NEW SUBSIDIARY") after the date hereof pursuant to any
transaction that is permitted by or not otherwise prohibited by this
Agreement, PROVIDED that (1) each New Subsidiary that is a Domestic
Incorporated Subsidiary shall execute a guaranty of the Obligations and (2)
(x) all of the Equity Interests in each New Subsidiary that is a Domestic
Incorporated Subsidiary and (y) 65% of the Equity Interests in each New
Subsidiary that is a Material Foreign Subsidiary, in each case, owned by the
Borrower or any other Subsidiary shall be pledged to the Administrative
Agent, for the benefit of Holders of Secured Obligations, pursuant to
documentation in form and substance satisfactory to the Administrative Agent.
(iii) Neither the Borrower nor any of its Subsidiaries shall make
any Acquisitions, other than (x) the Reynolds Acquisition, (y) the Latasa
Acquisition, provided the aggregate purchase price (including assumed
liabilities) in respect thereof shall not exceed $74,000,000, and (z) other
Acquisitions meeting the following requirements or otherwise approved by the
Required Lenders (each of the Acquisitions permitted by CLAUSES (x), (y) and
(z) constituting a "PERMITTED ACQUISITION"):
(1) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(2) after giving effect to such transaction, the aggregate of all
Foreign Subsidiary Investments would not exceed the Permitted Foreign
Subsidiary Investment Amount;
(3) the Acquisition shall be consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis and the businesses being
acquired shall be substantially similar, related or incidental to the
businesses or activities engaged in by the Borrower and its Subsidiaries on
the Closing Date;
(4) if the Leverage Ratio (calculated on a PRO FORMA basis using
historical audited and reviewed unaudited financial statements obtained
from the seller, broken down by fiscal quarter in the Borrower's reasonable
judgment, as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the last day
of the Borrower's most recently completed fiscal quarter) is greater than
3.0 to 1.0, the aggregate purchase price (including assumed liabilities) of
all Acquisitions otherwise permitted under this SECTION 7.3(G)(iii)(z)
shall not exceed (a) for any single transaction or series of related
transactions, $50,000,000; and (b) for all transactions from and after the
Closing Date, $100,000,000; and
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(5) prior to each such Acquisition, the Borrower shall deliver to the
Administrative Agent a certificate from one of the Authorized Officers of
the Borrower, demonstrating to the reasonable satisfaction of the
Administrative Agent and the Required Lenders that after giving effect to
such Acquisition and the incurrence of any Indebtedness permitted by
SECTION 7.3(A) in connection therewith, on a PRO FORMA basis using
historical audited and reviewed unaudited financial statements obtained
from the seller, broken down by fiscal quarter in the Borrower's reasonable
judgment, as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the last day
of the Borrower's most recently completed fiscal quarter, the Borrower
would have been in compliance with the financial covenants in SECTION 7.4
and not otherwise in Default.
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the
Borrower nor any of its Subsidiaries shall (i) directly or indirectly enter
into or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder or holders of any of the Equity Interests of the
Borrower, or with any Affiliate of the Borrower which is not its Subsidiary,
on terms that are less favorable to the Borrower or any of its Subsidiaries,
as applicable, than those that might be obtained in an arm's length
transaction at the time from Persons who are not such a holder or Affiliate,
except for (a) Permitted Receivables Transfers, (b) transactions pursuant to
the Tax Allocation Agreement, (c) transactions pursuant to the Manufacturing
Supply Agreement, and (d) Restricted Payments permitted by SECTION 7.3(F) or
(ii) enter or permit to exist any such non-arm's length transaction between
either the Borrower or any Domestic Incorporated Subsidiary, on the one hand,
and any Foreign Incorporated Subsidiary, on the other hand, if as a result
thereof the aggregate of all Foreign Subsidiary Investments would at any time
exceed the Permitted Foreign Subsidiary Investment Amount.
(I) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any
of its Subsidiaries shall enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or substantially all of the Borrower's or any
such Subsidiary's business or property, whether now or hereafter acquired,
except (a) transactions permitted under SECTIONS 7.3(B), 7.3(F) or 7.3(G) and
(b) the merger of any Subsidiary into the Borrower or a Controlled
Subsidiary. No member of the FTB Group shall enter into any merger or
consolidation, except the merger or consolidation of any member of the FTB
Group into any other member of the FTB Group; PROVIDED, that FTB shall be the
survivor of any merger or consolidation to which it is a party and no Change
of Control shall result therefrom.
(J) SALES AND LEASEBACKS. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Guarantied
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed (other
than the aircraft owned by the Borrower and its Subsidiaries as of the
Closing Date)) (i) which it or one of its Subsidiaries sold or transferred or
is to sell or transfer to any other Person, or (ii) which it or one of its
Subsidiaries intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by it or one of its
Subsidiaries to any other Person in connection with such lease, unless in
either case the sale involved is not prohibited under SECTION 7.3(B) and the
lease involved is not prohibited under SECTION 7.3(A).
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(K) MARGIN REGULATIONS. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(L) ERISA. To the extent that any of the following actions or
omissions, individually or in the aggregate, would reasonably be expected to
subject the Borrower or any member of the Controlled Group to liability in
excess of $25,000,000, the Borrower shall not:
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 975 of the
Code for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(ii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments required under Section
412 of the Code or due with respect to any waived funding deficiency with
respect to any Benefit Plan;
(iii) terminate, or permit any Controlled Group member to terminate,
any Benefit Plan which would result in any liability of the Borrower or any
Controlled Group member under Title IV of ERISA;
(iv) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(v) amend, or permit any Controlled Group member to amend, a Benefit
Plan resulting in an increase in current liability for the plan year such
that the Borrower or any Controlled Group member is required to provide
security to such Plan under Section 401(a)(29) of the Code other than an
amendment required by applicable law, a collective bargaining agreement or
related obligation or a purchase or sale agreement;
(vi) permit any unfunded liabilities with respect to any Foreign
Pension Plan except to the extent that any such unfunded liabilities are
being funded by annual contributions made by the Borrower or any member of
its Controlled Group and such annual contributions are not less than the
minimum amounts required under applicable local law; or
(vii) fail, or permit any of its Subsidiaries or Controlled Group
members to fail, to pay any required contributions or payments to a Foreign
Pension Plan on or before the due date for such required installment or
payment.
(M) ISSUANCE OF DISQUALIFIED STOCK. Neither the Borrower nor any of
its Subsidiaries shall issue any Disqualified Stock other than (i) the
issuance of Disqualified Stock having a liquidation preference in an
aggregate amount not in excess of the principal amount of Indebtedness that
the Borrower and its Subsidiaries could incur on the date of such issuance
pursuant to SECTION 7.3(A)(vi) OR (vii) Or (ii) pursuant to an exchange or
conversion of then outstanding Indebtedness of the Borrower
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or any of its Subsidiaries for or into Disqualified Stock, PROVIDED that, to
the extent that the aggregate amount of the liquidation preference of such
Disqualified Stock exceeds the principal amount of the Indebtedness so
exchanged or converted, such Disqualified Stock could be issued pursuant to
CLAUSE (i) above. All such issued and outstanding Disqualified Stock shall
be treated as Indebtedness for all purposes of this Agreement (and as funded
Indebtedness for purposes of SECTION 7.1(G)), and the amount of such deemed
Indebtedness shall be the aggregate amount of the liquidation preference of
such Disqualified Stock. The Borrower shall not permit any Subsidiary to
issue any shares of preferred stock.
(N) CORPORATE DOCUMENTS. Neither the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective constituent documents or the Tax
Allocation Agreement as in effect on the date hereof in any manner adverse in
any material respect to the interests of the Lenders, without the prior
written consent of the Required Lenders.
(O) FISCAL YEAR. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from
a period consisting of the 12-month period ending on December 31 of each
calendar year.
(P) SUBSIDIARY COVENANTS. Except as required in connection with the
Receivables Purchase Documents, the Borrower will not, and will not permit
any Subsidiary to, create or otherwise cause to become effective or suffer to
exist any consensual encumbrance or restriction of any kind on the ability of
any Subsidiary to effect any of the following: (i) pay dividends or make any
other distribution on its stock, (ii) make any other Restricted Payment,
(iii) pay any Indebtedness or other Obligation owed to the Borrower or any
other Subsidiary, (iv) make loans or advances or other Investments in the
Borrower or any other Subsidiary, or (v) sell, transfer or otherwise convey
any of its property to the Borrower or any other Subsidiary (except property
subject to a Lien permitted hereunder).
(Q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit
any of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity
exchange, swap, collar, cap or similar agreements entered into by the
Borrower pursuant to which the Borrower has hedged its actual interest rate,
foreign currency or commodity exposure. Such permitted hedging agreements
entered into by the Borrower and any other Person are sometimes referred to
herein as "HEDGING AGREEMENTS."
(R) OTHER INDEBTEDNESS. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or
consent to any amendment, modification or supplement of), any document,
agreement or instrument evidencing the Senior Notes or any Subordinated
Indebtedness (or any replacements, substitutions or renewals thereof) or
pursuant to which the Senior Notes or any Subordinated Indebtedness is issued
where such amendment, modification or supplement provides for the following
or which has any of the following effects:
(i) increases the overall principal amount of any such Indebtedness or
increases the amount of any single scheduled installment of principal or
interest;
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(ii) shortens or accelerates the date upon which any installment of
principal or interest becomes due or adds any additional mandatory
redemption provisions;
(iii) shortens the final maturity date of such Indebtedness or
otherwise accelerates the amortization schedule with respect to such
Indebtedness;
(iv) increases the rate of interest accruing on such Indebtedness;
(v) provides for the payment of additional fees or increases existing
fees;
(vi) amends or modifies any financial or negative covenant (or
covenant which prohibits or restricts the Borrower or a Subsidiary of the
Borrower from taking certain actions) in a manner which is more onerous or
more restrictive in any material respect to the Borrower (or any Subsidiary
of the Borrower) or which is otherwise materially adverse to the Borrower
and/or the Lenders or, in the case of adding covenants, which places
material additional restrictions on the Borrower (or a Subsidiary of the
Borrower) or which requires the Borrower or any such Subsidiary to comply
with more restrictive financial ratios or which requires the Borrower to
better its financial performance from that set forth in the existing
financial covenants;
(vii) amends, modifies or adds any affirmative covenant in a manner
which, when taken as a whole, is materially adverse to the Borrower and/or
the Lenders; or
(viii) in the case of any Subordinated Indebtedness, amends, modifies
or supplements the subordination provisions thereof.
(S) AMENDMENT OF RECEIVABLES PURCHASE DOCUMENTS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, agree to or enter into
any amendment, restatement or other modification of the Receivables Purchase
Documents, or substitute or replace the Receivables Purchase Documents with
another receivables securitization facility, that would (i) increase the
maximum amount of Indebtedness to be incurred thereunder to an amount in
excess of $125,000,000; (ii) accelerate any scheduled amortization date;
(iii) increase the recourse obligations of the Borrower or any of its
Subsidiaries (other than Ball Capital Corp.) in any material respect; (iv)
provide for an "Event of Default," "Termination Event," "Early Amortization
Event," "Servicer Default" or other similar event upon the occurrence of a
Default or Unmatured Default hereunder; (v) impose net worth covenants for
Ball Capital Corp. that are materially more stringent than those in existence
on the Closing Date; (vi) materially decrease the cash consideration to be
paid to Ball Capital Corp. or Ball Metal Food Container Corp., a Delaware
corporation, Ball Plastic Container Corp., a Colorado corporation, and BMBCC
on account of any Permitted Receivables Transfers; or (vii) materially
increase the amount of discount, yield or interest payable thereunder.
(T) RESTRICTIONS ON CREDIT SUPPORT TO THE FTB GROUP. Other than
Permitted Existing Investments with respect to the FTB Group, neither the
Borrower nor any of its Subsidiaries shall provide any type of credit support
or credit enhancement to any member of the FTB Group, whether directly
through loans to or Investments in, letters of credit issued for the benefit
of any creditor of any
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member of the FTB Group or guarantees or any other Contractual Obligation,
contingent or otherwise, of the Borrower or any of such Subsidiaries with
respect to any Indebtedness or other obligation or liability of any member of
the FTB Group, including, without limitation, any such Indebtedness,
obligation or liability directly or indirectly guaranteed, supported by
letter of credit, endorsed (other than for collection or deposit in the
ordinary course of business), co-made or discounted or sold with recourse, or
in respect of which the Borrower or any of its Subsidiaries is otherwise
directly or indirectly liable, including contractual obligations (contingent
or otherwise) arising through any agreement to purchase, repurchase, or
otherwise acquire such Indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether
in the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value received;
PROVIDED such credit support or other credit enhancement shall be permitted
if and only to the extent that it is treated as an Investment covered by the
provisions of SECTION 7.3(D) and to the extent that such credit support or
credit enhancement when added to the other Investments in the FTB Group would
be permitted pursuant to SECTION 7.3(D).
(U) AMENDMENTS TO AGREEMENTS. The Borrower shall not enter into, and
shall not permit any Subsidiary to enter into, or otherwise consent to, any
amendment or other modification to the Asset Purchase Agreement in any way
that would be materially adverse to the Borrower or any of its Subsidiaries
or to any of the Lenders.
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(A) DEFINED TERMS FOR FINANCIAL COVENANTS. The following terms used in
this Agreement shall have the following meanings (such meanings to be
applicable, except to the extent otherwise indicated in a definition of a
particular term, both to the singular and the plural forms of the terms
defined):
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness, but excluding
(without duplication) any capitalized interest with respect thereto) by the
Borrower and its Subsidiaries during that period that, in conformity with
Agreement Accounting Principles, are required to be included in or reflected
by the property, plant, equipment or similar fixed asset accounts reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries.
"CAPITALIZED LEASE" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be
capitalized on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CONSOLIDATED NET INCOME" shall mean the net income and net losses of
the Borrower and its Subsidiaries on a consolidated basis as defined
according to Agreement Accounting Principles after excluding, without
duplication, the sum of (i) any net losses or net income from the operations
of any
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member of the FTB Group (other than net income which has been paid by cash
dividend or otherwise distributed in cash to the Borrower or one of the
Guarantors) and (ii) the cumulative effect of a change in accounting
principles, in each case, calculated for the applicable period and determined
in accordance with Agreement Accounting Principles; PROVIDED, that when
calculating Consolidated Net Income, there shall be excluded from such
calculation, the earnings of a Subsidiary to the extent that the declaration
or payment of dividends or similar distributions by such Subsidiary to the
Borrower with respect to such earnings is not, at the date of determination,
permitted without the prior approval of a Governmental Authority (and such
approval has not been obtained), or is prohibited, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Subsidiary or the holders of its Capital Stock. For purposes of the
calculation of Consolidated Net Income, the provisions of CLAUSE (i) shall be
applicable to the FTB Group whether or not they constitute a Minority
Interest.
"CONSOLIDATED NET WORTH" shall mean the sum of shareholders' equity of
the Borrower and its Subsidiaries, including preferred stock of the Borrower
and its Subsidiaries; PROVIDED, that there shall be excluded therefrom all
amounts related to the FTB Group.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
<TABLE>
<S> <C> <C>
(i) Consolidated Net Income,
PLUS (ii) Interest Expense, to the extent deducted in computing
Consolidated Net Income,
PLUS (iii) charges against income for foreign, federal, state and
local taxes, to the extent deducted in computing
Consolidated Net Income,
PLUS (iv) depreciation expense, to the extent deducted in computing
Consolidated Net Income,
PLUS (v) amortization expense, including, without limitation,
amortization of goodwill and other intangible assets,
Transaction Costs, and other fees, costs and expenses in
connection with Permitted Acquisitions, in each case, to
the extent deducted in computing Consolidated Net Income,
PLUS (vi) the lease expense component of the Synthetic Leases, to
the extent deducted in computing Consolidated Net Income,
MINUS (vii) the gain (or PLUS the loss) (net of any tax effect)
resulting from the sale of any capital assets other than
in the ordinary course of business,
MINUS (viii) extraordinary or nonrecurring after-tax gains (or PLUS
extraordinary or nonrecurring after-tax losses),
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MINUS (ix) any gain resulting from any write-up of assets (other
than with respect to any Company Owned Life Insurance
Program),
PLUS (x) any loss resulting from any write-down of assets; and
PLUS (xi) any non-cash restructuring charge.
</TABLE>
in each case calculated for the applicable period in conformity with Agreement
Accounting Principles.
"INTEREST EXPENSE" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries (other than the FTB Group),
whether paid or accrued (including the interest component of Capitalized
Leases, the interest component of the Synthetic Leases, net payments (if any)
pursuant to Hedging Obligations relating to interest rate protection,
commitment and letter of credit fees, and discount and other fees and charges
incurred under the Receivables Purchase Documents), but excluding interest
expense not payable in cash (including amortization of discount), as
determined in conformity with Agreement Accounting Principles.
"TOTAL DEBT" means, for any period, on a consolidated basis for the
Borrower and its consolidated Subsidiaries (other than the FTB Group),
Indebtedness of the Borrower and its Subsidiaries, other than (i) Hedging
Obligations and (ii) the sum (without duplication) of the amounts then
available for drawing under commercial or trade letters of credit and (iii)
Support Obligations.
(B) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a)
$500,000,000, PLUS (b) fifty percent (50%) of Consolidated Net Income (if
positive) calculated separately for each fiscal quarter commencing with the
fiscal quarter ending December 31, 1998, PLUS (c) one hundred percent (100%)
of the Net Cash Proceeds resulting from the issuance by the Borrower of any
Capital Stock.
(C) TOTAL DEBT TO EBITDA RATIO. The Borrower shall not permit the ratio
(the "LEVERAGE RATIO") of Total Debt to EBITDA to be greater than the ratio
set forth below under the column entitled "Leverage Ratio" at any time during
the fiscal quarter ending on the corresponding date set forth below:
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<TABLE>
<CAPTION>
QUARTER ENDING LEVERAGE RATIO
-------------- --------------
<S> <C>
December 31, 1998 4.75 to 1.00
March 31, 1999 4.75 to 1.00
June 30, 1999 4.75 to 1.00
September 30, 1999 4.50 to 1.00
December 31, 1999 4.50 to 1.00
March 31, 2000 4.25 to 1.00
June 30, 2000 4.25 to 1.00
September 30, 2000 4.00 to 1.00
December 31, 2000 4.00 to 1.00
March 31, 2001 4.00 to 1.00
June 30, 2001
and each quarter
thereafter 3.50 to 1.00
</TABLE>
The Leverage Ratio shall be calculated, in each case, determined as of the
last day of each fiscal quarter based upon (a) for Total Debt, Total Debt as
of the last day of each such fiscal quarter; and (b) for EBITDA, the actual
amount for the four-quarter period ending on such day, calculated, with
respect to Permitted Acquisitions, on a PRO FORMA basis using historical
audited and reviewed unaudited financial statements obtained from the seller,
broken down by fiscal quarter in the Borrower's reasonable judgment;
PROVIDED, that there shall be excluded from the calculation of the Leverage
Ratio all amounts related to the FTB Group.
(D) FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain a ratio
("FIXED CHARGE COVERAGE RATIO") of (i) the sum (without duplication) of the
amounts of (a) EBITDA MINUS (b) Capital Expenditures to (ii) the sum of the
amounts of (a) scheduled amortization of the principal portion of the "Term
Loans" (as defined in the Long-Term Credit Agreement) and scheduled
amortization of the principal portion of all other Indebtedness of the
Borrower and its Subsidiaries (PROVIDED, that solely for purposes of
calculating the Fixed Charge Coverage Ratio as of the fiscal quarter ending
on December 31, 2001, such calculation shall be made exclusive of payments
made at the final maturity of the Synthetic Leases during such fiscal
quarter), PLUS (b) Interest Expense, PLUS (c) cash taxes paid, PLUS (d)
dividends paid by the Borrower or other cash distributions made on the equity
of the Borrower (PROVIDED, that for purposes of this SECTION 7.4(D),
calculation of the Fixed Charge Coverage Ratio shall be exclusive of the
effect of Restricted Payments made in compliance with SECTION 7.3(F)(v))
during such period of at least:
(i) 1.05 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending December 31, 1998 through the fiscal quarter
ending June 30, 1999;
(ii) 1.10 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending September 30, 1999 through the fiscal
quarter ending June 30, 2000;
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(iii) 1.15 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending on September 30, 2000 through the fiscal
quarter ending on June 30, 2001; and
(iv) 1.20 to 1.00 for each fiscal quarter thereafter until the
Termination Date.
In each case the Fixed Charge Coverage Ratio shall be determined as of the
last day of each fiscal quarter for the four-quarter period ending on such
day PROVIDED, that there shall be excluded from the calculation of the Fixed
Charge Coverage Ratio all amounts relating to the FTB Group.
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a
Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to
pay when due any of the Obligations consisting of principal with respect to
the Loans or (ii) shall fail to pay within five (5) Business Days of the date
when due any of the other Obligations under this Agreement or the other Loan
Documents.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation
binding on the Borrower under:
(i) SECTION 7.1(C) through and including (J) and SECTION 7.2 and
such failure shall continue unremedied for fifteen (15) Business Days;
(ii) SECTION 7.1(A), 7.1(B), or 7.3 or 7.4.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made or deemed made by the Borrower to the Administrative Agent or
any Lender herein or by the Borrower or any of its Subsidiaries in any of the
other Loan Documents or in any statement or certificate at any time given by
any such Person pursuant to any of the Loan Documents shall be untrue in any
material respect on the date as of which made (or deemed made).
(d) OTHER DEFAULTS. The Borrower shall default in the performance of
or compliance with any term contained in this Agreement (other than as
covered by PARAGRAPHS (a), (b) or (c) of this SECTION 8.1), or the Borrower
or any of its Subsidiaries shall default in the performance of or compliance
with any term contained in any of the other Loan Documents, and such default
shall continue for fifteen (15) Business Days after the earlier of (i) notice
from the Administrative Agent or (ii) the date on which any member of the
Borrower's or such Subsidiary's management, as applicable, shall first have
actual knowledge thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS. (x) Any "Default" shall occur
under and as defined in the Long-Term Credit Agreement; or (y) the Borrower
or any of its Subsidiaries shall fail to make any payment when due (whether
by scheduled maturity, required prepayment, acceleration, demand or
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otherwise) with respect to any Indebtedness (including, without limitation,
Indebtedness with respect to any Hedging Agreement, but other than (i) the
Obligations and the Indebtedness under the Receivables Purchase Documents and
(ii) the Obligations and Indebtedness of the FTB Group (which Obligations and
Indebtedness are non-recourse to the Borrower and its Subsidiaries)) the
aggregate outstanding principal amount of which Indebtedness is in excess of
$10,000,000; or any breach, default or event of default shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption, a requirement that the Borrower or any of
its Subsidiaries offer to purchase such Indebtedness or other required
repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness
to accelerate the maturity of any such Indebtedness or require a redemption
or other repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) or
the holder of such Indebtedness requires such Indebtedness to be prepaid,
redeemed or otherwise repurchased by the Borrower or any of its Subsidiaries
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case under applicable bankruptcy, insolvency or
other similar law shall be commenced against the Borrower or any Material
Subsidiary and the petition shall not be dismissed, stayed, bonded or
discharged within sixty (60) days after commencement of the case; or a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Borrower or any Material Subsidiary in an
involuntary case, under any applicable bankruptcy, insolvency or other
similar law now or hereinafter in effect; or any other similar relief shall
be granted under any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Borrower or any
Material Subsidiary or over all or a substantial part of the property of
the Borrower or any Material Subsidiary shall be entered; or an interim
receiver, trustee or other custodian of the Borrower or any Material
Subsidiary or of all or a substantial part of the property of the Borrower
or any Material Subsidiary shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the property
of the Borrower or any Material Subsidiary shall be issued and any such
event shall not be stayed, dismissed, bonded or discharged within sixty
(60) days after entry, appointment or issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower
or any Material Subsidiary shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under
any such law, (iii) consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property, (iv) make any assignment for the benefit of creditors or (v) take
any corporate action to authorize any of the foregoing.
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(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s) (other than a
money judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any Material
Subsidiary or any of their respective assets involving in any single case or
in the aggregate an amount in excess of $10,000,000 is or are entered and
shall remain undischarged, unvacated, unbonded or unstayed for a period of
sixty (60) days or in any event later than fifteen (15) days prior to the
date of any judicially sanctioned sale thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered
against the Borrower or any Material Subsidiary decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of sixty (60) days; or the Borrower or any Material
Subsidiary shall otherwise dissolve or cease to exist except as specifically
permitted by this Agreement.
(j) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason,
(i) any Loan Document as a whole that materially affects the ability of the
Administrative Agent, or any of the Lenders to enforce the Obligations or
enforce their rights against the Collateral ceases to be in full force and
effect or the Borrower or any of the Borrower's Subsidiaries party thereto
seeks to repudiate its obligations thereunder and the Liens intended to be
created thereby are, or the Borrower or any such Subsidiary seeks to render
such Liens, invalid or unperfected, or (ii) any material Lien on Collateral
in favor of the Administrative Agent contemplated by the Loan Documents
shall, at any time, for any reason (except as permitted by the terms of any
such Loan Document), be invalidated or otherwise cease to be in full force
and effect, or such Lien shall not have the priority contemplated by this
Agreement or the Loan Documents.
(k) TERMINATION EVENT. Any Termination Event occurs which individually
or in the aggregate would reasonably be expected to subject the Borrower or
any Controlled Group member to liability in excess of $25,000,000.
(l) WAIVER OF MINIMUM FUNDING STANDARD. The plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the substantial business
hardship upon which the application for the waiver is based could reasonably
be expected to subject either the Borrower or any Controlled Group member to
liability in excess of $10,000,000.
(m) CHANGE OF CONTROL. A Change of Control shall occur.
(n) ENVIRONMENTAL MATTERS. The Borrower or any of its Subsidiaries
shall be the subject of any proceeding or investigation pertaining to (i) the
Release by the Borrower or any of its Subsidiaries of any Contaminant, (ii)
the liability of the Borrower or any of its Subsidiaries arising from the
Release by any other Person of any Contaminant, or (iii) any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries, which, in any case, has subjected or is reasonably likely
to subject the Borrower or any of its Subsidiaries to liability individually
or in the aggregate in excess of $25,000,000 (exclusive of costs, expenses,
claims covered by insurance policies of the Borrower or any of its
Subsidiaries unless the insurers of such costs, expenses or claims have
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disclaimed coverage or reserved the right to disclaim coverage thereof and
exclusive of costs, expenses or claims covered by the indemnity of a
financially responsible indemnitor in favor of the Borrower or any of its
Subsidiaries unless the indemnitor has disclaimed or reserved the right to
disclaim coverage thereof).
(o) GUARANTOR DEFAULT OR REVOCATION. The Borrower or any Guarantor
shall terminate or revoke any of their respective obligations under any of
the Collateral Documents, or any other guarantor of the Obligations shall
terminate or revoke any of its obligations under the applicable guarantee
agreement or breach any of the terms of such guarantee agreement.
(p) FAILURE OF SUBORDINATION. The subordination provisions of the
documents and instruments evidencing any Subordinated Indebtedness shall, at
any time, be invalidated or otherwise cease to be in full force and effect.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
REMEDIES
9.1 TERMINATION OF REVOLVING LOAN COMMITMENTS; ACCELERATION. If any
Default described in SECTION 8.1(f) or 8.1(g) or 8.1(i) occurs with respect
to the Borrower, the obligations of the Lenders to make Loans hereunder and
the obligation of each Issuing Bank to issue Letters of Credit hereunder
shall automatically terminate and the Obligations shall immediately become
due and payable without any election or action on the part of the
Administrative Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to
make Loans hereunder and the obligation of the Issuing Banks to issue Letters
of Credit hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which the
Borrower expressly waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its
Revolving Loan Pro Rata Share of any Advance requested or deemed requested by
the Borrower, which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Advance being hereinafter referred to
as a "NON PRO RATA LOAN"), until the earlier of such Lender's cure of such
failure and the termination of the Revolving Loan Commitments, the proceeds
of all amounts thereafter repaid to the Administrative Agent by the Borrower
and otherwise required to be applied to such Lender's share of all other
Obligations pursuant to the terms of this Agreement shall be advanced to the
Borrower by the Administrative Agent on behalf of such Lender to cure, in
full or in part, such failure by such Lender, but shall nevertheless be
deemed to have been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything in this Agreement to the contrary:
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(i) the foregoing provisions of this SECTION 9.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to SECTION
2.10;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Revolving Loan Pro Rata Share of any Advance at such time
as an amount equal to such Lender's original Revolving Loan Pro Rata
Share of the requested principal portion of such Advance is fully
funded to the Borrower, whether made by such Lender itself or by
operation of the terms of this SECTION 9.2, and whether or not the Non
Pro Rata Loan with respect thereto has been repaid, converted or
continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Revolving Loan Pro Rata
Share of any Advance ("CURE LOANS") shall bear interest at the rate
applicable to Floating Rate Loans in effect from time to time, and for
all other purposes of this Agreement shall be treated as if they were
Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied FIRST, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, SECOND,
ratably to Floating Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, THIRD, ratably to Floating Rate Loans
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Revolving Loan Pro Rata Share of any
Advance and the termination of the Revolving Loan Commitments, the
term "Required Lenders" for purposes of this Agreement shall mean
Lenders (excluding all Lenders whose failure to fund their respective
Revolving Loan Pro Rata Share of such Advance have not been so cured)
whose Pro Rata Shares represent at least fifty percent (50%) of the
aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Revolving Loan Pro Rata Share of any Advance is cured in
accordance with SECTION 9.2(ii), (A) such Lender shall not be entitled
to any commitment fees with respect to its Revolving Loan Commitment
and (B) such Lender shall not be entitled to any letter of credit
fees, which commitment fees and letter of credit fees shall accrue in
favor of the Lenders which have funded their respective Revolving Loan
Pro Rata Share of such requested Advance, shall be allocated among
such performing Lenders ratably based upon their relative Revolving
Loan Commitments, and shall be calculated based upon the average
amount by which the aggregate Revolving Loan Commitments of such
performing Lenders exceeds the sum of (I) the outstanding principal
amount of the Loans owing to such performing Lenders, PLUS (II) the
outstanding Reimbursement Obligations owing to such performing
Lenders, PLUS (III) the aggregate participation interests of such
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performing Lenders arising pursuant to SECTION 3.6 with respect to
undrawn and outstanding Letters of Credit.
9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the
Required Lenders (or the Administrative Agent with the consent in writing of
the Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the Borrower
hereunder or waiving any Default hereunder; PROVIDED, HOWEVER, that no such
supplemental agreement shall, without the consent of each Lender affected
thereby:
(i) Postpone or extend the Revolving Loan Termination Date or any
other date fixed for any payment of principal of, or interest on, the
Loans, the Reimbursement Obligations or any fees or other amounts payable
to such Lender (except with respect to (a) any modifications of the
provisions relating to prepayments of Loans and other Obligations or (b) a
waiver of the application of the default rate of interest pursuant to
SECTION 2.11 hereof or (c) as expressly provided by the terms of SECTION
2.18).
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees thereon.
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters, or amend the
definitions of "Required Lenders", "Revolving Loan Pro Rata Share", or "Pro
Rata Share".
(iv) Increase the amount of the Revolving Loan Commitment of any
Lender hereunder, or increase any Lender's Revolving Loan Pro Rata Share or
Pro Rata Share.
(v) Permit the Borrower to assign its rights under this Agreement.
(vi) Amend this SECTION 9.3.
(vii) Release all or substantially all of the Collateral.
(viii) Except in connection with a transaction otherwise permitted
pursuant to the terms of any Loan Document, release any Domestic
Incorporated Subsidiary from its obligations under the Subsidiary Guaranty.
Any supplemental agreement entered into in accordance with the terms of this
SECTION 9.3 shall apply to each of the Lenders equally. No amendment of any
provision of this Agreement relating to (a) the Administrative Agent shall be
effective without the written consent of the Administrative Agent, (b) Swing
Line Loans shall be effective without the written consent of the Swing Line
Bank and (c) any Issuing Lender without the written consent of such Issuing
Lender. The Administrative Agent may waive payment of the fee required under
SECTION 13.3(B) without obtaining the consent of any of the Lenders.
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9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan or the issuance of a Letter of
Credit notwithstanding the existence of a Default or the inability of the
Borrower to satisfy the conditions precedent to such Loan or issuance of such
Letter of Credit shall not constitute any waiver or acquiescence. Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment
or other variation of the terms, conditions or provisions of the Loan
Documents whatsoever shall be valid unless in writing signed by the Lenders
required pursuant to SECTION 9.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by
law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Borrower contained in this Agreement shall survive delivery of this
Agreement and the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the
Administrative Agent may, but shall have no obligation, to (i) at any time,
pay or discharge taxes, liens, security interests or other encumbrances
levied or placed on or threatened against any Collateral and (ii) after the
occurrence and during the continuance of a Default, make any other payment or
perform any act required of the Borrower under any Loan Document or take any
other action which the Administrative Agent in its discretion deems necessary
or desirable to protect or preserve the Collateral, including, without
limitation, any action to (y) effect any repairs or obtain any insurance
called for by the terms of any of the Loan Documents and to pay all or any
part of the premiums therefor and the costs thereof and (z) pay any rents
payable by the Borrower which are more than 30 days past due, or as to which
the landlord has given notice of termination, under any lease. The
Administrative Agent shall use its best efforts to give the Borrower notice
of any action taken under this SECTION 10.3 prior to the taking of such
action or promptly thereafter provided the failure to give such notice shall
not affect the Borrower's obligations in respect thereof. The Borrower
agrees to pay the Administrative Agent, upon demand, the principal amount of
all funds advanced by the Administrative Agent under this SECTION 10.3,
together with interest thereon at the rate from time to time applicable to
Floating Rate Loans from the date of such advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make
payment in respect of any such advance under this SECTION 10.3 within one (1)
Business Day after the date the Borrower receives written demand therefor
from the Administrative Agent, the Administrative Agent shall promptly notify
each Lender and each Lender agrees that it shall thereupon make available to
the Administrative Agent, in Dollars in immediately available funds, the
amount equal to such Lender's Pro Rata Share of such advance. If such funds
are not made available to the
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Administrative Agent by any such Lender within one (1) Business Day after the
Administrative Agent's demand therefor, the Administrative Agent will be
entitled to recover any such amount from such Lender together with interest
thereon at the Federal Funds Effective Rate for each day during the period
commencing on the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the Administrative
Agent its Pro Rata Share of any such unreimbursed advance under this SECTION
10.3 shall neither relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent such other Lender's Pro Rata Share
of such advance on the date such payment is to be made nor increase the
obligation of any other Lender to make such payment to the Administrative
Agent. All outstanding principal of, and interest on, advances made under
this SECTION 10.3 shall constitute Obligations secured by the Collateral
until paid in full by the Borrower.
10.4 HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agents and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Agents and the Lenders relating to the subject matter thereof.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to
which the Administrative Agent is authorized to act as such). The failure of
any Lender to perform any of its obligations hereunder shall not relieve any
other Lender from any of its obligations hereunder. This Agreement shall not
be construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agents and the
Arrangers for any reasonable costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' and paralegals' fees and time
charges of attorneys and paralegals for the Agents, which attorneys and
paralegals may be employees of the Agents) paid or incurred by any Agent or
any Arranger in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, and administration of
the Loan Documents. The Borrower also agrees to reimburse the Agents and the
Arrangers and the Lenders for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' and paralegals' fees
and time charges of attorneys and paralegals for the Agents and the Arrangers
and the Lenders, which attorneys and paralegals may be employees of the
Agents or the Arrangers or the Lenders) paid or incurred by any Agent or any
Arranger or any Lender in connection with the restructure, workout or
collection of the Obligations and enforcement (whether by legal proceedings,
negotiation or otherwise) of the Loan Documents. In addition to expenses set
forth above, the Borrower agrees to reimburse the Administrative Agent,
promptly after the Administrative Agent's request therefor, for each audit,
or other business analysis expressly permitted or contemplated hereby and
performed by or for the benefit of the Lenders in connection
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with this Agreement or the other Loan Documents in an amount equal to the
Administrative Agent's then customary charges for each person employed to
perform such audit or analysis, plus all reasonable costs and expenses
(including without limitation, travel expenses) incurred by the
Administrative Agent in the performance of such audit or analysis; PROVIDED,
that the Borrower shall only be responsible for expenses in connection with
one (1) such audit or business analysis in any calendar year at a time when
no Default had occurred or was continuing.
(B) INDEMNITY. The Borrower further agrees to defend, protect,
indemnify, and hold harmless each and all of the Agents, the Arrangers and
the Lenders and each of their respective Affiliates, and each of such
Agent's, Arranger's, Lender's, or Affiliate's respective officers, directors,
trustees, investment advisors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in ARTICLE V)
(collectively, the "INDEMNITEES") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees in
any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto or to the Reynolds Acquisition, the making of the Loans,
and the issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of
the proceeds of the Loans or Letters of Credit hereunder, or any of the
other transactions contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or
threat to the environment, natural resources or public health or welfare,
costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future
relating to violation of any Environmental, Health or Safety Requirements
of Law arising from or in connection with the past, present or future
operations of the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future environmental,
health or safety condition of any respective property of the Borrower or
its Subsidiaries, the presence of asbestos-containing materials at any
respective property of the Borrower or its Subsidiaries or the Release or
threatened Release of any Contaminant arising out of or relating to, in any
way, the past, present or future operations of the Borrower, its
Subsidiaries or any of their respective predecessors in interest
(collectively, the "INDEMNIFIED MATTERS");
PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters to the extent caused by or
resulting from the willful misconduct or Gross Negligence of such Indemnitee
with respect to the Loan Documents or the Indemnified Matters, in
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each case, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it
is violative of any law or public policy, the Borrower shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by
the Indemnitees.
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability for consequential, special, indirect, exemplary or punitive damages.
No settlement shall be entered into by the Borrower or any of its Subsidiaries
with respect to any claim, litigation, arbitration or other proceeding with
respect to which any Agent or any Lender or any Indemnitee is a party (or in
connection with which liability has been asserted against any Agent or any
Lender or any Indemnitee) and relating to or arising out of the transactions
evidenced by this Agreement, the other Loan Documents or the Reynolds
Acquisition Documents unless such settlement releases all Indemnitees from any
and all liability with respect thereto.
(D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 10.7 shall survive the termination of this
Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Administrative Agent shall be solely that of borrower and
lender. Neither any Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither any Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
10.12 GOVERNING LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS AGREEMENT, ON
BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE ADMINISTRATIVE
AGENT, ANY LENDER, OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
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BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET
SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE ADMINISTRATIVE
AGENT, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2)
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR (3) TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON.
WITHOUT IMPAIRING THE BORROWER'S ABILITY TO BRING ANY COUNTERCLAIM IN ANY
PROCEEDING COMMENCED PURSUANT TO SUBSECTION (A) ABOVE, THE BORROWER AGREES THAT
IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON UNDER THIS SUBSECTION (B) TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED
IN THIS SUBSECTION (B).
(C) SERVICE OF PROCESS; VENUE. THE BORROWER WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND IRREVOCABLY APPOINTS CT CORPORATION, WHOSE ADDRESS IS
208 SOUTH LASALLE STREET, CHICAGO, ILLINOIS 60603 AS THE BORROWER'S AGENT FOR
THE PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY ANY COURT. THE BORROWER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS)
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WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION
SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees
that any and all claims of the Borrower against any of its Subsidiaries that is
a Guarantor or the capital stock of which is pledged pursuant to a Pledge
Agreement (each a "RESTRICTED SUBSIDIARY") with respect to any "Intercompany
Indebtedness" (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its
properties shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Secured Obligations; PROVIDED that, and not
in contravention of the foregoing, so long as no Default has occurred and is
continuing the Borrower may make loans to and receive payments in the ordinary
course with respect to such Intercompany Indebtedness from each such Restricted
Subsidiary to the extent permitted by the terms of this Agreement and the other
Loan Documents. Notwithstanding any right of the Borrower to ask, demand, sue
for, take or receive any payment from any Restricted Subsidiary all rights,
liens and security interests of the Borrower, whether now or hereafter arising
and howsoever existing, in any assets of any other Restricted Subsidiary
(whether constituting part of Collateral given to any Holder of Secured
Obligations or the Administrative Agent to secure payment of all or any part of
the Secured Obligations or otherwise) shall be and are subordinated to the
rights of the Holders of Secured Obligations and the Administrative Agent in
those assets. The Borrower shall have no right to possession of any such asset
or to foreclose upon any such asset, whether by judicial action or otherwise,
unless and until all of the Secured Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied (in cash) and all
financing arrangements pursuant to any Loan Document among the Borrower and the
Holders of Secured Obligations have been terminated. If all or any part of the
assets of any Restricted Subsidiary, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Restricted
Subsidiary, whether partial or
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complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of
creditors or any other action or proceeding, or if the business of any such
Restricted Subsidiary is dissolved or if substantially all of the assets of
any such Restricted Subsidiary are sold, then, and in any such event (such
events being herein referred to as an "INSOLVENCY EVENT"), any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
indebtedness of any Restricted Subsidiary to the Borrower ("INTERCOMPANY
INDEBTEDNESS") shall be paid or delivered directly to the Administrative
Agent for application on any of the Secured Obligations, due or to become
due, until such Secured Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied (in cash).
Should any payment, distribution, security or instrument or proceeds thereof
be received by the Borrower upon or with respect to the Intercompany
Indebtedness after an Insolvency Event and prior to the satisfaction of all
of the Secured Obligations (other than contingent indemnity obligations) and
the termination of all financing arrangements pursuant to any Loan Document
among the Borrower and the Holders of Secured Obligations, the Borrower shall
receive and hold the same in trust, as trustee, for the benefit of the
Holders of Secured Obligations and shall forthwith deliver the same to the
Administrative Agent, for the benefit of the Holders of Secured Obligations,
in precisely the form received (except for the endorsement or assignment of
the Borrower where necessary), for application to any of the Secured
Obligations, due or not due, and, until so delivered, the same shall be held
in trust by the Borrower as the property of the Holders of Secured
Obligations. If the Borrower fails to make any such endorsement or
assignment to the Administrative Agent, the Administrative Agent or any of
its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Secured Obligations (other than the contingent
indemnity obligations) have been paid in full (in cash) and satisfied and all
financing arrangements pursuant to any Loan Document among the Borrower and
the Holders of Secured Obligations have been terminated, the Borrower will
not assign or transfer to any Person (other than the Administrative Agent)
any claim the Borrower has or may have against any Restricted Subsidiary.
10.15 OTHER TRANSACTIONS. Each of the Agents, the Arrangers, the Lenders,
the Swing Line Bank, the Issuing Banks and the Borrower acknowledges that the
Lenders (or Affiliates of the Lenders) may, from time to time, effect
transactions for their own accounts or the accounts of customers, and hold
positions in loans or options on loans of the Borrower, the Borrower's
Subsidiaries and other companies that may be the subject of this credit
arrangement and nothing in this Agreement shall impair the right of any such
Person to enter into any such transaction (to the extent it is not expressly
prohibited by the terms of this Agreement) or give any other Person any claim or
right of action hereunder as a result of the existence of the credit
arrangements hereunder, all of which are hereby waived. In addition, certain
Affiliates of one or more of the Lenders are or may be securities firms and as
such may effect, from time to time, transactions for their own accounts or for
the accounts of customers and hold positions in securities or options on
securities of the Borrower, the Borrower's Subsidiaries and other companies that
may be the subject of this credit arrangement and nothing in this Agreement
shall impair the right of any such Person to enter into any such transaction (to
the extent it is not expressly prohibited by the terms of this Agreement) or
give any other Person any claim or right of action hereunder as a result of the
existence of the credit arrangements hereunder, all of which are hereby waived.
Other business units affiliated with each of the Agents are providing other
financial services and products to the Borrower in connection with the Reynolds
Acquisition and the other transactions contemplated by this Agreement. Each of
the Agents, the Arrangers, the Lenders, the
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Swing Line Bank, the Issuing Banks and the Borrower acknowledges and consents
to these multiple roles, and further acknowledges that the fact that any such
unit or Affiliate is providing another service or product or proposal
therefor to the Borrower does not mean that such service, product, or
proposal is or will be acceptable to any of the Agents, the Arrangers, the
Lenders, the Swing Line Bank, or the Issuing Banks.
ARTICLE XI: THE ADMINISTRATIVE AGENT
11.1 APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank of
Chicago is appointed by the Lenders as the Administrative Agent hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this ARTICLE XI.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Holder of Secured Obligations by reason of
this Agreement and that the Administrative Agent is merely acting as the
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Administrative Agent (i) does not assume any
fiduciary duties to any of the Holders of Secured Obligations, (ii) is a
"representative" of the Holders of Secured Obligations within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders, for itself and on behalf of its affiliates as Holders of Secured
Obligations, agrees to assert no claim against the Administrative Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Holder of Secured Obligations waives.
11.2 POWERS. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action hereunder or under any of the other Loan Documents
except any action specifically provided by the Loan Documents required to be
taken by the Administrative Agent.
11.3 GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction results from (i) the
Gross Negligence or willful misconduct of such Person or (ii) breach of contract
by such Person with respect to the Loan Documents.
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (i) any statement, warranty or representation made in
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connection with any Loan Document or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any obligor
under any Loan Document; (iii) the satisfaction of any condition specified in
ARTICLE V, except receipt of items required to be delivered solely to the
Administrative Agent; (iv) the existence or possible existence of any Default or
(v) the validity, effectiveness or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith. The Administrative
Agent shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or in any of the other Loan Documents, for
the perfection or priority of any of the Liens on any of the Collateral, or for
the execution, effectiveness, genuineness, validity, legality, enforceability,
collectibility, or sufficiency of this Agreement or any of the other Loan
Documents or the transactions contemplated thereby, or for the financial
condition of any guarantor of any or all of the Obligations, the Borrower or any
of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent in all
cases, as between the Administrative Agent and the Holders of Secured
Obligations, shall be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all Holders of Secured Obligations. As between the
Administrative Agent and the Holders of Secured Obligations, the Administrative
Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be indemnified
to its satisfaction by the Lenders pro rata against any and all liability, cost
and expense that it may incur by reason of taking or continuing to take any such
action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Administrative Agent may
execute any of its duties as the Administrative Agent hereunder and under any
other Loan Document by or through employees, agents, and attorney-in-fact and
shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning the
contractual arrangement between the Administrative Agent and the Lenders and all
matters pertaining to the Administrative Agent's duties hereunder and under any
other Loan Document.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. As between the Administrative Agent
and the Holders of Secured Obligations, the Administrative Agent shall be
entitled to rely upon any notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
11.8 THE ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Revolving Loan Commitments (i) for any amounts
not reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents (other than amounts not
reimbursed by the Borrower pursuant to the terms of the letter agreements
identified in SECTIONS 2.14(C)(ii) and (iii)), (ii) for any other expenses
incurred by the Administrative Agent on behalf of the Lenders, in connection
with the preparation, execution, delivery, administration and enforcement of the
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Loan Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Administrative
Agent.
11.9 RIGHTS AS A LENDER. With respect to its Revolving Loan Commitment,
Loans made by it and the Letters of Credit issued by it as an Issuing Bank, the
Administrative Agent shall have the same rights and powers hereunder and under
any other Loan Document as any Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which such Person
is not prohibited hereby from engaging with any other Person.
11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon any Agent, any Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent, any Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
11.11 SUCCESSOR AGENT. The Administrative Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, and the
Administrative Agent may be removed at any time with or without cause by written
notice received by the Administrative Agent from the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Administrative Agent's giving notice of resignation, then the
retiring Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. Notwithstanding anything herein to
the contrary, so long as no Default has occurred and is continuing, each such
successor Administrative Agent shall be subject to approval by the Borrower,
which approval shall not be unreasonably withheld. Such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents. After any
retiring Administrative Agent's resignation
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hereunder as Administrative Agent, the provisions of this ARTICLE XI shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Administrative Agent hereunder
and under the other Loan Documents. Notwithstanding anything herein to the
contrary, the Administrative Agent may at any time and without the consent of
any of the parties hereto designate one or more of its Affiliates as
successor Administrative Agent.
11.12 COLLATERAL DOCUMENTS. (a) Each Lender authorizes the Administrative
Agent to enter into each of the Collateral Documents to which it is a party and
to take all action contemplated by such documents. Each Lender agrees that no
Holder of Secured Obligations (other than the Administrative Agent) shall have
the right individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Administrative Agent for the benefit of
the Holders of Secured Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any
Person as collateral security for the Obligations, the Administrative Agent is
hereby authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Administrative Agent on behalf of the
Holders of Secured Obligations.
(c) The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Revolving
Loan Commitments and payment and satisfaction of all of the Obligations at any
time arising under or in respect of this Agreement or the Loan Documents or the
transactions contemplated hereby or thereby; (ii) as permitted by, but only in
accordance with, the terms of the applicable Loan Document; or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder. Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this SECTION 11.12(c).
(d) Upon any sale or transfer of assets constituting Collateral which
is permitted pursuant to the terms of any Loan Document, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, or
consummation of any transaction involving the sale of all or substantially all
of the assets of a Guarantor and upon at least five Business Days' prior written
request by the Borrower, the Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Administrative
Agent for the benefit of the Holders of Secured Obligations herein or pursuant
hereto upon the Collateral that was sold or transferred or evidence the release
of the applicable Guarantor from its obligations under the Subsidiary Guaranty;
PROVIDED, HOWEVER, that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in the Administrative Agent's opinion,
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Secured Obligations, any other Guarantor's obligations under the
Subsidiary Guaranty or any Liens upon (or obligations of the
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Borrower or any Subsidiary in respect of) all interests retained by the
Borrower or any Subsidiary, including (without limitation) the proceeds of
the sale, all of which shall continue to constitute part of the Collateral.
Notwithstanding the foregoing, each of the Agents, the Arrangers and the
Lenders hereby acknowledges and agrees that upon the consummation of any
transaction involving the sale of the PET business unit of the Borrower and
the disposition of the Aerospace business unit of the Borrower, which sale or
disposition is permitted pursuant to the terms of SECTION 7.3(B)(vi) or (vii)
or 7.3(F)(v), the Administrative Agent, for itself and on behalf of the
Lenders and the Issuing Banks, shall release and terminate the Subsidiary
Guaranty with respect to any Subsidiary of the Borrower which is the subject
of such transaction or, as applicable, release the stock of such Subsidiary
from the pledge to the Administrative Agent.
11.13. NO DUTIES IMPOSED UPON SYNDICATION AGENT, DOCUMENTATION AGENT OR
ARRANGERS. None of the Persons identified on the cover page to this Agreement,
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent" or "Documentation Agent" or "Arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, if such Person is a Lender, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Persons identified on the cover page
to this Agreement, the signature pages to this Agreement or otherwise in this
Agreements as a "Syndication Agent" or "Documentation Agent" or "Arranger" shall
have or be deemed to have any fiduciary duty to or fiduciary relationship with
any Lender. In addition to the agreements set forth in SECTION 11.10, each of
the Lenders acknowledges that it has not relied, and will not rely, on any of
the Persons so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
the Administrative Agent shall, unless otherwise specified at the direction of
the Required Lenders which direction shall
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be consistent with the last sentence of this SECTION 12.3 (it being agreed
and understood that so long as no Default shall have occurred and is
continuing any modification of the application of payments shall be made only
with the consent of the Borrower), apply all payments and prepayments in
respect of any Obligations and all proceeds of the Collateral in the
following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Administrative Agent may have advanced on behalf of any
Lender for which the Administrative Agent has not then been reimbursed by
such Lender or the Borrower;
(B) second, to pay interest on and then principal of any advance made
under SECTION 10.3 for which the Administrative Agent has not then been
paid by the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Administrative Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than Swing
Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans) and Reimbursement
Obligations;
(I) ninth, to provide required cash collateral, if required pursuant
to SECTION 3.11;
(J) tenth, to the ratable payment of all other Obligations; and
(K) eleventh, to the Hedging Obligations under Hedging Agreements.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied FIRST, to repay
outstanding Floating Rate Loans, and THEN to repay outstanding Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in this SECTION 12.3 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Administrative Agent, the Lenders, the Swing Line Bank and the issuer(s) of
Letters of Credit and other Holders of Secured Obligations as among themselves.
The order of priority set forth in CLAUSES (D) through (K) of this SECTION 12.3
may at any time and from time to time be
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changed by the Lenders without necessity of notice to or consent of or
approval by the Borrower, or any other Person; PROVIDED, that the order of
priority of payments in respect of Swing Line Loans may be changed only with
the prior written consent of the Swing Line Bank. The order of priority set
forth in CLAUSES (A) through (C) of this SECTION 12.3 may be changed only
with the prior written consent of the Administrative Agent.
12.4 RELATIONS AMONG LENDERS. Except with respect to the exercise of
set-off rights of any Lender in accordance with SECTION 12.1, the proceeds of
which are applied in accordance with this Agreement, and except as set forth in
the last sentence of this SECTION 12.4, each Lender agrees that it will not take
any action, nor institute any actions or proceedings, against the Borrower or
any other obligor hereunder or with respect to any Collateral or Loan Document,
without the prior written consent of the Required Lenders or, as may be provided
in this Agreement or the other Loan Documents, at the direction of the
Administrative Agent. The Lenders are not partners or co-venturers, and no
Lender shall be liable for the acts or omissions of, or (except as otherwise set
forth herein in case of the Administrative Agent) authorized to act for, any
other Lender. Notwithstanding the foregoing, and subject to SECTION 12.2, any
Lender shall have the right to enforce on an unsecured basis the payment of the
principal of and interest on any Loan made by it after the date such principal
or interest has become due and payable pursuant to the terms of this Agreement.
Notwithstanding anything to the contrary in this Agreement or in any other Loan
Document, the Administrative Agent shall commence enforcement of any remedy
(including, without limitation, the exercise of any voting rights under any
Pledge Agreement) under this Agreement or any other Loan Document only with the
consent, or at the direction, of the Required Lenders.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents without the consent of all of the Lenders, and any such
assignment in violation of this SECTION 13.1(i) shall be null and void, and (ii)
any assignment by any Lender must be made in compliance with SECTION 13.3
hereof. Notwithstanding CLAUSE (II) of this SECTION 13.1 or SECTION 13.3, (i)
any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank and (ii) any Lender which is a fund or
commingled investment vehicle that invests in commercial loans in the ordinary
course of its business may at any time, without the consent of the Borrower or
the Administrative Agent, pledge or assign all or any part of its rights under
this Agreement to a trustee or other representative of holders of obligations
owed or securities issued by such Lender as collateral to secure such
obligations or securities; PROVIDED, HOWEVER, that no such assignment or pledge
shall release the transferor Lender from its obligations hereunder. The
Administrative Agent may treat each Lender as the owner thereof for all purposes
hereof unless and until such Lender complies with SECTION 13.3 hereof in the
case of an assignment thereof or, in the case of any other transfer, a written
notice of the transfer is filed with the Administrative Agent. Any assignee or
transferee of a Loan, Revolving Loan Commitment, L/C Interest or any other
interest of a Lender under the Loan Documents agrees by acceptance thereof to be
bound by all the terms and provisions of the Loan Documents. Any request,
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<PAGE>
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of any Loan, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Loan.
13.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in
this SECTION 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Revolving Loan Commitment of such Lender, any L/C Interest of such
Lender or any other interest of such Lender under the Loan Documents on a pro
rata or non-pro rata basis. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of all Loans made by it for all purposes
under the Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such participating
interests, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents except that, for purposes of ARTICLE IV
hereof, the Participants shall be entitled to the same rights as if they were
Lenders.
(B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Revolving Loan Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment (but not any prepayment) of
principal of, or interest or fees on, any such Loan or Revolving Loan
Commitment, or releases all or substantially all of the Collateral, if any,
securing any such Loan.
(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in SECTION 12.1 hereof in respect to
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, PROVIDED that each Lender shall retain the
right of setoff provided in SECTION 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
SECTION 12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with SECTION 12.2 as if each Participant were a Lender.
13.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities
109
<PAGE>
("PURCHASERS") all or a portion of its rights and obligations under this
Agreement (including, without limitation, its Revolving Loan Commitment, all
Loans owing to it, all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional Letters of Credit
hereunder) in accordance with the provisions of this SECTION 13.3. Each
assignment may be of a non-ratable percentage of the assigning Lender's
rights and obligations under this Agreement. Such assignment shall be
substantially in the form of EXHIBIT D hereto and shall not be permitted
hereunder unless such assignment is either for all of such Lender's rights
and obligations under the Loan Documents or, without the prior written
consent of the Administrative Agent, involves loans and commitments in an
aggregate amount of at least $5,000,000 (which minimum amount (i) shall not
apply to any assignment between Lenders, or to an Affiliate or Approved Fund
of any Lender, and (ii) in any event may be waived by the Required Lenders
after the occurrence of a Default or Unmatured Event of Default). The
consent of the Administrative Agent and, prior to the occurrence of a
Default, the Borrower (which consent of the Administrative Agent and of the
Borrower, in each such case, shall not be unreasonably withheld), shall be
required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate or Approved Fund of such
Lender.
(B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Administrative Agent
of a notice of assignment, substantially in the form attached as APPENDIX I to
EXHIBIT D hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required
by SECTION 13.3(A) hereof, and (ii) payment of a $3,500 fee by the assignee or
the assignor (as agreed) to the Administrative Agent (unless waived by the
Administrative Agent) for processing such assignment, such assignment shall
become effective on the effective date specified in such Notice of Assignment.
The Notice of Assignment shall contain a representation by the Purchaser to the
effect that either (y) none of the consideration used to make the purchase of
the Revolving Loan Commitment, Loans and L/C Obligations under the applicable
assignment agreement are "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will not
be "plan assets" under ERISA or (z) the purchase by the Purchaser of the
assignment does not and the holding by the Purchaser of the rights and interests
in and under the Loan Documents does not and will not constitute a "prohibited
transaction" within the meaning of Sections 406 of ERISA and Section 4975 of the
Code. On and after the effective date of such assignment, such Purchaser, if
not already a Lender, shall for all purposes be a Lender party to this Agreement
and any other Loan Documents executed by the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and no further consent or action by the
Borrower, the Lenders or the Administrative Agent shall be required to release
the transferor Lender with respect to the percentage of the Aggregate Revolving
Loan Commitment, Loans and Letter of Credit participations assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this SECTION 13.3(B), the transferor Lender, the Administrative Agent and the
Borrower shall make appropriate arrangements so that to the extent notes have
been issued to evidence any of the transferred Loans, replacement notes are
issued to such transferor Lender and new notes or, as appropriate, replacement
notes, are issued to such Purchaser, in each case, in principal amounts
reflecting their Revolving Loan Commitment, as adjusted pursuant to such
assignment.
(C) THE REGISTER. The Administrative Agent shall maintain at its address
referred to in SECTION 14.1 a copy of each assignment delivered to and accepted
by it pursuant to this SECTION 13.3 and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the
110
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Revolving Loan Commitment of and principal amount of the Loans owing to, each
Lender from time to time and whether such Lender is an original Lender or the
assignee of another Lender pursuant to an assignment under this SECTION 13.3.
The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower and each of its
Subsidiaries, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Administrative Agent
and the Lenders and their respective representatives, consultants and advisors
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement or in connection with the transactions contemplated by this
Agreement and identified as such by the Borrower in accordance with such
Person's customary procedures for handling confidential information of this
nature and in accordance with safe and sound commercial lending or investment
practices and in any event may make disclosure reasonably required by a
prospective Transferee in connection with the contemplated participation or
assignment or as required or requested by any Governmental Authority or any
securities exchange or similar self-regulatory organization or representative
thereof or pursuant to a regulatory examination or legal process, or to any
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor, and shall require any such
Transferee to agree (and require any of its Transferees to agree in writing) to
comply with this SECTION 13.4. In no event shall the Administrative Agent or
any Lender be obligated or required to return any materials furnished by the
Borrower or any of its Subsidiaries; PROVIDED, HOWEVER, each prospective
Transferee shall be required to agree that if it does not become a participant
or assignee it shall return all materials furnished to it by or on behalf of the
Borrower in connection with this Agreement.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries and the Collateral; PROVIDED that
prior to any such disclosure, such prospective Transferee shall agree in writing
to preserve in accordance with SECTION 13.4 the confidentiality of any
confidential information described therein.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.13 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties; PROVIDED, HOWEVER,
that Borrowing/Conversion/Continuation Notices shall be delivered to the
Administrative Agent at One First National Plaza, Suite 0634, Chicago, Illinois
60670-0634, Attention: Karen Hannusch, Telephone No. 312-732-9868, Facsimile No.
312-732-2715. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes).
111
<PAGE>
14.2 CHANGE OF ADDRESS. The Borrower, the Administrative Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
15.1 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Administrative Agent and the Lenders and each party has notified
the Administrative Agent by telex or telephone, that it has taken such action.
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
112
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of the date first above written.
BALL CORPORATION, as the Borrower
By: /s/ Douglas E. Poling
----------------------------------
Name: Douglas E. Poling
Title: Treasurer
Address:
10 Longs Peak Drive
Broomfield, CO 80021
Attention: Douglas E. Poling
Telephone No.: (303) 460-2191
Facsimile No.: (303) 460-2127
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT
<PAGE>
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent and as a Lender
By: /s/ Scott C. Morrison
----------------------------------
Name: Scott C. Morrison
Title: Vice President
Address:
One First National Plaza
15th Floor
Chicago, Illinois 60670
Attention: Timothy E. Greening
Telephone No.: (312) 732-1864
Facsimile No.: (312) 732-7655
with a copy to:
One Indiana Square Suite 312
Indianapolis, IN 46266
Attention: Scott C. Morrison, Vice President
Telephone No.: (317) 266-7351
Facsimile No.: (317) 266-6042
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 114
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Syndication Agent and as a Lender
By: /s/ M.E. Kelley
-----------------------------------
Name: Mark Kelley
Title: Managing Director
Address:
231 South LaSalle Street
9th Floor
Chicago, IL 60697
Attention: Paul B. Higdon
Telephone No.: (312) 828-7952
Facsimile No.: (312) 987-0303
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 115
<PAGE>
LEHMAN COMMERCIAL PAPER INC., as Documentation
Agent and as a Lender
By: /s/ William J. Gallagher
----------------------------------
Name: William J. Gallagher
Title: Authorized Signatory
Address:
3 World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Michelle Swanson
Telephone No.: 212-526-0330
Facsimile No.: 212-528-0819
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 116
<PAGE>
ABN AMRO BANK N.V., as a Lender
By: /s/ Denis J. Campbell IV
------------------------------------
Name: Denis J. Campbell IV
Title: Vice President
By: /s/ Mary L. Honda
------------------------------------
Name: Mary L. Honda
Title: Vice President
Address:
135 South LaSalle Street
Suite 2805
Chicago, IL 60603
Attention: Credit Administration
Telephone No.: (312) 904-8835
Facsimile No.: (312) 904-8840
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street
Suite 625
Chicago, IL 60603
Attention: Mary Honda
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 117
<PAGE>
ARAB BANKING CORPORATION (B.S.C.), as a Lender
By: /s/ Grant E. McDonald
------------------------------------
Name: Grant E. McDonald
Title: Vice President
Address:
277 Park Avenue
32nd Floor
New York, NY 10172-3299
Attention: Grant McDonald, Vice President
Telephone No.: (212) 583-4759
Facsimile No.: (212) 583-0935
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 118
<PAGE>
BANKBOSTON, N.A., as a Lender
By: /s/ Janet Twomey
--------------------------------------
Name: Janet Twomey
Title: Vice President
Address:
100 Federal Street
Boston, MA 02110
Mail Stop: MA B05 01-10-01
Attention: Janet Twomey
Telephone No.: (617) 434-3069
Facsimile No.: (617) 434-0601
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 119
<PAGE>
BANK LEUMI USA, as a Lender
By: /s/ Del Lorimer
-----------------------------------
Name: Del Lorimer
Title: Vice President
Address:
8383 Wilshire Blvd.
Suite 400
Beverly Hills, CA 90211
Attention: Del Lorimer
Telephone No.: (323) 966-4721
Facsimile No.: (323) 655-5933
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 120
<PAGE>
BANK OF HAWAII, as a Lender
By: /s/ Brenda K. Testerman
--------------------------------------
Name: Brenda Testerman
Title: Vice President
Address:
130 Merchant Street
20th Floor
Honolulu, HI 96813
Attention: Donna Arakawa
Telephone No.: (808) 693-1698
Facsimile No.: (808) 693-1672
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 121
<PAGE>
THE BANK OF NEW YORK, as a Lender
By: /s/ Robert Louk
---------------------------------
Name: Robert Louk
Title: Vice President
Address:
One Wall Street
New York, NY 10286
Attention: Robert J. Louk
Telephone No.: (310) 996-8663
Facsimile No.: (310) 996-8667
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 122
<PAGE>
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ Jon Burckin
---------------------------------
Name: Jon Burckin
Title: Relationship Manager
Address:
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Attention: Kathy Clark
Telephone No.: (404) 877-1542
Facsimile No.: (404) 888-8998
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 123
<PAGE>
THE BANK OF TOKYO -- MITSUBISHI, LTD.,
CHICAGO BRANCH, as a Lender
By: /s/ Hajime Watanabe
-----------------------------------
Name: Hajime Watanabe
Title: Deputy General Manager
Address:
227 West Monroe Street
Suite 2300
Chicago, IL 60606
Attention: Christopher Jones
Telephone No.: (312) 696-4656
Facsimile No.: (312) 696-4535
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 124
<PAGE>
BANQUE NATIONALE DE PARIS, as a Lender
By: /s/ Clive Bettles
-----------------------------------
Name: Clive Bettles
Title: Senior Vice President & Manager
By: /s/ Mitchell M. Ozawa
-----------------------------------
Name: Mitchell M. Ozawa
Title: Vice President
Address:
725 South Figueroa Street
Suite 2090
Los Angeles, CA 90017
Attention: Mitchell Ozawa
Telephone No.: (213) 488-9120
Facsimile No.: (213) 488-9602
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 125
<PAGE>
PARIBAS, as a Lender
By: /s/ Nicholas C. Mast
-----------------------------------
Name: Nicholas C. Mast
Title: RGM
By: /s/ Ann B. McAloon
-----------------------------------
Name: Ann B. McAloon
Title: Vice President
Address:
227 West Monroe Street
Suite 3300
Chicago, IL 60606
Attention: Nicholas C. Mast
Telephone No.: (312) 853-6038
Facsimile No.: (312) 853-6020
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 126
<PAGE>
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, as a Lender
By: /s/ Sean Mounier
-------------------------------------
Name: Sean Mounier
Title: First Vice President
By: /s/ Brian O'Leary
-------------------------------------
Name: Brian O'Leary
Title: Vice President
Address:
520 Madison Avenue
37th Floor
New York, NY 10022
Attention: Sean Mounier
Telephone No.: (212) 715-4413
Facsimile No.: (212) 715-4535
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 127
<PAGE>
CITY NATIONAL BANK, as a Lender
By: /s/ Scott J. Kelley
---------------------------
Name: Scott J. Kelley
Title: Vice President
Address:
400 North Roxbury Drive
Beverly Hills, CA 90210
Attention: Scott Kelley
Telephone No.: (310) 888-6536
Facsimile No.: (310) 888-6564
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 128
<PAGE>
COMMERZBANK, A.G. NEW YORK BRANCH, as a Lender
By: /s/ Mary Harold
-------------------------------------------
Name: Mary Harold
Title: Vice President
By: /s/ Andrew Campball
-------------------------------------------
Name: Andrew Campball
Title: Assistant Vice President
Address:
2 World Financial Center
32nd Floor
New York, NY 10281-1050
Attention: Mary Harold
Telephone No.: (212) 266-7509
Facsimile No.: (212) 266-7374
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 129
<PAGE>
CREDIT LYONNAIS NEW YORK BRANCH, as a Lender
By: /s/ Alain Papiasse
-------------------------------------
Name: Alain Papiasse
Title: Executive Vice President
Address:
2200 Ross Avenue
Suite 4400 West
Dallas, TX 75201
Attention: Brian Brown
Telephone No.: (214) 220-2308
Facsimile No.: (214) 220-2323
with a copy to:
1301 Avenue of the Americas
New York, NY 10019
Attention: Ron Finn
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 130
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, CAYMAN
ISLAND BRANCH, as a Lender
By: /s/ S. Wendt
-----------------------------------
Name: Sabine Wendt
Title: Asst. Vice President
By: /s/ Karen A. Brinkman
-----------------------------------
Name: Karen A. Brinkman
Title: Vice President
Address:
609 Fifth Avenue
New York, NY 10017
Attention: Sabine Wendt
Telephone No.: (212) 745-1559
Facsimile No.: (212) 745-1556
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 131
<PAGE>
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN
BRANCHES, as a Lender
By: /s/ John W. Sweeney
---------------------------------
Name: John W. Sweeney
Title: Assistant Vice President
By: /s/ Christopher E. Sarisky
---------------------------------
Name: Christopher E. Sarisky
Title: Assistant Vice President
Address:
190 South LaSalle Street
Suite 2700
Chicago, IL 60603
Attention: James Jerz
Telephone No.: (312) 444-1314
Facsimile No.:
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 132
<PAGE>
ERSTE BANK NEW YORK BRANCH, as a Lender
By: /s/ RIMA TERRADISTA
-------------------------------
Name: Rima Terradista
Title: Vice President
By: /s/ JOHN S. RUNNION
-------------------------------
Name: JOHN S. RUNNION
Title: FIRST VICE PRESIDENT
Address for notices
280 Park Avenue, West Building
New York, NY 10017
Attention: Rima Terradista
Telephone No.: (212) 984-5638
Facsimile No.: (212) 984-5627
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 133
<PAGE>
FIRST COMMERCIAL BANK, NEW YORK AGENCY, as a
Lender
By: /s/ Ou Jia Shyang
-------------------------------
Name: Jia-Shyang Ou
Title: Assistant Vice President
& Deputy General Manager
Address:
Two World Trade Center
Suite 7868
New York, NY 10048
Attention: Jeffrey Wang
Telephone No.: (212) 432-6590
Facsimile No.: (212) 432-7250
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 134
<PAGE>
FIRST HAWAIIAN BANK, as a Lender
By: /s/ TRAVIS RUETENIK
-------------------------------
Name: Travis Ruetenik
Title: Corporate Banking Officer
Address:
999 Bishop Street
11th Floor
Honolulu, HI 96813
Attention: Travis Ruetenik
Telephone No.: (808) 525-7074
Facsimile No.: (808) 525-6372
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 135
<PAGE>
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ SCOTT SANTA CRUZ
-------------------------------
Name: Scott Santa Cruz
Title: VP
Address:
301 South College Street, DC-5
Charlotte, NC 28288-0737
Attention: Scott Santa Cruz
Telephone No.: (704) 383-1988
Facsimile No.: (704) 374-3300
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 136
<PAGE>
FLEET NATIONAL BANK, as a Lender
By: /s/ JEFFREY C. LYNCH
-------------------------------
Name: Jeffrey C. Lynch
Title: V.P.
Address:
One Federal Street
Boston, MA 02110
Attention: Jeffrey Lynch
Telephone No.: (617) 346-5061
Facsimile No.: (617) 346-0145
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 137
<PAGE>
THE FUJI BANK, LIMITED, as a Lender
By: /s/ PETER L. CHINNICI
-------------------------------
Name: Peter L. Chinnici
Title: Joint General Manager
Address:
225 West Wacker Drive
Suite 2000
Chicago, IL 60606
Attention: James R. Fayen
Telephone No.: (312) 621-0397
Facsimile No.: (312) 621-0530
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 138
<PAGE>
GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender
By: /s/ J K. WILLIAMS
-------------------------------
Name: Janet K. Williams
Title: Duly Authorized Signatory
Address:
201 High Ridge Road
Stamford, CT 06927-5100
Attention: David Rich
Telephone No.: (203) 961-2993
Facsimile No.: (203) 316-7978
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 139
<PAGE>
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ ANGELA BENTLEY
-------------------------------
Name: Angela Bentley
Title: Banking Officer
Address:
313 Carondelet Street
12th Floor
New Orleans, LA 70130
Attention: Angela Bentley
Telephone No.: (504) 533-2319
Facsimile No.: (504) 533-5344
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 140
<PAGE>
IMPERIAL BANK, as a Lender
By: /s/ RAY VADALMA
-------------------------------
Name: Ray Vadalma
Title: Senior Vice President
Address:
9920 South La Cienega Boulevard, 14th Floor
Inglewood, CA 90301
Attention: Mark W. Campbell
Telephone No.: (310) 417-5886
Facsimile No.: (310) 417-5997
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 141
<PAGE>
THE INDUSTRIAL BANK OF JAPAN, LIMITED, CHICAGO
BRANCH, as a Lender
By: /s/ WALTER R. WOLFF
-------------------------------
Name: Walter R. Wolff
Title: Joint General Manager
Address:
227 West Monroe Street
Suite 2600
Chicago, IL 60606
Attention: Steve Ryan
Telephone No.: (312) 855-6251
Facsimile No.: (312) 855-8200
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 142
<PAGE>
KBC BANK N.V., as a Lender
By: /s/ R. Snauffer
-------------------------------
Name: ROBERT SNAUFFER
Title: VICE PRESIDENT
By: /s/ Marcel Claes
-------------------------------
Name: MARCEL CLAES
Title: DEPUTY GENERAL MANAGER
Address:
125 West 55th Street
10th Floor
New York, NY 10019
Attention: Michael Curran
Telephone No.: (212) 541-0708
Facsimile No.: (212) 956-5580
with a copy to:
515 South Figueroa Street
Suite 1920
Los Angeles, CA 90071
Attention: Luc Cools
Telephone No.: (213) 624-0401
Facsimile No.: (213) 629-5801
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 143
<PAGE>
KEYBANK NATIONAL ASSOCIATION, as a Lender
By: /s/ Mary K. Young
-------------------------------
Name: Mary K. Young
Title: Commercial Banking Officer
Address:
700 Fifth Avenue
46th Floor
Seattle, WA 98104
Attention: Mary K. Young
Telephone No.: (206) 684-6085
Facsimile No.: (206) 684-6035
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 144
<PAGE>
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., as a
Lender
By: /s/ Brady S. Sadek
-------------------------------
Name: Brady S. Sadek
Title: Senior Vice President
Address:
165 Broadway
48th Floor
New York, NY 10006
Attention: Claire Kowalski
Telephone No.: (212) 335-4853
Facsimile No.: (212) 335-4441
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 145
<PAGE>
MARINE MIDLAND BANK, as a Lender
By: /s/ Gina Sidorsky
-------------------------------
Name: Gina Sidorsky
Title: Authorized Signatory
Address:
140 Broadway
5th Floor
New York, NY 10005
Attention: Gina Sidorsky
Telephone No.: (212) 658-2750
Facsimile No.: (212) 658-2586
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 146
<PAGE>
MITSUBISHI TRUST & BANKING CORP., CHICAGO BRANCH,
as a Lender
By: /s/ Nobuo Tominaga
-------------------------------
Name: Nobuo Tominaga
Title: Chief Manager
Address:
311 South Wacker Drive
Suite 6300
Chicago, IL 60606
Attention: John Zimmerman
Telephone No.: (312) 408-6014
Facsimile No.: (312) 663-0863
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 147
<PAGE>
NATEXIS BANQUE, NEW YORK BRANCH, as a Lender
By: /s/ G. Kevin Dooley
-------------------------------
Name: G. Kevin Dooley
Title: Vice President
By: /s/ William C. Maier
-------------------------------
Name: William C. Maier
Title: VP-Group Manager
Address:
645 Fifth Avenue
20th Floor
New York, NY 10022
Attention: Kevin Dooley
Telephone No.: (212) 872-5195
Facsimile No.: (212) 872-5045
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 148
<PAGE>
NATIONAL CITY BANK, as a Lender
By: /s/ Barry C. Robinson
-------------------------------
Name: Barry C. Robinson
Title: Vice President
Address:
1900 East Ninth Street
Loc 2077
Cleveland, OH 44114
Attention: Barry C. Robinson
Telephone No.: (216) 575-9322
Facsimile No.: (216) 222-0003
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 149
<PAGE>
NORWEST BANK COLORADO, NATIONAL ASSOCIATION, as a
Lender
By: /s/ Randall Schmidt
-------------------------------
Name: Randall Schmidt
Title: Vice President
Address:
1740 Broadway
MS 8673
Denver, CO 80274
Attention: Randall Schmidt
Telephone No.: (303) 863-6033
Facsimile No.: (303) 863-6670
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 150
<PAGE>
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ David F. Knuth
-------------------------------
Name: DAVID F. KNUTH
Title: VICE PRESIDENT
Address:
201 East Fifth Street
Cincinnati, OH 45202
Attention: David F. Knuth
Telephone No.: (513) 651-8675
Facsimile No.: (513) 651-8951
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 151
<PAGE>
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, as a
Lender
By: /s/ Dana W. Hemenway
-------------------------------
Name: Dana W. Hemenway
Title: Vice President
By: /s/ W. Pieter C. Kodde
-------------------------------
Name: W. Pieter C. Kodde
Title: Vice President
Address:
245 Park Avenue
New York, NY 10167
Attention: Corporate Services Dept.
Telephone No.: (212) 916-7800
Facsimile No.: (212) 818-0233
with a copy to:
Gordon Arnold
13355 Noel Road
Suite 1000
Dallas, TX 75240-6645
Phone: (972) 419-5260
Fax: (972) 419-6315
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 152
<PAGE>
ROYAL BANK OF CANADA, as a Lender
By: /s/ Michael Korine
---------------------------
Name: Michael Korine
Title: Senior Manager
Address:
One Liberty Plaza
5th Floor
New York, NY 10006-1404
Attention: Michael Korine
Telephone No.: (212) 428-6258
Facsimile No.: (212) 428-2319
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 153
<PAGE>
THE SANWA BANK, LTD., as a Lender
By: /s/ Richard H. Ault
---------------------------
Name: Richard H. Ault
Title:
Address:
10 S. Wacker Drive
31st Floor
Chicago, IL 60606
Attention: Richard Ault
Telephone No.: (312) 368-3011
Facsimile No.: (312) 346-6677
SOCIETE GENERALE, as a Lender
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 154
<PAGE>
SOCIETE GENERALE, as a Lender
By: /s/ Michael Lincoln
---------------------------
Name: Michael Lincoln
Title: Director
Address:
181 West Madison Street
Suite 3400
Chicago, IL 60602
Attention: Michael Lincoln
Telephone No.: (312) 578-5056
Facsimile No.: (312) 578-5099
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 155
<PAGE>
SOUTHERN PACIFIC BANK, as a Lender
By: /s/ Charles D. Martorano
---------------------------
Name: Charles D. Martorano
Title: Senior Vice President
Address:
150 S. Rodeo Drive
Beverly Hills, CA 90212
Attention: Cheryl Wasilewski/Chuck Martorano
Telephone No.: (310) 246-3739/3770
Facsimile No.: (310) 246-3666
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 156
<PAGE>
STAR BANK, N.A., as a Lender
By: /s/ Thomas D. Gibbons
---------------------------
Name: Thomas D. Gibbons
Title: VP
Address:
425 Walnut Street, ML8160
Cincinnati, OH 45201-1038
Attention: Thomas D. Gibbons
Telephone No.: (513) 287-8313
Facsimile No.: (513) 632-2068
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 157
<PAGE>
THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH, as a
Lender
By: /s/ John H. Kemper
---------------------------
Name: John H. Kemper
Title: Senior Vice President
Address:
233 South Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Attention: James Beckett
Telephone No.: (312) 876-7794
Facsimile No.: (312) 876-6436
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 158
<PAGE>
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK
BRANCH, as a Lender
By: /s/ Suraj Bhatia
---------------------------
Name: Suraj Bhatia
Title: Senior Vice President
Address:
527 Madison Avenue
New York, NY 10022
Attention: Tim Ng
Telephone No.: (212) 326-0751
Facsimile No.: (212) 418-4848
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 159
<PAGE>
SUNTRUST BANK, CENTRAL FLORIDA, N.A., as a Lender
By: /s/ Chris Black
---------------------------
Name: Chris Black
Title: FVP
Address:
200 South Orange Avenue
10th Floor
Orlando, FL 32801
Attention: Chris Black
Telephone No.: (407) 237-2467
Facsimile No.: (407) 237-6894
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 160
<PAGE>
THE TOKAI BANK, LIMITED, NEW YORK BRANCH as a
Lender
By: /s/ Shinichi Kondo
---------------------------
Name: Shinichi Kondo
Title: Deputy General Manager
Address:
55 East 52nd Street
12th Floor
New York, NY 10055
Attention: Haruyo Niki
Telephone No.: (212) 339-1123
Facsimile No.: (212) 832-1428
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 161
<PAGE>
TORONTO DOMINION (TEXAS), INC., as a Lender
By: /s/ David G. Parker
---------------------------
Name: David G. Parker
Title: Vice President
Address:
909 Fannin Street
17th Floor
Houston, TX 77010
Attention: Sonja R. Jordan
Telephone No.: (713) 653-8244
Facsimile No.: (713) 951-9921
with copy to:
Stephen Watts
Three First National Plaza
70 West Madison
Suite 5430
Chicago, IL 60602-4227
Telephone No.: (312) 977-2105
Facsimile No.: (312) 782-6337
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 162
<PAGE>
TORONTO DOMINION (NEW YORK), INC., as a Lender
By: /s/ David G. Parker
---------------------------
Name: David G. Parker
Title: Vice President
Address:
909 Fannin Street
17th Floor
Houston, TX 77010
Attention: David G. Parker
Telephone No.: (713) 653-8248
Facsimile No.: (713) 951-9921
with copy to:
Hal Holappa
The Toronto Dominion Bank
31 West 52nd Street
New York, NY 10019
Telephone No.: (212) 827-7375
Facsimile No.: (212) 307-0750
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 163
<PAGE>
WACHOVIA BANK, as a Lender
By: /s/ William F. Hamlet
---------------------------
Name: William F. Hamlet
Title: Senior Vice President
Address:
191 Peachtree Street N.E.
Atlanta, GA 30303
Attention: Michael S. Sims
Telephone No.: (404) 332-4403
Facsimile No.: (404) 332-6898
SIGNATURE PAGE TO SHORT-TERM
CREDIT AGREEMENT 164
<PAGE>
EXECUTION COPY
LONG-TERM CREDIT AGREEMENT
DATED AS OF AUGUST 10, 1998
among
BALL CORPORATION,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT
and
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
AS SYNDICATION AGENT
and
LEHMAN COMMERCIAL PAPER INC.,
AS DOCUMENTATION AGENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
ARTICLE I: DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.3 Currency Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES . . . . . . . . . . . . . 30
2.1. Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.3 Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.4 Rate Options for all Advances. . . . . . . . . . . . . . . . . . . . . . 36
2.5 Optional Payments; Mandatory Prepayments . . . . . . . . . . . . . . . . 36
(A) Optional Payments. . . . . . . . . . . . . . . . . . . . . . . . . 36
(B) Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . . 36
2.6 Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . 40
2.7 Method of Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.8 Method of Selecting Types and Interest Periods for Advances. . . . . . . 40
2.9 Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . . . . 40
2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances. . . . . . . . . . . . . . . . . . . . . . . . 41
(A) Right to Convert . . . . . . . . . . . . . . . . . . . . . . . . . 41
(B) Automatic Conversion and Continuation. . . . . . . . . . . . . . . 41
(C) No Conversion Post-Default or Post-Unmatured Default . . . . . . . 41
(D) Borrowing/Conversion/Continuation Notice . . . . . . . . . . . . . 41
2.11 Default Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.12 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.13 Evidence of Debt, Telephonic Notices. . . . . . . . . . . . . . . . . . 42
2.14 Promise to Pay; Interest and Commitment Fees; Interest
Payment Dates; Interest and Fee Basis; Taxes; Loan and
Control Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(A) Promise to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(B) Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . 43
(C) Commitment Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 43
(D) Interest and Fee Basis; Applicable Floating Rate Margins;
Applicable Eurodollar Margins and Applicable Commitment
Fee Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(E) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(F) Control Account. . . . . . . . . . . . . . . . . . . . . . . . . . 50
(G) Entries Binding. . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.15 Notification of Advances, Interest Rates, Prepayments and
Aggregate Revolving Loan Commitment Reductions. . . . . . . . . . . . . 50
2.16 Lending Installations . . . . . . . . . . . . . . . . . . . . . . . . . 50
ii
<PAGE>
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- ------- ----
<S> <C>
2.17 Non-Receipt of Funds by the Administrative Agent. . . . . . . . . . . . 50
2.18 Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.19 Replacement of Certain Lenders. . . . . . . . . . . . . . . . . . . . . 51
ARTICLE III: THE LETTER OF CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . 52
3.1 Obligation to Issue. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.2 Transitional Provision. . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.3 Types and Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.4 Conditions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.5 Procedure for Issuance of Letters of Credit. . . . . . . . . . . . . . . 53
3.6 Letter of Credit Participation . . . . . . . . . . . . . . . . . . . . . 54
3.7 Reimbursement Obligation . . . . . . . . . . . . . . . . . . . . . . . . 54
3.8 Cash Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.9 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.10 Issuing Bank Reporting Requirements.. . . . . . . . . . . . . . . . . . 55
3.11 Indemnification; Exoneration. . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE IV: CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . 57
4.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.2 Changes in Capital Adequacy Regulations. . . . . . . . . . . . . . . . . 57
4.3 Availability of Types of Advances. . . . . . . . . . . . . . . . . . . . 58
4.4 Funding Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 58
4.5 Lender Statements; Survival of Indemnity . . . . . . . . . . . . . . . . 58
ARTICLE V: CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1 Initial Advances and Letters of Credit . . . . . . . . . . . . . . . . . 59
5.2 Each Advance and Letter of Credit. . . . . . . . . . . . . . . . . . . . 61
ARTICLE VI: REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 62
6.1 Organization; Corporate Powers . . . . . . . . . . . . . . . . . . . . . 62
6.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.3 No Conflict; Governmental Consents . . . . . . . . . . . . . . . . . . . 63
6.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . 64
6.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(A) Tax Examinations . . . . . . . . . . . . . . . . . . . . . . . . . 64
(B) Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.7 Litigation; Loss Contingencies and Violations. . . . . . . . . . . . . . 65
6.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
iii
<PAGE>
SECTION PAGE
- ------- ----
<S> <C>
6.9 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.10 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . 67
6.11 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.12 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.14 Assets and Properties . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.15 Statutory Indebtedness Restrictions . . . . . . . . . . . . . . . . . . 68
6.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.17 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.18 Reynolds Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.19 Environmental Matters.. . . . . . . . . . . . . . . . . . . . . . . . . 69
6.20 Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.21 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.22 Year 2000 Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.23 Foreign Employee Benefit Matters. . . . . . . . . . . . . . . . . . . . 71
ARTICLE VII : COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.1 Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(A) Financial Reporting. . . . . . . . . . . . . . . . . . . . . . . . 71
(B) Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . 72
(C) Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(D) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(E) ERISA Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(F) Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(G) Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 75
(H) Other Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(I) Environmental Notices. . . . . . . . . . . . . . . . . . . . . . . 76
(J) Other Information. . . . . . . . . . . . . . . . . . . . . . . . . 76
7.2 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . 76
(A) Corporate Existence, Etc.. . . . . . . . . . . . . . . . . . . . . 76
(B) Corporate Powers; Conduct of Business. . . . . . . . . . . . . . . 76
(C) Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . 76
(D) Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . 76
(E) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
(F) Inspection of Property; Books and Records; Discussions . . . . . . 77
(G) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 77
(H) Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . 78
(I) Environmental Compliance . . . . . . . . . . . . . . . . . . . . . 78
(J) Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 78
(K) Additional Guarantors/Pledge of Capital Stock. . . . . . . . . . . 78
iv
<PAGE>
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- ------- ----
<S> <C>
(L) Year 2000 Issues . . . . . . . . . . . . . . . . . . . . . . . . . 79
(M) Foreign Employee Benefit Compliance. . . . . . . . . . . . . . . . 80
(N) Foreign Governmental Consents and Approvals. . . . . . . . . . . . 80
7.3 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(A) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(B) Sales of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 82
(C) Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
(D) Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
(E) Guarantied Obligations . . . . . . . . . . . . . . . . . . . . . . 86
(F) Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . 86
(G) Conduct of Business; Restrictions on Excluded
Subsidiaries; Subsidiaries; Acquisitions . . . . . . . . . . . . . 88
(H) Transactions with Shareholders and Affiliates. . . . . . . . . . . 89
(I) Restriction on Fundamental Changes . . . . . . . . . . . . . . . . 89
(J) Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . 89
(K) Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . 90
(L) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
(M) Issuance of Disqualified Stock . . . . . . . . . . . . . . . . . . 91
(N) Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . . 91
(O) Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
(P) Subsidiary Covenants . . . . . . . . . . . . . . . . . . . . . . . 91
(Q) Hedging Obligations. . . . . . . . . . . . . . . . . . . . . . . . 91
(R) Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 92
(S) Amendment of Receivables Purchase Documents. . . . . . . . . . . . 92
7.4 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 93
(A) Defined Terms for Financial Covenants. . . . . . . . . . . . . . . 93
(B) Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . 95
(C) Total Debt to EBITDA Ratio. . . . . . . . . . . . . . . . . . . . . 95
(D) Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . . . . . 96
ARTICLE VIII: DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
8.1 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . .100
9.1 Termination of Commitments; Acceleration . . . . . . . . . . . . . . . .100
9.2 Defaulting Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . .100
9.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
9.4 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . .103
v
<PAGE>
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<S> <C>
ARTICLE X: GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . .103
10.1 Survival of Representations . . . . . . . . . . . . . . . . . . . . . .103
10.2 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . .103
10.3 Performance of Obligations. . . . . . . . . . . . . . . . . . . . . . .103
10.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
10.5 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . .104
10.6 Several Obligations; Benefits of this Agreement . . . . . . . . . . . .104
10.7 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . .104
(A) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
(B) Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
(C) Waiver of Certain Claims; Settlement of Claims . . . . . . . . . .106
(D) Survival of Agreements . . . . . . . . . . . . . . . . . . . . . .106
10.8 Numbers of Documents. . . . . . . . . . . . . . . . . . . . . . . . . .106
10.9 Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
10.10 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . .106
10.11 Nonliability of Lenders. . . . . . . . . . . . . . . . . . . . . . . .107
10.12 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL. . . . . . . .107
(A) EXCLUSIVE JURISDICTION . . . . . . . . . . . . . . . . . . . . . .107
(B) OTHER JURISDICTIONS. . . . . . . . . . . . . . . . . . . . . . . .107
(C) SERVICE OF PROCESS; VENUE. . . . . . . . . . . . . . . . . . . . .108
(D) WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . .108
(E) ADVICE OF COUNSEL. . . . . . . . . . . . . . . . . . . . . . . . .108
10.14 Subordination of Intercompany Indebtedness . . . . . . . . . . . . . .108
10.15 Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . .109
ARTICLE XI: THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . .110
11.1 Appointment; Nature of Relationship . . . . . . . . . . . . . . . . . .110
11.2 Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
11.3 General Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . .111
11.4 No Responsibility for Loans, Creditworthiness,
Collateral, Recitals, Etc.. . . . . . . . . . . . . . . . . . . . . . .111
11.5 Action on Instructions of Lenders . . . . . . . . . . . . . . . . . . .111
11.6 Employment of Agents and Counsel. . . . . . . . . . . . . . . . . . . .111
11.7 Reliance on Documents; Counsel. . . . . . . . . . . . . . . . . . . . .112
11.8 The Administrative Agent's Reimbursement and Indemnification. . . . . .112
11.9 Rights as a Lender. . . . . . . . . . . . . . . . . . . . . . . . . . .112
11.10 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . .112
11.11 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . .112
11.12 Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . .113
11.13. No Duties Imposed Upon Syndication Agent, Documentation
Agent or Arrangers. . . . . . . . . . . . . . . . . . . . . . . . . .114
vi
<PAGE>
SECTION PAGE
- ------- ----
<S> <C>
ARTICLE XII: SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . . . .114
12.1 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
12.2 Ratable Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . .115
12.3 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . .115
12.4 Relations Among Lenders . . . . . . . . . . . . . . . . . . . . . . . .116
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . . .116
13.1 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . .116
13.2 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .117
(A) Permitted Participants; Effect . . . . . . . . . . . . . . . . . .117
(B) Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . .117
(C) Benefit of Setoff. . . . . . . . . . . . . . . . . . . . . . . . .118
13.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
(A) Permitted Assignments. . . . . . . . . . . . . . . . . . . . . . .118
(B) Effect; Effective Date . . . . . . . . . . . . . . . . . . . . . .118
(C) The Register . . . . . . . . . . . . . . . . . . . . . . . . . . .119
13.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
13.5 Dissemination of Information. . . . . . . . . . . . . . . . . . . . . .119
ARTICLE XIV: NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
14.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
14.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . .120
ARTICLE XV: COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
15.1 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
</TABLE>
vii
<PAGE>
EXHIBITS AND SCHEDULES
EXHIBITS
<TABLE>
<S> <C> <C>
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B -- Form of Borrowing/Conversion/Continuation Notice (Section 2.8)
EXHIBIT C -- Form of Request for Letter of Credit (Section 3.4)
EXHIBIT D -- Form of Assignment and Acceptance Agreement
(Sections 2.19 and 13.3)
EXHIBIT E -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT F -- List of Closing Documents
(Section 5.1)
EXHIBIT G -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT H -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
</TABLE>
viii
<PAGE>
SCHEDULES
<TABLE>
<S> <C> <C>
Schedule 1.1.2 -- Permitted Existing Guarantied Obligations (Definitions)
Schedule 1.1.3 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.4 -- Permitted Existing Investments (Definitions)
Schedule 1.1.5 -- Permitted Existing Liens (Definitions)
Schedule 3.1 -- Issuing Banks' Maximum Amounts (Section 3.1)
Schedule 3.2 -- Transitional Letters of Credit (Section 3.2)
Schedule 3.3 -- Industrial Revenue Bonds
Schedule 5.1 -- Note Purchase Agreements
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.8 -- Excluded Subsidiaries, Material Foreign Subsidiaries,
Subsidiaries (Definitions, Section 6.8)
Schedule 6.9 -- ERISA
Schedule 6.16 -- Insurance (Sections 6.16 and 7.2(E))
Schedule 6.17 -- Labor Matters; Compensation Agreements
(Section 6.17)
Schedule 6.19 -- Environmental Matters (Section 6.19)
</TABLE>
ix
<PAGE>
LONG-TERM CREDIT AGREEMENT
This Long-Term Credit Agreement dated as of August 10, 1998 is entered
into among Ball Corporation, an Indiana corporation, the institutions from
time to time parties hereto as Lenders, whether by execution of this
Agreement or an Assignment Agreement pursuant to SECTION 13.3, The First
National Bank of Chicago, in its capacity as Administrative Agent for itself
and the other Lenders, Bank of America National Trust and Savings
Association, in its capacity as Syndication Agent, and Lehman Commercial
Paper Inc., in its capacity as Documentation Agent. The parties hereto agree
as follows:
ARTICLE I: DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only
by reason of the happening of a contingency) or a majority (by percentage of
voting power) of the outstanding Equity Interests of another Person.
"ADMINISTRATIVE AGENT" means First Chicago, in its capacity as
contractual representative for itself and the Lenders pursuant to ARTICLE XI
hereof, and any successor Administrative Agent appointed pursuant to ARTICLE
XI hereof.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
of the several Loans made by the Lenders to the Borrower of the same Type
and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.19 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A
Person shall be deemed to control another Person if the controlling Person is
the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of greater than ten percent (10%) or more of any class
of voting securities (or other voting interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of Capital Stock, by contract or otherwise.
<PAGE>
"AGENTS" means each of the Administrative Agent, the Syndication Agent
and the Documentation Agent.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as may be reduced from time to
time pursuant to the terms hereof. The initial Aggregate Revolving Loan
Commitment is Five Hundred Million and 00/100 Dollars ($500,000,000.00).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Tranche A
Term Loan Commitments and the Tranche B Term Loan Commitments of all the
Lenders. The Aggregate Term Loan Commitment is Five Hundred Fifty Million and
00/100 Dollars ($550,000,000.00).
"AGREEMENT" means this Long-Term Credit Agreement, as it may be amended,
restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in SECTION
6.4(B)(1) hereof, PROVIDED, HOWEVER, that with respect to the calculation of
financial ratios and other financial tests required by this Agreement,
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect as of the date of this Agreement, applied in a manner
consistent with that used in preparing the financial statements referred to
in SECTION 6.4(B)(1) hereof; PROVIDED, FURTHER, HOWEVER, all PRO FORMA
financial statements reflecting Acquisitions shall be prepared in accordance
with the requirements established by the SEC for acquisition accounting for
reporting acquisitions by public companies (whether or not such Acquisitions
are required to be publicly reported).
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.14(C)(i) hereof determined in accordance with
the provisions of SECTION 2.14(D)(ii) hereof.
"APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination,
the rate per annum then applicable to Eurodollar Rate Loans which are Tranche
A Term Loans, Revolving Loans or Tranche B Term Loans, as applicable,
determined in accordance with the provisions of SECTION 2.14(D)(ii) hereof.
"APPLICABLE FLOATING RATE MARGIN" means, as at any date of
determination, the rate per annum then applicable to Floating Rate Loans
which are Tranche A Term Loans, Revolving Loans or Tranche B Term Loans, as
applicable, determined in accordance with the provisions of SECTION
2.14(D)(ii) hereof.
2
<PAGE>
"APPLICABLE L/C FEE PERCENTAGE" means, as at any date of determination,
a rate per annum equal to the Applicable Eurodollar Margin for Revolving
Loans in effect on such date.
"APPLICABLE PRO RATA SHARE" means, for any Lender, such Lender's
Revolving Loan Pro Rata Share, Tranche A Pro Rata Share, or Tranche B Pro
Rata Share, as applicable.
"APPROVED FUND" means, with respect to any Lender that is a fund or
commingled investment vehicle that invests in commercial loans, any other
fund that invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor.
"ARRANGERS" means each of First Chicago Capital Markets, Inc.,
BancAmerica Robertson Stephens, Inc. and Lehman Brothers Inc., in their
respective capacities as arrangers for the loan transaction evidenced by this
Agreement.
"ASSET PURCHASE AGREEMENT" is defined in the definition of "Reynolds
Acquisition" below.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including, without limitation, by way of a sale-leaseback transaction and
including, without limitation, the sale or other transfer of any of the
Equity Interests of any Subsidiary of such Person).
"ASSIGNMENT AGREEMENT" shall mean an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof
in substantially the form of EXHIBIT D.
"AUTHORIZED OFFICER" means any of the President, any Vice President, the
Chief Financial Officer or the Treasurer of the Borrower acting singly.
"BALL CANADA" means Ball Packaging Products Canada, Inc., a corporation
organized under the federal Laws of Canada, together with its successors and
assigns, including a debtor-in-possession on behalf of Ball Canada.
"BALL CAPITAL CORP." means Ball Capital Corp., a Delaware corporation,
together with its successors and assigns, including a debtor-in-possession on
behalf of Ball Capital Corp.
"BALL CORPORATE GROUP" means the Borrower, each of its Subsidiaries, the
Excluded Subsidiaries and the members of the FTB Group.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan or a Foreign Employee Benefit Plan)
in respect of which the Borrower or any other member of the Controlled Group
is, or within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA.
"BMBCC" means Ball Metal Beverage Container Corp., a Colorado
corporation.
3
<PAGE>
"BORROWER" means Ball Corporation, an Indiana corporation, together with
its successors and permitted assigns, including a debtor-in-possession on
behalf of the Borrower.
"BORROWING/CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8
hereof.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than
a Saturday or Sunday) on which banks are open for business in Chicago,
Illinois and New York, New York and on which dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes a day
(other than a Saturday or Sunday) on which banks are open for business in
Chicago, Illinois and New York, New York.
"CANADIAN CREDIT FACILITY" means that certain Letter Agreement, dated as
of May 21, 1998, by and among Ball Canada, the Borrower, and Royal Bank of
Canada as in effect on the Closing Date, and as the same may be modified and
restated pursuant to the terms of that certain Commitment Letter and Term
Sheet, dated July 16, 1998, by and among Ball Canada, the Borrower and Royal
Bank of Canada.
"CANADIAN SUBORDINATION AGREEMENT" means that certain Subsidiary
Subordination Agreement, dated as of August 10, 1998, by and among Ball
Canada and the Borrower, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
"CAPITAL EXPENDITURES" is defined in SECTION 7.4(A) hereof.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets
of, the issuing Person.
"CAPITALIZED LEASE" is defined in SECTION 7.4(A) hereof.
"CAPITALIZED LEASE OBLIGATIONS" is defined in SECTION 7.4(A) hereof.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances
and floating rate certificates of deposit issued by any commercial bank
organized under the laws of the United States, any state thereof or the
District of Columbia, any foreign bank, or its branches or agencies (fully
protected against currency fluctuations for any such deposits with a term of
more than ten (10) days); (iii) shares of money market, mutual or similar
funds having assets in excess of $100,000,000 and the investments of which
are limited to investment grade securities (i.e., securities rated at least
Baa by Moody's Investors Service, Inc. or at least BBB by Standard & Poor's
Ratings
4
<PAGE>
Group) and repurchase agreements with respect thereto; and (iv) commercial
paper of United States and foreign banks and bank holding companies and their
subsidiaries and United States and foreign finance, commercial, industrial or
utility companies which, at the time of acquisition, are rated A-1 (or
better) by Standard & Poor's Ratings Group or P-1 (or better) by Moody's
Investors Services, Inc.; PROVIDED that the maturities of such Cash
Equivalents shall not exceed 365 days.
"CASH FLOW PERIOD" means the twelve-month period from January 1, 1999
through the end of the Borrower's fiscal year ending December 31, 1999 and,
thereafter, as separate periods, each fiscal year of the Borrower.
"CHANGE IN CAPITAL ADEQUACY" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934), becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of fifty percent (50%) or more of the Voting
Stock of the Borrower;
(b) a majority of the members of the board of directors of the
Borrower cease to be Continuing Directors;
(c) the Borrower consolidates with or merges into another corporation
or conveys, transfers or leases all or substantially all of its property
to any Person, or any corporation consolidates with or merges into the
Borrower, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other property;
(d) except as otherwise permitted under the terms of this Agreement,
the Borrower shall cease to own and control, directly or indirectly, at
least (i) such percentage of the economic and voting rights of the Capital
Stock of each of its Domestic Incorporated Subsidiaries and Material
Foreign Subsidiaries (other than FTB) as is owned as of the Closing Date or
such later date as such Person became a Domestic Incorporated Subsidiary or
Material Foreign Subsidiary, as applicable, or (ii) ninety percent (90%) of
the economic and voting rights of the Capital Stock of FTB;
(e) any "Change of Control" (as such term is defined in the Senior
Note Indenture) shall have occurred; or
(f) any "Change of Control" (as such term is defined in the
Subordinated Note Indenture) shall have occurred.
5
<PAGE>
"CLOSING DATE" means the date on which the Term Loans and the initial
Revolving Loans are advanced hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"COLI INDEBTEDNESS" of any Person shall mean, with respect to any
Company Owned Life Insurance Program in which such Person is a participant,
Indebtedness of such Person consisting of (i) loans to such Person under life
insurance policies taken or made against the available cash surrender values
of such policies, which loans are made pursuant to the contract terms of life
insurance policies issued in connection with a Company Owned Life Insurance
Program or (ii) other obligations for borrowed money of such Person, if and
only if the proceeds of such obligations are used solely to pay policy
premiums on life insurance policies issued in connection with a Company Owned
Life Insurance Program.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon
which a security interest is granted to the Administrative Agent, for the
benefit of the Holders of Secured Obligations under the Pledge Agreements or
under any of the other Loan Documents.
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Secured Obligations, including, without
limitation, the Pledge Agreements, together with all agreements and documents
referred to therein or contemplated thereby.
"COMMITMENT" means, for each Lender, collectively, such Lender's
Revolving Loan Commitment, Tranche A Term Loan Commitment and/or Tranche B
Term Loan Commitment.
"COMPANY OWNED LIFE INSURANCE PROGRAM" means a life insurance program in
which the Borrower is a participant, pursuant to which the Borrower is the
owner of whole life policies insuring the lives of certain of its employees.
"CONSOLIDATED ASSETS" means, for any Person, the total assets of such
Person and its Subsidiaries on a consolidated basis, but excluding therefrom
all items that are treated as intangibles under Agreement Accounting
Principles.
"CONSOLIDATED NET INCOME" is defined in SECTION 7.4(A) hereof.
"CONSOLIDATED NET WORTH is defined in SECTION 7.4(A) hereof.
"CONTAMINANT" means any waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, as defined in, or used in,
Environmental, Health or Safety Requirements of Law.
6
<PAGE>
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Borrower who (i) was a member of such
Board of Directors on the Closing Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in any case in writing, to
which that Person is a party or by which it or any of its properties is
bound, or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
(iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in
CLAUSE (i) above or any partnership or trade or business described in CLAUSE
(ii) above; or (iv) any other Person which is required to be aggregated with
the Borrower or any of its Subsidiaries pursuant to regulations promulgated
under Section 414(o) of the Code.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) ninety percent (90%) or more of the total Equity Interests or other
ownership interests of which (other than directors' qualifying shares) shall
at the time be owned by such Person or by one or more wholly-owned
Subsidiaries of such Person and (ii) of which such Person possesses, directly
or indirectly, the power to direct or cause the direction of the management
or policies, whether through the ownership of voting securities, by agreement
or otherwise.
"CORPORATE BASE RATE" means the corporate base rate of interest
announced by First Chicago from time to time, changing when and as said
corporate base rate changes.
"CURE LOAN" is defined in SECTION 9.2(iii) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced)
which are being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance
with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens
imposed by law created in
7
<PAGE>
the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance
or other types of social security benefits or to secure the performance of
bids, tenders, sales, contracts (other than for the repayment of borrowed
money), surety, appeal and performance bonds; PROVIDED that (A) all such
Liens do not in the aggregate materially detract from the value of the
Borrower's or such Subsidiary's assets or property taken as a whole or
materially impair the use thereof in the operation of the businesses taken
as a whole, and (B) all Liens securing bonds to stay judgments or in
connection with appeals do not secure at any time an aggregate amount
exceeding $10,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not in any case materially detract from the value
of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any
of its Subsidiaries which do not constitute a Default under SECTION 8.1(h)
hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its Subsidiaries
in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the later of (i) the Revolving Loan Termination
Date, (ii) the Tranche A Term Loan Termination Date and (iii) the Tranche B
Term Loan Termination Date.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOCUMENTATION AGENT" means Lehman Commercial Paper Inc., in its
capacity as documentation agent for the loan transaction evidenced by this
Agreement, together with its successors and assigns.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
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"DOLLAR AMOUNT" of any currency other than Dollars at any date shall
mean the equivalent amount of Dollars, calculated on the basis of the then
applicable Exchange Rate.
"DOMESTIC INCORPORATED SUBSIDIARY" means a Subsidiary of the Borrower
organized under the laws of a jurisdiction located in the United States of
America.
"EBITDA" is defined in SECTION 7.4(A) hereof.
"ENVIRONMENTAL AUDIT" means the Phase I and Phase II Environmental
Property Assessment reports dated between February 12, 1998, and June 16,
1998 prepared for the Borrower by McLaren Hart, and listed in SCHEDULE 6.19.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state, provincial
and local laws or regulations relating to or addressing pollution or
protection of the environment, or protection of worker health or safety,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 ET SEQ., the
Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 ET SEQ.,
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 ET SEQ., in each case including any amendments thereto, any successor
statutes, and any regulations or guidance promulgated thereunder, and any
state, provincial or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of
Law, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, the "Industrial Site Recovery Act,"
NJSA 13:1K-6 ET SEQ., the "Responsible Property Transfer Act," 765 ILCS 90/1
ET SEQ., or similar laws.
"EQUIPMENT" means all of the Borrower's and its Subsidiaries' present
and future (i) equipment, including, without limitation, machinery,
manufacturing, distribution, selling, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, vessels, aircraft, aircraft engines, and trade
fixtures, (ii) other tangible personal property (other than the Borrower's
and its Subsidiaries' Inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires)
any rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
any specified Interest Period, either (i) the rate of interest per annum
equal to the rate for deposits in U.S. Dollars with a maturity approximately
equal to such Interest Period which appears on Telerate Page 3750 as of 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period or (ii) if no such rate of interest appears on Telerate Page 3750 for
such specified Interest Period, the rate of interest per annum equal to the
rate for deposits in U.S. Dollars with a maturity occurring immediately
before or immediately after such specified Interest Period, whichever is
higher, as determined by the Administrative Agent from Telerate Page 3750 at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or (iii) if no such rate of interest appears on
Telerate Page 3750 for any specified Interest Period, the rate of interest
per annum equal to the rate at which deposits in U.S. Dollars are offered by
First Chicago to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, in the approximate amount of the Applicable Pro
Rata Share of First Chicago of such Eurodollar Rate Loan and having a
maturity approximately equal to such Interest Period, in each case, as
adjusted for Reserves. The term "Telerate Page 3750" means the display
designated as "Page 3750" on the Associated Press-Dow Jones Telerate Service
(or such other page as may replace Page 3750 on the Associated Press-Dow
Jones Telerate Service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association interest rate settlement rates for
U.S. Dollars). Any Eurodollar Base Rate determined on the basis of the rate
displayed on Telerate Page 3750 in accordance with the foregoing provisions
of this subparagraph shall be subject to corrections, if any, made in such
rate and displayed by the Associated Press-Dow Jones Telerate Service within
one hour of the time when such rate is first displayed by such service.
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such
Interest Period PLUS the Applicable Eurodollar Margin. The Eurodollar Rate
shall be rounded to the next higher multiple of 1/16 of 1% if the rate is not
such a multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
"EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"EXCESS CASH FLOW" means, for any Cash Flow Period, an amount equal to
the Borrower's and its Subsidiaries' consolidated:
(i) EBITDA for such period,
MINUS (ii) foreign, federal, state and local taxes paid in cash for
such period,
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MINUS (iii) Capital Expenditures paid in cash during such period,
MINUS (iv) cash dividends paid by the Borrower during such period to
the extent permitted under SECTION 7.3(F) hereof and
payable in compliance with applicable corporate law,
MINUS (v) Interest Expense paid in cash during such period,
MINUS (vi) scheduled amortization of the principal portion of the
Term Loans and of the principal portion of all other
Indebtedness of the Borrower and its Subsidiaries paid in
cash during such period,
MINUS (vii) for the Cash Flow Periods ending on December 31, 1999,
December 31, 2000 and December 31, 2001, the cash portion
of Rationalization Costs in an amount not to exceed
$70,000,000 in the aggregate for the period commencing on
the Closing Date through and including December 31, 2001
only to the extent such Rationalization Costs are not
reflected on the Borrower's consolidated income statement
as prepared in accordance with Agreement Accounting
Principles,
MINUS (viii) voluntary prepayments of the principal portion of the
Term Loans, in each case calculated in accordance with
Agreement Accounting Principles.
All such amounts shall be calculated assuming that the Borrower and its
Subsidiaries have conducted their respective business in the ordinary course and
in accordance with past practices; PROVIDED, that (without duplication) there
shall be excluded from the calculation of Excess Cash Flow all amounts related
to the FTB Group.
"EXCHANGE RATE" means, the rate at which any currency other than Dollars
may be exchanged into Dollars, calculated on the basis of the arithmetical mean
of the buy and sell spot rates of exchange as quoted in the electronic media
publication of Bloomberg L.P. for such other currency at or about 11:00 a.m.
(Chicago time), on such date of determination for the purchase of Dollars with
such other currency for delivery two (2) Business Days later; PROVIDED, HOWEVER,
that if at the time of any such determination, for any reason, no such spot rate
is being quoted, the Borrower may with the consent of the Administrative Agent
use any reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error. For purposes of this
agreement, the applicable Exchange Rate shall be determined (x) for any
Investment, as of the date of incurrence thereof, (y) for any sale of assets, as
of the date of the consummation of the transaction pursuant to which such sale
of assets shall occur, and (z) in all other cases, as of such date of
determination.
"EXCLUDED SUBSIDIARY" means, each Subsidiary of the Borrower identified on
SCHEDULE 6.8 as an Excluded Subsidiary; PROVIDED, that each such Subsidiary
shall be an Excluded Subsidiary only if (i) each such Subsidiary is in existence
solely for the purposes of being a "name-holding" entity, (ii) each such
Subsidiary engages in no business, (iii) each such Subsidiary has no
liabilities, and (iv) the aggregate of the assets (including capitalization) of
all such Subsidiaries shall not exceed $5,000,000.
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"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FINANCING" means, with respect to any Person, the issuance or sale by such
Person of any Equity Interests, or any Indebtedness consisting of debt
securities of such Person pursuant to a registered offering or private
placement.
"FIRST CHICAGO" means The First National Bank of Chicago, in its individual
capacity, and its successors.
"FIXED CHARGE COVERAGE RATIO" is defined in SECTION 7.4(D) hereof.
"FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day, changing as and when the Alternate Base
Rate changes, PLUS the then Applicable Floating Rate Margin.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears interest
at the Floating Rate.
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined
in Section 3(3) of ERISA which is maintained or contributed to for the benefit
of the employees of the Borrower, any of its Subsidiaries or any members of its
Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"FOREIGN INCORPORATED SUBSIDIARY" means a Subsidiary of the Borrower which
is not a Domestic Incorporated Subsidiary.
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
Section 3(3) of ERISA for which the Borrower or any member of its Controlled
Group is a sponsor or administrator and which (i) is maintained or contributed
to for the benefit of employees of the Borrower, any of its Subsidiaries or any
member of its Controlled Group, (ii) is not covered by ERISA pursuant to
Section 4(b)(4) of ERISA, and (iii) under applicable local law, is required to
be funded through a trust or other funding vehicle.
"FOREIGN SUBSIDIARY INVESTMENT" means the sum of (a) all intercompany loans
made on or after the Closing Date from either the Borrower or any Domestic
Incorporated Subsidiary to any Foreign Incorporated Subsidiary (other than Ball
Canada pursuant to the Manufacturing Supply
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Agreement and the FTB Group); (b) all Investments made on or after the
Closing Date by either the Borrower or any Domestic Incorporated Subsidiary
in any Foreign Incorporated Subsidiary (other than Ball Canada pursuant to
the Manufacturing Supply Agreement and the FTB Group); and (c) an amount
equal to the net benefit derived by the Foreign Incorporated Subsidiaries
(other than Ball Canada pursuant to the Manufacturing Supply Agreement and
the FTB Group) resulting from any non-arms length transactions between the
Borrower and/or any Domestic Incorporated Subsidiary, on the one hand, and
such Foreign Incorporated Subsidiaries (other than Ball Canada pursuant to
the Manufacturing Supply Agreement and the FTB Group), on the other hand.
"FTB" means FTB Packaging Limited, a Hong Kong corporation, and its
successors and assigns.
"FTB GROUP" means FTB and each of its Subsidiaries, including, without
limitation, MCP and each of its Subsidiaries and joint ventures.
"GOVERNMENTAL ACTS" is defined in SECTION 3.11(a) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, provincial, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GROSS NEGLIGENCE" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence"
is used with respect to any Agent, any Arranger or any Lender or any indemnitee
in any of the other Loan Documents, it shall have the meaning set forth herein.
"GUARANTIED OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person (i) guaranteeing, directly
or indirectly, in any manner (including, without limitation, letters of credit
and reimbursement agreements in respect thereof) Indebtedness of another
including, without limitation, any Contractual Obligations arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness, or
any security therefor, or to provide funds for the payment or discharge thereof
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or (ii) to maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value received (all such
Contractual Obligations under this CLAUSE (ii) being "SUPPORT OBLIGATIONS");
PROVIDED, HOWEVER, notwithstanding anything herein to the contrary, any
Contractual Obligation of a Person relating to a take-or-pay obligation or
supply contract of such Person shall not constitute a Guarantied Obligation.
"GUARANTORS" means each Domestic Incorporated Subsidiary (other than Ball
Capital Corp.) as of the Closing Date, and each other Domestic Incorporated
Subsidiary which becomes a party to the Subsidiary Guaranty pursuant to the
terms of SECTIONS 7.2(K) or 7.3(G), and in each case its successors and assigns.
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"GUARANTY AGREEMENT" means that certain Guaranty Agreement of the Borrower
dated as of June 15, 1989 Re: $44,938,000 8.46% Guaranteed ESOP Notes, Series A,
due June 15, 1999 and $25,062,000 8.83% Guaranteed ESOP Notes, Series B, due
December 15, 2001.
"HEDGING AGREEMENTS" is defined in SECTION 7.3(Q) hereof.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall include (i) each Lender in respect of
its Loans, (ii) the Issuing Bank in respect of Reimbursement Obligations, (iii)
the Agents, the Lenders, the Swing Line Bank and the Issuing Bank in respect of
all other present and future obligations and liabilities of the Borrower or any
of its Subsidiaries of every type and description arising under or in connection
with this Agreement or any other Loan Document, (iv) each Indemnitee in respect
of the obligations and liabilities of the Borrower to such Person hereunder, (v)
each Lender (or affiliate thereof), in respect of all Hedging Obligations of the
Borrower or any of its Subsidiaries to such Lender (or such affiliate) as
exchange party or counterparty under any Hedging Agreement, and (vi) their
respective successors, transferees and assigns.
"INDEBTEDNESS" of any Person means, without duplication, such Person's (a)
obligations for borrowed money (other than the COLI Indebtedness), (b)
obligations representing the deferred purchase price of property or services
(other than accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade), (c) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production from
property or assets now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances or other instruments, (e)
Capitalized Lease Obligations, (f) Guarantied Obligations, (g) obligations with
respect to letters of credit, (h) Off-Balance Sheet Liabilities and (i)
Disqualified Stock as provided in SECTION 7.3(M). The amount of Indebtedness of
any Person at any date shall be without duplication (i) the outstanding balance
at such date of all unconditional obligations as described above and the maximum
liability of any such Guarantied Obligations at such date and (ii) in the case
of Indebtedness of others secured by a Lien to which the property or assets
owned or held by such Person is subject, the lesser of the fair market value at
such date of any asset subject to a Lien securing the Indebtedness of others and
the amount of the Indebtedness secured. In the case of Ball Capital Corp.,
Indebtedness shall include the unrecovered investment of purchasers of
Receivables from Ball Capital Corp. pursuant to the Receivables Purchase
Documents, and such Indebtedness shall be deemed to be funded Indebtedness for
purposes of SECTION 7.1(G).
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"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INITIAL ADJUSTMENT DATE" is defined in SECTION 2.14(D)(ii) hereof.
"INTERCOMPANY INDEBTEDNESS" is defined in SECTION 10.14 hereof.
"INTEREST EXPENSE" is defined in SECTION 7.4(A) hereof.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3) or six (6) months or such other period as the
Borrower may request and the Lenders, in their discretion, shall agree to,
commencing on a Business Day selected by the Borrower pursuant to this
Agreement; PROVIDED, HOWEVER, notwithstanding anything in this Agreement to the
contrary and only at the Administrative Agent's sole option, for the period from
the Closing Date to the earlier of (y) the date that is 90 days after the
Closing Date and (z) the date upon which the Arrangers confirm that the loan
syndication process has been completed (the "SYNDICATION PERIOD"), "Interest
Period" means, with respect to a Eurodollar Rate Loan, a period of seven (7)
days, provided that during the Syndication Period all Interest Periods shall end
on the same day. Other than during the Syndication Period, such Interest Period
shall end on (but exclude) the day which corresponds numerically to such date
one, two, three or six months thereafter (or as agreed); PROVIDED, HOWEVER, that
if there is no such numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the last Business Day
of such next, second, third or sixth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, PROVIDED, HOWEVER, that if said
next succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INVENTORY" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by the Borrower or any of its Subsidiaries, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the business of the
Borrower or any of its Subsidiaries, and shall include all right, title and
interest of the Borrower or any of its Subsidiaries in any property the sale or
other disposition of which has given rise to Receivables and which has been
returned to or repossessed or stopped in transit by the Borrower or any of its
Subsidiaries.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person and (ii) any loan, advance (other
than deposits with financial institutions available for withdrawal on demand,
prepaid expenses, accounts receivable, advances to employees and similar items
made or incurred in the ordinary course of business) or capital contribution by
that Person to any other Person, including all Indebtedness to such Person
arising from a sale of property by such Person other than in the ordinary course
of its business; PROVIDED, HOWEVER, notwithstanding anything herein to the
contrary, any Contractual
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Obligation of a Person relating to a take-or-pay obligation or supply
contract of such Person shall not constitute an Investment by such Person in
the other party to such contract.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUING BANKS" means First Chicago; Bank of America National Trust and
Savings Association; ABN AMRO Bank N.V.; Bank of Tokyo -- Mitsubishi Ltd.,
Chicago Branch; Wachovia Bank; and any other Lender which, at the Borrower's
request, agrees, in each such Lender's sole discretion, to become an Issuing
Bank for the purpose of issuing Letters of Credit, and their respective
successors and assigns, in each case in such Lender's separate capacity as an
issuer of Letters of Credit pursuant to ARTICLE III hereof. The designation of
any Lender as an Issuing Bank after the date hereof shall be subject to the
prior written consent of the Administrative Agent.
"LATASA" means Latas de Alumino, S.A., a corporation organized under the
laws of Brazil.
"LATASA ACQUISITION" means the Acquisition of the "Latasa Assets" (as
defined in the Asset Purchase Agreement).
"L/C DOCUMENTS" is defined in SECTION 3.4 hereof.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"L/C INTEREST" is defined in SECTION 3.6 hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, and (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time.
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or Agent, any
office, branch, subsidiary or affiliate of such Lender or Agent.
"LETTER OF CREDIT" means the letters of credit to be (a) issued by the
Issuing Banks pursuant to SECTION 3.1 hereof or (b) deemed issued by the Issuing
Banks pursuant to SECTION 3.2 hereof.
"LEVERAGE RATIO" is defined in SECTION 7.4(C) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
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"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.1 or SECTION 2.2 hereof, as applicable, and
in the case of the Swing Line Bank, any Swing Line Loan made pursuant to SECTION
2.3 hereof, and collectively all Term Loans, Revolving Loans and Swing Line
Loans, whether made or continued as or converted to Floating Rate Loans or
Eurodollar Rate Loans.
"LOAN ACCOUNT" is defined in SECTION 2.13(a) hereof.
"LOAN DOCUMENTS" means this Agreement, the L/C Documents, the Collateral
Documents, the Subsidiary Guaranty, the Canadian Subordination Agreement and all
other documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.
"MANUFACTURING SUPPLY AGREEMENT" means that certain Manufacturing Supply
Agreement, dated as of January 1, 1994, by and between Ball Canada and Ball
Metal Packaging Sales Corp., a Colorado corporation and successor by assignment
to the Borrower, as amended, restated, supplemented and otherwise modified as of
the date hereof.
"MARGIN STOCK" shall have the meaning ascribed to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties, results of operations or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower or any of its
Subsidiaries to perform their respective obligations under the Loan Documents,
or (c) the ability of the Lenders or the Agents to enforce the Obligations or
their rights with respect to the Collateral.
"MATERIAL FOREIGN SUBSIDIARY" means (i) Ball Canada, (ii) FTB (but not any
other member of the FTB Group), (iii) upon the consummation of the Latasa
Acquisition, Latasa and (iv) any other direct or indirect Foreign Incorporated
Subsidiary of the Borrower (but not any member of the FTB Group other than FTB),
the Consolidated Assets (directly and together with its Subsidiaries) of which
are, at any time, greater than $50,000,000.
"MATERIAL SUBSIDIARY" means any Domestic Incorporated Subsidiary or
Material Foreign Subsidiary.
"MCP" means M.C. Packaging (Hong Kong) Limited, a Hong Kong corporation,
and its successors and assigns.
"MINORITY INTEREST" shall mean owning or holding less than a majority of
the outstanding Voting Stock of any Person.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by either the Borrower or any member of the
Controlled Group.
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"NET CASH PROCEEDS" means, with respect to any Asset Sale or Financing by
any Person, (a) cash (freely convertible into Dollars) received by such Person
or any Subsidiary of such Person from such Asset Sale (including cash received
as consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale) or Financing, after (i)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (ii) payment of all brokerage commissions and other fees and expenses
related to such Asset Sale or Financing, and (iii) all amounts used to repay
Indebtedness secured by a Lien on any asset disposed of in such Asset Sale or
which is or may be required (by the express terms of the instrument governing
such Indebtedness) to be repaid in connection with such Asset Sale (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness) or Financing consisting of Permitted Refinancing Indebtedness; and
(b) cash payments in respect of any Indebtedness, Equity Interest or other
consideration received by such Person or any Subsidiary of such Person from such
Asset Sale upon receipt of such cash payments by such Person or such Subsidiary.
"NEW SUBSIDIARY" is defined in SECTION 7.3(G) hereof.
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
"OBLIGATIONS" means all Loans, Letters of Credit, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Agent, any Lender, any affiliate of any Agent or any Lender, the Swing Line
Bank, any Arranger, any Issuing Bank, or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement, the L/C Documents, the
Collateral Documents or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document.
"OFF-BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
including, without limitation, under the Receivables Purchase Documents, (b) any
liability of such Person or any of its Subsidiaries under any sale and leaseback
transactions which do not create a liability on the consolidated balance sheet
of such Person, (c) any liability of such Person or any of its Subsidiaries
under any financing lease or so-called "synthetic" lease transaction, including,
without limitation, the Synthetic Leases, or (d) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the
consolidated balance sheets of such Person and its Subsidiaries.
"OTHER TAXES" is defined in SECTION 2.14(E)(ii) hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
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"PAYMENT DATE" means the last Business Day of each fiscal quarter of the
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in SECTION 7.3(G)(iii) hereof.
"PERMITTED ADDITIONAL SUBORDINATED INDEBTEDNESS" is defined in SECTION
7.3(A)(vii) hereof.
"PERMITTED EXISTING GUARANTIED OBLIGATIONS" means the Guarantied
Obligations of the Borrower and its Subsidiaries identified as such on SCHEDULE
1.1.2 to this Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.4 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.5 to this Agreement,
together with Liens on the assets of the Borrower and its Subsidiaries arising
out of the replacement, extension or renewal of any Permitted Existing Lien,
upon or in the same property and securing the same amount of Indebtedness, in
each case, in connection with any Permitted Refinancing Indebtedness incurred in
respect of the original Indebtedness secured thereby.
"PERMITTED FOREIGN SUBSIDIARY INVESTMENT AMOUNT" means the sum of (i)
$25,000,000 PLUS (ii) Investments in Foreign Incorporated Subsidiaries made in
compliance with SECTION 7.3(D)(xv).
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A)(xii)
hereof.
"PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by Ball
Metal Food Container Corp., a Delaware corporation, Ball Plastic Container
Corp., a Colorado corporation, and BMBCC to Ball Capital Corp. of "Receivables"
and "Related Security" under and as such terms are defined in the Receivables
Sale Agreement, in accordance with the terms of the Receivables Sale Agreement
and/or (ii) a sale by Ball Capital Corp. to purchasers in accordance with the
terms of the Receivables Purchase Agreement.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness (other than the Subordinated
Notes) permitted by this Agreement that (i) does not exceed the aggregate
principal amount (plus accrued interest and any applicable premium and
associated fees and expenses) of the Indebtedness being replaced, renewed,
refinanced or extended, (ii) does not have a Weighted Average Life to
Maturity at the time of such replacement, renewal, refinancing or extension
that is less than the Weighted Average Life to Maturity of the Indebtedness
being replaced, renewed, refinanced or extended, (iii) does not rank at the
time of such replacement, renewal, refinancing or extension senior to the
Indebtedness being replaced, renewed, refinanced or
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extended, and (iv) does not contain terms (including, without limitation,
terms relating to security, amortization, interest rate, premiums, fees,
covenants, subordination, events of default and remedies) materially less
favorable to the Borrower and its Subsidiaries, taken as a whole, or to the
Lenders, taken as a whole, than those applicable to the Indebtedness being
replaced, renewed, refinanced or extended.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means each of (a) those certain Pledge Agreements of
even date herewith executed by the Borrower in favor of the Administrative
Agent, (b) that certain Share Security Deed of even date herewith executed by
the Borrower in favor of the Administrative Agent, (c) that certain Pledge
Agreement of even date herewith executed by Ball Packaging Corp., a Colorado
corporation, in favor of the Administrative Agent, (d) that certain Pledge
Agreement of even date herewith executed by Ball Glass Container Corporation, a
Delaware corporation, in favor of the Administrative Agent, (e) that certain
Pledge Agreement of even date herewith executed by BMBCC, in favor of the
Administrative Agent, (f) that certain Pledge Agreement of even date herewith
executed by Ball Technologies Holdings Corp., a Colorado corporation, in favor
of the Administrative Agent, (g) that certain Pledge Agreement of even date
herewith executed by Ball Aerospace & Technologies Corp., a Delaware
corporation, in favor of the Administrative Agent, (h) that certain Pledge
Agreement of even date herewith executed by RCAL Cans, Inc., a Delaware
corporation, in favor of the Administrative Agent and (i) each other Pledge
Agreement executed pursuant to the terms of SECTION 7.2(K), in each case, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"PRELIMINARY FINANCIALS" is defined in SECTION 2.14(D)(ii) hereof.
"PRELIMINARY FINANCIAL COMPLIANCE CERTIFICATE" is defined in SECTION
2.14(D)(ii) hereof.
"PRELIMINARY FINANCIAL PACKAGE" is defined in SECTION 2.14(D)(ii) hereof.
"PRO RATA SHARE" means, with respect to any Lender, (i) at any time prior
to the Closing Date, the percentage obtained by dividing (A) such Lender's
Commitments at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
Aggregate Term Loan Commitment and the Aggregate Revolving Loan Commitment at
such time and (ii) at any time after the Closing Date, the percentage obtained
by dividing (A) the sum of such Lender's Term Loans and Revolving Loan
Commitment at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
aggregate amount of all of the Term Loans and the Aggregate Revolving Loan
Commitment at such time;
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PROVIDED, HOWEVER, if all of the Commitments are terminated pursuant to the
terms of this Agreement, then "Pro Rata Share" means the percentage obtained
by dividing (x) the sum of (A) such Lender's Term Loans and Revolving Loans,
PLUS (B) such Lender's share of the obligations to purchase participations in
Swing Line Loans and Letters of Credit, by (y) the sum of (A) the aggregate
outstanding amount of all Term Loans and Revolving Loans, PLUS (B) the
aggregate outstanding amount of all Swing Line Loans and all Letters of
Credit.
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
"RATIONALIZATION COST" means any cash rationalization cost with respect to
the Reynolds Acquisition as evidenced by the reduction of the relevant balance
sheet liability of the Borrower in accordance with Agreement Accounting
Principles.
"RECEIVABLE(S)" means and includes all of the Borrower's and its
Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit; PROVIDED, HOWEVER, that Receivables that are
transferred to Ball Capital Corp. pursuant to a Permitted Receivables Transfer
shall be deemed not to be Receivables hereunder, until such time, if any, as any
such Receivables are repurchased by or otherwise transferred to Ball Metal Food
Container Corp., Ball Plastic Container Corp., or BMBCC pursuant to the terms of
the Receivables Sale Agreement or otherwise.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchase
Agreement dated as of December 29, 1997, among Ball Capital Corp., as seller,
the Borrower, as servicer, Old Line Funding Corp., a Delaware corporation, as
buyer, and Royal Bank of Canada, as agent, as such agreement may be amended,
restated or otherwise modified from time to time in accordance with the terms
hereof, or any replacement or substitution therefor.
"RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Sale Agreement and
the Receivables Purchase Agreement.
"RECEIVABLES SALE AGREEMENT" means that certain Originator Purchase
Agreement dated as of December 29, 1997, between Ball Metal Food Container
Corp., a Delaware corporation, Ball Plastic Container Corp., a Colorado
corporation, and BMBCC and Ball Capital Corp., pursuant to which Ball Metal Food
Container Corp., a Delaware corporation, Ball Plastic Container Corp., a
Colorado corporation, and BMBCC shall sell to Ball Capital Corp. all of its
"Receivables" and "Related Security" (as such terms are defined therein), as
such agreement may be amended, restated or otherwise modified from time to time
in accordance with the terms hereof, or any replacement or substitution
therefor.
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"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks and nonbank, nonbroker lenders for the purpose of
purchasing or carrying Margin Stock.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.7 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"REMEDIAL ACTION" means any action required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(ii) prevent the Release or threat of Release or minimize the further Release of
Contaminants; or (iii) perform pre-remedial studies and investigations and post
remedial care.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"REPLACEMENT LENDER" is defined in SECTION 2.19 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are greater than fifty percent (50%); PROVIDED, HOWEVER, that, if any of the
Lenders shall have failed to fund its Revolving Loan Pro Rata Share of any
Revolving Loan requested by the Borrower, or any Swing Line
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Loan as requested by the Administrative Agent, which such Lenders are
obligated to fund under the terms of this Agreement and any such failure has
not been cured, then for so long as such failure continues, "REQUIRED
LENDERS" means Lenders (excluding all Lenders whose failure to fund their
respective Revolving Loan Pro Rata Shares of such Revolving Loans or Swing
Line Loans has not been so cured) whose Pro Rata Shares represent greater
than fifty percent (50%) of the aggregate Pro Rata Shares of such Lenders;
PROVIDED FURTHER, HOWEVER, that, if the Commitments have been terminated
pursuant to the terms of this Agreement, "REQUIRED LENDERS" means Lenders
(without regard to such Lenders' performance of their respective obligations
hereunder) whose aggregate ratable shares (stated as a percentage) of the
aggregate outstanding principal balance of all Loans and L/C Obligations are
greater than fifty percent (50%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"RESTRICTED INVESTMENT" means any Investment other than an Investment
permitted by SECTION 7.3(D) (other than CLAUSE (xii) thereof).
"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower now or hereafter outstanding, other than in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a Subsidiary of
the Borrower) of other Equity Interests of the Borrower (other than Disqualified
Stock), (iii) any redemption, purchase, retirement, defeasance, prepayment or
other acquisition for value, direct or indirect, of any Indebtedness prior to
the stated maturity thereof, other than the Obligations and other than with the
proceeds of Permitted Refinancing Indebtedness, and (iv) any Restricted
Investment.
"RESTRICTED SUBSIDIARY" is defined in SECTION 10.14 hereof.
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"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Aggregate Revolving Loan Commitment at such time exceeds the
Revolving Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Revolving Loans at such time, PLUS
(ii) the outstanding principal amount of the Swing Line Loans at such time, PLUS
(iii) the L/C Obligations at such time.
"REVOLVING LOAN" is defined in SECTION 2.2(a) hereof.
"REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make Revolving Loans and to purchase participations in Letters of
Credit not exceeding the amount set forth on EXHIBIT A to this Agreement
opposite its name thereon under the heading "Revolving Loan Commitment" or on
Schedule 1 of the assignment and acceptance by which it became a Lender, as such
amount may be modified from time to time pursuant to the terms of this Agreement
or to give effect to any applicable assignment and acceptance.
"REVOLVING LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by dividing (A) the then aggregate amount of such Lender's
Revolving Loan Commitment (as adjusted from time to time in accordance with the
provisions of this Agreement) by (B) the Aggregate Revolving Loan Commitment at
such time; PROVIDED, HOWEVER, if all of the Commitments are terminated pursuant
to the terms of this Agreement, then "Revolving Loan Pro Rata Share" means the
percentage obtained by dividing (x) the sum of (A) such Lender's Revolving
Loans, PLUS (B) such Lender's share of the obligations to purchase
participations in Swing Line Loans and Letters of Credit, by (y) the sum of (A)
the aggregate outstanding amount of all Revolving Loans, PLUS (B) the aggregate
outstanding amount of all Swing Line Loans and all Letters of Credit.
"REVOLVING LOAN TERMINATION DATE" means August 10, 2004.
"REYNOLDS" means Reynolds Metals Company, a Delaware corporation.
"REYNOLDS ACQUISITION" means the acquisition by the Borrower and certain of
its Subsidiaries of certain of the assets and liabilities of the aluminum
beverage-can manufacturing business of Reynolds and its Affiliates on the terms
and conditions set forth in that certain Asset Purchase Agreement ("ASSET
PURCHASE AGREEMENT") dated as of April 22, 1998, as amended through the Closing
Date, by and among the Borrower, BMBCC and Reynolds.
"REYNOLDS ACQUISITION DOCUMENTS" means the Asset Purchase Agreement and all
other documents, instruments and agreements entered into by the Borrower or any
of its Subsidiaries in connection with the Reynolds Acquisition.
"REYNOLDS GROUP" is defined in SECTION 6.4(B).
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2.
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"SEC" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Hedging Obligations owing under Hedging Agreements to any Lender or any
Affiliate of any Lender.
"SENIOR NOTE INDENTURE" means that certain Indenture dated as of August 10,
1998, between the Borrower and The Bank of New York, as Trustee, as amended,
supplemented or modified in accordance with SECTION 7.3(R) hereof.
"SENIOR NOTES" means those certain Senior Notes due 2006, issued by the
Borrower in the aggregate principal amount of $300,000,000 pursuant to the
Senior Note Indenture, as amended, supplemented or modified in accordance with
SECTION 7.3(R) hereof, which term shall include and shall constitute the notes
issued in exchage therefor as contemplated by the Senior Note Indenture.
"SHORT-TERM CREDIT AGREEMENT" means that certain Short-Term Credit
Agreement, dated as of August 10, 1998 among the Borrower, the Agents, the
Arrangers and the financial institutions from time to time parties thereto as
lenders, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group that is not a Multiemployer Plan.
"SOLVENT" shall mean, when used with respect to any Person, that at the
time of determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total amount
of its liabilities, including, without limitation, contingent liabilities;
and
(ii) it is then able and expects to be able to pay its debts as they
mature; and
(iii) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can reasonably be expected to become an actual or
matured liability.
"SUBORDINATED INDEBTEDNESS" means, (i) the Subordinated Notes and (ii) any
Permitted Additional Subordinated Indebtedness.
"SUBORDINATED NOTE INDENTURE" means that certain Indenture dated as of
August 10, 1998, between the Borrower and The Bank of New York, as Trustee, as
amended, supplemented or modified
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in accordance with SECTION 7.3(R) hereof, which term shall include and shall
constitute the notes issued in exchage therefor as contemplated by the Senior
Note Indenture.
"SUBORDINATED NOTES" means those certain Senior Subordinated Notes due
2008, issued by the Borrower in the aggregate principal amount of $250,000,000
pursuant to the Subordinated Note Indenture, as amended, supplemented or
modified in accordance with SECTION 7.3(R) hereof.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding Voting Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than 50% of the
Voting Stock of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of the Borrower and any references to Subsidiaries of the Borrower
shall not include: (a) any member of the FTB Group or (b) any Excluded
Subsidiary.
"SUBSIDIARY GUARANTY" means the Guarantee Agreement of even date herewith
entered into by each of the Guarantors in favor of the Administrative Agent, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
"SUPPORT OBLIGATIONS" is defined in the definition of "GUARANTIED
OBLIGATIONS".
"SWING LINE BANK" means First Chicago or any other Lender as a successor
Swing Line Bank.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to make
Swing Line Loans up to a maximum principal amount of $15,000,000 at any one time
outstanding.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Bank pursuant to SECTION 2.3 hereof.
"SYNDICATION AGENT" means Bank of America National Trust and Savings
Association, in its capacity as syndication agent for the loan transaction
evidenced by this Agreement, together with its successors and assigns.
"SYNDICATION PERIOD" is defined in the definition of "Interest Period".
"SYNTHETIC LEASES" means each of (i) that certain Participation Agreement,
dated as of September 27, 1996, among Ball Plastic Container Corp., and Ball
1996-A Equipment Trust, the guarantors parties thereto, the certificate
purchasers parties thereto, Royal Bank of Canada, as agent, and PNC Bank, Ohio,
National Association, as bank and certificate trustee, and the Lease Agreement
related thereto, (ii) that certain Participation Agreement, dated as of
September 27, 1996, among Ball Aerospace & Technologies Corp., as lessee, Lease
Plan North America, Inc., as lessor, ABN AMRO Bank N.V., Chicago Branch, as
participant, and ABN AMRO Bank N.V., Chicago Branch, as agent, and the Master
Lease related thereto, and (iii) that certain Participation Agreement, dated as
of
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November 15, 1996, among Ball Plastic Container Corp., as lessee, Lease Plan
North America, Inc., as lessor, ABN AMRO Bank N.V., Chicago Branch, as agent and
participant, and the Master Lease related thereto, in each case, as amended as
of the date hereof.
"TAX ALLOCATION AGREEMENT" means the State Tax Sharing Agreement among the
Borrower and its Subsidiaries, dated as of December 1, 1990, as amended,
modified, supplemented or restated from time to time in compliance with the
terms of this Agreement.
"TAXES" is defined in SECTION 2.14(E)(i) hereof.
"TERMINATION DATE" means the earlier of (a) the Revolving Loan Termination
Date, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to SECTION 2.6 hereof or the Commitments pursuant to SECTION
9.1 hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC or any similar
foreign governmental authority of proceedings to terminate a Benefit Plan or
Foreign Pension Plan; (v) any event or condition which would constitute grounds
under Section 4042 of ERISA (other than subparagraph (a)(4) of such Section) for
the termination of, or the appointment of a trustee to administer, any Benefit
Plan; (vi) that a foreign governmental authority shall appoint or institute
proceedings to appoint a trustee to administer any Foreign Pension Plan in place
of the existing administrator; or (vii) the partial or complete withdrawal of
the Borrower or any member of the Controlled Group from a Multiemployer Plan or
Foreign Pension Plan.
"TERM LOANS" means, collectively, the Tranche A Term Loans and the Tranche
B Term Loans.
"THIRD-PARTY PAYMENTS" is defined in SECTION 7.3(F)(iii) hereof.
"TOTAL DEBT" is defined in SECTION 7.4(A) hereof.
"TRANCHE A PRO RATA SHARE" means, with respect to any Lender, (i) at any
time prior to the Closing Date, the percentage obtained by dividing (A) such
Lender's Tranche A Term Loan Commitment by (B) the aggregate Tranche A Term Loan
Commitment for all Lenders at such time and (ii) at any time after the Closing
Date, the percentage obtained by dividing (A) the sum of such Lender's Tranche A
Term Loans at such time by (B) the sum of the aggregate amount of all of the
Tranche A Term Loans at such time.
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"TRANCHE A TERM LOAN" is defined in SECTION 2.1(a)(i) hereof.
"TRANCHE A TERM LOAN COMMITMENT" means, for each Lender, the obligation of
such Lender to make its Tranche A Term Loan pursuant to the terms and conditions
of this Agreement, and which shall not exceed the principal amount set forth on
EXHIBIT A to this Agreement opposite its name thereon under the heading "Tranche
A Term Loan Commitment", as such amount may be modified from time to time
pursuant to the terms hereof. The aggregate of the Tranche A Term Loan
Commitments is Three Hundred Fifty Million and 00/100 Dollars ($350,000,000).
"TRANCHE A TERM LOAN LENDER" means any Lender with a Tranche A Term Loan
Commitment.
"TRANCHE A TERM LOAN TERMINATION DATE" means August 10, 2004.
"TRANCHE B PRO RATA SHARE" means, with respect to any Lender, (i) at any
time prior to the Closing Date, the percentage obtained by dividing (A) such
Lender's Tranche B Term Loan Commitment by (B) the aggregate Tranche B Term Loan
Commitment for all Lenders at such time and (ii) at any time after the Closing
Date, the percentage obtained by dividing (A) the sum of such Lender's Tranche B
Term Loans at such time by (B) the sum of the aggregate amount of all of the
Tranche B Term Loans at such time.
"TRANCHE B TERM LOAN" is defined in SECTION 2.1(a)(ii) hereof.
"TRANCHE B TERM LOAN COMMITMENT" means, for each Lender, the obligation of
such Lender to make its Tranche B Term Loan pursuant to the terms and conditions
of this Agreement, and which shall not exceed the principal amount set forth on
EXHIBIT A to this Agreement opposite its name thereon under the heading "Tranche
B Term Loan Commitment", as such amount may be modified from time to time
pursuant to the terms hereof. The aggregate of the Tranche B Term Loan
Commitments is Two Hundred Million and 00/100 Dollars ($200,000,000).
"TRANCHE B TERM LOAN LENDER" means any Lender with a Tranche B Term Loan
Commitment.
"TRANCHE B TERM LOAN TERMINATION DATE" means March 10, 2006.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower or any of its Subsidiaries in connection with the execution, delivery
and performance of the Transaction Documents, the issuance of the Senior Notes
and the Subordinated Notes, the extinguishment of term Indebtedness existing
immediately prior to the Closing Date, and the consummation of the Reynolds
Acquisition.
"TRANSACTION DOCUMENTS" means the Loan Documents, the Reynolds Acquisition
Documents, and the documents executed in connection with the Subordinated Notes
and the Senior Notes.
"TRANSFEREE" is defined in SECTION 13.5 hereof.
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<PAGE>
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"VOTING STOCK" means stock or similar interests of any class or classes
(however designated), the holders of which are generally and ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
Persons performing similar functions) of a corporation or other Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"WHOLLY-OWNED SUBSIDIARY" means any member of the Ball Corporate Group 100%
of the Capital Stock and other Equity Interests of which is directly or
indirectly owned by the Borrower (other than director's qualifying shares).
"YEAR 2000 ISSUES" means, with respect to any Person, anticipated costs,
problems and uncertainties associated with the inability of certain computer
applications and imbedded systems to effectively handle data, including dates,
prior to, on and after January 1, 2000, as it affects the business, operations,
and financial condition of such Person, and such Person's customers, suppliers
and vendors.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with Agreement Accounting Principles.
1.2 REFERENCES. Any references to Subsidiaries of the Borrower set forth
herein shall (i) with respect to representations and warranties which deal with
historical matters be deemed to include the Borrower and its Subsidiaries,
together with the businesses acquired pursuant to the Reynolds Acquisition; and
(ii) shall not in any way be construed as consent by any Agent or any Lender to
the establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
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<PAGE>
1.3 CURRENCY EQUIVALENTS. If at the time of determination of any amount
hereunder, such amount shall be in a currency other than U.S. Dollars, such
amount shall be deemed to be equal to the Dollar Amount thereof.
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
2.1. TERM LOANS. (a) (i) Amount of TRANCHE A TERM LOANS. Subject to the
terms and conditions set forth in this Agreement, each Tranche A Term Loan
Lender on the Closing Date severally and not jointly agrees to make on the
Closing Date, a term loan, in Dollars, to the Borrower in an amount equal to
such Lender's Tranche A Term Loan Commitment (each individually, a "TRANCHE A
TERM LOAN" and, collectively, the "Tranche A Term Loans"). All Tranche A Term
Loans shall be made by the Lenders on the Closing Date simultaneously and
proportionately to their respective Tranche A Pro Rata Shares, it being
understood that no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Tranche A Term Loan hereunder nor
shall the Tranche A Term Loan Commitment of any Lender be increased or decreased
as a result of any such failure.
(ii) AMOUNT OF TRANCHE B TERM LOANS. Subject to the terms and conditions
set forth in this Agreement, each Tranche B Term Loan Lender on the Closing Date
severally and not jointly agrees to make on the Closing Date, a term loan, in
Dollars, to the Borrower in an amount equal to such Lender's Tranche B Term Loan
Commitment (each individually, a "TRANCHE B TERM LOAN" and, collectively, the
"TRANCHE B TERM LOANS"). All Tranche B Term Loans shall be made by the Lenders
on the Closing Date simultaneously and proportionately to their respective
Tranche B Pro Rata Shares, it being understood that no Lender shall be
responsible for any failure by any other Lender to perform its obligation to
make any Tranche B Term Loan hereunder nor shall the Tranche B Term Loan
Commitment of any Lender be increased or decreased as a result of any such
failure.
(b) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall deliver
to the Administrative Agent a Borrowing/Conversion/Continuation Notice, signed
by it, on the Closing Date. Such Borrowing/Conversion/Continuation Notice shall
specify (i) the aggregate amount of the Tranche A Term Loans and Tranche B Term
Loans being requested and (ii) instructions for the disbursement of the proceeds
of such Term Loans. The Term Loans shall initially be Floating Rate Loans and
thereafter may be continued as Floating Rate Loans or converted into Eurodollar
Rate Loans in the manner provided in SECTION 2.10 and subject to the other
conditions and limitations therein set forth and set forth in this ARTICLE II.
Any Borrowing/Conversion/Continuation Notice given pursuant to this SECTION
2.1(b) shall be irrevocable.
(c) MAKING OF TERM LOANS. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under SECTION 2.1(b) in respect of the
Term Loans, the Administrative Agent shall notify each Lender by telex or
telecopy, or other similar form of transmission, of the proposed Advance. Each
Lender shall deposit an amount equal to its Tranche A Pro Rata Share of the
Tranche A Term Loans and its Tranche B Pro Rata Share of the Tranche B Term
Loans, as applicable, with the Administrative Agent at its office in Chicago,
Illinois, in immediately available funds, on the Closing Date, as specified in
the Borrowing/Conversion/Continuation Notice. Subject to the fulfillment of the
conditions
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<PAGE>
precedent set forth in SECTIONS 5.1 and 5.2, as applicable, the
Administrative Agent shall make the proceeds of such amounts received by it
available to the Borrower at the Administrative Agent's office in Chicago,
Illinois on the Closing Date and shall disburse such proceeds in accordance
with the Borrower's disbursement instructions set forth in such
Borrowing/Conversion/Continuation Notice. The failure of any Lender to
deposit the amount described above with the Administrative Agent on the
Closing Date shall not relieve any other Lender of its obligations hereunder
to make its Term Loan on the Closing Date.
(d) REPAYMENT OF THE TRANCHE A TERM LOANS. (i) The Tranche A Term
Loans shall be repaid in twenty-three (23) consecutive quarterly principal
installments, payable on the last Business Day of each fiscal quarter of the
Borrower, commencing on March 31, 1999 and continuing thereafter until the
Tranche A Term Loan Termination Date, and the Tranche A Term Loans shall be
permanently reduced by the amount of each installment on the date payment
thereof is made hereunder. The installments shall be in the aggregate
amounts set forth below:
<TABLE>
<CAPTION>
TRANCHE A TERM LOAN
INSTALLMENT DATE INSTALLMENT AMOUNT
---------------- -------------------
<S> <C>
March 31, 1999 $5,000,000
June 30, 1999 $5,000,000
September 30, 1999 $5,000,000
December 31, 1999 $5,000,000
March 31, 2000 $8,750,000
June 30, 2000 $8,750,000
September 30, 2000 $8,750,000
December 31, 2000 $8,750,000
March 31, 2001 $12,500,000
June 30, 2001 $12,500,000
September 30, 2001 $12,500,000
December 31, 2001 $12,500,000
March 31, 2002 $16,250,000
June 30, 2002 $16,250,000
September 30, 2002 $16,250,000
December 31, 2002 $16,250,000
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<PAGE>
March 31, 2003 $21,250,000
June 30, 2003 $21,250,000
September 30, 2003 $21,250,000
December 31, 2003 $21,250,000
March 31, 2004 $31,666,666
June 30, 2004 $31,666,667
Tranche A Term Loan
Termination Date $31,666,667
</TABLE>
Notwithstanding the foregoing, the final installment shall be in the amount
of the then outstanding principal balance of the Tranche A Term Loans. In
addition, the then outstanding principal balance of the Tranche A Term Loans,
if any, shall be due and payable on the Tranche A Term Loan Termination Date.
No installment of any Tranche A Term Loan shall be reborrowed once repaid.
(e) REPAYMENT OF THE TRANCHE B TERM LOANS. (i) The Tranche B Term
Loans shall be repaid in thirty-one (31) consecutive quarterly principal
installments, payable on the last Business Day of each fiscal quarter of the
Borrower, commencing on March 31, 1999, and continuing thereafter until the
Tranche B Term Loan Termination Date, and the Tranche B Term Loans shall be
permanently reduced by the amount of each installment on the date payment
thereof is made hereunder. The installments shall be in the aggregate amounts
set forth below:
<TABLE>
<CAPTION>
TRANCHE B TERM LOAN
INSTALLMENT DATE INSTALLMENT AMOUNT
---------------- -------------------
<S> <C>
March 31, 1999 $500,000
June 30, 1999 $500,000
September 30, 1999 $500,000
December 31, 1999 $500,000
March 31, 2000 $500,000
June 30, 2000 $500,000
September 30, 2000 $500,000
December 31, 2000 $500,000
March 31, 2001 $500,000
June 30, 2001 $500,000
September 30, 2001 $500,000
December 31, 2001 $500,000
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<PAGE>
March 31, 2002 $500,000
June 30, 2002 $500,000
September 30, 2002 $500,000
December 31, 2002 $500,000
March 31, 2003 $500,000
June 30, 2003 $500,000
September 30, 2003 $500,000
December 31, 2003 $500,000
March 31, 2004 $500,000
June 30, 2004 $500,000
September 30, 2004 $500,000
December 31, 2004 $500,000
March 31, 2005 $500,000
June 30, 2005 $500,000
September 30, 2005 $500,000
December 31, 2005 $500,000
Tranche B Term Loan
Termination Date $186,000,000
</TABLE>
Notwithstanding the foregoing, the final installment shall be in the amount
of the then outstanding principal balance of the Tranche B Term Loans. In
addition, the then outstanding principal balance of the Tranche B Term Loans,
if any, shall be due and payable on the Tranche B Term Loan Termination Date.
No installment of any Tranche B Term Loan shall be reborrowed once repaid.
(f) In addition to the scheduled payments on the Term Loans, the
Borrower (a) may make the voluntary prepayments described in SECTION 2.5(A)
for credit against the scheduled payments on the Term Loans pursuant to
SECTION 2.5(A) and (b) shall make the mandatory prepayments prescribed in
SECTION 2.5(B) for credit against the scheduled payments on the Term Loans
pursuant to SECTION 2.5(B).
2.2 REVOLVING LOANS. (a) Upon the satisfaction of the conditions
precedent set forth in SECTIONS 5.1 and 5.2, as applicable, from and
including the date of this Agreement and prior to the Termination Date, each
Lender severally and not jointly agrees, on the terms and conditions set
forth in this Agreement, to make revolving loans to the Borrower from time to
time, in Dollars, in an amount not to exceed such Lender's Revolving Loan Pro
Rata Share of Revolving Credit Availability at such time (each individually,
a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS"); PROVIDED,
HOWEVER, at no time shall the Revolving Credit Obligations exceed the
Aggregate Revolving Loan Commitment. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Revolving Loans at any time prior
to the Termination Date. The Revolving Loans made on the Closing Date or on
or before the third (3rd) Business Day thereafter shall initially be Floating
Rate Loans and
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<PAGE>
thereafter may be continued as Floating Rate Loans or converted into
Eurodollar Rate Loans in the manner provided in SECTION 2.10 and subject to
the other conditions and limitations therein set forth, set forth in this
ARTICLE II and set forth in the definition of Interest Period. Revolving
Loans made after the third (3rd) Business Day after the Closing Date shall
be, at the option of the Borrower, selected in accordance with SECTION 2.10,
either Floating Rate Loans or Eurodollar Rate Loans. On the Termination
Date, the Borrower shall repay in full the outstanding principal balance of
the Revolving Loans. Each Advance under this SECTION 2.2 shall consist of
Revolving Loans made by each Lender ratably in proportion to such Lender's
respective Revolving Loan Pro Rata Share.
(b) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall
deliver to the Administrative Agent a Borrowing/Conversion/Continuation
Notice, signed by it, in accordance with the terms of SECTION 2.8. The
Administrative Agent shall promptly notify each Lender with a Revolving Loan
Commitment greater than zero of such request.
(c) MAKING OF REVOLVING LOANS. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under SECTION 2.8 in respect of
Revolving Loans, the Administrative Agent shall notify each Lender with a
Revolving Loan Commitment greater than zero by telex or telecopy, or other
similar form of transmission, of the requested Revolving Loan. Each Lender
with a Revolving Loan Commitment greater than zero shall make available its
Revolving Loan in accordance with the terms of SECTION 2.7. The
Administrative Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Administrative Agent's office in
Chicago, Illinois on the applicable Borrowing Date and shall disburse such
proceeds in accordance with the Borrower's disbursement instructions set
forth in such Borrowing/Conversion/Continuation Notice. The failure of any
Lender to deposit the amount described above with the Administrative Agent on
the applicable Borrowing Date shall not relieve any other Lender of its
obligations hereunder to make its Revolving Loan on such Borrowing Date.
2.3 SWING LINE LOANS. (a) AMOUNT OF SWING LINE LOANS. Upon the
satisfaction of the conditions precedent set forth in SECTION 5.1 and 5.2, as
applicable, from and including the date of this Agreement and prior to the
Termination Date, the Swing Line Bank agrees, on the terms and conditions set
forth in this Agreement, to make swing line loans to the Borrower from time
to time, in Dollars, in an amount not to exceed the Swing Line Commitment
(each, individually, a "SWING LINE LOAN" and collectively, the "SWING LINE
LOANS"); PROVIDED, HOWEVER, at no time shall the Revolving Credit Obligations
exceed the Aggregate Revolving Loan Commitment; and PROVIDED, FURTHER, that
at no time shall the sum of (a) the outstanding amount of the Swing Line
Loans, PLUS (b) the outstanding amount of Revolving Loans made by the Swing
Line Bank pursuant to SECTION 2.2 (after giving effect to any concurrent
repayment of Loans), exceed the Swing Line Bank's Revolving Loan Commitment
at such time. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans at any time prior to the
Termination Date.
(b) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall
deliver to the Administrative Agent and the Swing Line Bank a
Borrowing/Conversion/Continuation Notice, signed by it, not later than 1:00
p.m. (Chicago time) on the Borrowing Date of each Swing Line Loan, specifying
(i) the applicable Borrowing Date (which date shall be a Business Day and
which may be the same date as the date the Borrowing/Conversion/Continuation
Notice is given), (ii) the aggregate
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<PAGE>
amount of the requested Swing Line Loan which shall be an amount not less
than $1,000,000 and (iii) instructions for the disbursement of the proceeds
of such Swing Line Loan. The Swing Line Loans shall at all times be Floating
Rate Loans. The Administrative Agent shall promptly notify the Swing Line
Bank of such request.
(c) MAKING OF SWING LINE LOANS. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under SECTION 2.3(b) in respect of
Swing Line Loans, the Administrative Agent shall notify the Swing Line Bank
by telex or telecopy, or other similar form of transmission, of the requested
Swing Line Loan. Not later than 3:00 p.m. (Chicago time) on the applicable
Borrowing Date, the Swing Line Bank shall make available its Swing Line Loan,
in funds immediately available in Chicago, Illinois to the Administrative
Agent at its address specified pursuant to ARTICLE XIV. The Administrative
Agent will promptly make the funds so received from the Swing Line Bank
available to the Borrower on the Borrowing Date at the Administrative Agent's
aforesaid address and shall disburse such funds in accordance with the
Borrower's disbursement instructions set forth in the related
Borrowing/Conversion/Continuation Notice.
(d) REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan shall be paid
in full by the Borrower on or before the fifth Business Day after the
Borrowing Date for such Swing Line Loan. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans or, in a minimum
amount of $1,000,000 and increments of $100,000 in excess thereof, any
portion of the outstanding Swing Line Loans, upon notice to the
Administrative Agent and the Swing Line Bank. In addition, the
Administrative Agent (i) may at any time in its sole discretion with respect
to any outstanding Swing Line Loan, or (ii) shall on the fifth Business Day
after the Borrowing Date of any Swing Line Loan, require each Lender
(including the Swing Line Bank) to make a Revolving Loan in the amount of
such Lender's Revolving Loan Pro Rata Share of such Swing Line Loan, for the
purpose of repaying such Swing Line Loan. Not later than 2:00 p.m. (Chicago
time) on the date of any notice from the Administrative Agent to the Lenders
received pursuant to this SECTION 2.3(d), each Lender shall make available
its required Revolving Loan or Revolving Loans, in funds immediately
available in Chicago, Illinois to the Administrative Agent at its address
specified pursuant to ARTICLE XIV. Revolving Loans made pursuant to this
SECTION 2.3(d) shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in
the manner provided in SECTION 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this ARTICLE II. Unless a
Lender shall have notified the Swing Line Bank, prior to its making any Swing
Line Loan, that any applicable condition precedent set forth in SECTIONS 5.1
and 5.2 had not then been satisfied, such Lender's obligation to make
Revolving Loans pursuant to this SECTION 2.3(d) to repay Swing Line Loans
shall be unconditional, continuing, irrevocable and absolute and shall not be
affected by any circumstances, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such Lender
may have against the Administrative Agent, the Swing Line Bank or any other
Person, (B) the occurrence and continuance of a Default or Unmatured Default,
(C) any adverse change in the condition (financial or otherwise) of the
Borrower, or (D) any other circumstance, happening or event whatsoever. In
the event that any Lender fails to make payment to the Administrative Agent
of any amount due under this SECTION 2.3(d), the Administrative Agent shall
be entitled to receive, retain and apply against such obligation the
principal and interest otherwise payable to such Lender hereunder until the
Administrative Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied. In addition to the foregoing, if
for any
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<PAGE>
reason any Lender fails to make payment to the Administrative Agent of any
amount due under this SECTION 2.3(d), such Lender shall be deemed, at the
option of the Administrative Agent, to have unconditionally and irrevocably
purchased from the Swing Line Bank, without recourse or warranty, an
undivided interest and participation in the applicable Swing Line Loan in the
amount of such Revolving Loan, and such interest and participation may be
recovered from such Lender together with interest thereon at the Federal
Funds Effective Rate for each day during the period commencing on the date of
demand and ending on the date such amount is received. On the Termination
Date, the Borrower shall repay in full the outstanding principal balance of
the Swing Line Loans.
2.4 RATE OPTIONS FOR ALL ADVANCES. The Swing Line Loans shall be
Floating Rate Loans at all times. The Revolving Loans and Term Loans may be
Floating Rate Loans or Eurodollar Rate Loans, or a combination thereof,
selected by the Borrower in accordance with SECTION 2.10; PROVIDED, HOWEVER,
notwithstanding anything herein to the contrary, the Borrower may not without
the Administrative Agent's consent select, convert or continue any Loans as
Eurodollar Rate Loans during the Syndication Period; and, PROVIDED, FURTHER,
that, in the event that the Administrative Agent consents to the selection,
conversion or continuation of any Loans as Eurodollar Rate Loans during the
Syndication Period, the Borrower may not select Interest Periods for
Eurodollar Rate Advances made during the Syndication Period which exceed
seven (7) days and all Interest Periods with respect to all such Eurodollar
Rate Advances made, converted or continued during the Syndication Period
shall be required to expire on the same date. The Borrower may select, in
accordance with SECTION 2.10, Rate Options and Interest Periods applicable to
portions of the Revolving Loans and the Term Loans; PROVIDED that there shall
be no more than twelve (12) Interest Periods in effect with respect to all of
the Loans at any time.
2.5 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time and at any
time repay or prepay, without penalty or premium all or any part of
outstanding Floating Rate Advances; PROVIDED, that the Borrower may not so
prepay Floating Rate Advances consisting of Term Loans unless it shall have
provided at least one Business Day's written notice to the Administrative
Agent of such prepayment. Any optional prepayment of the Term Loans must be
applied ratably to the Tranche A Term Loans and the Tranche B Term Loans.
Eurodollar Rate Advances may be voluntarily repaid or prepaid prior to the
last day of the applicable Interest Period, subject to the indemnification
provisions contained in SECTION 4.4, PROVIDED, that the Borrower may not so
prepay Eurodollar Rate Advances unless it shall have provided at least one
(1) Business Day's prior written notice to the Administrative Agent of such
prepayment. Unless the aggregate outstanding principal balance of the Term
Loans is to be prepaid in full, voluntary prepayments of the Term Loans and
the Revolving Loans shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. Voluntary
prepayments of the Term Loans shall be applied to each of the then remaining
installments payable thereunder, on a ratable basis based upon the respective
amounts of such remaining installments.
(B) MANDATORY PREPAYMENTS.
(i) MANDATORY PREPAYMENTS OF TERM LOANS.
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<PAGE>
(a) Upon the consummation of any Asset Sale by the Borrower or any
Subsidiary of the Borrower, other than those Asset Sales permitted pursuant
to SECTION 7.3(B)(i), (ii), (iii), (iv) and (v), except to the extent that
the Net Cash Proceeds of such Asset Sale, when combined with the Net Cash
Proceeds of all such Asset Sales during the immediately preceding
twelve-month period, do not exceed $25,000,000 plus the "Carryover Amount"
(as defined below), and except as provided in the second sentence of this
SECTION 2.5(B)(i)(a), within five (5) Business Days after the Borrower's or
any of its Subsidiaries' (i) receipt of any Net Cash Proceeds from any such
Asset Sale, or (ii) conversion to cash or Cash Equivalents of non-cash
proceeds (whether principal or interest and including securities, release
of escrow arrangements or lease payments) received from any Asset Sale, the
Borrower shall make a mandatory prepayment of the Obligations in an amount
equal to one hundred percent (100%) of the excess of (x) such Net Cash
Proceeds or such proceeds converted from non-cash to cash or Cash
Equivalents over (y) $25,000,000 PLUS the Carryover Amount for such
twelve-month period; PROVIDED, that, notwithstanding the foregoing, the
Borrower shall make mandatory prepayments of the Obligations in an amount
equal to one hundred percent (100%) of the Net Cash Proceeds or such
proceeds converted from non-cash to cash or Cash Equivalents from the sale
of the PET business unit of the Borrower and the disposition of the
Aerospace business unit of the Borrower. So long as no Default shall have
occurred and is continuing, Net Cash Proceeds of Asset Sales (other than
Net Cash Proceeds related to the sale of the PET business unit of the
Borrower and the disposition of the Aerospace business unit of the
Borrower) with respect to which the Borrower shall have given the
Administrative Agent written notice prior to the consummation of the Asset
Sale of the Borrower's or the applicable Subsidiary's intention to reinvest
such Net Cash Proceeds in the Borrower's and its Subsidiaries' existing
business, and in connection with which the Borrower or the applicable
Subsidiary shall have commenced such reinvestment within 360 days after
such Asset Sale and shall have completed such reinvestment within
twenty-four (24) months after such Asset Sale, shall not be subject to the
provisions of the first sentence of this SECTION 2.5(B)(i)(a) unless and to
the extent that such applicable period shall have expired without such
reinvestment having been made; PROVIDED, that upon the occurrence of any
Default, such portion of such Net Cash Proceeds as has not been reinvested
shall be paid to the Administrative Agent to be applied as a mandatory
prepayment of the Obligations in an amount equal to 100% of such Net Cash
Proceeds or such proceeds converted from non-cash to cash or Cash
Equivalents. The "CARRYOVER AMOUNT" for any twelve-month period means an
amount, if positive, equal to (1) $25,000,000 MINUS (2) the aggregate
amount of Net Cash Proceeds of all Asset Sales during the immediately
preceding twelve-month period; PROVIDED, that the Carryover Amount shall
not at any time exceed $25,000,000, and the Carryover Amount shall be
reduced to zero if a Default shall have occurred and is continuing as of
the date any mandatory prepayment is required to be made pursuant to this
SECTION 2.5(B)(i)(a). No portion of the Carryover Amount available in any
twelve-month period can be utilized in the following twelve-month period.
Without in any way limiting the foregoing but without duplication of the
foregoing, upon the consummation of any "Asset Sale" (as such term is
defined in the Senior Note Indenture and the Subordinated Note Indenture)
where, but for the provisions of this sentence, some or all of the Net Cash
Proceeds would constitute "Excess Proceeds" (as such term is defined in the
Senior Note Indenture or the Subordinated Note Indenture), prior to the
date on which the Borrower shall be required to make an offer to purchase
the Senior Notes and/or the Subordinated Notes, the Borrower shall
37
<PAGE>
make a mandatory prepayment of the Obligations in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds.
(b) (i) Except as provided in CLAUSE (ii) below, upon the
consummation of any Financing, including, without limitation any Restricted
Payment made in compliance with SECTION 7.3(F)(v), by the Borrower or any
Subsidiary of the Borrower, within three (3) Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Cash Proceeds
from such Financing, the Borrower shall make a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such Net
Cash Proceeds; PROVIDED, HOWEVER, that such prepayments (other than
prepayments resulting from a Restricted Payment made in compliance with
SECTION 7.3(F)(v) which prepayments shall be made without regard to the
ratio of Total Debt to EBITDA) shall be required only to the extent that
the ratio of (x) Total Debt to (y) EBITDA for the immediately preceding
four fiscal quarters is equal to or greater than 3.50 to 1.00 immediately
after taking into account the receipt of such Net Cash Proceeds and the
making of such prepayments.
(ii) Notwithstanding the foregoing, Net Cash Proceeds subject to
CLAUSE (i) above shall not include (x) Net Cash Proceeds received in
connection with the issuance of any Capital Stock, other than Disqualified
Stock, to any employee and (y) Net Cash Proceeds of Financings consisting
of Permitted Refinancing Indebtedness or which are used, after written
notice by the Borrower to the Administrative Agent thereof, for any
Permitted Acquisition.
(c) Simultaneously with the delivery of the annual audited financial
statements required to be delivered pursuant to SECTION 7.1(A)(ii) for each
Cash Flow Period commencing with the fiscal year ending December 31, 1999,
the Borrower shall calculate Excess Cash Flow for such Cash Flow Period and
shall make a mandatory prepayment of the Obligations, payable not later
than the earlier of ten (10) days after such financial statements and
calculation are delivered or one hundred (100) days after the end of such
Cash Flow Period, in an amount equal to:
(x) at any time the Leverage Ratio (calculated as of the last day of
such Cash Flow Period) shall be greater than or equal to 4.0 to
1.0, 65% of such Excess Cash Flow;
(y) at any time the Leverage Ratio (calculated as of the last day of
such Cash Flow Period) shall be less than 4.0 to 1.0 and greater
than or equal to 3.5 to 1.0, 50% of such Excess Cash Flow; and
(z) at any time the Leverage Ratio (calculated as of the last day of
such Cash Flow Period) shall be less than 3.5 to 1.0, 0% of such
Excess Cash Flow.
(d) Nothing in this SECTION 2.5(B)(i) shall be construed to
constitute the Lenders' consent to any transaction referred to in CLAUSES
(a) and (b) above which is not expressly permitted by the terms of this
Agreement.
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<PAGE>
(e) Each mandatory prepayment required by CLAUSES (a), (b) and (c) of
this SECTION 2.5(B) shall be referred to herein as a "DESIGNATED
PREPAYMENT". Designated Prepayments shall be allocated and applied to the
Obligations as follows:
(I) except as set forth in CLAUSE (f) below, the amount of
each Designated Prepayment shall be applied ratably to the
Tranche A Term Loans and the Tranche B Term Loans, in each case
applied to each of the then remaining installments payable under
such Term Loans, on a ratable basis based upon the respective
amounts of such remaining installments; and
(II) following the payment in full of the Term Loans, the
amount of each Designated Prepayment shall be applied to repay
Revolving Loans (but shall reduce Revolving Loan Commitments only
at the option of the Required Lenders) and following the payment
in full of the Revolving Loans, the amount of each Designated
Prepayment shall be applied first to interest on the
Reimbursement Obligations, then to principal on the Reimbursement
Obligations, then to fees on account of Letters of Credit and
then, to the extent any L/C Obligations are contingent, deposited
with the Administrative Agent as cash collateral in respect of
such L/C Obligations.
(f) The Borrower shall have the right to offer the Tranche B Term
Loan Lenders to decline any Designated Prepayment pursuant to CLAUSES (a)
or (c) above, unless the amount of such Designated Prepayment if made would
repay the Tranche B Term Loans in their entirety (which offer shall be
communicated to the Administrative Agent by irrevocable written notice not
later than 1:00 p.m. (Chicago time) on the Business Day preceding the date
on which such Designated Prepayment shall be made, and the Administrative
Agent shall promptly notify each of the Tranche B Lenders of such offer).
If given such option by the Borrower, any Tranche B Term Loan Lender may
decline any such Designated Prepayment by written notice to the
Administrative Agent not later than 10:00 a.m. (Chicago time) on the date
on which such Designated Prepayment shall be made (and the failure to
provide such notice shall be deemed to be a decision not to decline such
Designated Prepayment), in which case the amount declined will be applied
pro rata to each of the then remaining installments of the Tranche A Term
Loans.
(ii) MANDATORY PREPAYMENTS OF REVOLVING LOANS. In addition to repayments
under SECTION 2.5(B)(i)(e)(II), if at any time and for any reason the Revolving
Credit Obligations are greater than the Aggregate Revolving Loan Commitment, the
Borrower shall immediately make a mandatory prepayment of the Revolving Credit
Obligations in an amount equal to such excess.
(iii) Subject to the preceding provisions of this SECTION 2.5(B), all of
the mandatory prepayments made under this SECTION 2.5(B) shall be applied first
to the applicable Floating Rate Loans and to any Eurodollar Rate Loans maturing
on such date and then to subsequently maturing Eurodollar Rate Loans in order of
maturity.
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<PAGE>
2.6 REDUCTION OF COMMITMENTS. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount (unless the Aggregate Revolving Loan
Commitment is reduced in whole), upon at least one (1) Business Day's written
notice to the Administrative Agent, which notice shall specify the amount of any
such reduction; PROVIDED, HOWEVER, that the amount of the Aggregate Revolving
Loan Commitment may not be reduced below the aggregate outstanding principal
amount of the outstanding Revolving Credit Obligations. All accrued commitment
fees due and payable pursuant to SECTION 2.15(c) shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Revolving Loans hereunder.
2.7 METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan or Term
Loan, in funds immediately available in Chicago to the Administrative Agent at
its address specified pursuant to ARTICLE XIV.
2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Administrative Agent irrevocable notice in
substantially the form of EXHIBIT B hereto (a "BORROWING/CONVERSION/CONTINUATION
NOTICE") not later than 11:00 a.m. (Chicago time) (a) on or before the Borrowing
Date of each Floating Rate Advance and (b) three Business Days before the
Borrowing Date for each Eurodollar Rate Advance, specifying: (i) the Borrowing
Date (which shall be a Business Day) of such Advance; (ii) the aggregate amount
of such Advance; (iii) the Type of Advance selected; and (iv) in the case of
each Eurodollar Rate Advance, the Interest Period applicable thereto. Each
Floating Rate Advance and all Obligations other than Loans shall bear interest
from and including the date of the making of such Advance, in the case of Loans,
and the date such Obligation is due and owing in the case of such other
Obligations, to (but not including) the date of repayment thereof at the
Floating Rate, changing when and as such Floating Rate changes. Changes in the
rate of interest on that portion of any Advance maintained as a Floating Rate
Loan will take effect simultaneously with each change in the Alternate Base
Rate. Each Eurodollar Rate Advance shall bear interest from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined as applicable
to such Eurodollar Rate Advance; PROVIDED, that the Eurodollar Rate applicable
to any Eurodollar Rate Advance shall change when and as the Applicable
Eurodollar Rate Margin changes.
2.9 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance (other than an Advance
to repay Swing Line Loans pursuant to SECTION 2.3(d) or a Reimbursement
Obligation pursuant to SECTION 3.7) shall be in the minimum amount of $5,000,000
(and in multiples of $1,000,000 if in excess thereof), PROVIDED, HOWEVER, that
any Floating Rate Advance may be in the amount of the unused Aggregate Revolving
Loan Commitment.
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<PAGE>
2.10 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(A) RIGHT TO CONVERT. The Borrower may elect from time to time, subject
to the provisions of SECTION 2.4 and this SECTION 2.10, to convert all or any
part of a Loan of any Type into any other Type or Types of Loans; PROVIDED that
any conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Administrative Agent notice in accordance with SECTION 2.10(D) requesting that,
at the end of such Interest Period, such Eurodollar Rate Loans continue as a
Eurodollar Rate Loan.
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT. Notwithstanding
anything to the contrary contained in SECTION 2.10(A) or SECTION 2.10(B), no
Loan may be converted into or continued as a Eurodollar Rate Loan (except with
the consent of the Required Lenders) when any Default or Unmatured Default has
occurred and is continuing.
(D) BORROWING/CONVERSION/CONTINUATION NOTICE. The Borrower shall give the
Administrative Agent irrevocable notice, in substantially the form of a
Borrowing/Conversion/Continuation Notice, of each conversion of a Floating Rate
Loan into a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan not
later than 11:00 a.m. (Chicago time) three Business Days prior to the date of
the requested conversion or continuation, specifying: (1) the requested date
(which shall be a Business Day) of such conversion or continuation; (2) the
amount and Type of the Loan to be converted or continued; and (3) the amount of
Eurodollar Rate Loan(s) into which such Loan is to be converted or continued and
the duration of the Interest Period applicable thereto.
2.11 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Administrative Agent or at the direction of the
Required Lenders, the interest rate(s) applicable to the Obligations and the
fees payable under SECTION 3.9 with respect to Letters of Credit shall be
increased by two percent (2.0%) per annum above the Floating Rate or Eurodollar
Rate, as applicable, or, if such increase results in the violation of applicable
usury law, shall be increased to the maximum interest rate allowed under such
usury law.
2.12 METHOD OF PAYMENT. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Administrative Agent at the Administrative
Agent's address specified pursuant to ARTICLE XIV, or at any other Lending
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by (x) 1:00 p.m. (Chicago time) with
respect to each Swing Line Loan and (y) 12:00 noon (Chicago time) with respect
to all other Loans, in each case, on the date when due and shall be made ratably
among the Swing Line Banks and the Lenders, as applicable (unless such amount is
not to be shared ratably in accordance with the terms hereof). Each payment
delivered to the Administrative
41
<PAGE>
Agent for the account of any Lender shall be delivered promptly by the
Administrative Agent to such Lender in the same type of funds which the
Administrative Agent received at its address specified pursuant to ARTICLE
XIV or at any Lending Installation specified in a notice received by the
Administrative Agent from such Lender. The Borrower authorizes the
Administrative Agent to charge the account of the Borrower maintained with
First Chicago for each payment of principal, interest and fees as it becomes
due hereunder.
2.13 EVIDENCE OF DEBT, TELEPHONIC NOTICES.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts (a "LOAN ACCOUNT") evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(b) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period, if any, applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to SUBSECTIONS
(A) or (B) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(d) Any Lender may request that the Revolving Loans or Term Loans made by
it each be evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note for such Loans
payable to the order of such Lender and in a form approved by the Administrative
Agent and consistent with the terms of this Agreement. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to SECTION 13.3) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein.
(e) The Borrower authorizes the Lenders and the Administrative Agent to
extend, convert or continue Advances, effect selections of Types of Advances and
to transfer funds based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be an Authorized
Officer acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Administrative Agent a written confirmation of each telephonic
notice signed by an Authorized Officer of the Borrower. If the written
confirmation differs in any material respect from the action taken by the
Administrative Agent and the Lenders, the records of the Administrative Agent
and the Lenders shall govern absent manifest error. In case of disagreement
concerning such notices, if the Administrative Agent has recorded telephonic
borrowing notices, such recordings will be made available to the Borrower upon
the Borrower's request therefor.
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<PAGE>
2.14 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay when due all unpaid interest accrued thereon, in accordance with the
terms of this Agreement and the other Loan Documents.
(B) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, on any date on which the Floating Rate Loan is
prepaid, whether due to acceleration or otherwise, and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Rate Loan shall
be payable on the last day of its applicable Interest Period, on any date on
which the Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise,
and at maturity. Interest accrued on each Eurodollar Rate Loan having an
Interest Period longer than three months shall also be payable on the last day
of each three-month interval during such Interest Period. Interest accrued on
the principal balance of all other Obligations shall be payable in arrears
(i) on the last day of each calendar month, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment thereof in full
or in part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) COMMITMENT FEES. (i) The Borrower shall pay to the Administrative
Agent, for the account of the Lenders in accordance with their Revolving Loan
Pro Rata Shares, from and after the Closing Date until the date on which the
Aggregate Revolving Loan Commitment shall be terminated in whole, a commitment
fee accruing at the rate of the Applicable Commitment Fee Percentage, on the
average daily closing amount (as of 2:00 p.m. (Chicago time)) by which (A) the
Aggregate Revolving Loan Commitment in effect from time to time exceeds (B) the
Revolving Credit Obligations (excluding the outstanding principal amount of the
Swing Line Loans) in effect from time to time. All such commitment fees payable
under this CLAUSE (C) shall be payable quarterly in arrears on the last day of
each fiscal quarter of the Borrower occurring after the Closing Date (with the
first such payment being calculated for the period from the Closing Date and
ending on September 30, 1998), and, in addition, on the date on which the
Aggregate Revolving Loan Commitment shall be terminated in whole.
(ii) The Borrower agrees to pay to the Administrative Agent for the sole
account of the Agents and the Arrangers (unless otherwise agreed between the
Administrative Agent, the other Agents and the Arrangers and any Lender) the
fees set forth in the letter agreement between the Agents, the Arrangers and the
Borrower, dated April 22, 1998, payable at the times and in the amounts set
forth therein.
(iii) The Borrower agrees to pay to the Administrative Agent for its sole
account the fees set forth in the letter agreement between the Administrative
Agent and the Borrower, dated April 22, 1998, payable at the times and in the
amounts set forth therein.
(D) INTEREST AND FEE BASIS; APPLICABLE FLOATING RATE MARGINS; APPLICABLE
EURODOLLAR MARGINS AND APPLICABLE COMMITMENT FEE PERCENTAGE.
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<PAGE>
(i) Interest on Floating Rate Loans and the commitment fee payable under
SECTION 2.14(C) shall be calculated for actual days elapsed on the basis of a
365/366-day year. All other interest and fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Obligation is incurred but not for the day of any payment on the amount
paid if payment is received prior to 2:00 p.m. (Chicago time) at the place of
payment. If any payment of principal of or interest on a Loan or any payment of
any other Obligations shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
(ii) The Applicable Floating Rate Margins, Applicable Eurodollar Margins
and Applicable Commitment Fee Percentage shall be determined from time to time
by reference to the table set forth below, on the basis of the then applicable
Leverage Ratio as described in this SECTION 2.14(D)(ii):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
APPLICABLE
COMMITMENT
APPLICABLE FLOATING APPLICABLE EURODOLLAR FEE
RATE MARGINS MARGINS PERCENTAGE
----------------------------------------------------
TRANCHE A TRANCHE B TRANCHE A TRANCHE B
TERM LOANS TERM LOANS TERM LOANS TERM LOANS
AND AND
LEVERAGE REVOLVING REVOLVING
RATIO LOANS LOANS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Greater than
or equal to 0.75% 1.125% 1.75% 2.125% 0.375%
4.75 to 1.0
- --------------------------------------------------------------------------------
Greater than
or equal to 0.50% 1.125% 1.50% 2.125% 0.375%
4.25 to 1.0
and less than
4.75 to 1.0
- --------------------------------------------------------------------------------
Greater than
or equal to 0.25% 1.00% 1.25% 2.00% 0.300%
3.75 to 1.0
and less than
4.25 to 1.0
- --------------------------------------------------------------------------------
Greater than
or equal to 0.00% 1.00% 1.00% 2.00% 0.300%
3.25 to 1.0
and less than
3.75 to 1.0
- --------------------------------------------------------------------------------
44
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------
APPLICABLE
COMMITMENT
APPLICABLE FLOATING APPLICABLE EURODOLLAR FEE
RATE MARGINS MARGINS PERCENTAGE
----------------------------------------------------
TRANCHE A TRANCHE B TRANCHE A TRANCHE B
TERM LOANS TERM LOANS TERM LOANS TERM LOANS
AND AND
LEVERAGE REVOLVING REVOLVING
RATIO LOANS LOANS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Greater than
or equal to 0.00% .875% .875% 1.875% 0.250%
2.75 to 1.0
and less than
3.25 to 1.0
- --------------------------------------------------------------------------------
Less than
2.75 to 1.0 0.00% .875% .750% 1.875% 0.200%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
For purposes of this SECTION 2.14(D)(ii), the Leverage Ratio shall be determined
as of the last day of each fiscal quarter based upon (a) for Total Debt, Total
Debt as of the last day of each such fiscal quarter; and (b) for EBITDA, the
actual amount for the four-quarter period ending on such day, calculated, with
respect to Permitted Acquisitions, on a PRO FORMA basis using historical audited
and reviewed unaudited financial statements obtained from the seller, broken
down by fiscal quarter in the Borrower's reasonable judgment. Except as
provided in CLAUSE (III) below, upon receipt of (x) (i) the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of each fiscal quarter
for each fiscal year and the related consolidated statements of income,
stockholder's equity and cash flows of the Borrower and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, together with consolidating
schedules, in form and substance sufficient to calculate the financial covenants
set forth in SECTIONS 2.5(B), 7.3(A) through (G), 7.3(L), 7.3(T) and 7.4; and
(ii) the consolidating balance sheet of the Borrower and its Subsidiaries as at
the end of such period and the related consolidating statements of income of the
Borrower and its Subsidiaries for such fiscal quarter and for the period from
the beginning of the then current fiscal year to the end of such fiscal quarter,
in each case, prepared in a manner consistent with past practice (collectively,
the "PRELIMINARY FINANCIALS"), and (y) a compliance certificate signed by the
chief financial officer or treasurer of the Borrower substantially in the form
of EXHIBIT H attached hereto and made a part hereof, which demonstrates
compliance with the provisions of SECTION 7.4 (a "PRELIMINARY FINANCIAL
COMPLIANCE CERTIFICATE", and together with the Preliminary Financials, the
"PRELIMINARY FINANCIAL PACKAGE") for each quarter of each fiscal year, the
Applicable Floating Rate Margins, Applicable Eurodollar Margins and Applicable
Commitment Fee Percentage shall be adjusted, such adjustment being effective
five (5) Business Days following the Administrative Agent's receipt of such
Preliminary Financial Package (the "INITIAL ADJUSTMENT DATE"); PROVIDED, that,
if upon receipt of the Borrower's financial statements delivered pursuant to
SECTION 7.1(A)(i) for the first three quarters of each fiscal year and pursuant
to SECTION 7.1(A)(ii) for the fourth quarter of each fiscal year, such financial
statements indicate that the Leverage Ratio as of such fiscal quarter end or
fiscal year end, as applicable, was higher or lower, as applicable, than the
Leverage Ratio set forth in the
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<PAGE>
Preliminary Financial Compliance Certificate for such fiscal quarter or
fiscal year, as applicable, then an appropriate adjustment to the Applicable
Floating Rate Margins, Applicable Eurodollar Margins and Applicable
Commitment Fee Percentage shall be made (x) in the case of an adjustment
upward, retroactively to the Initial Adjustment Date and the Borrower shall
pay adjusted interest and commitment fees to the Administrative Agent for the
account of the applicable Lenders for the period from the effective date of
such initial adjustment based upon such Preliminary Financial Compliance
Certificate to the date of such subsequent adjustment based upon such
financial statements, such payment to be made not later than five (5)
Business Days following delivery of such financial statements, and (y) in the
case of an adjustment downward, retroactively to the Initial Adjustment Date,
and an appropriate reduction to the Applicable Floating Rate Margins,
Applicable Eurodollar Margins and Applicable Commitment Fee Percentage for
the next succeeding fiscal quarter shall be made such that the Borrower shall
pay adjusted interest and commitment fees to the Administrative Agent for the
account of the applicable Lenders for such next succeeding fiscal quarter in
an amount equal to (i) the then due and payable interest and commitment fees
for such next succeeding fiscal quarter MINUS (ii) the excess payment made
during the period from the effective date of such initial adjustment based
upon such Preliminary Financial Compliance Certificate to the date of such
subsequent adjustment based upon such financial statements; PROVIDED,
FURTHER, that if the Borrower shall not have timely delivered its financial
statements in accordance with SECTION 7.1(A)(i) or SECTION 7.1(A)(ii), as
applicable, then commencing on the date upon which such financial statements
should have been delivered and continuing until such financial statements are
actually delivered, it shall be assumed for purposes of determining the
Applicable Floating Rate Margins, Applicable Eurodollar Margins and
Applicable Commitment Fee Percentage that the Leverage Ratio was greater than
4.75 to 1.0.
(iii) Notwithstanding anything herein to the contrary, from the Closing
Date to but not including the later of (i) the fifth Business Day following
receipt of a Preliminary Financial Package in respect of the fiscal quarter
ending December 31, 1998 and (ii) the six month anniversary of the Closing Date,
the Applicable Floating Rate Margin, Applicable Eurodollar Margin and Applicable
Commitment Fee Percentage shall be determined as though the Leverage Ratio is
greater than 4.75 to 1.00. The Applicable Floating Rate Margins, Applicable
Eurodollar Margins and Applicable Commitment Fee Percentage shall be initially
adjusted based upon the Preliminary Financial Package in respect of the fiscal
quarter ending December 31, 1998, such initial adjustment being effective on the
later of (i) five (5) Business Days following the Administrative Agent's receipt
of such Preliminary Financial Package and (ii) the six month anniversary of the
Closing Date; PROVIDED, that, if upon receipt of the Borrower's audited
financial statements delivered pursuant to SECTION 7.1(A)(ii) for the fiscal
year ending December 31, 1998, such audited financial statements indicate that
the Leverage Ratio for the fiscal quarter ending December 31, 1998 was higher
than the Leverage Ratio set forth in the Preliminary Financial Compliance
Certificate for such fiscal quarter, then an appropriate adjustment to the
Applicable Floating Rate Margins, Applicable Eurodollar Margins and Applicable
Commitment Fee Percentage shall be made retroactively to the applicable Initial
Adjustment Date and the Borrower shall pay adjusted interest and commitment fees
to the Administrative Agent for the account of the applicable Lenders for the
period from such Initial Adjustment Date based upon such Preliminary Financial
Compliance Certificate to the date of such subsequent adjustment based upon the
audited financial statements, such payment to be made not later than five (5)
Business Days following the delivery of such audited financial statements.
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<PAGE>
(E) TAXES.
(i) Except as otherwise provided herein, any and all payments by the
Borrower hereunder shall be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings or any liabilities with respect thereto including
those arising after the date hereof as a result of the adoption of or any
change in any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or application
thereof by a Governmental Authority but excluding, in the case of each
Lender and each Agent, such taxes (including, without limitation, income
taxes, franchise taxes and branch profit taxes) as are imposed on or
measured by such Lender's or Agent's, as the case may be, income by the
United States of America or any political subdivision thereof or any
Governmental Authority of the jurisdiction under the laws of which such
Lender or Agent, as the case may be, is organized or maintains a Lending
Installation (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities applicable to this Agreement, the
other Loan Documents, the Revolving Loan Commitments, the Loans or the
Letters of Credit being hereinafter referred to as "TAXES"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the other Loan Documents to any Lender
or Agent that has fully complied with all provisions of SECTION 2.14(e)(vi)
and has delivered a certificate described in SECTION 2.14(E)(vi)(a) or (c),
(i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.14(E)) such Lender or Agent
(as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any other
Loan Documents to any Lender or Agent that has not fully complied with all
provisions of SECTION 2.14(E)(vi) or has complied with such provisions by
delivering a certificate described in SECTION 2.14(E)(vi)(b), (i) the sum
payable shall not be increased as a result of any required deductions, (ii)
the Borrower shall make such deductions, and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. If a withholding tax of the
United States of America or any other Governmental Authority shall be or
become applicable (y) after the date of this Agreement, to such payments by
the Borrower made to the Lending Installation or any other office that a
Lender may claim as its Lending Installation, or (z) after such Lender's
selection and designation of any other Lending Installation, to such
payments made to such other Lending Installation, such Lender shall use
reasonable efforts to make, fund and maintain its Loans through another
Lending Installation of such Lender in another jurisdiction so as to reduce
the Borrower's liability hereunder, if the making, funding or maintenance
of such Loans through such other Lending Installation of such Lender does
not, in the good faith judgment of such Lender, otherwise adversely affect
such Loans, or obligations under the Revolving Loan Commitments or such
Lender.
(ii) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges,
goods and services tax, or
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similar levies which arise from any payment made hereunder, from the
issuance of Letters of Credit hereunder, or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement, the
other Loan Documents, the Revolving Loan Commitments, the Loans or the
Letters of Credit (hereinafter referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any Governmental Authority on amounts payable
under this SECTION 2.14(E)) paid by such Lender or Agent (as the case may
be) and any liability (including penalties, interest, and out-of-pocket
expenses) arising therefrom or with respect thereto. This indemnification
shall be made within thirty (30) days after the date such Lender or Agent
(as the case may be) makes written demand therefor. A certificate as to
any additional amount payable to any Lender or Agent under this
SECTION 2.14(E) submitted to the Borrower and the Administrative Agent (if
a Lender is so submitting) by such Lender or Agent shall show in reasonable
detail the amount payable and the calculations used to determine such
amount and shall, absent manifest error, be final, conclusive and binding
upon all parties hereto. With respect to such deduction or withholding for
or on account of any Taxes and to confirm that all such Taxes have been
paid to the appropriate Governmental Authorities, the Borrower shall
promptly (and in any event not later than thirty (30) days after receipt)
furnish to each Lender and Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender or Agent) to
establish any tax credit to which such Lender or Agent may be entitled.
(iv) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes by the Borrower, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 2.14(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit
and the termination of this Agreement and shall continue to survive until
the expiration of the applicable statute of limitations for collection of
the relevant Tax or Other Tax.
(vi) Each Lender and Agent that is not created or organized under the
laws of the United States of America or a political subdivision thereof
shall deliver to the Borrower and the Administrative Agent on or before the
Closing Date, or, in the case of any Person that becomes a Lender or an
Agent after the date hereof, on or before the date on which such Person
becomes a Lender or an Agent, as applicable, after the date hereof, a true
and accurate certificate executed in duplicate by a duly authorized officer
of such Lender or Agent, in a form satisfactory to the Borrower and the
Administrative Agent, to the effect that such Lender or Agent is eligible
under the provisions of an applicable tax treaty concluded by the United
States of America or other exemption (in which case the certificate shall
be accompanied by two executed copies of Form 1001 of the IRS or successor
applicable form) or under Section 1442 of the Code (in which case the
certificate shall be accompanied by two copies of Form 4224 of the IRS or
successor applicable form) or, if such Lender is not a "bank" within the
meaning of
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Section 881(c)(3)(A) of the Code, two completed signed copies of
IRS Form W-8 or W-9 or successor applicable form, to receive payments of
interest hereunder without deduction or withholding of United States
federal income tax. Each such Lender and Agent further agrees to deliver
to the Borrower and the Administrative Agent from time to time a true and
accurate certificate executed in duplicate by a duly authorized officer of
such Lender or Agent substantially in a form satisfactory to the Borrower
and the Administrative Agent, before or promptly upon the occurrence of any
event requiring a change in the most recent certificate previously
delivered by it to the Borrower and the Administrative Agent pursuant to
this SECTION 2.14(E)(vi). Further, each Lender or Agent which delivers a
certificate accompanied by Form 1001 of the IRS covenants and agrees to
deliver to the Borrower and the Administrative Agent within fifteen (15)
days prior to January 1, 1999, and every third (3rd) anniversary of such
date thereafter on which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of
Form 1001 (or any successor form or forms required under the Code or the
applicable regulations promulgated thereunder to establish an exemption
from or reduction in the rate of withholding), and each Lender or Agent
that delivers a Form W-8 or W-9 as prescribed above or a certificate
accompanied by Form 4224 of the IRS covenants and agrees to deliver to the
Borrower and the Administrative Agent within fifteen (15) days prior to the
beginning of each subsequent taxable year of such Lender or Agent during
which this Agreement is still in effect, another such Form W-8 or W-9 or
another such certificate and two accurate and complete original signed
copies of IRS Form 4224 (or any successor form or forms required under the
Code or the applicable regulations promulgated thereunder to establish an
exemption from withholding). Each such certificate shall certify as to one
of the following:
(a) that such Lender or Agent is eligible to receive
payments of interest hereunder without deduction or withholding
of United States of America federal income tax;
(b) that such Lender or Agent is not eligible to receive
payments of interest hereunder without deduction or withholding
of United States of America federal income tax as specified
therein but is capable of recovering the full amount of any such
deduction or withholding from a source other than the Borrower
and will not seek any such recovery from the Borrower; or
(c) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Lender became a party hereto, such Lender is not eligible to
receive payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Borrower.
Each Lender and Agent shall promptly furnish to the Borrower and the
Administrative Agent such additional documents as may be reasonably
required by the Borrower or the
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Administrative Agent to establish any exemption from or reduction of any
Taxes or Other Taxes required to be deducted or withheld and which may
be obtained without undue expense to such Lender.
(F) CONTROL ACCOUNT. The Register maintained by the Administrative Agent
pursuant to SECTION 13.3(C) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Advance made hereunder, the type of Loan
comprising such Advance and any Interest Period applicable thereto, (ii) the
effective date and amount of each Assignment Agreement delivered to and accepted
by it and the parties thereto pursuant to SECTION 13.3, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder, (iv) the amount of any sum received by the
Administrative Agent from the Borrower hereunder and each Lender's share
thereof, and (v) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges, expenses and
interest.
(G) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.15 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
REVOLVING LOAN COMMITMENT REDUCTIONS. Promptly after receipt thereof, the
Administrative Agent will notify each Lender of the contents of each Aggregate
Revolving Loan Commitment reduction notice, Borrowing/Conversion/Continuation
Notice, and repayment notice received by it hereunder. The Administrative Agent
will notify each Lender of the interest rate applicable to each Eurodollar Rate
Loan promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate.
2.16 LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation. Each Lender may, by written or facsimile notice to the
Administrative Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.17 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by
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the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (i) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day or (ii) in the case of payment by
the Borrower, the interest rate applicable to the relevant Loan.
2.18 TERMINATION DATE. This Agreement shall be effective until the later
of (i) the Termination Date, (ii) the Tranche A Term Loan Termination Date and
(iii) the Tranche B Term Loan Termination Date. Notwithstanding the termination
of this Agreement, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders shall have been
terminated (other than under Hedging Agreements or other agreements with respect
to Hedging Obligations) and all of the Letters of Credit shall have expired,
been canceled or terminated, all of the rights and remedies under this Agreement
and the other Loan Documents shall survive.
2.19 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Revolving Loan Pro Rata Share,
Tranche A Pro Rata Share or Tranche B Pro Rata Share, as applicable, of any
Advance requested by the Borrower, or to fund a Revolving Loan in order to repay
Swing Line Loans pursuant to SECTION 2.3(d), which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under SECTIONS 2.14(E), 4.1 or 4.2
to recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to SECTION 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked SECTION 10.2, then, in any such case, the
Borrower or the Administrative Agent may make written demand on such Affected
Lender (with a copy to the Administrative Agent in the case of a demand by the
Borrower and a copy to the Borrower in the case of a demand by the
Administrative Agent) for the Affected Lender to assign, and such Affected
Lender shall use commercially reasonable efforts to assign pursuant to one or
more duly executed Assignment Agreements five (5) Business Days after the date
of such demand, to one or more financial institutions that comply with the
provisions of SECTION 13.3(A) which the Borrower or the Administrative Agent, as
the case may be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all
of such Affected Lender's rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, its Revolving Loan
Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with SECTION 13.3. The
Administrative Agent agrees, upon the occurrence of such events with respect to
an Affected Lender and upon the written request of the Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. The Administrative Agent is
authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the same
within five (5) Business Days after the date of such demand. Further, with
respect to such assignment the Affected Lender shall have concurrently received,
in cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
SECTIONS 2.14(E), 4.1, and 4.2 with respect to such Affected Lender and
compensation payable under SECTION 2.14(C) in the event of any replacement of
any Affected Lender under CLAUSE (ii) or CLAUSE (III) of this SECTION 2.19;
PROVIDED that upon such Affected Lender's
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replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of SECTIONS 2.14(E), 4.1, 4.2, 4.4,
and 10.7 accrued with respect to the period prior to the date such Affected
Lender is replaced, as well as to any fees accrued through the date of such
assignment for its account hereunder and not yet paid, and shall continue to
be obligated under SECTION 11.8. Upon the replacement of any Affected Lender
pursuant to this SECTION 2.19, the provisions of SECTION 9.2 shall continue
to apply with respect to Borrowings which are then outstanding with respect
to which the Affected Lender failed to fund its Revolving Loan Pro Rata
Share, Tranche A Pro Rata Share or Tranche B Pro Rata Share, as applicable,
and which failure has not been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue upon
Borrower's request, for the account of the Borrower or any Guarantor through
such Issuing Bank's branches as it and the Borrower may jointly agree, one or
more Letters of Credit in accordance with this ARTICLE III, from time to time
during the period, commencing on the date hereof and ending on the Business Day
prior to the Termination Date; PROVIDED, HOWEVER, that no Issuing Bank shall
have any obligation to issue any Letter of Credit if, after taking into account
such issuance, the aggregate L/C Obligations outstanding under Letters of Credit
issued by such Issuing Bank would exceed the amount set forth on SCHEDULE 3.1
opposite such Issuing Bank's name. SCHEDULE 3.1 may be updated at any time and
from time to time by the Administrative Agent in connection with the addition of
any Issuing Bank.
3.2 TRANSITIONAL PROVISION. SCHEDULE 3.2 contains a schedule of certain
letters of credit issued for the account of the Borrower and certain Guarantors
prior to the Closing Date. Subject to the satisfaction of the conditions
contained in SECTIONS 5.1 and 5.2, from and after the Closing Date such letters
of credit shall be deemed to be Letters of Credit issued pursuant to this
ARTICLE III.
3.3 TYPES AND AMOUNTS. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Aggregate Revolving Loan Commitment at such time, or (b)
the aggregate outstanding amount of the L/C Obligations would exceed
$100,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of (A) one (1) year after the
date of issuance thereof (other than pursuant to evergreen renewal
provisions with respect to letters of credit issued in support of the
industrial revenue bonds identified on SCHEDULE 3.3 hereto and
Permitted Refinancing Indebtedness in respect thereof) and (B) the
Revolving Loan Termination Date.
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3.4 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered or caused the applicable
Guarantor applicant to deliver to the applicable Issuing Bank at such
times and in such manner as such Issuing Bank may reasonably
prescribe, a request for issuance of such Letter of Credit in
substantially the form of EXHIBIT C hereto, duly executed applications
for such Letter of Credit, and such other customary documents,
instructions and agreements as may be required pursuant to the terms
thereof (all such applications, documents, instructions, and
agreements being referred to herein as the "L/C Documents"), and the
proposed Letter of Credit shall be reasonably satisfactory to such
Issuing Bank as to form and content; and
(ii) as of the date of issuance of such Letter of Credit, no
order, judgment or decree of any court, arbitrator or Governmental
Authority shall purport by its terms to enjoin or restrain the
applicable Issuing Bank from issuing such Letter of Credit and no law,
rule or regulation applicable to such Issuing Bank and no request or
directive (whether or not having the force of law) from a Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit or
request that such Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of that Letter of Credit.
To the extent that any provision of any L/C Document cannot reasonably be
construed to be consistent with this Agreement, requires greater collateral
security or imposes additional obligations not reasonably related to customary
letter of credit arrangements, such provision shall be invalid and this
Agreement shall control.
3.5 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) Subject to the
terms and conditions of this ARTICLE III and provided that the applicable
conditions set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower or Guarantor, as applicable, in accordance with such
Issuing Bank's usual and customary business practices and, in this connection,
such Issuing Bank may assume that the applicable conditions set forth in
SECTION 5.2 hereof have been satisfied unless it shall have received notice to
the contrary from the Administrative Agent or a Lender or has knowledge that the
applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Administrative Agent
written or telex notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of a Letter of Credit, PROVIDED, HOWEVER, that the
failure to provide such notice shall not result in any liability on the part of
such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this SECTION 3.5 are met as though a new Letter of Credit was
being requested and issued.
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3.6 LETTER OF CREDIT PARTICIPATION. Immediately upon the issuance of
each Letter of Credit hereunder, each Lender with a Revolving Loan Pro Rata
Share shall be deemed to have automatically, irrevocably and unconditionally
purchased and received from the applicable Issuing Bank an undivided interest
and participation in and to such Letter of Credit, the obligations of the
Borrower and/or Guarantor, as applicable, in respect thereof, and the
liability of such Issuing Bank thereunder (collectively, an "L/C INTEREST")
in an amount equal to the amount available for drawing under such Letter of
Credit multiplied by such Lender's Revolving Loan Pro Rata Share. Each
Issuing Bank will notify each Lender promptly upon presentation to it of an
L/C Draft or upon any other draw under a Letter of Credit. On or before the
Business Day on which an Issuing Bank makes payment of each such L/C Draft
or, in the case of any other draw on a Letter of Credit, on demand by the
Administrative Agent or the applicable Issuing Bank, each Lender shall make
payment to the Administrative Agent, for the account of the applicable
Issuing Bank, in immediately available funds in an amount equal to such
Lender's Revolving Loan Pro Rata Share of the amount of such payment or draw.
The obligation of each Lender to reimburse the Issuing Banks under this
SECTION 3.6 shall be unconditional, continuing, irrevocable and absolute. In
the event that any Lender fails to make payment to the Administrative Agent
of any amount due under this SECTION 3.6, the Administrative Agent shall be
entitled to receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until the
Administrative Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; PROVIDED, HOWEVER, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the applicable Issuing Bank for such amount in accordance with this
SECTION 3.6.
3.7 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay promptly upon demand therefor to the
Administrative Agent, for the account of the Lenders, the amount of each advance
which may be drawn under or pursuant to a Letter of Credit (whether such Letter
of Credit was issued for the account of the Borrower or any Guarantor) or an L/C
Draft related thereto (such obligation of the Borrower to reimburse the
Administrative Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to
such Letter of Credit or L/C Draft). If the Borrower at any time fails to repay
when due a Reimbursement Obligation pursuant to this SECTION 3.7, the Borrower
shall be deemed to have elected to borrow Revolving Loans from the Lenders, as
of the date of the advance giving rise to the Reimbursement Obligation, equal in
amount to the amount of the unpaid Reimbursement Obligation. Such Revolving
Loans shall be made as of the date of the payment giving rise to such
Reimbursement Obligation, automatically, without notice and without any
requirement to satisfy the conditions precedent otherwise applicable to an
Advance of Revolving Loans. Such Revolving Loans shall constitute a Floating
Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.8 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of a Default, the Borrower shall, upon the Administrative Agent's
demand, deliver to the Administrative Agent for the benefit of the
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Lenders and the Issuing Banks, cash, or other collateral of a type reasonably
satisfactory to the Required Lenders, having a value, as determined by such
Lenders, equal to the aggregate outstanding L/C Obligations. Any such
collateral shall be held by the Administrative Agent in a separate interest
bearing account appropriately designated as a cash collateral account in
relation to this Agreement and the Letters of Credit and retained by the
Administrative Agent for the benefit of the Lenders and the Issuing Banks as
collateral security for the Borrower's obligations in respect of this
Agreement and each of the Letters of Credit and L/C Drafts. Such amounts
shall be applied to reimburse the Issuing Banks for drawings or payments
under or pursuant to Letters of Credit or L/C Drafts, or if no such
reimbursement is required, to payment of such of the other Obligations as the
Administrative Agent shall determine. If no Default shall be continuing all
amounts (including interest income), or, to the extent that L/C Obligations
have been paid in full in cash or have otherwise been reduced to $0 amounts
(including interest income) equal to the reduction in such L/C Obligations,
in each case, remaining in any cash collateral account established pursuant
to this SECTION 3.8 which are not to be applied to reimburse an Issuing Bank
for amounts actually paid or to be paid by such Issuing Bank in respect of a
Letter of Credit or L/C Draft, shall be returned to the Borrower (after
deduction of the Administrative Agent's expenses incurred in connection with
such cash collateral account).
3.9 LETTER OF CREDIT FEES. The Borrower agrees to pay (i) on each Payment
Date and on the Termination Date, in arrears, to the Administrative Agent for
the ratable benefit of the Lenders, except as set forth in SECTION 9.2, a letter
of credit fee at a rate per annum equal to the Applicable L/C Fee Percentage on
the average daily outstanding face amount available for drawing under all
Letters of Credit, (ii) on each Payment Date and on the Termination Date, in
arrears, to the Administrative Agent for the sole account of each Issuing Bank,
a letter of credit fronting fee at such percentage rate as may be agreed between
the Borrower or Guarantor, as applicable, and each Issuing Bank on the average
daily outstanding face amount available for drawing under all Letters of Credit
issued by such Issuing Bank, and (iii) to the Administrative Agent for the
benefit of each Issuing Bank, all customary fees and other issuance, amendment,
document examination, negotiation and presentment expenses and related charges
in connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by such Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.
3.10 ISSUING BANK REPORTING REQUIREMENTS. Each Issuing Bank shall, no
later than the tenth Business Day following the last day of each month, provide
to the Administrative Agent, upon the Administrative Agent's request, schedules,
in form and substance reasonably satisfactory to the Administrative Agent,
showing the date of issue, account party, amount, expiration date and the
reference number of each Letter of Credit issued by it outstanding at any time
during such month and the aggregate amount payable by the Borrower and/or any
Guarantor during such month. In addition, upon the request of the
Administrative Agent, each Issuing Bank shall furnish to the Administrative
Agent copies of any Letter of Credit and any application for or reimbursement
agreement with respect to a Letter of Credit to which the Issuing Bank is party
and such other documentation as may reasonably be requested by the
Administrative Agent. Upon the request of any Lender, the Administrative Agent
will provide to such Lender information concerning such Letters of Credit.
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3.11 INDEMNIFICATION; EXONERATION. (a) In addition to amounts payable as
elsewhere provided in this ARTICLE III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Administrative Agent, each Issuing Bank and
each Lender from and against any and all liabilities and costs which the
Administrative Agent, such Issuing Bank or such Lender may incur or be subject
to as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit other than, in the case of the applicable Issuing Bank, as a result of
its Gross Negligence or willful misconduct, or (ii) the failure of the
applicable Issuing Bank to honor a drawing under a Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
DE JURE or DE FACTO Governmental Authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Administrative Agent and the
Issuing Banks, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter of Credit by, the beneficiary of any Letters of Credit.
In furtherance and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit applications and Letter of Credit reimbursement
agreements executed by the Borrower or any Guarantor at the time of request for
any Letter of Credit, neither the Administrative Agent, any Issuing Bank nor any
Lender shall be responsible (in the absence of Gross Negligence or willful
misconduct in connection therewith): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of technical
trade terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Administrative Agent, the Issuing Banks and the Lenders, including, without
limitation, any Governmental Acts. None of the above shall affect, impair, or
prevent the vesting of any Issuing Bank's rights or powers under this
SECTION 3.11.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Administrative Agent or any
Lender under any resulting liability to the Borrower or any Guarantor or relieve
the Borrower of any of its obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.11 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
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ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding federal taxation of the overall net income of any Lender or
applicable Lending Installation), or changes the basis of taxation of
payments to any Lender in respect of its Loans, its L/C Interests, the
Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurodollar Rate Loans) with respect to its Loans, L/C
Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining the Loans, the L/C Interests or the Letters of
Credit or reduces any amount received by any Lender or any applicable
Lending Installation in connection with Loans or Letters of Credit, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit,
by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to SECTION
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Revolving Loan Commitment.
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change in Capital Adequacy" (as defined below),
and (ii) such increase in capital will result in an increase in the cost to such
Lender of maintaining its Loans, L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder, then, within 15 days after receipt by the
Borrower of written demand by such Lender pursuant to
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SECTION 4.5, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans, its L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "CHANGE IN CAPITAL ADEQUACY" means (i) any
change after the date of this Agreement in the "Risk-Based Capital
Guidelines" (as defined below) excluding, for the avoidance of doubt, the
effect of any phasing in of such Risk-Based Capital Guidelines or any other
capital requirements passed prior to the date hereof, or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement and having general
applicability to all banks and financial institutions within the jurisdiction
in which such Lender operates which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means
(i) the risk-based capital guidelines in effect in the United States on the
date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted
prior to the date of this Agreement.
4.3 AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Administrative Agent shall suspend the availability of the
affected Type of Advance and, in the case of any occurrence set forth in clause
(i) require any Advances of the affected Type to be repaid.
4.4 FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower in any
Borrowing/Conversion/Continuation Notice for any reason other than default by
the Lenders, the Borrower agrees to indemnify each Lender upon such Lender's
delivery of written demand therefor to the Borrower in accordance with the terms
of SECTION 4.5 for any reasonable loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Rate Advance. In
connection with any assignment by any Lender of any portion of the Loans made
pursuant to SECTION 13.3 and made during the Syndication Period, the Borrower
shall be deemed to have repaid all outstanding Eurodollar Rate Advances as of
such date and reborrowed such amounts as Floating Rate Advances and the
indemnification provisions under this SECTION 4.4 shall apply.
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under SECTION 4.3, so long as such designation is not disadvantageous to such
Lender.
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Each Lender requiring compensation pursuant to SECTION 2.14(E) or to
this ARTICLE IV shall use its best efforts to notify the Borrower and the
Administrative Agent in writing of any Change in Capital Adequacy, law, policy,
rule, guideline or directive giving rise to such demand for compensation not
later than ninety (90) days following the date upon which the responsible
account officer of such Lender knows or should have known of such Change in
Capital Adequacy, law, policy, rule, guideline or directive. Any demand for
compensation pursuant to this ARTICLE IV shall be in writing and shall state the
amount due, if any, under SECTION 4.1, 4.2 or 4.4 and shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under SECTION 4.4 in connection
with a Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. The
obligations of the Borrower under SECTIONS 4.1, 4.2 and 4.4 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit or purchase
any participations therein, in each case, on the Closing Date, unless (i) such
initial Loans are made not later than December 31, 1998; (ii) the Subordinated
Notes and Senior Notes have been issued and the Borrower has received the net
proceeds thereof; (iii) the Reynolds Acquisition has been consummated; and (iv)
the Borrower has furnished to the Administrative Agent each of the following,
with sufficient copies for the Lenders, all in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders:
(1) Copies of the Articles of Incorporation (or equivalent
organizational document) of the Borrower, and each of the Guarantors, each
of the Material Foreign Subsidiaries which is a party to any of the Loan
Documents or the Capital Stock of which is subject to a Pledge Agreement,
together with all amendments and a certificate of good standing (in the
case of the Material Foreign Subsidiaries, to the extent applicable), both
certified by the appropriate governmental officer in its respective
jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of each
of the Borrower, each Guarantor, and each of the Material Foreign
Subsidiaries which is a party to any of the Loan Documents or the Capital
Stock of which is subject to a Pledge Agreement of its respective By-Laws
(or equivalent organizational document) and, for each such Person which is
a party to any of the Loan Documents, of its respective Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed necessary
by counsel for any Lender) authorizing its execution of such Loan
Documents;
(3) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each member of the Ball Corporate Group which is a party to
any of the Loan Documents, which shall identify by name and title and bear
the signature of the officers of such Person authorized to sign the Loan
Documents to which it is a party and, in the case of the Borrower,
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to make borrowings hereunder, upon which certificate the Lenders shall be
entitled to rely until informed of any change in writing by the Borrower;
(4) A certificate, in form and substance reasonably satisfactory to
the Administrative Agent, signed by the chief financial officer or
treasurer of the Borrower, stating that on the Closing Date all the
representations in this Agreement are true and correct and no Default or
Unmatured Default has occurred and is continuing;
(5) A written opinion of the Borrower's domestic and foreign counsel,
addressed to the Agents, the Arrangers and the Lenders, substantially in
the form of EXHIBIT E hereto;
(6) Evidence reasonably satisfactory to the Administrative Agent that
(i) all conditions precedent to the consummation of the Reynolds
Acquisition (other than the failure to obtain the consents of Paco, Inc.
and Independent Beverage Corporation to the consummation of the Reynolds
Acquisition) have been satisfied or waived with the approval of the Agents
(such approval not to be unreasonably withheld), (ii) the Reynolds
Acquisition shall have been consummated in accordance with the Asset
Purchase Agreement, as in effect on April 22, 1998, without giving effect
to any amendment, modification or waiver thereto which (x) is deemed
material by the Agents and (y) to which the Agents shall not have consented
in writing, (iii) the Asset Purchase Agreement has been approved by all
necessary corporate action of Reynold's and the Borrower's respective Board
of Directors and/or shareholders, and (iv) there has not occurred any
material breach or default under the Asset Purchase Agreement;
(7) Evidence reasonably satisfactory to the Administrative Agent that
there exists no injunction or temporary restraining order which, in the
reasonable judgment of the Administrative Agent, would prohibit the making
of the Loans or the consummation of the Reynolds Acquisition and the other
transactions contemplated by the Transaction Documents or any litigation
seeking such an injunction or restraining order;
(8) Written money transfer instructions reasonably requested by the
Administrative Agent, addressed to the Administrative Agent and signed by
an Authorized Officer of the Borrower;
(9) (x) the audited financial statements of the Reynolds Group for
the fiscal years ending December 31, 1996 and December 31, 1997 and (y) the
PRO FORMA opening consolidated financial statements of the Borrower and its
Subsidiaries, after giving effect to the Reynolds Acquisition, which
financial statements shall demonstrate, in the reasonable judgement of the
Agents and the Required Lenders, together with all other information then
available to the Agents and the Required Lenders, the ability of the
Borrower and its Subsidiaries to repay their debts and satisfy their
respective other obligations as and when due, and to comply with the
financial covenants set forth in SECTION 7.4 hereof, has not changed in any
material respect from the PRO FORMA financial statements furnished to the
Agents on March 5, 1998;
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(10) Evidence reasonably satisfactory to the Administrative Agent
that (x) all required U.S. governmental approvals related to the Reynolds
Acquisition have been obtained and all related filings made and any
applicable waiting periods shall have expired or been terminated, including
those prescribed by the Hart-Scott-Rodino Antitrust Improvements Act, as
amended, and (y) prior to the consummation of that portion of the Reynolds
Acquisition relating to the foreign assets of the Reynolds Group, all
material consents (other than governmental approvals) shall have been
obtained;
(11) Evidence satisfactory to the Administrative Agent of the payment
of all principal, interest, fees and premiums, if any, on all loans
outstanding under all outstanding funded debt and credit facilities of the
Borrower and each of its Domestic Incorporated Subsidiaries (other than
Permitted Existing Indebtedness) and the termination of the applicable
agreements, including, without limitation, BMBCC's Long-Term Credit
Agreement and Short-Term Credit Agreement, each dated as of February 5,
1996, and the Borrower's and its Subsidiaries' Indebtedness identified on
SCHEDULE 5.1 attached hereto;
(12) Evidence reasonably satisfactory to the Agents that the Borrower
and each of its Subsidiaries, and the Reynolds Group (a) has made a full
and complete assessment of the Year 2000 Issues; (b) has a realistic and
achievable program for remediating the Year 2000 Issues, including a
timetable and budget of anticipated costs; and (c) has a source of funds as
required in such budget;
(13) Such other documents as the Administrative Agent or any Lender
or its counsel may have reasonably requested, including, without
limitation, all of the documents reflected on the List of Closing Documents
attached as EXHIBIT F to this Agreement; and
(14) Evidence satisfactory to the Administrative Agent that the
Borrower has paid or caused to be paid (x) to the Agents and the Arrangers
the fees agreed to and then due and payable in the fee letter dated April
22, 1998, among the Agents, the Arrangers and the Borrower and (y) to the
Administrative Agent the fees agreed to and then due and payable in the
letter agreement dated April 22, 1998 among the Administrative Agent and
the Borrower.
5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be required
to make any Advance or issue any Letter of Credit, unless on the applicable
Borrowing Date, or in the case of a Letter of Credit, the date on which the
Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in ARTICLE VI are
true and correct in all material respects as of such Borrowing Date except
for changes in the Schedules to this Agreement reflecting events,
conditions or transactions permitted by or not in violation of this
Agreement and except to the extent any such representation or warranty
speaks expressly only as of a different date.
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Each Borrowing/Conversion/Continuation Notice with respect to each such
Advance and the letter of credit application with respect to each Letter of
Credit shall constitute a representation and warranty by the Borrower that the
conditions contained in SECTIONS 5.2(i) and (ii) have been satisfied. Any
Lender may require a duly completed officer's certificate in substantially the
form of EXHIBIT G hereto and/or a duly completed compliance certificate in
substantially the form of EXHIBIT H hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and Agent as of the Closing Date, giving
effect to the Reynolds Acquisition and the consummation of the other
transactions contemplated by the Transaction Documents on the Closing Date, and
thereafter on each date as required by SECTION 5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing will have a Material Adverse Effect, and (iii) has all requisite
corporate power and authority to own, operate and (to the extent contemplated
hereby) encumber its property and to conduct its business as presently conducted
and as proposed to be conducted.
6.2 AUTHORITY.
(A) The Borrower and each of its Subsidiaries has the requisite corporate
power and authority (i) to execute, deliver and perform each of the Transaction
Documents which are to be executed by it in connection with the Reynolds
Acquisition or which have been executed by it as required by this Agreement and
the other Loan Documents on or prior to Closing Date and (ii) to file the
Transaction Documents which must be filed by it in connection with the Reynolds
Acquisition or which have been filed by it as required by this Agreement, the
other Loan Documents or otherwise on or prior to the Closing Date with any
Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may be,
of each of the Transaction Documents which must be executed or filed by the
Borrower or any of its Subsidiaries in connection with the Reynolds Acquisition
or which have been executed or filed as required by this Agreement, the other
Loan Documents or otherwise on or prior to the Closing Date and to which the
Borrower or any of its Subsidiaries is party, and the consummation of the
transactions contemplated thereby, have been duly approved by the respective
boards of directors and, if necessary, the shareholders of the Borrower and its
Subsidiaries, and such approvals have not been rescinded. No other corporate
action or proceedings on the part of the Borrower or its Subsidiaries are
necessary to consummate such transactions.
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(C) Each of the Transaction Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally and general principles of equity,
regardless of whether such enforcement is sought at equity or at law), is in
full force and effect and no material term or condition thereof has been
amended, modified or waived from the terms and conditions contained in the
Transaction Documents delivered to the Administrative Agent pursuant to SECTION
5.1 without the prior written consent of the Required Lenders.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not
(i) conflict with the certificate or articles of incorporation or by-laws of
the Borrower or any such Subsidiary, (ii) conflict with, result in a breach
of or constitute (with or without notice or lapse of time or both) a default
under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or material Contractual Obligation of
the Borrower or any such Subsidiary, or require termination of any material
Contractual Obligation, (iii) with respect to the Loan Documents, conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law (including, without
limitation, any Environmental Property Transfer Act) or material Contractual
Obligation of the Borrower or any such Subsidiary, or require termination of
any material Contractual Obligation, except such breach, default or
termination which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, or (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or
assets of the Borrower or any such Subsidiary, other than Liens permitted by
the Loan Documents. Except as set forth on SCHEDULE 6.3 to this Agreement,
the execution, delivery and performance of each of the Transaction Documents
to which the Borrower or any of its Subsidiaries is a party do not and will
not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except (a) filings, consents or notices
which have been made, obtained or given, or which, if not made, obtained or
given, individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect, and (b) filings necessary to create or
perfect security interests in the Collateral.
6.4 FINANCIAL STATEMENTS.
(A) The PRO FORMA financial statements of the Borrower and its
Subsidiaries, copies of which are attached hereto as SCHEDULE 6.4 to this
Agreement, present on a PRO FORMA basis the financial condition of the Borrower
and such Subsidiaries as of such date, and reflect on a PRO FORMA basis those
liabilities reflected in the notes thereto as of such date and resulting from
consummation of the Reynolds Acquisition and the other transactions contemplated
by this Agreement, and the payment or accrual of all Transaction Costs payable
on the Closing Date with respect to any of the foregoing and demonstrate that,
after giving effect to the Reynolds Acquisition, the ability of the Borrower and
its Subsidiaries to repay their debts and satisfy their respective other
obligations as and when due, and to comply with the requirements of this
Agreement has not changed in any material respect from the PRO FORMA financial
statements furnished to the Agents on March 5, 1998. The projections and
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assumptions expressed in the PRO FORMA financials referenced in this
SECTION 6.4(A) were prepared in good faith and represent management's opinion
based on the information available to the Borrower at the time so furnished.
(B) Complete and accurate copies of the following financial statements and
the following related information have been delivered to the Administrative
Agent: (1) the consolidated balance sheets of the Borrower and its Subsidiaries
as at December 31, 1996 and December 31, 1997, and the related consolidated
statements of income, changes in stockholders' equity and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and the audit
report related thereto, and the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as at March 31, 1998 and the related unaudited,
consolidated statements of operations, changes in stockholder's equity and cash
flows of the Borrower and its Subsidiaries for the three (3) months then ended;
and (2) the consolidated balance sheet of the aluminum beverage-can
manufacturing business of Reynolds purchased under the Asset Purchase Agreement
(the "REYNOLDS GROUP") as at December 31, 1996 and December 31, 1997, and the
related consolidated statements of operations, changes in stockholder's equity
and cash flows of the Reynolds Group for the fiscal years then ended, and the
audit report related thereto. Each of the financial statements delivered
pursuant to this SECTION 6.4(B) present fairly the financial condition of the
Borrower and its Subsidiaries and the Reynolds Group, as applicable.
6.5 NO MATERIAL ADVERSE CHANGE. (a) Since December 31, 1997 up to the
Closing Date, there has been no material adverse change in the operations,
business, properties, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its consolidated Subsidiaries taken as a whole,
and since December 31, 1997 up to the Closing Date no condition, event, change
or occurrence, or any series of the foregoing, exists or has occurred which,
individually or in the aggregate, has had or is reasonably likely to have, a
"Material Adverse Effect" as defined in the draft Asset Purchase Agreement
delivered to the Agents on April 14, 1998 (identified as document 116230.14
Draft of April 6, 1998 - 10:52 AM) and which definition is as follows:
"MATERIAL ADVERSE EFFECT" means an individual or cumulative adverse
change in, or effect on, the business, customers, operations,
properties, condition (financial or otherwise), assets or liabilities
of the Business taken as a whole that is reasonably expected to be
materially adverse to the business, customers, operations, properties,
condition (financial or otherwise), assets or liabilities of the
Business taken as a whole.
(b) Since the Closing Date, there has occurred no change in the operations,
business, properties, condition (financial or otherwise), results of operations
or prospects of the Borrower, or the Borrower and its Subsidiaries taken as a
whole, which has had or would reasonably be expected to have a Material Adverse
Effect (as defined in SECTION 1.1 hereof).
6.6 TAXES.
(A) TAX EXAMINATIONS. All deficiencies which have been asserted in
writing against the Borrower or any of its Subsidiaries as a result of any
federal, provincial, state, local or foreign tax examination for each taxable
year in respect of which an examination has been conducted have been
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fully paid or finally settled or are being contested in good faith, and as of
the Closing Date no issue has been raised in writing by any taxing authority
in any such examination which, by application of similar principles,
reasonably can be expected to result in assertion by such taxing authority of
a material deficiency for any other year not so examined which has not been
reserved for in the Borrower's consolidated financial statements to the
extent, if any, required by Agreement Accounting Principles. Except as
permitted pursuant to SECTION 7.2(D), neither the Borrower nor any of its
Subsidiaries anticipates any material tax liability with respect to the years
which have not been closed pursuant to applicable law.
(B) PAYMENT OF TAXES. All material tax returns and reports of the
Borrower and its Subsidiaries required to be filed have been timely filed, and
all taxes, assessments, fees and other governmental charges thereupon and upon
their respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. There is no action,
suit, proceeding, arbitration or (to the Borrower's knowledge) investigation
before or by any Governmental Authority or private arbitrator pending or, to the
Borrower's knowledge, threatened against the Borrower or any of its Subsidiaries
or any property of any of them (i) challenging the validity or the
enforceability of any material provision of the Transaction Documents or
(ii) which will have or would reasonably be expected to have a Material Adverse
Effect. There is no material loss contingency within the meaning of Agreement
Accounting Principles which has not been reflected in the consolidated financial
statements of the Borrower prepared and delivered pursuant to SECTION 7.1(A) for
the fiscal period during which such material loss contingency was incurred.
Neither the Borrower nor any of its Subsidiaries is (A) in violation of any
applicable Requirements of Law which violation will have or would reasonably be
expected to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will have or would reasonably be expected to have a Material Adverse
Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description of the corporate structure of the Borrower, its Subsidiaries
(including for purposes of this clause (i) its Excluded Subsidiaries and the FTB
Group) and any other Person in which the Borrower or any of its Subsidiaries
holds an Equity Interest (both narratively and in chart form); (ii) accurately
sets forth as of the Closing Date (A) the correct legal name, the jurisdiction
of incorporation and the jurisdictions in which each of the Borrower and the
direct and indirect Subsidiaries of the Borrower is qualified to transact
business as a foreign corporation, (B) the authorized, issued and outstanding
shares of each class of Capital Stock of the Borrower, each of its Subsidiaries
and FTB and, for such Subsidiaries and FTB, the owners of such shares (both as
of the Closing Date and on a fully-diluted basis), and (C) a summary of the
direct and indirect partnership, joint venture, or other Equity Interests, if
any, of the Borrower and each Subsidiary of the Borrower in any Person that is
not a corporation; and (iii) accurately sets forth which of the Persons
identified in clause (i) is (A) a member of the FTB Group or
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(B) an Excluded Subsidiary. Except as set forth on SCHEDULE 6.8, none of the
issued and outstanding Capital Stock of the Borrower or any of its
Subsidiaries is subject to any vesting, mandatory redemption, or mandatory
repurchase agreement. Except as set forth on SCHEDULE 6.8, as of the Closing
Date, there are no warrants or options outstanding with respect to the
Capital Stock of any of the Borrower's Material Subsidiaries. The
outstanding Capital Stock of the Borrower, each of its Subsidiaries and, as
of the Closing Date, FTB is duly authorized, validly issued, fully paid and
nonassessable and is not Margin Stock. Except as set forth on SCHEDULE 6.8,
as of the Closing Date, the Borrower has no Subsidiaries or Excluded
Subsidiaries and there are no other members of the FTB Group.
6.9 ERISA. (a) Except as set forth on SCHEDULE 6.9, neither the Borrower
nor any member of the Controlled Group maintains or contributes to any Benefit
Plan or Multiemployer Plan. Except as set forth on SCHEDULE 6.9, no Benefit
Plan has incurred any material accumulated funding deficiency (as defined in
Sections 302(a)(2) of ERISA and 412(a) of the Code) whether or not waived.
Neither the Borrower nor any member of the Controlled Group has incurred any
material liability to the PBGC which remains outstanding. Schedule B to the
most recent annual report filed with the IRS with respect to each Benefit Plan
and furnished to the lenders is complete and accurate in all material respects.
Since the date of each such Schedule B, there has been no material adverse
change in the funding status or financial condition of the Benefit Plan relating
to such Schedule B. Within the previous six years, neither the Borrower nor any
member of the Controlled Group has (i) failed to make a required contribution or
payment to a Multiemployer Plan or (ii) made a complete or partial withdrawal
under Sections 4203 or 4205 of ERISA from a Multiemployer Plan for which the
required withdrawal liability has not been satisfied. Within the previous six
years, neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment to any
Benefit Plan. Neither the Borrower nor any member of the Controlled Group is
required to provide security to a Benefit Plan under Section 401(a)(29) of the
Code due to a Plan amendment that results in an increase in current liability
for the plan year. Each Single Employer Plan which is intended to be qualified
under Section 401(a) of the Code as currently in effect is so qualified, and
each trust related to any such Plan is exempt from federal income tax under
Section 501(a) of the Code as currently in effect. The Borrower and all
Subsidiaries are in compliance in all material respects with the
responsibilities, obligations and duties imposed on them by ERISA and the Code
with respect to all Single Employer Plans. Neither the Borrower nor any of its
Subsidiaries nor any fiduciary of any Plan has engaged in a material nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the Code.
Neither the Borrower nor any member of the Controlled Group has taken or failed
to take any action which would constitute or result in a material Termination
Event. Neither the Borrower nor any member of the Controlled Group is subject
to any material liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA. Neither the Borrower nor any of its Subsidiaries has, by reason of the
transactions contemplated hereby, any obligation to make any material payment to
any employee pursuant to any Plan or existing contract or arrangement.
(b) For purposes of this SECTION 6.9 and SECTION 6.23 only,
"material" means any noncompliance or basis for liability which, together with
all other noncompliance or grounds for liability under this SECTION 6.9, or
SECTION 6.23, as applicable, would be reasonably likely to subject Ball or any
of its Subsidiaries to liability individually or in the aggregate in excess of
$25,000,000.
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6.10 ACCURACY OF INFORMATION. (a) The written information, exhibits
and reports furnished by or on behalf of the Borrower and any of its
Subsidiaries to the Agents or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents, the representations
and warranties of the Borrower and its Subsidiaries contained in the Loan
Documents, and all certificates and documents delivered to the Agents and the
Lenders pursuant to the terms thereof, including, without limitation, the
Confidential Information Memorandum, dated May 1998, taken as a whole, do not
contain as of the date furnished any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading.
(b) The projections supplied in connection with the factual
information referred to in CLAUSE (a) above were or are based on good faith
estimates and assumptions believed to be fair and reasonable at the time
made, given historical financial performance and current and reasonably
foreseeable business conditions, and, to the Borrower's knowledge, there are
no facts or circumstances presently existing which singly or in the aggregate
would cause a material change in such projections, it being recognized and
agreed by the Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered
by any such projections may differ from the projected results and that the
differences may be material.
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a
party to any Contractual Obligation which individually or in the aggregate
will have or would reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries has received notice or has
knowledge that (i) it is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
any Contractual Obligation applicable to it, or (ii) any condition exists
which, with the giving of notice or the lapse of time or both, would
constitute a default with respect to any such Contractual Obligation, in each
case, except where such default or defaults, if any, individually or in the
aggregate will not have or would not reasonably be expected to have a
Material Adverse Effect.
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all of its material assets and properties (tangible
and intangible, real or personal) owned by it or a valid leasehold interest in
all of its material leased assets (except insofar as marketability may be
limited by any laws or regulations of any Governmental Authority affecting such
assets), and all such assets and property are free and clear of all Liens,
except Liens permitted under SECTION 7.3(C). Substantially all of the assets
and properties used or useful to the business of the Borrower or any Subsidiary
of the Borrower are in adequate operating condition and repair, ordinary wear
and tear excepted.
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6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or
the Investment Company Act of 1940, or any other foreign, federal or state
statute or regulation which limits its ability to incur indebtedness as
contemplated hereby or its ability to consummate the transactions
contemplated hereby or in connection with the Reynolds Acquisition.
6.16 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all of its respective properties in at least such
amounts, against at least such risks and with such risk retention as are
usually maintained, insured against or retained, as the case may be, in the
same general area by companies of established repute engaged in the same or a
similar business; PROVIDED, that the Borrower and its Subsidiaries may
self-insure to the same extent as other companies of established repute
engaged in the same or a similar business in the same general area in which
the Borrower or such Subsidiary operates and to the extent consistent with
prudent business practice. The Borrower will furnish to the Lenders, upon
request from the Administrative Agent, information presented in reasonable
detail as to the insurance so carried.
6.17 LABOR MATTERS.
(A) Except as listed on SCHEDULE 6.17 to this Agreement, there are on
the Closing Date: (1) no collective bargaining agreements to which the
Borrower or any of its Subsidiaries is a party covering any of the employees
of the Borrower or any of its Subsidiaries; (2) to the Borrower's knowledge
no attempts to organize the employees of the Borrower or any of its
Subsidiaries; and (3) no material labor disputes at any facility of the
Borrower or any of its Subsidiaries, including without limitation any
walkouts disrupting the operations of the Borrower or any of its
Subsidiaries, any strikes or any lockouts, pending, or, to the Borrower's
knowledge, threatened.
(B) Set forth in SCHEDULE 6.17 to this Agreement is a list, as of the
Closing Date, of all material consulting agreements, employment contracts and
service agreements with temporary employment agencies that individually are of
value in excess of $1,000,000 per year and are not otherwise disclosed pursuant
to this Agreement.
(C) Set forth in SCHEDULE 6.17 to this Agreement is a list, as of the
Closing Date, of all employment arbitration awards, judgments, consent
decrees, findings, settlement agreements, or other final resolutions rendered
against the Borrower or any of its Subsidiaries during the preceding five
years that, individually or in the aggregate, exceed $10,000,000 or which,
regardless of when rendered, individually or in the aggregate impose
continuing obligations on the Borrower or any of its Subsidiaries in excess
of $10,000,000.
6.18 REYNOLDS ACQUISITION. As of the Closing Date and immediately prior
to (or contemporaneous with) the making of the initial Loans:
(i) the Reynolds Acquisition Documents are in full force and effect,
no material breach, default or waiver of any term or provision thereof by
the Borrower or any of its
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Subsidiaries or, to the best of the Borrower's knowledge, the other
parties thereto, has occurred (except for such breaches, defaults and
waivers, if any, consented to in writing by the Agents) and no action
has been taken by any competent authority which restrains, prevents or
imposes any material adverse condition upon, or seeks to restrain,
prevent or impose any material adverse condition upon, the Reynolds
Acquisition;
(ii) the representations and warranties of the Borrower contained in
the Reynolds Acquisition Documents, if any, are true and correct in all
material respects;
(iii) except as set forth in SCHEDULE 6.18 to this Agreement, all
material conditions precedent to, and all material consents necessary to
permit, the Reynolds Acquisition pursuant to the Reynolds Acquisition
Documents have been satisfied or waived, the Reynolds Acquisition has been
consummated in accordance with the Reynolds Acquisition Documents, and the
Borrower has obtained good and marketable title to the "Business Assets"
(as defined in the Asset Purchase Agreement) free and clear of any Liens
other than Liens permitted under SECTION 7.3(C).
6.19 ENVIRONMENTAL MATTERS. (a) Except as disclosed on SCHEDULE 6.19 to
this Agreement, or otherwise in the Environmental Audit (a copy of which was
delivered by the Borrower to the Administrative Agent and made available by the
Administrative Agent to each Lender prior to the Closing Date):
(i) the operations of the Borrower and its Subsidiaries comply in all
material respects with Environmental, Health or Safety Requirements of Law;
(ii) the Borrower and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health or
Safety Requirements of Law (or have filed timely applications for renewal
of such permits, licenses or authorizations) and are in material compliance
with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, the
Borrower's or any of its Subsidiaries' knowledge, any of their respective
past property or operations, are subject to or the subject of, any
investigation known to the Borrower or any of its Subsidiaries, any
judicial or administrative proceeding, order, judgment, decree, settlement
or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material
Remedial Action; or (C) any material claims or liabilities arising from the
Release or threatened Release of a Contaminant;
(iv) there is not now, nor to the best of the Borrower's or any of
its Subsidiaries' knowledge has there ever been, on or in the property of
the Borrower or any of its Subsidiaries any landfill, hazardous waste
storage facility in which Contaminants are or were stored for more than
ninety (90) days, waste pile, or surface impoundment that may reasonably be
expected to result in a material claim, loss or Remedial Action obligation;
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(v) there is not now, nor to the best of the Borrower's or any of its
Subsidiaries' knowledge has there ever been, on or in the property of the
Borrower's or any of its Subsidiaries any underground storage tanks, above
ground storage tanks, polychlorinated biphenyls (PCBs) used in hydraulic
oils, electric transformers or other equipment, or any asbestos containing
material that may reasonably be expected to result in a material claim,
loss or Remedial Action obligation; and
(vi) neither the Borrower nor any of its Subsidiaries has any
material contingent obligation or liability in connection with any Release
or threatened Release of a Contaminant.
(b) For purposes of this SECTION 6.19 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
or any of its Subsidiaries to liability individually or in the aggregate in
excess of $25,000,000 (exclusive of costs, expenses, claims covered by insurance
policies of the Borrower or any of its Subsidiaries unless the insurers of such
costs, expenses or claims have disclaimed coverage or reserved the right to
disclaim coverage thereof and exclusive of costs, expenses or claims covered by
the indemnity of a financially responsible indemnitor in favor of the Borrower
or any of its Subsidiaries unless the indemnitor has disclaimed or reserved the
right to disclaim coverage thereof).
6.20 OTHER INDEBTEDNESS.
(i) As of the Closing Date and immediately prior to the making of the
initial Loans, the Borrower has issued the Subordinated Notes in an
aggregate original principal amount of $250,000,000 and received the net
proceeds thereof, and the subordination provisions of the Subordinated Note
Indenture are enforceable against the holders of the Subordinated Notes.
(ii) As of the Closing Date and immediately prior to the making of
the initial Loans, the Borrower has issued the Senior Notes in an aggregate
original principal amount of $300,000,000 and received the net proceeds
thereof.
6.21 SOLVENCY. After giving effect to (i) the Loans to be made on the
Closing Date or such other date as Loans requested hereunder are made, (ii) the
issuance of the Senior Notes and the Subordinated Notes, (iii) the consummation
of the Reynolds Acquisition and the payment of the "Purchase Price" under and as
defined in the Asset Purchase Agreement and (iv) the payment and accrual of all
Transaction Costs, the Borrower and its Subsidiaries taken as a whole is
Solvent.
6.22 YEAR 2000 ISSUES. Each of the Borrower and its Subsidiaries has made
a full and complete assessment of the Year 2000 Issues and has a realistic and
achievable program for remediating the Year 2000 Issues on a timely basis.
Based on this assessment and program, the Borrower does not reasonably
anticipate any Material Adverse Effect on its or its Subsidiaries' operations,
business or financial condition as a result of Year 2000 Issues.
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6.23 FOREIGN EMPLOYEE BENEFIT MATTERS. (a) Each Foreign Employee
Benefit Plan is in compliance in all material respects with all laws,
regulations and rules applicable thereto and the respective requirements of
the governing documents for such Plan; (b) the aggregate of the accumulated
benefit obligations under all Foreign Pension Plans does not exceed to any
material extent the current fair market value of the assets held in the
trusts or similar funding vehicles for such Plans; (c) with respect to any
Foreign Employee Benefit Plan maintained or contributed to by the Borrower or
any Subsidiary or any member of its Controlled Group (other than a Foreign
Pension Plan), reasonable reserves have been established in accordance with
prudent business practice or where required by ordinary accounting practices
in the jurisdiction in which such Plan is maintained; and (d) there are no
material actions, suits or claims (other than routine claims for benefits)
pending or, to the knowledge of the Borrower and its Subsidiaries, threatened
against the Borrower or any Subsidiary or any member of its Controlled Group
with respect to any Foreign Employee Benefit Plan. For purposes of this
SECTION 6.23, "material" shall have the meaning set forth in SECTION 6.9(b).
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders
shall otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Administrative Agent (and the
Administrative Agent shall promptly provide copies of the following to each
of the other Agents and the Lenders):
(i) QUARTERLY REPORTS. As soon as practicable, and in any event
within fifty (50) days after the end of the first three fiscal quarters in
each fiscal year, (a) the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such period and the related consolidated
statements of income, stockholder's equity and cash flows of the Borrower
and its Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, together with schedules, in form and substance sufficient to
calculate the financial covenants set forth in SECTIONS 2.5(B), 7.3(A)
through (G), 7.3(L), 7.3(T) and 7.4; and (b) the consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such period and
the related consolidating statements of income of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, in each
case, prepared in a manner consistent with past practice and certified by
the chief financial officer or treasurer of the Borrower on behalf of the
Borrower as fairly presenting the consolidated (and, to the extent
presented, the consolidating) financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations
for the periods indicated in accordance with Agreement Accounting
Principles, subject to normal year end adjustments.
(ii) ANNUAL REPORTS. As soon as practicable, and in any event within
ninety-five (95) days after the end of each fiscal year, (a) the
consolidated and consolidating balance sheets
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of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated and consolidating statements of income of the
Borrower and its Subsidiaries for such fiscal year, consolidated
stockholders' equity and cash flow of the Borrower and its Subsidiaries
for such fiscal year, and in comparative form the corresponding figures
for the previous fiscal year, with schedules in form and substance
sufficient to calculate the financial covenants set forth in SECTIONS
2.5(B), 7.3(A) through (G), 7.3(L), 7.3(T) and 7.4; and (b) an audit
report on the consolidated financial statements listed in CLAUSE (A)
hereof of independent certified public accountants of recognized
national standing, which audit report shall be unqualified and shall state
that such financial statements fairly present the consolidated financial
position of the Borrower and its Subsidiaries, as at the dates indicated
and the results of their operations and cash flows for the periods
indicated in conformity with Agreement Accounting Principles and that the
examination by such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards. The deliveries made pursuant to this CLAUSE (ii) shall be
accompanied by any management letter prepared by the above-referenced
accountants (or, if such management letter is later prepared by such
accountants it shall be delivered to the Agent promptly after receipt by
the Borrower).
(iii) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement pursuant to CLAUSES (i) and (ii) of this SECTION
7.1(A), (a) an Officer's Certificate of the Borrower, substantially in the
form of EXHIBIT G attached hereto and made a part hereof, stating that as
of the date of such Officer's Certificate no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the nature
and status thereof and (b) a compliance certificate, substantially in the
form of EXHIBIT H attached hereto and made a part hereof, signed by the
Borrower's chief financial officer or treasurer, setting forth calculations
for the period then ended for SECTION 2.5(B), if applicable, which
demonstrate compliance, when applicable, with the provisions of SECTION
7.4, and which calculate the Leverage Ratio for purposes of determining the
then Applicable Floating Rate Margin, Applicable Eurodollar Margin and
Applicable Commitment Fee Percentage.
(iv) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than forty-five (45) days after the
beginning of each fiscal year, a copy of the plan and forecast (including a
projected balance sheet, income statement and a statement of cash flow) of
the Borrower and its Subsidiaries for the upcoming fiscal year, prepared on
a quarterly basis for such fiscal year, and otherwise prepared in such
detail as shall be reasonably satisfactory to the Administrative Agent.
(B) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of the
Borrower obtaining knowledge (i) of any condition or event which constitutes a
Default or Unmatured Default, or becoming aware that any Lender or Agent has
given any written notice with respect to a claimed Default or Unmatured Default
under this Agreement, or (ii) that any Person has given any written notice to
the Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
SECTION 8.1(e), deliver to the Administrative Agent an Officer's Certificate (a
copy of which the Administrative Agent shall promptly deliver to the other
Agents and the Lenders) specifying (a) the nature and period of existence of any
such claimed default, Default,
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Unmatured Default, condition or event, (b) the notice given or action taken
by such Person in connection therewith, and (c) what action the Borrower
and/or its Subsidiaries has taken, is taking and proposes to take with
respect thereto.
(C) LAWSUITS. (i) Promptly upon the Borrower or any Subsidiary of the
Borrower obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against
or affecting the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries not previously disclosed pursuant to
SECTION 6.7, which action, suit, proceeding, governmental investigation or
arbitration exposes, or in the case of multiple actions, suits, proceedings,
governmental investigations or arbitrations arising out of the same general
allegations or circumstances which expose, in the Borrower's reasonable
judgment, the Borrower or any of its Subsidiaries to liability in an amount
aggregating $20,000,000 or more (exclusive of claims covered by insurance
policies of the Borrower or any of its Subsidiaries unless the insurers of
such claims have disclaimed coverage or reserved the right to disclaim
coverage on such claims and exclusive of claims covered by the indemnity of a
financially responsible indemnitor in favor of the Borrower or any of its
Subsidiaries unless the indemnitor has disclaimed or reserved the right to
disclaim coverage thereof), give written notice thereof to the Administrative
Agent and provide such other information as may be reasonably available to
enable each Lender and the Administrative Agent and its counsel to evaluate
such matters; and (ii) in addition to the requirements set forth in CLAUSE
(i) of this SECTION 7.1(C), upon request of the Administrative Agent or the
Required Lenders, promptly give written notice of the status of any action,
suit, proceeding, governmental investigation or arbitration covered by a
report delivered pursuant to CLAUSE (i) above and provide such other
information as may be reasonably available to it that would not violate any
attorney-client privilege by disclosure to the Lenders to enable each Lender
and the Administrative Agent and its counsel to evaluate such matters.
(D) INSURANCE. As soon as practicable and in any event within ninety
(90) days of the end of each fiscal year commencing with the fiscal year
ending December 31, 1998, deliver to the Administrative Agent a report in
form and substance reasonably satisfactory to the Administrative Agent and
the Lenders outlining all material insurance coverage maintained as of the
date of such report by the Borrower and its Subsidiaries and the duration of
such coverage.
(E) ERISA NOTICES. Deliver or cause to be delivered to the
Administrative Agent , at the Borrower's expense, the following information
and notices as soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower or any
member of the Controlled Group obtains knowledge that a Termination Event
has occurred which would be reasonably likely to subject the Borrower or
any of its Subsidiaries to liability, individually or in the aggregate in
excess of $10,000,000, a written statement of the appropriate financial
officer or treasurer of the Borrower describing such Termination Event and
the action, if any, which the Borrower or the applicable Subsidiary has
taken, is taking or proposes to take with respect thereto, and if and when
known, any action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
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(ii) within ten (10) Business Days after any officer of the Borrower
or any of its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred which would be reasonably likely to subject the Borrower or any of
its Subsidiaries to liability, individually or in the aggregate in excess
of $10,000,000, a statement of the chief financial officer or treasurer of
the Borrower describing such transaction and the action which the Borrower
or such Subsidiary has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days after any material increase in
the benefits of any existing Benefit Plan or the establishment of any new
Benefit Plan or the commencement of, or obligation to commence,
contributions to any Benefit Plan or Multiemployer Plan to which the
Borrower or any member of the Controlled Group was not previously
contributing, where the aggregate annual contributions to such Plan(s)
resulting therefrom are or could reasonably be expected to exceed
$10,000,000, notification of such increase, establishment, commencement or
obligation to commence and the amount of such contributions;
(iv) within ten (10) Business Days after the Borrower or any of its
Subsidiaries receives notice of any unfavorable determination letter from
the IRS regarding the qualification of a Plan under Section 401(a) of the
Code which would be reasonably likely to subject the Borrower or any of its
Subsidiaries to liability, individually or in the aggregate in excess of
$10,000,000, copies of each such letter;
(v) within ten (10) Business Days after the establishment of any
Foreign Employee Benefit Plan or the commencement of, or obligation to
commence, contributions to any Foreign Employee Benefit Plan to which the
Borrower or any Subsidiary was not previously contributing, where the
aggregate annual contributions to such Plan(s) resulting therefrom are or
would reasonably be expected to exceed $10,000,000, notification of such
establishment, commencement or obligation to commence and the amount of
such contributions;
(vi) upon the request of the Administrative Agent or any Lender,
copies of each annual report (form 5500 series), including Schedule B
thereto, filed with respect to each Benefit Plan;
(vii) upon the request of the Administrative Agent or any Lender,
copies of each available actuarial report for any Benefit Plan or
Multiemployer Plan and each available annual report for any Multiemployer
Plan;
(viii) within ten (10) Business Days after the filing thereof with
the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by the Borrower or a member of
the Controlled Group with respect to such request;
(ix) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit Plan,
copies of each such notice;
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(x) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability which would be reasonably
likely to subject the Borrower or any of its Subsidiaries to liability,
individually or in the aggregate in excess of $10,000,000, copies of each
such notice;
(xi) within ten (10) Business Days after the Borrower or any member
of the Controlled Group fails to make a required installment or any other
required payment under Section 412 of the Code on or before the due date
for such installment or payment which would be reasonably likely to subject
the Borrower or any of its Subsidiaries to liability, individually or in
the aggregate in excess of $10,000,000, a notification of such failure;
and
(xii) within ten (10) Business Days after any officer of the Borrower
or any member of the Controlled Group knows or has reason to know that
(a) a Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (c) the PBGC has instituted proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
For purposes of this SECTION 7.1(E), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Plan Administrator (as defined in Section 3(16)(A) of ERISA) of any Plan of
which the Borrower or any member of the Controlled Group or such Subsidiary is
the plan sponsor.
(F) LABOR MATTERS. Notify the Administrative Agent within a reasonable
period of time following the Borrower's knowledge thereof of (i) any material
labor dispute at any facility of the Borrower or any of its Subsidiaries,
including without limitation, any authorized or unauthorized strike or any
lockout, and (ii) any attempt to organize the employees of the Borrower or any
of its Subsidiaries.
(G) OTHER INDEBTEDNESS. Deliver to the Administrative Agent (i) a copy of
each regular report, notice or other written communication regarding potential
or actual defaults (including any accompanying officer's certificate) delivered
by or on behalf of the Borrower and/or any of its Subsidiaries to the holders of
funded Indebtedness pursuant to the terms of the agreements governing such
Indebtedness, such delivery to be made at the same time and by the same means as
such notice or other communication is delivered to such holders, and (ii) a copy
of each notice or other written communication received by the Borrower and/or
any of its Subsidiaries from the holders of funded Indebtedness pursuant to the
terms of such Indebtedness, such delivery to be made promptly after such notice
or other communication is received by the Borrower and/or such Subsidiary.
(H) OTHER REPORTS. Deliver or cause to be delivered to the Administrative
Agent copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the SEC by the Borrower, all press releases made available generally by the
Borrower or any of the Borrower's Subsidiaries to the public concerning material
developments in the business of the Borrower or any such Subsidiary and all
notifications received from the SEC by the
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Borrower or its Subsidiaries pursuant to the Securities Exchange Act of 1934,
as amended, and the rules promulgated thereunder.
(I) ENVIRONMENTAL NOTICES. As soon as possible and in any event within
ten (10) days after receipt by the Borrower or any of its Subsidiaries, a
copy of (i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by
the Borrower, any of its Subsidiaries, or any other Person of any
Contaminant, and (ii) any notice alleging any violation of any Environmental,
Health or Safety Requirements of Law by the Borrower or any of its
Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to subject the Borrower or any of its
Subsidiaries to liability individually or in the aggregate in excess of
$10,000,000.
(J) OTHER INFORMATION. Promptly upon receiving a request therefor from
the Administrative Agent, prepare and deliver to the Administrative Agent and
the Lenders such other information with respect to the Borrower, any of its
Subsidiaries, or the Collateral, including, without limitation, schedules
identifying any Asset Sale or Financing (and the use of the Net Cash Proceeds
thereof), as from time to time may be reasonably requested by the
Administrative Agent.
7.2 AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. Except in connection with a transaction
otherwise permitted under the terms of this Agreement, the Borrower shall,
and shall cause each of its Subsidiaries to, at all times maintain its
corporate existence and preserve and keep, or cause to be preserved and kept,
in full force and effect its rights and franchises material to its businesses.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. Except in connection with a
transaction otherwise permitted under the terms of this Agreement, the
Borrower shall, and shall cause each of its Subsidiaries to, qualify and
remain qualified to do business in each jurisdiction in which the nature of
its business requires it to be so qualified and where the failure to be so
qualified will have or would reasonably be expected to have a Material
Adverse Effect. The Borrower will, and will cause each Subsidiary to, carry
on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (i) comply in all material respects with all Requirements of
Law and all restrictive covenants affecting such Person or the business,
properties, assets or operations of such Person, and (ii) obtain as needed
all material permits necessary for its operations and maintain such permits
in good standing unless, in either such case under clause (i) or (ii),
failure to comply or obtain would not reasonably be expected to have a
Material Adverse Effect.
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all material taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income
or property before any penalty or interest accrues thereon, and (ii) all
claims (including, without limitation, claims for labor, services, materials
and supplies) for sums which have become due and
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payable and which by law have or may become a material Lien (other than a
Lien permitted by SECTION 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any material penalty
or fine shall be incurred with respect thereto; PROVIDED, HOWEVER, that no
such taxes, assessments and governmental charges referred to in CLAUSE (i)
above or claims referred to in CLAUSE (ii) above (and interest, penalties or
fines relating thereto) need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with Agreement Accounting Principles shall have been made therefor.
(E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full
force and effect, insurance policies and programs as reflect coverage that is
reasonably consistent with prudent industry practice for similarly situated
companies.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The
Borrower shall permit and cause each of the Borrower's Subsidiaries, the FTB
Group and the Excluded Subsidiaries to permit, any authorized
representative(s) designated by either the Administrative Agent or any Lender
to visit and inspect any of the properties of the Borrower or any of such
Subsidiaries, members of the FTB Group or Excluded Subsidiaries, to examine,
audit, check and make copies of their respective financial and accounting
records, books, journals, orders, receipts and any correspondence and other
data relating to their respective businesses or the transactions contemplated
hereby or by the Reynolds Acquisition (including, without limitation, in
connection with environmental compliance, hazard or liability), and to
discuss their affairs, finances and accounts with their officers and
independent certified public accountants (and such accountants are hereby
authorized to disclose to the Administrative Agent any and all financial
statements and other supporting financial documents with respect to the
business, financial condition and other affairs of the Borrower and its
Subsidiaries, the FTB Group and the Excluded Subsidiaries), all upon
reasonable notice and at such reasonable times during normal business hours,
as often as may be reasonably requested; PROVIDED, HOWEVER, that the
Borrower's obligation to reimburse the Administrative Agent and the Lenders
for reasonable costs and expenses incurred in connection with such
inspections shall be limited to no more than one (1) inspection during any
calendar year if such inspections are conducted at a time when no Default or
Unmatured Default shall have occurred and is continuing. The Borrower shall
keep and maintain, and cause each of its Subsidiaries, FTB and the Excluded
Subsidiaries to keep and maintain, in all material respects, proper books of
record and account in which entries in conformity with Agreement Accounting
Principles shall be made of all dealings and transactions in relation to
their respective businesses and activities. If a Default has occurred and is
continuing, the Borrower, upon the Administrative Agent's request, shall turn
over or make available copies of any such records to the Administrative Agent
or its representatives; PROVIDED, that if no Default shall have occurred and
is continuing, the Administrative Agent or its representatives, as
applicable, shall return such records to the Borrower.
(G) ERISA COMPLIANCE. The Borrower shall, and shall cause each other
member of the Ball Corporate Group to, establish, maintain and operate all
Plans to comply in all respects with the provisions, if applicable, of ERISA,
the Code, all other applicable laws, and the regulations and interpretations
thereunder and the respective requirements of the governing documents for
such Plans, except where such noncompliance would not reasonably be expected
to subject the Borrower or any of its Subsidiaries to liability individually
or in the aggregate in excess of $25,000,000.
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(H) MAINTENANCE OF PROPERTY. The Borrower shall cause all material
property used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order (normal wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this SECTION 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such
property if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its business or the business of any Subsidiary
and not disadvantageous in any material respect to the Administrative Agent
or the Lenders.
(I) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower or any Subsidiary to liability individually or in the aggregate in
excess of $25,000,000.
(J) USE OF PROCEEDS. The Borrower shall use the proceeds of the Term
Loans to (i) facilitate the Reynolds Acquisition and (ii) repay existing
Indebtedness. The Borrower shall use the proceeds of the Revolving Loans to
(i) facilitate the Reynolds Acquisition, (ii) repay existing Indebtedness,
(iii) pay the Transaction Costs, and (iv) provide funds for the additional
working capital needs and other general corporate purposes of the Borrower
and its Subsidiaries. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry any
Margin Stock or to make any Acquisition, other than the Reynolds Acquisition
and any other Permitted Acquisition pursuant to SECTION 7.3(G).
(K) ADDITIONAL GUARANTORS/PLEDGE OF CAPITAL STOCK. (i) The Borrower
will (a) deliver and cause each of its Domestic Incorporated Subsidiaries to
deliver an agreement evidencing the pledge, to the Administrative Agent, for
the benefit of the Holders of Secured Obligations, of all of the Capital
Stock of each Domestic Incorporated Subsidiary, within thirty (30) days after
such Subsidiary has become a Subsidiary of the Borrower and (b) cause each
Domestic Incorporated Subsidiary, within twenty (20) days after becoming a
Subsidiary of the Borrower, to execute and deliver to the Administrative
Agent an assumption agreement pursuant to which it agrees to be bound by the
terms and provisions of the Subsidiary Guaranty (whereupon such Subsidiary
shall become a "Guarantor" under this Agreement), and (c) deliver and cause
such Subsidiaries to deliver corporate resolutions, opinions of counsel,
stock certificates, stock powers, UCC financing statements with respect to
the Capital Stock Collateral and such other corporate documentation as the
Administrative Agent may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
(ii) The Borrower shall deliver an agreement evidencing the pledge, to
the Administrative Agent, for the benefit of the Holders of Secured
Obligations, of (A) all of the Capital Stock of Latasa owned by any member of
the Ball Corporate Group (but not in excess of 65% of all of the outstanding
Capital Stock thereof) on the date of the consummation of the Latasa
Acquisition; and (B) 65% of the Capital Stock of each other Material Foreign
Subsidiary, within sixty (60) days after such Subsidiary has become a
Material Foreign Subsidiary, together, in each such case, with corporate
resolutions, opinions of counsel, stock certificates, stock powers and such
other corporate documentation as the
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Administrative Agent may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent; provided, however, in
the event that any such Material Foreign Subsidiary is wholly-owned by a
Domestic Incorporated Subsidiary, in connection with which all of the
requirements of CLAUSE (i) above have been satisfied and the activities of
which are limited to owning the Capital Stock of its Subsidiaries, then, the
Administrative Agent, at its option, may waive the requirement for the pledge
of such Material Foreign Subsidiary's Capital Stock under this CLAUSE (ii);
and PROVIDED FURTHER, HOWEVER, in the event that more than one Subsidiary
within a commonly controlled group of Subsidiaries constitutes a Material
Foreign Subsidiary, then only the Capital Stock of the "parent" or
"controlling" Subsidiary shall be required to be pledged.
(iii) If at any time any Material Foreign Subsidiary shall issue or
cause to be issued Capital Stock, or warrants or options with respect to its
Capital Stock, such that the aggregate amount of the Capital Stock of such
Material Foreign Subsidiary pledged to the Administrative Agent for the
benefit of the Holders of Secured Obligations is less than 65% of all of the
outstanding Capital Stock thereof, the Borrower shall (A) promptly notify the
Administrative Agent of such deficiency and (B) deliver or cause to be
delivered any agreements, instruments, certificates and other documents as
the Administrative Agent may reasonably request all in a form and substance
reasonably satisfactory to the Administrative Agent in order to cause all of
the Capital Stock of such Material Foreign Subsidiary owned by any member of
the Ball Corporate Group (but not in excess of 65% of all of the outstanding
Capital Stock thereof) to be pledged to the Agent for the benefit of the
Holders of Secured Obligations; PROVIDED, that any Material Subsidiary may
issue or cause to be issued any Capital Stock or warrants or options in
respect of such Capital Stock only so long as no Change of Control shall
result therefrom.
(iv) In the event that the Borrower or any Guarantor causes or permits
any Foreign Incorporated Subsidiary that is not a Guarantor to, directly or
indirectly, guarantee the payment of any Indebtedness of the Borrower or any
Guarantor then the Borrower will (a) simultaneously deliver, or cause to be
delivered, an agreement evidencing the pledge, to the Administrative Agent,
for the benefit of the Holders of Secured Obligations, of all of the Capital
Stock of such Foreign Incorporated Subsidiary, (b) simultaneously cause such
Foreign Incorporated Subsidiary to execute and deliver to the Administrative
Agent an assumption agreement pursuant to which it agrees to be bound by the
terms and provisions of the Subsidiary Guaranty (whereupon such Subsidiary
shall become a "Guarantor" under this Agreement), and (c) deliver and cause
such Subsidiaries to deliver corporate resolutions, opinions of counsel,
stock certificates, stock powers, UCC financing statements with respect to
the Capital Stock Collateral and such other corporate documentation as the
Administrative Agent may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
(L) YEAR 2000 ISSUES. The Borrower shall, and shall cause each of its
Subsidiaries to, take all actions reasonably necessary to assure that the
Year 2000 Issues will not have a Material Adverse Effect. The Borrower shall
provide the Administrative Agent and each of the Lenders a copy of the
Borrower's program to address Year 2000 Issues, including updates and
progress reports upon request. The Borrower shall advise the Administrative
Agent if any Year 2000 Issues will have or would reasonably be expected to
have a Material Adverse Effect.
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(M) FOREIGN EMPLOYEE BENEFIT COMPLIANCE. The Borrower shall, and shall
cause each of its Subsidiaries and each member of the Controlled Group to,
establish, maintain and operate all Foreign Employee Benefit Plans to comply
in all material respects with all laws, regulations and rules applicable
thereto and the respective requirements of the governing documents for such
Plans, except for failures to comply which, in the aggregate, would not be
reasonably likely to subject the Borrower or any of its Subsidiaries to
liability, individually or in the aggregate in excess of $25,000,000.
(N) FOREIGN GOVERNMENTAL CONSENTS AND APPROVALS. Within fifteen (15)
days after the date upon which the Latasa Acquisition is consummated, the
Borrower shall, or shall cause its Subsidiaries to, make all required filings
or registrations with, give appropriate notice to, and otherwise seek any
required authorization, consent and approval of the Administrative Council
for Economic Defense in Brazil in respect of the Reynolds Acquisition.
7.3 NEGATIVE COVENANTS.
(A) INDEBTEDNESS. Neither the Borrower nor any other member of the
Ball Corporate Group shall directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(i) the Obligations;
(ii) Indebtedness incurred in connection with the Short-Term Credit
Agreement in a principal amount not to exceed $150,000,000 at any time;
(iii) Indebtedness incurred in connection with the Receivables
Purchase Documents;
(iv) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(v) Indebtedness evidenced by the Canadian Credit Facility and
Permitted Refinancing Indebtedness in respect thereof, in each case, in a
principal amount not to exceed $50,000,000;
(vi) Indebtedness evidenced by the Senior Notes and the
Subordinated Notes;
(vii) subordinated indebtedness the terms (including, without
limitation, those with respect to amount, maturity, amortization, interest
rate, premiums, fees, covenants, subordination, events of default and
remedies) of which are acceptable to the Required Lenders when issued, but
in each case not any increase in the principal amount thereof and not any
refinancing, modification, refunding or extension of maturity thereof, in
whole or in part, unless such refinancing, modification, refunding or
extension is not materially less favorable to the Borrower or any of its
Subsidiaries, including, without limitation, with respect to amount,
maturity, amortization, interest rate, premiums, fees, covenants,
subordination, events of
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default and remedies (such Indebtedness being referred to herein as
"PERMITTED ADDITIONAL SUBORDINATED INDEBTEDNESS");
(viii) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(ix) Indebtedness constituting Guarantied Obligations permitted
by SECTION 7.3(E);
(x) Indebtedness arising from intercompany loans from the
Borrower to any Controlled Subsidiary, or from any Subsidiary to the
Borrower or any Controlled Subsidiary, PROVIDED that if the Borrower or
any Guarantor is the obligor on such Indebtedness, such Indebtedness
shall be expressly subordinate to the payment in full of the Secured
Obligations; PROVIDED, FURTHER, that the aggregate of all Foreign
Subsidiary Investments does not exceed the Permitted Foreign Subsidiary
Investment Amount at any time;
(xi) guaranties by the Borrower of Indebtedness permitted to be
incurred by any Subsidiary or Indebtedness of any Person in which the
Borrower makes an Investment pursuant to SECTION 7.3(D)(ix) (provided the
amount of Indebtedness so guarantied shall be included for purposes of
calculating the Investment in such Person as provided under SECTION
7.3(D)(ix));
(xii) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date to finance the acquisition of assets used in the
business, if (1) at the time of such incurrence, no Default or Unmatured
Default has occurred and is continuing or would result from such
incurrence, (2) such Indebtedness has a scheduled maturity and is not due
on demand, (3) such Indebtedness does not exceed the lower of the fair
market value or the cost of the applicable fixed assets on the date
acquired, (4) such Indebtedness does not exceed $50,000,000 in aggregate
principal amount outstanding at any time, and (5) any Lien securing such
Indebtedness is permitted under SECTION 7.3(C) (such Indebtedness being
referred to herein as "PERMITTED PURCHASE MONEY INDEBTEDNESS");
(xiii) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
course of business;
(xiv) Indebtedness incurred by the Borrower or any of its
Subsidiaries (whether assumed by the Borrower or such Subsidiary or issued
to the seller) in any Permitted Acquisition as part of the consideration
therefor, PROVIDED that such Indebtedness is unsecured and is subordinated
to the Obligations on terms reasonably acceptable to the Administrative
Agent (including, without limitation, those with respect to amount,
maturity, amortization, interest rate, premiums, fees, covenants,
subordination, events of default and remedies);
(xv) Indebtedness in respect of the Synthetic Leases;
(xvi) all Indebtedness of the FTB Group only to the extent that
neither the Borrower nor any Guarantor shall incur or suffer to exist any
Guarantied Obligations in respect thereof
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(unless and to the extent such Guarantied Obligation would otherwise be
permitted under SECTION 7.3(T)) and;
(xvii) Indebtedness incurred by the Borrower or any Guarantor in
addition to that referred to elsewhere in this SECTION 7.3(A) in a
principal amount not to exceed in the aggregate (a) $25,000,000 if the
Leverage Ratio (calculated as of the last day of the immediately preceding
fiscal quarter) shall be greater than 3.0 to 1.0 as of the date of
incurrence thereof, and (b) $75,000,000 if the Leverage Ratio (calculated
as of the last day of the immediately preceding fiscal quarter) shall be
less than or equal to 3.0 to 1.0 as of the date of incurrence thereof.
(B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) Permitted Receivables Transfers;
(iii) the disposition in the ordinary course of business of
Equipment that is obsolete, excess or no longer useful in the Borrower's
and its Subsidiaries' business;
(iv) transfers of assets between the Borrower and any Controlled
Subsidiary or between Controlled Subsidiaries of the Borrower not otherwise
prohibited by this Agreement; PROVIDED, that the aggregate of all Foreign
Subsidiary Investments does not exceed the Permitted Foreign Subsidiary
Investment Amount at any time;
(v) transfers of assets pursuant to Investments permitted by
SECTION 7.3(D) and Restricted Payments permitted by SECTION 7.3(F);
(vi) the sale of the PET business unit of the Borrower and its
Subsidiaries; PROVIDED, that such transaction (a) is for consideration
consisting at least seventy-five percent (75%) of cash, (b) is for not less
than fair market value (as determined by the board of directors of the
Borrower in good faith, whose determination shall be conclusive evidence
thereof and shall be evidenced by a resolution of such board of directors
set forth in an Authorized Officer of the Borrower's certificate delivered
to the Administrative Agent), (c) the Net Cash Proceeds of which shall be
paid in accordance with SECTION 2.5(B)(i)(a) and (d) is consummated when no
Default has occurred and is continuing or would result therefrom;
(vii) the sale of all or part of the assets or business
constituting the Aerospace business unit of the Borrower and its
Subsidiaries in one or more transactions; PROVIDED, that (a) each such
transaction (x) is for consideration consisting at least seventy-five
percent (75%) of cash, (y) is for not less than fair market value (as
determined by the board of directors of the Borrower in good faith, whose
determination shall be conclusive evidence thereof and shall be evidenced
by a resolution of such board of directors set forth in an Authorized
Officer of the
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Borrower's certificate delivered to the Administrative Agent), and
(z) is consummated when no Default has occurred and is continuing or
would result therefrom, (b) the PRO FORMA opening consolidated
financial statements of the Borrower and its Subsidiaries shall
demonstrate that the Leverage Ratio of the Borrower and its Subsidiaries
as of the last day of the Borrower's most recently completed fiscal
quarter (assuming the effectiveness of such sale on such last day of the
Borrower's most recently completed fiscal quarter) shall be less than or
equal to the greater of (A) 3.0 to 1.0 and (B) the Leverage Ratio of the
Borrower and its Subsidiaries as of the last day of the Borrower's most
recently completed fiscal quarter as set forth on the compliance
certificate delivered together with the financial statements for such
fiscal quarter pursuant to SECTION 7.1(A)(iii), and (c) the Net Cash
Proceeds of which shall be paid in accordance with SECTION 2.5(B)(i)(a);
(viii) leases that are operating leases under which the Borrower or
any of its Subsidiaries is the lessor in the ordinary course of its
business that are not substantially equivalent to sales; and
(ix) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets, PROVIDED that any such transaction (a) is for
consideration consisting at least seventy-five percent (75%) of cash, (b)
is for not less than fair market value (as determined by the board of
directors of the Borrower in good faith, whose determination shall be
conclusive evidence thereof and shall be evidenced by a resolution of such
board of directors set forth in an Authorized Officer of the Borrower's
certificate delivered to the Administrative Agent), (c) when combined with
all such other transactions pursuant to this CLAUSE (ix) (each such
transaction being valued at book value) (i) during the immediately
preceding twelve-month period, represents the disposition of not greater
than $100,000,000, and (ii) during the period from the Closing Date to the
date of such proposed transaction, represents the disposition of not
greater than $300,000,000 and (d) the Net Cash Proceeds of which shall be
paid in accordance with SECTION 2.5(B)(i)(a).
Not less than five (5) Business Days prior to the consummation of any
transaction permitted by CLAUSE (vi), (vii), or (ix) above, the Borrower
shall deliver to the Administrative Agent a certificate of an Authorized
Officer of the Borrower certifying compliance with the requirements of CLAUSE
(vi), (vii) or (ix), as applicable, and showing in reasonable detail the
calculations on which such certification is based.
(C) LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on
or with respect to any of their respective property or assets except:
(i) Liens created by the Loan Documents or otherwise securing
the Secured Obligations;
(ii) Liens arising under the Receivables Purchase Documents;
(iii) Permitted Existing Liens;
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(iv) Customary Permitted Liens;
(v) purchase money Liens (including the interest of a lessor
under a Capitalized Lease and Liens to which any property is subject at the
time of the Borrower's acquisition thereof) securing Permitted Purchase
Money Indebtedness; PROVIDED that such Liens shall not apply to any
property of the Borrower or its Subsidiaries other than that purchased or
subject to such Capitalized Lease;
(vi) Liens with respect to property acquired by the Borrower or
any Subsidiary after the Closing Date (and not created in contemplation of
such acquisition) to the extent any such acquisitions are permitted
pursuant to the terms hereof;
(vii) Liens incurred in connection with sale-leaseback
transactions permitted under SECTION 7.3(J);
(viii) Liens on any of the Collateral which are incurred in
connection with the Guaranty Agreement to the extent (a) such Collateral
secures the Secured Obligations at such time and (b) the beneficiaries of
the Guaranty Agreement have entered into an intercreditor agreement with
the Administrative Agent in form and substance reasonably acceptable to the
Agents; and
(ix) Liens securing other obligations not exceeding $25,000,000
in the aggregate at any time outstanding.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any
other action, which would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Administrative Agent for the
benefit of itself and the Holders of Secured Obligations, as additional
collateral for the Obligations; PROVIDED that any agreement, note, indenture
or other instrument in connection with Permitted Purchase Money Indebtedness
(including Capitalized Leases) may prohibit the creation of a Lien in favor
of the Administrative Agent for the benefit of itself and the Holders of the
Secured Obligations on the items of property obtained with the proceeds of
such Permitted Purchase Money Indebtedness.
(D) INVESTMENTS. Other than Investments permitted pursuant to
PARAGRAPH (G) below, neither the Borrower nor any of its Subsidiaries shall
directly or indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than
the amount thereof on the Closing Date;
(iii) Investments in Ball Capital Corp. required in connection
with the Receivables Purchase Documents;
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(iv) Investments, if any, resulting from transactions under the
Manufacturing Supply Agreement;
(v) Investments in trade receivables or received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement (including settlements of litigation) of delinquent obligations
of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(vi) Investments consisting of deposit accounts maintained by the
Borrower and its Subsidiaries in the ordinary course of business in
connection with its cash management system;
(vii) Investments consisting of non-cash consideration from a
sale, assignment, transfer, lease, conveyance or other disposition of
property permitted by SECTION 7.3(B);
(viii) Investments consisting of intercompany loans from the
Borrower or any Subsidiary to the Borrower or any other Subsidiary
permitted by SECTION 7.3(A)(x); PROVIDED, that the aggregate of all Foreign
Subsidiary Investments made pursuant to this SECTION 7.3(D)(viii) shall not
exceed $25,000,000 at any time;
(ix) Investments which do not constitute Acquisitions, made in
cash and in any Person having similar lines of business to those of the
Borrower, PROVIDED that the total amount of all such Investments made after
the Closing Date (including the amount of all cash invested, the fair
market value of assets or property contributed and the principal amount of
any Indebtedness guaranteed in connection therewith, but excluding, to the
extent that any such Investment permitted hereunder shall be sold for cash,
the lesser of (x) the cash return of capital with respect to such
Investment (net of the cost of disposition) and (y) the initial amount of
such Investment) shall not exceed $25,000,000 during the term of this
Agreement; and
(x) Investments in any Subsidiary that is a Controlled Subsidiary
of the Borrower;
(xi) Investments constituting Permitted Acquisitions;
(xii) Restricted Investments permitted by SECTION 7.3(F)(viii);
(xiii) Investments, in addition to the Permitted Existing
Investment, in any member of the FTB Group; PROVIDED, HOWEVER, such
additional Investments which when aggregated with the amount of
Indebtedness which is credit enhanced pursuant to the provisions of SECTION
7.3(T) shall not exceed, in the aggregate an amount equal to Two Hundred
Seven Million Dollars ($207,000,000);
(xiv) Investments constituting Indebtedness permitted by SECTION
7.3(A) or Guarantied Obligations permitted by SECTION 7.3(E); and
(xv) Investments in addition to those permitted elsewhere in this
SECTION 7.3(D), in an amount not to exceed $40,000,000 in the aggregate at
any time outstanding;
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PROVIDED, HOWEVER, that the investments described in CLAUSES (ix), (xi), (xii)
AND (xiii) above shall not be permitted if either a default or an unmatured
default shall have occurred and be continuing on the date thereof or would
result therefrom.
(E) GUARANTIED OBLIGATIONS. neither the borrower nor any of its
subsidiaries shall directly or indirectly create or become or be liable with
respect to any Guarantied Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) Permitted Existing Guarantied Obligations; (iii) obligations,
warranties, and indemnities, not relating to indebtedness of any Person, which
have been or are undertaken or made in the ordinary course of business and not
for the benefit of or in favor of an Affiliate of the Borrower or such
Subsidiary which is not a Guarantor; (iv) Guarantied Obligations arising under
the Transaction Documents; (v) guaranties of Indebtedness permitted by SECTION
7.3(A), PROVIDED, that to the extent such indebtedness shall be subordinated to
the Obligations, each such guarantee shall be subordinated to the Obligations on
terms reasonably acceptable to the Administrative Agent; (vi) obligations under
the Guaranty Agreement; (vii) Guarantied Obligations with respect to surety,
appeal and performance bonds obtained by the Borrower or any Subsidiary in the
ordinary course of business; and (viii) additional Guarantied Obligations which
do not exceed $10,000,000 in the aggregate at any time.
(F) RESTRICTED PAYMENTS. Neither the borrower nor any of its subsidiaries
shall declare or make any Restricted Payment, except:
(i) the defeasance, redemption or repurchase of any
Indebtedness with the Net Cash Proceeds of Permitted Refinancing
Indebtedness;
(ii) mandatory payments of interest, principal or premium, if
any, due on the indebtedness in accordance with mandatory redemption or
repayment provisions in effect with respect to such indebtedness as of the
Closing Date, unless in each case such payments are prohibited by the terms
of such Indebtedness or the subordination provisions applicable thereto;
(iii) dividends or other distributions (including, without
limitation liquidating distributions) payable or made by (a) any
Wholly-Owned Subsidiary of the Borrower in compliance with applicable
corporation law; and (b) any other subsidiary of the borrower in compliance
with applicable corporation law; PROVIDED, that the amount of such
dividends or distributions under this CLAUSE (b) which are paid or made to
any Person not a member of the Ball Corporate Group (the "THIRD-PARTY
PAYMENTS") shall be included for purposes of calculating compliance with
CLAUSE (viii) below and shall be permitted only to the extent they are
permitted under CLAUSE (viii) below;
(iv) dividends or other payments from any Subsidiary of the
Borrower to the Borrower pursuant to the Tax Allocation Agreement;
(v) any public offering or other offering qualified under
Rule 144A under the Securities Act of 1933, as amended, of all or part
of the Equity Interests of a Person constituting the Aerospace business
unit of the Borrower and/or any dividend or other distribution by the
Borrower, direct or indirect, of any Equity Interests of a Person
constituting
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the Aerospace business unit of the Borrower; PROVIDED that (x) the
PRO FORMA opening consolidated financial statements of the Borrower
and its Subsidiaries shall demonstrate that the Leverage Ratio of the
Borrower and its Subsidiaries as of the last day of the Borrower's
most recently completed fiscal quarter (assuming the effectiveness of
such Restricted Payment on such last day of the Borrower's most recently
completed fiscal quarter) shall be less than or equal to the greater
of (A) 3.0 to 1.0 and (B) the Leverage Ratio of the Borrower and its
Subsidiaries as of the last day of the Borrower's most recently completed
fiscal quarter as set forth on the compliance certificate delivered
together with the financial statements for such fiscal quarter pursuant
to SECTION 7.1(A)(iii), (y) the Borrower would not otherwise be in Default
after giving effect thereto and (z) the Net Cash Proceeds of which shall
be paid in compliance with SECTION 2.5(B)(I)(a) and (b);
(vi) in connection with the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Borrower
owned by any member of the Borrower's or any of its Subsidiaries'
management, pursuant to a management equity subscription agreement or stock
option agreement in effect on the Closing Date or entered into after the
Closing Date with members of the management of any Person acquired after
the Closing Date, PROVIDED, that the aggregate purchase price of all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $15,000,000 in the aggregate since the Closing Date;
(vii) in connection with the repurchase of Equity Interests of the
Borrower or any Subsidiary of the Borrower held by employees, former
employees, directors or former directors pursuant to the terms of
agreements (including employment agreements) approved by the Borrower's
board of directors, PROVIDED, that the aggregate purchase price of all such
repurchased Equity Interests net of Equity Interests sold to employees or
directors shall not exceed $5,000,000 during any twelve-month period; and
(viii) Third-Party Payments under CLAUSE (iii) above and additional
Restricted Payments (including Restricted Investments but excluding any
Restricted Payment made in compliance with CLAUSE (v) above) which do not
in the aggregate exceed, for the period commencing with the Borrower's
fiscal quarter ending December 31, 1998, and ending on the last day of the
last quarter ending prior to such Third-Party Payment or Restricted
Payment, the greater of (A) the sum of $60,000,000 MINUS the amount of all
Third-Party Payments and Restricted Payments made under this CLAUSE (a),
and (B) the sum of (a) fifty percent (50%) of Consolidated Net Income for
such period (or, if Consolidated Net Income for such period is a deficit,
less 100% of such deficit), PLUS (b) the aggregate Net Cash Proceeds from
the sale or issuance of Equity Interests (other than Disqualified Stock) of
the Borrower for such period, PLUS (c) to the extent that any Restricted
Investment permitted hereunder and made after the Closing Date shall be
sold for cash during such period, the lesser of (x) the cash return of
capital with respect to such Restricted Investment (net of the cost of
disposition) and (y) the initial amount of such Restricted Investment;
PROVIDED, HOWEVER, that the Restricted Payments described in CLAUSES (iv),
(v), (vi), (vii) and (viii) above shall not be permitted if either a
Default or an Unmatured Default shall have
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occurred and be continuing at the date of declaration or payment thereof
or would result therefrom.
(G) CONDUCT OF BUSINESS; RESTRICTIONS ON EXCLUDED SUBSIDIARIES;
SUBSIDIARIES; ACQUISITIONS. (i) Neither the Borrower nor any of its
Subsidiaries or Excluded Subsidiaries shall engage in any business other than
the businesses engaged in by the Borrower and such Subsidiaries and Excluded
Subsidiaries on the date hereof, the businesses engaged in by the Reynolds
Group which is being acquired pursuant to the Reynolds Acquisition and any
business or activities which are substantially similar, related or incidental
thereto. Without first entering into documentation reasonably acceptable to
the Administrative Agent and consistent with the requirements set forth in
SECTION 7.2(K), pursuant to which the Capital Stock of such entity is
pledged pursuant to a Pledge Agreement and pursuant to which such entity
becomes a Guarantor (at which time such entity shall be a "Subsidiary"
hereunder and shall no longer constitute an "Excluded Subsidiary"), no
Excluded Subsidiary shall engage in any business enterprise other than being
a "name-holding" entity and shall have no assets (other than the statutorily
required minimum capitalization) or liabilities.
(ii) The Borrower may create, acquire and/or capitalize any
Subsidiary (a "NEW SUBSIDIARY") after the date hereof pursuant to any
transaction that is permitted by or not otherwise prohibited by this
Agreement, PROVIDED that (1) each New Subsidiary that is a Domestic
Incorporated Subsidiary shall execute a guaranty of the Obligations and (2)
(x) all of the Equity Interests in each New Subsidiary that is a Domestic
Incorporated Subsidiary and (y) 65% of the Equity Interests in each New
Subsidiary that is a Material Foreign Subsidiary, in each case, owned by the
Borrower or any other Subsidiary shall be pledged to the Administrative
Agent, for the benefit of Holders of Secured Obligations, pursuant to
documentation in form and substance satisfactory to the Administrative Agent.
(iii) Neither the Borrower nor any of its Subsidiaries shall make any
Acquisitions, other than (x) the Reynolds Acquisition, (y) the Latasa
Acquisition, provided the aggregate purchase price (including assumed
liabilities) in respect thereof shall not exceed $74,000,000, and (z) other
Acquisitions meeting the following requirements or otherwise approved by the
Required Lenders (each of the Acquisitions permitted by CLAUSES (x), (y) and (z)
constituting a "PERMITTED ACQUISITION"):
(1) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(2) after giving effect to such transaction, the aggregate of all
Foreign Subsidiary Investments would not exceed the Permitted Foreign
Subsidiary Investment Amount;
(3) the Acquisition shall be consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis and the businesses being
acquired shall be substantially similar, related or incidental to the
businesses or activities engaged in by the Borrower and its Subsidiaries on
the Closing Date;
(4) if the Leverage Ratio (calculated on a PRO FORMA basis using
historical audited and reviewed unaudited financial statements obtained
from the seller, broken down by fiscal quarter in the Borrower's reasonable
judgment, as if the Acquisition and such incurrence of
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Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Borrower's most recently completed fiscal
quarter) is greater than 3.0 to 1.0, the aggregate purchase price
(including assumed liabilities) of all Acquisitions otherwise permitted
under this SECTION 7.3(G)(iii)(z) shall not exceed (a) for any single
transaction or series of related transactions, $50,000,000; and (b) for
all transactions from and after the Closing Date, $100,000,000; and
(5) prior to each such Acquisition, the Borrower shall deliver to the
Administrative Agent a certificate from one of the Authorized Officers of
the Borrower, demonstrating to the reasonable satisfaction of the
Administrative Agent and the Required Lenders that after giving effect to
such Acquisition and the incurrence of any Indebtedness permitted by
SECTION 7.3(A) in connection therewith, on a PRO FORMA basis using
historical audited and reviewed unaudited financial statements obtained
from the seller, broken down by fiscal quarter in the Borrower's reasonable
judgment, as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the last day
of the Borrower's most recently completed fiscal quarter, the Borrower
would have been in compliance with the financial covenants in SECTION 7.4
and not otherwise in Default.
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the
Borrower nor any of its Subsidiaries shall (i) directly or indirectly enter
into or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder or holders of any of the Equity Interests of the
Borrower, or with any Affiliate of the Borrower which is not its Subsidiary,
on terms that are less favorable to the Borrower or any of its Subsidiaries,
as applicable, than those that might be obtained in an arm's length
transaction at the time from Persons who are not such a holder or Affiliate,
except for (a) Permitted Receivables Transfers, (b) transactions pursuant to
the Tax Allocation Agreement, (c) transactions pursuant to the Manufacturing
Supply Agreement, and (d) Restricted Payments permitted by SECTION 7.3(F) or
(ii) enter or permit to exist any such non-arm's length transaction between
either the Borrower or any Domestic Incorporated Subsidiary, on the one hand,
and any Foreign Incorporated Subsidiary, on the other hand, if as a result
thereof the aggregate of all Foreign Subsidiary Investments would at any time
exceed the Permitted Foreign Subsidiary Investment Amount.
(I) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any
of its Subsidiaries shall enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or substantially all of the Borrower's or any
such Subsidiary's business or property, whether now or hereafter acquired,
except (a) transactions permitted under SECTIONS 7.3(B), 7.3(F) or 7.3(G) and
(b) the merger of any Subsidiary into the Borrower or a Controlled
Subsidiary. No member of the FTB Group shall enter into any merger or
consolidation, except the merger or consolidation of any member of the FTB
Group into any other member of the FTB Group; PROVIDED, that FTB shall be the
survivor of any merger or consolidation to which it is a party and no Change
of Control shall result therefrom.
(J) SALES AND LEASEBACKS. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Guarantied
Obligation, with respect to any lease, whether an
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operating lease or a Capitalized Lease, of any property (whether real or
personal or mixed (other than the aircraft owned by the Borrower and its
Subsidiaries as of the Closing Date)) (i) which it or one of its Subsidiaries
sold or transferred or is to sell or transfer to any other Person, or (ii)
which it or one of its Subsidiaries intends to use for substantially the same
purposes as any other property which has been or is to be sold or transferred
by it or one of its Subsidiaries to any other Person in connection with such
lease, unless in either case the sale involved is not prohibited under
SECTION 7.3(B) and the lease involved is not prohibited under SECTION 7.3(A).
(K) MARGIN REGULATIONS. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(L) ERISA. To the extent that any of the following actions or
omissions, individually or in the aggregate, would reasonably be expected to
subject the Borrower or any member of the Controlled Group to liability in
excess of $25,000,000, the Borrower shall not:
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Code for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(ii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments required under Section
412 of the Code or due with respect to any waived funding deficiency with
respect to any Benefit Plan;
(iii) terminate, or permit any Controlled Group member to terminate,
any Benefit Plan which would result in any liability of the Borrower or any
Controlled Group member under Title IV of ERISA;
(iv) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(v) amend, or permit any Controlled Group member to amend, a Benefit
Plan resulting in an increase in current liability for the plan year such
that the Borrower or any Controlled Group member is required to provide
security to such Plan under Section 401(a)(29) of the Code other than an
amendment required by applicable law, a collective bargaining agreement or
related obligation or a purchase or sale agreement;
(vi) permit any unfunded liabilities with respect to any Foreign
Pension Plan except to the extent that any such unfunded liabilities are
being funded by annual contributions made by the Borrower or any member of
its Controlled Group and such annual contributions are not less than the
minimum amounts required under applicable local law; or
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(vii) fail, or permit any of its Subsidiaries or Controlled Group
members to fail, to pay any required contributions or payments to a Foreign
Pension Plan on or before the due date for such required installment or
payment.
(M) ISSUANCE OF DISQUALIFIED STOCK. Neither the Borrower nor any of its
Subsidiaries shall issue any Disqualified Stock other than (i) the issuance of
Disqualified Stock having a liquidation preference in an aggregate amount not in
excess of the principal amount of Indebtedness that the Borrower and its
Subsidiaries could incur on the date of such issuance pursuant to SECTION
7.3(A)(vi) or (vii) or (ii) pursuant to an exchange or conversion of then
outstanding Indebtedness of the Borrower or any of its Subsidiaries for or into
Disqualified Stock, PROVIDED that, to the extent that the aggregate amount of
the liquidation preference of such Disqualified Stock exceeds the principal
amount of the Indebtedness so exchanged or converted, such Disqualified Stock
could be issued pursuant to CLAUSE (i) above. All such issued and outstanding
Disqualified Stock shall be treated as Indebtedness for all purposes of this
Agreement (and as funded Indebtedness for purposes of SECTION 7.1(G)), and the
amount of such deemed Indebtedness shall be the aggregate amount of the
liquidation preference of such Disqualified Stock. The Borrower shall not
permit any Subsidiary to issue any shares of preferred stock.
(N) CORPORATE DOCUMENTS. Neither the Borrower nor any of its Subsidiaries
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents or the Tax Allocation Agreement as in
effect on the date hereof in any manner adverse in any material respect to the
interests of the Lenders, without the prior written consent of the Required
Lenders.
(O) FISCAL YEAR. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on December 31 of each calendar
year.
(P) SUBSIDIARY COVENANTS. Except as required in connection with the
Receivables Purchase Documents, the Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective or suffer to exist
any consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to effect any of the following: (i) pay dividends or make any other
distribution on its stock, (ii) make any other Restricted Payment, (iii) pay any
Indebtedness or other Obligation owed to the Borrower or any other Subsidiary,
(iv) make loans or advances or other Investments in the Borrower or any other
Subsidiary, or (v) sell, transfer or otherwise convey any of its property to the
Borrower or any other Subsidiary (except property subject to a Lien permitted
hereunder).
(Q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant to
which the Borrower has hedged its actual interest rate, foreign currency or
commodity exposure. Such permitted hedging agreements entered into by the
Borrower and any other Person are sometimes referred to herein as "HEDGING
AGREEMENTS."
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(R) OTHER INDEBTEDNESS. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or consent
to any amendment, modification or supplement of), any document, agreement or
instrument evidencing the Senior Notes or any Subordinated Indebtedness (or any
replacements, substitutions or renewals thereof) or pursuant to which the Senior
Notes or any Subordinated Indebtedness is issued where such amendment,
modification or supplement provides for the following or which has any of the
following effects:
(i) increases the overall principal amount of any such
Indebtedness or increases the amount of any single scheduled installment
of principal or interest;
(ii) shortens or accelerates the date upon which any installment of
principal or interest becomes due or adds any additional mandatory
redemption provisions;
(iii) shortens the final maturity date of such Indebtedness or
otherwise accelerates the amortization schedule with respect to such
Indebtedness;
(iv) increases the rate of interest accruing on such Indebtedness;
(v) provides for the payment of additional fees or increases
existing fees;
(vi) amends or modifies any financial or negative covenant (or
covenant which prohibits or restricts the Borrower or a Subsidiary of the
Borrower from taking certain actions) in a manner which is more onerous or
more restrictive in any material respect to the Borrower (or any Subsidiary
of the Borrower) or which is otherwise materially adverse to the Borrower
and/or the Lenders or, in the case of adding covenants, which places
material additional restrictions on the Borrower (or a Subsidiary of the
Borrower) or which requires the Borrower or any such Subsidiary to comply
with more restrictive financial ratios or which requires the Borrower to
better its financial performance from that set forth in the existing
financial covenants;
(vii) amends, modifies or adds any affirmative covenant in a manner
which, when taken as a whole, is materially adverse to the Borrower and/or
the Lenders; or
(viii) in the case of any Subordinated Indebtedness, amends, modifies
or supplements the subordination provisions thereof.
(S) AMENDMENT OF RECEIVABLES PURCHASE DOCUMENTS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, agree to or enter into any
amendment, restatement or other modification of the Receivables Purchase
Documents, or substitute or replace the Receivables Purchase Documents with
another receivables securitization facility, that would (i) increase the maximum
amount of Indebtedness to be incurred thereunder to an amount in excess of
$125,000,000, provided that in any event the Borrower shall concurrently reduce
the Aggregate Revolving Loan Commitment pursuant to SECTION 2.6 by an amount
equal to or greater than the amount of any increase of such Indebtedness; (ii)
accelerate any scheduled amortization date; (iii) increase the recourse
obligations of the Borrower or any of its Subsidiaries (other than Ball Capital
Corp.) in any material
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respect; (iv) provide for an "Event of Default," "Termination Event," "Early
Amortization Event," "Servicer Default" or other similar event upon the
occurrence of a Default or Unmatured Default hereunder; (v) impose net worth
covenants for Ball Capital Corp. that are materially more stringent than
those in existence on the Closing Date; (vi) materially decrease the cash
consideration to be paid to Ball Capital Corp. or Ball Metal Food Container
Corp., a Delaware corporation, Ball Plastic Container Corp., a Colorado
corporation, and BMBCC on account of any Permitted Receivables Transfers; or
(vii) materially increase the amount of discount, yield or interest payable
thereunder.
(T) RESTRICTIONS ON CREDIT SUPPORT TO THE FTB GROUP. Other than
Permitted Existing Investments with respect to the FTB Group, neither the
Borrower nor any of its Subsidiaries shall provide any type of credit support
or credit enhancement to any member of the FTB Group, whether directly
through loans to or Investments in, letters of credit issued for the benefit
of any creditor of any member of the FTB Group or guarantees or any other
Contractual Obligation, contingent or otherwise, of the Borrower or any of
such Subsidiaries with respect to any Indebtedness or other obligation or
liability of any member of the FTB Group, including, without limitation, any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
supported by letter of credit, endorsed (other than for collection or deposit
in the ordinary course of business), co-made or discounted or sold with
recourse, or in respect of which the Borrower or any of its Subsidiaries is
otherwise directly or indirectly liable, including contractual obligations
(contingent or otherwise) arising through any agreement to purchase,
repurchase, or otherwise acquire such Indebtedness, obligation or liability
or any security therefor, or to provide funds for the payment or discharge
thereof (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received; PROVIDED such credit support or other credit enhancement shall be
permitted if and only to the extent that it is treated as an Investment
covered by the provisions of SECTION 7.3(D) and to the extent that such
credit support or credit enhancement when added to the other Investments in
the FTB Group would be permitted pursuant to SECTION 7.3(D).
(U) AMENDMENTS TO AGREEMENTS. The Borrower shall not enter into, and
shall not permit any Subsidiary to enter into, or otherwise consent to, any
amendment or other modification to the Asset Purchase Agreement in any way
that would be materially adverse to the Borrower or any of its Subsidiaries
or to any of the Lenders.
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(A) DEFINED TERMS FOR FINANCIAL COVENANTS. The following terms used in
this Agreement shall have the following meanings (such meanings to be
applicable, except to the extent otherwise indicated in a definition of a
particular term, both to the singular and the plural forms of the terms
defined):
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness, but excluding
(without duplication) any capitalized interest with respect thereto) by the
Borrower and its Subsidiaries during that period that, in conformity with
Agreement Accounting Principles, are required to be included in or reflected
by the property, plant, equipment or similar fixed asset accounts reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries.
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"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CONSOLIDATED NET INCOME" shall mean the net income and net losses of the
Borrower and its Subsidiaries on a consolidated basis as defined according to
Agreement Accounting Principles after excluding, without duplication, the sum of
(i) any net losses or net income from the operations of any member of the FTB
Group (other than net income which has been paid by cash dividend or otherwise
distributed in cash to the Borrower or one of the Guarantors) and (ii) the
cumulative effect of a change in accounting principles, in each case, calculated
for the applicable period and determined in accordance with Agreement Accounting
Principles; PROVIDED, that when calculating Consolidated Net Income, there shall
be excluded from such calculation, the earnings of a Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary to the Borrower with respect to such earnings is not, at the date of
determination, permitted without the prior approval of a Governmental Authority
(and such approval has not been obtained), or is prohibited, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary or the holders of its Capital Stock. For purposes
of the calculation of Consolidated Net Income, the provisions of CLAUSE (i)
shall be applicable to the FTB Group whether or not they constitute a Minority
Interest.
"CONSOLIDATED NET WORTH" shall mean the sum of shareholders' equity of the
Borrower and its Subsidiaries, including preferred stock of the Borrower and its
Subsidiaries; PROVIDED, that there shall be excluded therefrom all amounts
related to the FTB Group.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
(i) Consolidated Net Income,
PLUS (ii) Interest Expense, to the extent deducted in computing
Consolidated Net Income,
PLUS (iii) charges against income for foreign, federal, state and
local taxes, to the extent deducted in computing
Consolidated Net Income,
PLUS (iv) depreciation expense, to the extent deducted in
computing Consolidated Net Income,
PLUS (v) amortization expense, including, without limitation,
amortization of goodwill and other intangible assets,
Transaction Costs, and other fees, costs and
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expenses in connection with Permitted Acquisitions,
in each case, to the extent deducted in computing
Consolidated Net Income,
PLUS (vi) the lease expense component of the Synthetic Leases,
to the extent deducted in computing Consolidated Net
Income,
MINUS (vii) the gain (or PLUS the loss) (net of any tax effect)
resulting from the sale of any capital assets other
than in the ordinary course of business,
MINUS (viii) extraordinary or nonrecurring after-tax gains (or PLUS
extraordinary or nonrecurring after-tax losses),
MINUS (ix) any gain resulting from any write-up of assets (other
than with respect to any Company Owned Life Insurance
Program),
PLUS (x) any loss resulting from any write-down of assets; and
PLUS (xi) any non-cash restructuring charge.
in each case calculated for the applicable period in conformity with Agreement
Accounting Principles.
"INTEREST EXPENSE" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries (other than the FTB Group),
whether paid or accrued (including the interest component of Capitalized
Leases, the interest component of the Synthetic Leases, net payments (if any)
pursuant to Hedging Obligations relating to interest rate protection,
commitment and letter of credit fees, and discount and other fees and charges
incurred under the Receivables Purchase Documents), but excluding interest
expense not payable in cash (including amortization of discount), as
determined in conformity with Agreement Accounting Principles.
"TOTAL DEBT" means, for any period, on a consolidated basis for the
Borrower and its consolidated Subsidiaries (other than the FTB Group),
Indebtedness of the Borrower and its Subsidiaries, other than (i) Hedging
Obligations and (ii) the sum (without duplication) of the amounts then
available for drawing under commercial or trade letters of credit and (iii)
Support Obligations.
(B) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a)
$500,000,000, PLUS (b) fifty percent (50%) of Consolidated Net Income (if
positive) calculated separately for each fiscal quarter commencing with the
fiscal quarter ending December 31, 1998, PLUS (c) one hundred percent (100%)
of the Net Cash Proceeds resulting from the issuance by the Borrower of any
Capital Stock.
(C) TOTAL DEBT TO EBITDA RATIO. The Borrower shall not permit the ratio
(the "LEVERAGE RATIO") of Total Debt to EBITDA to be greater than the ratio
set forth below under the column entitled "Leverage Ratio" at any time during
the fiscal quarter ending on the corresponding date set forth below:
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<TABLE>
<CAPTION>
QUARTER ENDING LEVERAGE RATIO
-------------- --------------
<S> <C>
December 31, 1998 4.75 to 1.00
March 31, 1999 4.75 to 1.00
June 30, 1999 4.75 to 1.00
September 30, 1999 4.50 to 1.00
December 31, 1999 4.50 to 1.00
March 31, 2000 4.25 to 1.00
June 30, 2000 4.25 to 1.00
September 30, 2000 4.00 to 1.00
December 31, 2000 4.00 to 1.00
March 31, 2001 4.00 to 1.00
June 30, 2001
and each quarter
thereafter 3.50 to 1.00
</TABLE>
The Leverage Ratio shall be calculated, in each case, determined as of the last
day of each fiscal quarter based upon (a) for Total Debt, Total Debt as of the
last day of each such fiscal quarter; and (b) for EBITDA, the actual amount for
the four-quarter period ending on such day, calculated, with respect to
Permitted Acquisitions, on a PRO FORMA basis using historical audited and
reviewed unaudited financial statements obtained from the seller, broken down by
fiscal quarter in the Borrower's reasonable judgment; PROVIDED, that there shall
be excluded from the calculation of the Leverage Ratio all amounts related to
the FTB Group.
(D) FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain a ratio
("FIXED CHARGE COVERAGE RATIO") of (i) the sum (without duplication) of the
amounts of (a) EBITDA MINUS (b) Capital Expenditures to (ii) the sum of the
amounts of (a) scheduled amortization of the principal portion of the Term Loans
and scheduled amortization of the principal portion of all other Indebtedness of
the Borrower and its Subsidiaries (PROVIDED, that solely for purposes of
calculating the Fixed Charge Coverage Ratio as of the fiscal quarter ending on
December 31, 2001, such calculation shall be made exclusive of payments made at
the final maturity of the Synthetic Leases during such fiscal quarter), PLUS (b)
Interest Expense, PLUS (c) cash taxes paid, PLUS (d) dividends paid by the
Borrower or other cash distributions made on the equity of the Borrower
(PROVIDED, that for purposes of this SECTION 7.4(D), calculation of the Fixed
Charge Coverage Ratio shall be exclusive of the effect of Restricted Payments
made in compliance with SECTION 7.3(F)(v)) during such period of at least:
(i) 1.05 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending December 31, 1998 through the fiscal quarter
ending June 30, 1999;
(ii) 1.10 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending September 30, 1999 through the fiscal
quarter ending June 30, 2000;
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(iii) 1.15 to 1.00 for each fiscal quarter for the period commencing
with the fiscal quarter ending on September 30, 2000 through the fiscal
quarter ending on June 30, 2001; and
(iv) 1.20 to 1.00 for each fiscal quarter thereafter until the
Termination Date.
In each case the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four-quarter period ending on such day
PROVIDED, that there shall be excluded from the calculation of the Fixed Charge
Coverage Ratio all amounts relating to the FTB Group.
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a
Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to pay
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within five (5) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) SECTION 7.1(C) through and including (J) and SECTION 7.2 and such
failure shall continue unremedied for fifteen (15) Business Days;
(ii) SECTION 7.1(A), 7.1(B), or 7.3 or 7.4.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by the Borrower to the Administrative Agent or any Lender
herein or by the Borrower or any of its Subsidiaries in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be untrue in any material
respect on the date as of which made (or deemed made).
(d) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
PARAGRAPHS (a), (b) or (c) of this SECTION 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for fifteen (15) Business Days after the earlier of (i) notice from the
Administrative Agent or (ii) the date on which any member of the Borrower's or
such Subsidiary's management, as applicable, shall first have actual knowledge
thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS. (x) Any "Default" shall occur under
and as defined in the Short-Term Credit Agreement; or (y) the Borrower or any of
its Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or
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otherwise) with respect to any Indebtedness (including, without limitation,
Indebtedness with respect to any Hedging Agreement, but other than (i) the
Obligations and the Indebtedness under the Receivables Purchase Documents and
(ii) the Obligations and Indebtedness of the FTB Group (which Obligations and
Indebtedness are non-recourse to the Borrower and its Subsidiaries)) the
aggregate outstanding principal amount of which Indebtedness is in excess of
$10,000,000; or any breach, default or event of default shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption, a requirement that the Borrower or any of
its Subsidiaries offer to purchase such Indebtedness or other required
repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness
to accelerate the maturity of any such Indebtedness or require a redemption
or other repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) or
the holder of such Indebtedness requires such Indebtedness to be prepaid,
redeemed or otherwise repurchased by the Borrower or any of its Subsidiaries
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case under applicable bankruptcy, insolvency or
other similar law shall be commenced against the Borrower or any Material
Subsidiary and the petition shall not be dismissed, stayed, bonded or
discharged within sixty (60) days after commencement of the case; or a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Borrower or any Material Subsidiary in an
involuntary case, under any applicable bankruptcy, insolvency or other
similar law now or hereinafter in effect; or any other similar relief shall
be granted under any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Borrower or any
Material Subsidiary or over all or a substantial part of the property of
the Borrower or any Material Subsidiary shall be entered; or an interim
receiver, trustee or other custodian of the Borrower or any Material
Subsidiary or of all or a substantial part of the property of the Borrower
or any Material Subsidiary shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the property
of the Borrower or any Material Subsidiary shall be issued and any such
event shall not be stayed, dismissed, bonded or discharged within sixty
(60) days after entry, appointment or issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any Material Subsidiary shall (i) commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (ii)
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, (iii)
consent to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property, (iv) make any
assignment for the benefit of creditors or (v) take any corporate action to
authorize any of the foregoing.
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(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any Material Subsidiary
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $10,000,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any judicially
sanctioned sale thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower or any Material Subsidiary decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of sixty (60) days; or the Borrower or any Material Subsidiary shall
otherwise dissolve or cease to exist except as specifically permitted by this
Agreement.
(j) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason, (i)
any Loan Document as a whole that materially affects the ability of the
Administrative Agent, or any of the Lenders to enforce the Obligations or
enforce their rights against the Collateral ceases to be in full force and
effect or the Borrower or any of the Borrower's Subsidiaries party thereto seeks
to repudiate its obligations thereunder and the Liens intended to be created
thereby are, or the Borrower or any such Subsidiary seeks to render such Liens,
invalid or unperfected, or (ii) any material Lien on Collateral in favor of the
Administrative Agent contemplated by the Loan Documents shall, at any time, for
any reason (except as permitted by the terms of any such Loan Document), be
invalidated or otherwise cease to be in full force and effect, or such Lien
shall not have the priority contemplated by this Agreement or the Loan
Documents.
(k) TERMINATION EVENT. Any Termination Event occurs which individually or
in the aggregate would reasonably be expected to subject the Borrower or any
Controlled Group member to liability in excess of $25,000,000.
(l) WAIVER OF MINIMUM FUNDING STANDARD. The plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the substantial business
hardship upon which the application for the waiver is based could reasonably be
expected to subject either the Borrower or any Controlled Group member to
liability in excess of $10,000,000.
(m) CHANGE OF CONTROL. A Change of Control shall occur.
(n) ENVIRONMENTAL MATTERS. The Borrower or any of its Subsidiaries shall
be the subject of any proceeding or investigation pertaining to (i) the Release
by the Borrower or any of its Subsidiaries of any Contaminant, (ii) the
liability of the Borrower or any of its Subsidiaries arising from the Release by
any other Person of any Contaminant, or (iii) any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries, which, in any case, has subjected or is reasonably likely to
subject the Borrower or any of its Subsidiaries to liability individually or in
the aggregate in excess of $25,000,000 (exclusive of costs, expenses, claims
covered by insurance policies of the Borrower or any of its Subsidiaries unless
the insurers of such costs, expenses or claims have
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disclaimed coverage or reserved the right to disclaim coverage thereof and
exclusive of costs, expenses or claims covered by the indemnity of a
financially responsible indemnitor in favor of the Borrower or any of its
Subsidiaries unless the indemnitor has disclaimed or reserved the right to
disclaim coverage thereof).
(o) GUARANTOR DEFAULT OR REVOCATION. The Borrower or any Guarantor shall
terminate or revoke any of their respective obligations under any of the
Collateral Documents, or any other guarantor of the Obligations shall terminate
or revoke any of its obligations under the applicable guarantee agreement or
breach any of the terms of such guarantee agreement.
(p) FAILURE OF SUBORDINATION. The subordination provisions of the
documents and instruments evidencing any Subordinated Indebtedness shall, at any
time, be invalidated or otherwise cease to be in full force and effect.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described in
SECTION 8.1(f) or 8.1(g) or 8.1(i) occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation of each
Issuing Bank to issue Letters of Credit hereunder shall automatically terminate
and the Obligations shall immediately become due and payable without any
election or action on the part of the Administrative Agent or any Lender. If
any other Default occurs, the Required Lenders may terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation of the
Issuing Banks to issue Letters of Credit hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower expressly waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its
Applicable Pro Rata Share of any Advance requested or deemed requested by the
Borrower, which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Advance being hereinafter referred to as a
"NON PRO RATA LOAN"), until the earlier of such Lender's cure of such failure
and the termination of the Revolving Loan Commitments, the proceeds of all
amounts thereafter repaid to the Administrative Agent by the Borrower and
otherwise required to be applied to such Lender's share of all other Obligations
pursuant to the terms of this Agreement shall be advanced to the Borrower by the
Administrative Agent on behalf of such Lender to cure, in full or in part, such
failure by such Lender, but shall nevertheless be deemed to have been paid to
such Lender in satisfaction of such other Obligations. Notwithstanding anything
in this Agreement to the contrary:
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(i) the foregoing provisions of this SECTION 9.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to SECTION
2.10;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Revolving Loan Pro Rata Share, Tranche A Pro Rata Share or
Tranche B Pro Rata Share, as applicable, of any Advance at such time
as an amount equal to such Lender's original Revolving Loan Pro Rata
Share, Tranche A Pro Rata Share or Tranche B Pro Rata Share, as
applicable, of the requested principal portion of such Advance is
fully funded to the Borrower, whether made by such Lender itself or by
operation of the terms of this SECTION 9.2, and whether or not the Non
Pro Rata Loan with respect thereto has been repaid, converted or
continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Revolving Loan Pro Rata
Share, Tranche A Pro Rata Share or Tranche B Pro Rata Share, as
applicable, of any Advance ("CURE LOANS") shall bear interest at the
rate applicable to Floating Rate Loans in effect from time to time,
and for all other purposes of this Agreement shall be treated as if
they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied FIRST, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, SECOND,
ratably to Floating Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, THIRD, ratably to Floating Rate Loans
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Revolving Loan Pro Rata Share, Tranche
A Pro Rata Share or Tranche B Pro Rata Share, as applicable, of any
Advance and the termination of the Revolving Loan Commitments, the
term "Required Lenders" for purposes of this Agreement shall mean
Lenders (excluding all Lenders whose failure to fund their respective
Revolving Loan Pro Rata Share, Tranche A Pro Rata Share or Tranche B
Pro Rata Share, as applicable, of such Advance have not been so cured)
whose Pro Rata Shares represent at least fifty percent (50%) of the
aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Revolving Loan Pro Rata Share, Tranche A Pro Rata Share or Tranche
B Pro Rata Share, as applicable, of any Advance is cured in accordance
with SECTION 9.2(ii), (A) such Lender shall not be entitled to any
commitment fees with respect to its Revolving Loan Commitment and (B)
such Lender shall not be entitled to any letter of credit fees, which
commitment fees and letter of credit fees shall accrue in favor of the
Lenders which have funded their respective Revolving Loan Pro Rata
Share, Tranche A Pro Rata Share or Tranche B Pro Rata Share, as
applicable, of such requested Advance,
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shall be allocated among such performing Lenders ratably based upon
their relative Revolving Loan Commitments, and shall be calculated based
upon the average amount by which the aggregate Revolving Loan
Commitments of such performing Lenders exceeds the sum of (I) the
outstanding principal amount of the Loans owing to such performing
Lenders, PLUS (II) the outstanding Reimbursement Obligations owing to
such performing Lenders, PLUS (III) the aggregate participation
interests of such performing Lenders arising pursuant to SECTION 3.6
with respect to undrawn and outstanding Letters of Credit.
9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the
Required Lenders (or the Administrative Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; PROVIDED, HOWEVER, that no such supplemental
agreement shall, without the consent of each Lender affected thereby:
(i) Postpone or extend the Revolving Loan Termination Date, the
Tranche A Term Loan Termination Date or the Tranche B Term Loan Termination
Date or any other date fixed for any payment of principal of, or interest
on, the Loans, the Reimbursement Obligations or any fees or other amounts
payable to such Lender (except with respect to (a) any modifications of the
provisions relating to prepayments of Loans and other Obligations (provided
that any modifications of the provisions relating to the prepayments of the
Tranche A Term Loans and/or the Tranche B Term Loans shall also require the
approval of Lenders with Tranche A Pro Rata Shares and Tranche B Pro Rata
Shares, as applicable and in each case, greater than fifty percent (50%))
or (b) a waiver of the application of the default rate of interest pursuant
to SECTION 2.11 hereof).
(ii) Reduce the principal amount of any Loans or L/C Obligations,
or reduce the rate or extend the time of payment of interest or fees
thereon.
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters, or
amend the definitions of "Required Lenders", "Revolving Loan Pro Rata
Share", "Tranche A Pro Rata Share", "Tranche B Pro Rata Share", or "Pro
Rata Share".
(iv) Increase the amount of the Revolving Loan Commitment,
Tranche A Term Loan Commitment or Tranche B Term Loan Commitment of any
Lender hereunder, or increase any Lender's Revolving Loan Pro Rata Share,
Tranche A Pro Rata Share, Tranche B Pro Rata Share or Pro Rata Share.
(v) Permit the Borrower to assign its rights under this
Agreement.
(vi) Amend this SECTION 9.3.
(vii) Release all or substantially all of the Collateral.
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(viii) Except in connection with a transaction otherwise permitted
pursuant to the terms of any Loan Document, release any Domestic
Incorporated Subsidiary from its obligations under the Subsidiary Guaranty.
Any supplemental agreement entered into in accordance with the terms of this
SECTION 9.3 shall apply to each of the Lenders equally. No amendment of any
provision of this Agreement relating to (a) the Administrative Agent shall be
effective without the written consent of the Administrative Agent, (b) Swing
Line Loans shall be effective without the written consent of the Swing Line Bank
and (c) any Issuing Lender without the written consent of such Issuing Lender.
The Administrative Agent may waive payment of the fee required under SECTION
13.3(B) without obtaining the consent of any of the Lenders.
9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan or the issuance of a Letter of Credit
notwithstanding the existence of a Default or the inability of the Borrower to
satisfy the conditions precedent to such Loan or issuance of such Letter of
Credit shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to SECTION 9.3,
and then only to the extent in such writing specifically set forth. All
remedies contained in the Loan Documents or by law afforded shall be cumulative
and all shall be available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of this
Agreement and the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the
Administrative Agent may, but shall have no obligation, to (i) at any time, pay
or discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against any Collateral and (ii) after the occurrence and
during the continuance of a Default, make any other payment or perform any act
required of the Borrower under any Loan Document or take any other action which
the Administrative Agent in its discretion deems necessary or desirable to
protect or preserve the Collateral, including, without limitation, any action to
(y) effect any repairs or obtain any insurance called for by the terms of any of
the Loan Documents and to pay all or any part of the premiums therefor and the
costs thereof and (z) pay any rents payable by the Borrower which are more than
30 days past due, or as to which the
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landlord has given notice of termination, under any lease. The
Administrative Agent shall use its best efforts to give the Borrower notice
of any action taken under this SECTION 10.3 prior to the taking of such
action or promptly thereafter provided the failure to give such notice shall
not affect the Borrower's obligations in respect thereof. The Borrower
agrees to pay the Administrative Agent, upon demand, the principal amount of
all funds advanced by the Administrative Agent under this SECTION 10.3,
together with interest thereon at the rate from time to time applicable to
Floating Rate Loans from the date of such advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make
payment in respect of any such advance under this SECTION 10.3 within one (1)
Business Day after the date the Borrower receives written demand therefor
from the Administrative Agent, the Administrative Agent shall promptly notify
each Lender and each Lender agrees that it shall thereupon make available to
the Administrative Agent, in Dollars in immediately available funds, the
amount equal to such Lender's Pro Rata Share of such advance. If such funds
are not made available to the Administrative Agent by any such Lender within
one (1) Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Effective Rate for
each day during the period commencing on the date of such demand and ending
on the date such amount is received. The failure of any Lender to make
available to the Administrative Agent its Pro Rata Share of any such
unreimbursed advance under this SECTION 10.3 shall neither relieve any other
Lender of its obligation hereunder to make available to the Administrative
Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Administrative Agent. All outstanding principal of, and
interest on, advances made under this SECTION 10.3 shall constitute
Obligations secured by the Collateral until paid in full by the Borrower.
10.4 HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agents and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agents and the
Lenders relating to the subject matter thereof.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Administrative Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agents and the Arrangers
for any reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agents, which attorneys and paralegals may be
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employees of the Agents) paid or incurred by any Agent or any Arranger in
connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Agents and the
Arrangers and the Lenders for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' and paralegals' fees
and time charges of attorneys and paralegals for the Agents and the Arrangers
and the Lenders, which attorneys and paralegals may be employees of the
Agents or the Arrangers or the Lenders) paid or incurred by any Agent or any
Arranger or any Lender in connection with the restructure, workout or
collection of the Obligations and enforcement (whether by legal proceedings,
negotiation or otherwise) of the Loan Documents. In addition to expenses set
forth above, the Borrower agrees to reimburse the Administrative Agent,
promptly after the Administrative Agent's request therefor, for each audit,
or other business analysis expressly permitted or contemplated hereby and
performed by or for the benefit of the Lenders in connection with this
Agreement or the other Loan Documents in an amount equal to the
Administrative Agent's then customary charges for each person employed to
perform such audit or analysis, plus all reasonable costs and expenses
(including without limitation, travel expenses) incurred by the
Administrative Agent in the performance of such audit or analysis; PROVIDED,
that the Borrower shall only be responsible for expenses in connection with
one (1) such audit or business analysis in any calendar year at a time when
no Default had occurred or was continuing.
(B) INDEMNITY. The Borrower further agrees to defend, protect, indemnify,
and hold harmless each and all of the Agents, the Arrangers and the Lenders and
each of their respective Affiliates, and each of such Agent's, Arranger's,
Lender's, or Affiliate's respective officers, directors, trustees, investment
advisors, employees, attorneys and agents (including, without limitation, those
retained in connection with the satisfaction or attempted satisfaction of any of
the conditions set forth in ARTICLE V) (collectively, the "INDEMNITEES") from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall be
designated a party thereto), imposed on, incurred by, or asserted against such
Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any of the Transaction
Documents, or any act, event or transaction related or attendant thereto or
to the Reynolds Acquisition, the making of the Loans, and the issuance of
and participation in Letters of Credit hereunder, the management of such
Loans or Letters of Credit, the use or intended use of the proceeds of the
Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or
threat to the environment, natural resources or public health or welfare,
costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future
relating to violation of any Environmental, Health or Safety
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Requirements of Law arising from or in connection with the past,
present or future operations of the Borrower, its Subsidiaries or any
of their respective predecessors in interest, or, the past, present or
future environmental, health or safety condition of any respective
property of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the
Borrower or its Subsidiaries or the Release or threatened Release of
any Contaminant arising out of or relating to, in any way, the past,
present or future operations of the Borrower, its Subsidiaries or any
of their respective predecessors in interest (collectively, the
"INDEMNIFIED MATTERS");
PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters to the extent caused by or
resulting from the willful misconduct or Gross Negligence of such Indemnitee
with respect to the Loan Documents or the Indemnified Matters, in each case, as
determined by the final non-appealed judgment of a court of competent
jurisdiction. If the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability for consequential, special, indirect, exemplary or punitive damages.
No settlement shall be entered into by the Borrower or any of its Subsidiaries
with respect to any claim, litigation, arbitration or other proceeding with
respect to which any Agent or any Lender or any Indemnitee is a party (or in
connection with which liability has been asserted against any Agent or any
Lender or any Indemnitee) and relating to or arising out of the transactions
evidenced by this Agreement, the other Loan Documents or the Reynolds
Acquisition Documents unless such settlement releases all Indemnitees from any
and all liability with respect thereto.
(D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 10.7 shall survive the termination of this
Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
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10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Administrative Agent shall be solely that of borrower and
lender. Neither any Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither any Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
10.12 GOVERNING LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS AGREEMENT, ON
BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE ADMINISTRATIVE
AGENT, ANY LENDER, OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET
SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF
THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY
BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL
DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE ADMINISTRATIVE
AGENT, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2)
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR (3) TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON.
WITHOUT IMPAIRING THE BORROWER'S ABILITY TO BRING ANY COUNTERCLAIM IN ANY
PROCEEDING COMMENCED PURSUANT TO SUBSECTION (A) ABOVE, THE BORROWER AGREES THAT
IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON UNDER THIS SUBSECTION (B) TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A
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JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH
PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) SERVICE OF PROCESS; VENUE. THE BORROWER WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND IRREVOCABLY APPOINTS CT CORPORATION, WHOSE ADDRESS IS
208 SOUTH LASALLE STREET, CHICAGO, ILLINOIS 60603 AS THE BORROWER'S AGENT FOR
THE PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY ANY COURT. THE BORROWER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees
that any and all claims of the Borrower against any of its Subsidiaries that is
a Guarantor or the capital stock of which is pledged pursuant to a Pledge
Agreement (each a "RESTRICTED SUBSIDIARY") with respect to any "Intercompany
Indebtedness" (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Secured Obligations, or against any of its
properties shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Secured Obligations; PROVIDED that, and not
in contravention of the foregoing, so long as no Default has occurred and is
continuing the Borrower may make loans to and receive payments in the ordinary
course with respect to such Intercompany Indebtedness from each such Restricted
Subsidiary to the extent permitted by the terms of this Agreement and the other
Loan Documents. Notwithstanding any right of the Borrower to
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ask, demand, sue for, take or receive any payment from any Restricted
Subsidiary, all rights, liens and security interests of the Borrower, whether
now or hereafter arising and howsoever existing, in any assets of any other
Restricted Subsidiary (whether constituting part of Collateral given to any
Holder of Secured Obligations or the Administrative Agent to secure payment
of all or any part of the Secured Obligations or otherwise) shall be and are
subordinated to the rights of the Holders of Secured Obligations and the
Administrative Agent in those assets. The Borrower shall have no right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Secured Obligations
(other than contingent indemnity obligations) shall have been fully paid and
satisfied (in cash) and all financing arrangements pursuant to any Loan
Document among the Borrower and the Holders of Secured Obligations have been
terminated. If all or any part of the assets of any Restricted Subsidiary,
or the proceeds thereof, are subject to any distribution, division or
application to the creditors of such Restricted Subsidiary, whether partial
or complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of
creditors or any other action or proceeding, or if the business of any such
Restricted Subsidiary is dissolved or if substantially all of the assets of
any such Restricted Subsidiary are sold, then, and in any such event (such
events being herein referred to as an "INSOLVENCY EVENT"), any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
indebtedness of any Restricted Subsidiary to the Borrower ("INTERCOMPANY
INDEBTEDNESS") shall be paid or delivered directly to the Administrative
Agent for application on any of the Secured Obligations, due or to become
due, until such Secured Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied (in cash).
Should any payment, distribution, security or instrument or proceeds thereof
be received by the Borrower upon or with respect to the Intercompany
Indebtedness after an Insolvency Event prior to the satisfaction of all of
the Secured Obligations (other than contingent indemnity obligations) and the
termination of all financing arrangements pursuant to any Loan Document among
the Borrower and the Holders of Secured Obligations, the Borrower shall
receive and hold the same in trust, as trustee, for the benefit of the
Holders of Secured Obligations and shall forthwith deliver the same to the
Administrative Agent, for the benefit of the Holders of Secured Obligations,
in precisely the form received (except for the endorsement or assignment of
the Borrower where necessary), for application to any of the Secured
Obligations, due or not due, and, until so delivered, the same shall be held
in trust by the Borrower as the property of the Holders of Secured
Obligations. If the Borrower fails to make any such endorsement or
assignment to the Administrative Agent, the Administrative Agent or any of
its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Secured Obligations (other than the contingent
indemnity obligations) have been paid in full (in cash) and satisfied and all
financing arrangements pursuant to any Loan Document among the Borrower and
the Holders of Secured Obligations have been terminated, the Borrower will
not assign or transfer to any Person (other than the Administrative Agent)
any claim the Borrower has or may have against any Restricted Subsidiary.
10.15 OTHER TRANSACTIONS. Each of the Agents, the Arrangers, the Lenders,
the Swing Line Bank, the Issuing Banks and the Borrower acknowledges that the
Lenders (or Affiliates of the Lenders) may, from time to time, effect
transactions for their own accounts or the accounts of customers, and hold
positions in loans or options on loans of the Borrower, the Borrower's
Subsidiaries and other companies that may be the subject of this credit
arrangement and nothing in this Agreement shall impair the right of any such
Person to enter into any such transaction (to the extent it is not expressly
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prohibited by the terms of this Agreement) or give any other Person any claim or
right of action hereunder as a result of the existence of the credit
arrangements hereunder, all of which are hereby waived. In addition, certain
Affiliates of one or more of the Lenders are or may be securities firms and as
such may effect, from time to time, transactions for their own accounts or for
the accounts of customers and hold positions in securities or options on
securities of the Borrower, the Borrower's Subsidiaries and other companies that
may be the subject of this credit arrangement and nothing in this Agreement
shall impair the right of any such Person to enter into any such transaction (to
the extent it is not expressly prohibited by the terms of this Agreement) or
give any other Person any claim or right of action hereunder as a result of the
existence of the credit arrangements hereunder, all of which are hereby waived.
Other business units affiliated with each of the Agents are providing other
financial services and products to the Borrower in connection with the Reynolds
Acquisition and the other transactions contemplated by this Agreement. Each of
the Agents, the Arrangers, the Lenders, the Swing Line Bank, the Issuing Banks
and the Borrower acknowledges and consents to these multiple roles, and further
acknowledges that the fact that any such unit or Affiliate is providing another
service or product or proposal therefor to the Borrower does not mean that such
service, product, or proposal is or will be acceptable to any of the Agents, the
Arrangers, the Lenders, the Swing Line Bank, or the Issuing Banks.
ARTICLE XI: THE ADMINISTRATIVE AGENT
11.1 APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank of
Chicago is appointed by the Lenders as the Administrative Agent hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this ARTICLE XI.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Holder of Secured Obligations by reason of
this Agreement and that the Administrative Agent is merely acting as the
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Administrative Agent (i) does not assume any
fiduciary duties to any of the Holders of Secured Obligations, (ii) is a
"representative" of the Holders of Secured Obligations within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders, for itself and on behalf of its affiliates as Holders of Secured
Obligations, agrees to assert no claim against the Administrative Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Holder of Secured Obligations waives.
11.2 POWERS. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action
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hereunder or under any of the other Loan Documents except any action
specifically provided by the Loan Documents required to be taken by the
Administrative Agent.
11.3 GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction results from (i) the
Gross Negligence or willful misconduct of such Person or (ii) breach of contract
by such Person with respect to the Loan Documents.
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (i) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any obligor
under any Loan Document; (iii) the satisfaction of any condition specified in
ARTICLE V, except receipt of items required to be delivered solely to the
Administrative Agent; (iv) the existence or possible existence of any Default or
(v) the validity, effectiveness or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith. The Administrative
Agent shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or in any of the other Loan Documents, for
the perfection or priority of any of the Liens on any of the Collateral, or for
the execution, effectiveness, genuineness, validity, legality, enforceability,
collectibility, or sufficiency of this Agreement or any of the other Loan
Documents or the transactions contemplated thereby, or for the financial
condition of any guarantor of any or all of the Obligations, the Borrower or any
of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent in all
cases, as between the Administrative Agent and the Holders of Secured
Obligations, shall be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all Holders of Secured Obligations. As between the
Administrative Agent and the Holders of Secured Obligations, the Administrative
Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be indemnified
to its satisfaction by the Lenders pro rata against any and all liability, cost
and expense that it may incur by reason of taking or continuing to take any such
action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Administrative Agent may
execute any of its duties as the Administrative Agent hereunder and under any
other Loan Document by or through employees, agents, and attorney-in-fact and
shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning the
contractual arrangement between the Administrative Agent and the Lenders and all
matters pertaining to the Administrative Agent's duties hereunder and under any
other Loan Document.
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11.7 RELIANCE ON DOCUMENTS; COUNSEL. As between the Administrative Agent
and the Holders of Secured Obligations, the Administrative Agent shall be
entitled to rely upon any notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
11.8 THE ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Pro Rata Share (i) for any amounts not reimbursed
by the Borrower for which the Administrative Agent is entitled to reimbursement
by the Borrower under the Loan Documents (other than amounts not reimbursed by
the Borrower pursuant to the terms of the letter agreements identified in
SECTIONS 2.14(C)(ii) and (iii)), (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Administrative
Agent.
11.9 RIGHTS AS A LENDER. With respect to its Revolving Loan Commitment,
its Term Loan Commitment, Loans made by it and the Letters of Credit issued by
it as an Issuing Bank, the Administrative Agent shall have the same rights and
powers hereunder and under any other Loan Document as any Lender and may
exercise the same as though it were not the Administrative Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which such Person is not prohibited hereby from engaging with
any other Person.
11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon any Agent, any Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent, any Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
11.11 SUCCESSOR AGENT. The Administrative Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, and the
Administrative Agent may be removed at any time with or without cause by written
notice received by the Administrative Agent from the Required
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Lenders. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty days after the retiring Administrative Agent's
giving notice of resignation, then the retiring Administrative Agent may
appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. Notwithstanding anything herein to the contrary, so
long as no Default has occurred and is continuing, each such successor
Administrative Agent shall be subject to approval by the Borrower, which
approval shall not be unreasonably withheld. Such successor Administrative
Agent shall be a commercial bank having capital and retained earnings of at
least $500,000,000. Upon the acceptance of any appointment as the
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this ARTICLE XI shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Administrative Agent hereunder and under the
other Loan Documents. Notwithstanding anything herein to the contrary, the
Administrative Agent may at any time and without the consent of any of the
parties hereto designate one or more of its Affiliates as successor
Administrative Agent.
11.12 COLLATERAL DOCUMENTS. (a) Each Lender authorizes the Administrative
Agent to enter into each of the Collateral Documents to which it is a party and
to take all action contemplated by such documents. Each Lender agrees that no
Holder of Secured Obligations (other than the Administrative Agent) shall have
the right individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Administrative Agent for the benefit of
the Holders of Secured Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any
Person as collateral security for the Obligations, the Administrative Agent is
hereby authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Administrative Agent on behalf of the
Holders of Secured Obligations.
(c) The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment and satisfaction of all of the Obligations at any time arising under
or in respect of this Agreement or the Loan Documents or the transactions
contemplated hereby or thereby; (ii) as permitted by, but only in accordance
with, the terms of the applicable Loan Document; or (iii) if approved,
authorized or ratified in writing by the Required Lenders, unless such release
is required to be approved by all of the Lenders hereunder. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to release particular types or items of
Collateral pursuant to this SECTION 11.12(c).
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(d) Upon any sale or transfer of assets constituting Collateral which
is permitted pursuant to the terms of any Loan Document, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, or
consummation of any transaction involving the sale of all or substantially all
of the assets of a Guarantor and upon at least five Business Days' prior written
request by the Borrower, the Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Administrative
Agent for the benefit of the Holders of Secured Obligations herein or pursuant
hereto upon the Collateral that was sold or transferred or evidence the release
of the applicable Guarantor from its obligations under the Subsidiary Guaranty;
PROVIDED, HOWEVER, that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in the Administrative Agent's opinion,
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Secured Obligations, any other Guarantor's obligations under the
Subsidiary Guaranty or any Liens upon (or obligations of the Borrower or any
Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral. Notwithstanding the
foregoing, each of the Agents, the Arrangers and the Lenders hereby acknowledges
and agrees that upon the consummation of any transaction involving the sale of
the PET business unit of the Borrower and the disposition of the Aerospace
business unit of the Borrower, which sale or disposition is permitted pursuant
to the terms of SECTION 7.3(B)(vi) or (vii) or 7.3(F)(v), the Administrative
Agent, for itself and on behalf of the Lenders and the Issuing Banks, shall
release and terminate the Subsidiary Guaranty with respect to any Subsidiary of
the Borrower which is the subject of such transaction or, as applicable, release
the stock of such Subsidiary from the pledge to the Administrative Agent.
11.13. NO DUTIES IMPOSED UPON SYNDICATION AGENT, DOCUMENTATION AGENT OR
ARRANGERS. None of the Persons identified on the cover page to this Agreement,
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent" or "Documentation Agent" or "Arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, if such Person is a Lender, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Persons identified on the cover page
to this Agreement, the signature pages to this Agreement or otherwise in this
Agreements as a "Syndication Agent" or "Documentation Agent" or "Arranger" shall
have or be deemed to have any fiduciary duty to or fiduciary relationship with
any Lender. In addition to the agreements set forth in SECTION 11.10, each of
the Lenders acknowledges that it has not relied, and will not rely, on any of
the Persons so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
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12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
the Administrative Agent shall, unless otherwise specified at the direction of
the Required Lenders which direction shall be consistent with the last sentence
of this SECTION 12.3 (it being agreed and understood that so long as no Default
shall have occurred and is continuing any modification of the application of
payments shall be made only with the consent of the Borrower), apply all
payments and prepayments in respect of any Obligations and all proceeds of the
Collateral in the following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Administrative Agent may have advanced on behalf of any
Lender for which the Administrative Agent has not then been reimbursed by
such Lender or the Borrower;
(B) second, to pay interest on and then principal of any advance made
under SECTION 10.3 for which the Administrative Agent has not then been
paid by the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Administrative Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than Swing
Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans) and Reimbursement
Obligations;
(I) ninth, to provide required cash collateral, if required pursuant
to SECTION 3.11;
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(J) tenth, to the ratable payment of all other Obligations; and
(K) eleventh, to the Hedging Obligations under Hedging Agreements.
Unless otherwise designated (which designation shall only be applicable prior
to the occurrence of a Default) by the Borrower, all principal payments in
respect of Loans (other than Swing Line Loans) shall be applied FIRST, to the
outstanding Revolving Loans, and SECOND, to the outstanding Term Loans, in
each case, FIRST, to repay outstanding Floating Rate Loans, and THEN to repay
outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which have
earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods. The order of priority set forth in this
SECTION 12.3 and the related provisions of this Agreement are set forth
solely to determine the rights and priorities of the Administrative Agent,
the Lenders, the Swing Line Bank and the issuer(s) of Letters of Credit and
other Holders of Secured Obligations as among themselves. The order of
priority set forth in CLAUSES (D) through (K) of this SECTION 12.3 may at any
time and from time to time be changed by the Lenders without necessity of
notice to or consent of or approval by the Borrower, or any other Person;
PROVIDED, that the order of priority of payments in respect of Swing Line
Loans may be changed only with the prior written consent of the Swing Line
Bank. The order of priority set forth in CLAUSES (A) through (C) of this
SECTION 12.3 may be changed only with the prior written consent of the
Administrative Agent.
12.4 RELATIONS AMONG LENDERS. Except with respect to the exercise of
set-off rights of any Lender in accordance with SECTION 12.1, the proceeds of
which are applied in accordance with this Agreement, and except as set forth
in the last sentence of this SECTION 12.4, each Lender agrees that it will
not take any action, nor institute any actions or proceedings, against the
Borrower or any other obligor hereunder or with respect to any Collateral or
Loan Document, without the prior written consent of the Required Lenders or,
as may be provided in this Agreement or the other Loan Documents, at the
direction of the Administrative Agent. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Administrative Agent)
authorized to act for, any other Lender. Notwithstanding the foregoing, and
subject to SECTION 12.2, any Lender shall have the right to enforce on an
unsecured basis the payment of the principal of and interest on any Loan made
by it after the date such principal or interest has become due and payable
pursuant to the terms of this Agreement. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, the Administrative
Agent shall commence enforcement of any remedy (including, without
limitation, the exercise of any voting rights under any Pledge Agreement)
under this Agreement or any other Loan Document only with the consent, or at
the direction, of the Required Lenders.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents without the consent of all of the Lenders, and any such
assignment in violation of this SECTION 13.1(i) shall be null and void, and
(ii) any assignment by any Lender must be made in
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compliance with SECTION 13.3 hereof. Notwithstanding CLAUSE (ii) of this
SECTION 13.1 or SECTION 13.3, (i) any Lender may at any time, without the
consent of the Borrower or the Administrative Agent, assign all or any
portion of its rights under this Agreement to a Federal Reserve Bank and (ii)
any Lender which is a fund or commingled investment vehicle that invests in
commercial loans in the ordinary course of its business may at any time,
without the consent of the Borrower or the Administrative Agent, pledge or
assign all or any part of its rights under this Agreement to a trustee or
other representative of holders of obligations owed or securities issued by
such Lender as collateral to secure such obligations or securities; PROVIDED,
HOWEVER, that no such assignment or pledge shall release the transferor
Lender from its obligations hereunder. The Administrative Agent may treat
each Lender as the owner thereof for all purposes hereof unless and until
such Lender complies with SECTION 13.3 hereof in the case of an assignment
thereof or, in the case of any other transfer, a written notice of the
transfer is filed with the Administrative Agent. Any assignee or transferee
of a Loan, Commitment, L/C Interest or any other interest of a Lender under
the Loan Documents agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of
any Person, who at the time of making such request or giving such authority
or consent is the owner of any Loan, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Loan.
13.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in
this SECTION 13.2, any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any Loan owing to
such Lender, any Revolving Loan Commitment of such Lender, any L/C Interest
of such Lender or any other interest of such Lender under the Loan Documents
on a pro rata or non-pro rata basis. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of all Loans made by it for
all purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents except that, for
purposes of ARTICLE IV hereof, the Participants shall be entitled to the same
rights as if they were Lenders.
(B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver
of any provision of the Loan Documents other than any amendment, modification
or waiver with respect to any Loan or Revolving Loan Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment,
postpones any date fixed for any regularly-scheduled payment (but not any
prepayment) of principal of, or interest or fees on, any such Loan or
Revolving Loan Commitment, or releases all or substantially all of the
Collateral, if any, securing any such Loan.
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(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in SECTION 12.1 hereof in
respect to its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, PROVIDED that
each Lender shall retain the right of setoff provided in SECTION 12.1 hereof
with respect to the amount of participating interests sold to each
Participant except to the extent such Participant exercises its right of
setoff. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in SECTION 12.1
hereof, agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance with
SECTION 12.2 as if each Participant were a Lender.
13.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("PURCHASERS") all or a portion of its rights
and obligations under this Agreement (including, without limitation, its
Revolving Loan Commitment, all Loans owing to it, all of its participation
interests in existing Letters of Credit, and its obligation to participate in
additional Letters of Credit hereunder) in accordance with the provisions of
this SECTION 13.3. Each assignment may be of a non-ratable percentage of the
assigning Lender's rights and obligations under this Agreement. Such
assignment shall be substantially in the form of EXHIBIT D hereto and shall
not be permitted hereunder unless such assignment is either for all of such
Lender's rights and obligations under the Loan Documents or, without the
prior written consent of the Administrative Agent, involves loans and
commitments in an aggregate amount of at least $5,000,000 (which minimum
amount (i) shall not apply to any assignment between Lenders, or to an
Affiliate or Approved Fund of any Lender, and (ii) in any event may be waived
by the Required Lenders after the occurrence of a Default or Unmatured Event
of Default). The consent of the Administrative Agent and, prior to the
occurrence of a Default, the Borrower (which consent of the Administrative
Agent and of the Borrower, in each such case, shall not be unreasonably
withheld), shall be required prior to an assignment becoming effective with
respect to a Purchaser which is not a Lender or an Affiliate or Approved Fund
of such Lender.
(B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Administrative
Agent of a notice of assignment, substantially in the form attached as
APPENDIX I to EXHIBIT D hereto (a "NOTICE OF ASSIGNMENT"), together with any
consent required by SECTION 13.3(A) hereof, and (ii) payment of a $3,500 fee
by the assignee or the assignor (as agreed) to the Administrative Agent
(unless waived by the Administrative Agent) for processing such assignment,
such assignment shall become effective on the effective date specified in
such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that either (y) none of the
consideration used to make the purchase of the Revolving Loan Commitment,
Loans and L/C Obligations under the applicable assignment agreement are "plan
assets" as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets" under
ERISA or (z) the purchase by the Purchaser of the assignment does not and the
holding by the Purchaser of the rights and interests in and under the Loan
Documents does not and will not constitute a "prohibited transaction" within
the meaning of Sections 406 of ERISA and Section 4975 of the Code. On and
after the effective date of such assignment, such Purchaser, if not already a
Lender, shall for all purposes be a Lender party to
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this Agreement and any other Loan Documents executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative Agent
shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Revolving Loan Commitment, Loans and Letter of
Credit participations assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this SECTION 13.3(B), the
transferor Lender, the Administrative Agent and the Borrower shall make
appropriate arrangements so that to the extent notes have been issued to
evidence any of the transferred Loans, replacement notes are issued to such
transferor Lender and new notes or, as appropriate, replacement notes, are
issued to such Purchaser, in each case, in principal amounts reflecting their
Revolving Loan Commitment and their Term Loans, as adjusted pursuant to such
assignment.
(C) THE REGISTER. The Administrative Agent shall maintain at its
address referred to in SECTION 14.1 a copy of each assignment delivered to
and accepted by it pursuant to this SECTION 13.3 and a register (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the Revolving Loan Commitment of and principal amount of the Loans owing to,
each Lender from time to time and whether such Lender is an original Lender
or the assignee of another Lender pursuant to an assignment under this
SECTION 13.3. The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower and each of its
Subsidiaries, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Administrative
Agent and the Lenders and their respective representatives, consultants and
advisors shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement or in connection with the transactions
contemplated by this Agreement and identified as such by the Borrower in
accordance with such Person's customary procedures for handling confidential
information of this nature and in accordance with safe and sound commercial
lending or investment practices and in any event may make disclosure
reasonably required by a prospective Transferee in connection with the
contemplated participation or assignment or as required or requested by any
Governmental Authority or any securities exchange or similar self-regulatory
organization or representative thereof or pursuant to a regulatory
examination or legal process, or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's
professional advisor, and shall require any such Transferee to agree (and
require any of its Transferees to agree in writing) to comply with this
SECTION 13.4. In no event shall the Administrative Agent or any Lender be
obligated or required to return any materials furnished by the Borrower or
any of its Subsidiaries; PROVIDED, HOWEVER, each prospective Transferee shall
be required to agree that if it does not become a participant or assignee it
shall return all materials furnished to it by or on behalf of the Borrower in
connection with this Agreement.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's
possession concerning the Borrower and its Subsidiaries and the Collateral;
PROVIDED that prior to any
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such disclosure, such prospective Transferee shall agree in writing to
preserve in accordance with SECTION 13.4 the confidentiality of any
confidential information described therein.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.13 with
respect to borrowing notices, all notices and other communications provided
to any party hereto under this Agreement or any other Loan Documents shall be
in writing or by telex or by facsimile and addressed or delivered to such
party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties;
PROVIDED, HOWEVER, that Borrowing/Conversion/Continuation Notices shall be
delivered to the Administrative Agent at One First National Plaza, Suite
0634, Chicago, Illinois 60670-0634, Attention: Karen Hannusch, Telephone No.
312-732-9868, Facsimile No. 312-732-2715. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any
notice, if transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of telexes).
14.2 CHANGE OF ADDRESS. The Borrower, the Administrative Agent and any
Lender may each change the address for service of notice upon it by a notice
in writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
15.1 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by
the Borrower, the Administrative Agent and the Lenders and each party has
notified the Administrative Agent by telex or telephone, that it has taken
such action.
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
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SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of the date first above written.
BALL CORPORATION, as the Borrower
By: /s/ Douglas E. Poling
---------------------------
Name: Douglas E. Poling
Title: Treasurer
Address:
10 Longs Peak Drive
Broomfield, CO 80021
Attention: R. David Hoover
Telephone No.: (765) 747-6476
Facsimile No.: (765) 747-6826
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent and as a Lender
By: /s/ Scott C. Morrison
---------------------------
Name: Scott C. Morrison
Title: Vice President
Address:
One First National Plaza
15th Floor
Chicago, Illinois 60670
Attention: Timothy E. Greening
Telephone No.: (312) 732-1864
Facsimile No.: (312) 732-7655
with a copy to:
One Indiana Square Suite 312
Indianapolis, IN 46266
Attention: Scott C. Morrison, Vice President
Telephone No.: (317) 266-7351
Facsimile No.: (317) 266-6042
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Syndication Agent and as a Lender
By: /s/ Mark E. Kelley
---------------------------
Name: Mark Kelley
Title: Managing Director
Address:
231 South LaSalle Street
9th Floor
Chicago, IL 60697
Attention: Paul B. Higdon
Telephone No.: (312) 828-7952
Facsimile No.: (312) 987-0303
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
LEHMAN COMMERCIAL PAPER INC., as Documentation
Agent and as a Lender
By: /s/ William J. Gallagher
---------------------------
Name: William J. Gallagher
Title: Authorized Signatory
Address:
3 Ward Financial Center
200 Vesey Street
New York, New York 10285
Attention: Michelle Swanson
Telephone No.: (212) 526-0330
Facsimile No.: (212) 528-0819
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
ABN AMRO BANK N.V., as a Lender
By: /s/ Denis J. Campbell IV
---------------------------
Name: Denis J. Campbell IV
Title: Vice President
By: /s/ Mary L. Honda
---------------------------
Name: MARY L. HONDA
Title: VICE PRESIDENT
Address:
135 South LaSalle Street
Suite 2805
Chicago, IL 60603
Attention: Credit Administration
Telephone No.: (312) 904-8835
Facsimile No.: (312) 904-8840
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street
Suite 625
Chicago, IL 60603
Attention: Mary Honda
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
ARAB BANKING CORPORATION (B.S.C.), as a
Lender
By: /s/ Grant E. McDonald
---------------------------------
Name: Grant E. McDonald
Title: Vice President
Address:
277 Park Avenue
32nd Floor
New York, NY 10172-3299
Attention: Grant McDonald, Vice President
Telephone No.: (212) 583-4759
Facsimile No.: (212) 583-0935
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
BANKBOSTON, N.A., as a Lender
By: /s/ Janet Twomey
---------------------------
Name: Janet Twomey
Title: Vice President
Address:
100 Federal Street
Boston, MA 02110
Mail Stop: MA B05 01-10-01
Attention: Janet Twomey
Telephone No.: (617) 434-3069
Facsimile No.: (617) 434-0601
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
BANK LEUMI USA, as a Lender
By: /s/ Del Lorimer
---------------------------------
Name: Del Lorimer
Title: Vice President
Address:
8383 Wilshire Blvd.
Suite 400
Beverly Hills, CA 90211
Attention: Del Lorimer
Telephone No.: (323) 966-4721
Facsimile No.: (323) 655-5933
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
BANK OF HAWAII, as a Lender
By: /s/ Brenda K. Testerman
---------------------------
Name: Brenda Testerman
Title: Vice President
Address:
130 Merchant Street
20th Floor
Honolulu, HI 96813
Attention: Donna Arakawa
Telephone No.: (808) 693-1698
Facsimile No.: (808) 693-1672
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE BANK OF NEW YORK, as a Lender
By: /s/ Robert Louk
---------------------------
Name: Robert Louk
Title: Vice President
Address:
One Wall Street
New York, NY 10286
Attention: Robert J. Louk
Telephone No.: (310) 996-8663
Facsimile No.: (310) 996-8667
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE BANK OF NOVA SCOTIA, as a Lender
By: /s/ John Burckin
------------------------------------
Name: John Burckin
Title: Relationship Manager
Address:
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Attention: Kathy Clark
Telephone No.: (404) 877-1542
Facsimile No.: (404) 888-8998
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE BANK OF TOKYO -- MITSUBISHI, LTD., CHICAGO
BRANCH, as a Lender
By: /s/ Hajime Watanabe
------------------------------------
Name: Hajime Watanabe
Title: Deputy General Manager
Address:
227 West Monroe Street
Suite 2300
Chicago, IL 60606
Attention: Christopher Jones
Telephone No.: (312) 696-4656
Facsimile No.: (312) 696-4535
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
BANQUE NATIONALE DE PARIS, as a Lender
By: /s/ Clive Bettles
------------------------------------
Name: Clive Bettles
Title: Senior Vice President & Manager
By: /s/ Mitchell M. Ozawa
------------------------------------
Name: Mitchell M. Ozawa
Title: Vice President
Address:
725 South Figueroa Street
Suite 2090
Los Angeles, CA 90017
Attention: Mitchell Ozawa
Telephone No.: (213) 488-9120
Facsimile No.: (213) 488-9602
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
PARIBAS, as a Lender
By: /s/ Nicholas C. Mast
------------------------------------
Name: Nicholas C. Mast
Title: RGM
By: /s/ Ann B. McAloon
------------------------------------
Name: ANN B. McALOON
Title: VICE PRESIDENT
Address:
227 West Monroe Street
Suite 3300
Chicago, IL 60606
Attention: Nicholas C. Mast
Telephone No.: (312) 853-6038
Facsimile No.: (312) 853-6020
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, as a Lender
By: /s/ Sean Mounier
------------------------------------
Name: Sean Mounier
Title: First Vice President
By: /s/ Brian O'Leary
------------------------------------
Name: Brian O'Leary
Title: Vice President
Address:
520 Madison Avenue
37th Floor
New York, NY 10022
Attention: Sean Mounier
Telephone No.: (212) 715-4413
Facsimile No.: (212) 715-4535
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
CITY NATIONAL BANK, as a Lender
By: /s/ Scott J. Kelley
------------------------------------
Name: Scott J. Kelley
Title: Vice President
Address:
400 North Roxbury Drive
Beverly Hills, CA 90210
Attention: Scott Kelley
Telephone No.: (310) 888-6536
Facsimile No.: (310) 888-6564
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
COMMERZBANK, A.G. NEW YORK
BRANCH, as a Lender
By: /s/ Mary Harold
------------------------------------
Name: Mary Harold
Title: Vice President
By: /s/ Andrew Campball
------------------------------------
Name: Andrew Campball
Title: Assistant Vice President
Address:
2 World Financial Center
32nd Floor
New York, NY 10281-1050
Attention: Mary Harold
Telephone No.: (212) 266-7509
Facsimile No.: (212) 266-7374
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By: /s/ Alain Papiasse
---------------------------------
Name: Alain Papiasse
Title: Executive Vice President
Address:
2200 Ross Avenue
Suite 4400 West
Dallas, TX 75201
Attention: Brian Brown
Telephone No.: (214) 220-2308
Facsimile No.: (214) 220-2323
with a copy to:
1301 Avenue of the Americas
New York, NY 10019
Attention: Ron Finn
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN
ISLAND BRANCH, as a Lender
By: /s/ S. Wendt
------------------------------------
Name: SABINE WENDT
Title: Asst. Vice President
By: /s/ Karen A. Brinkman
------------------------------------
Name: KAREN A. BRINKMAN
Title: Vice President
Address:
609 Fifth Avenue
New York, NY 10017
Attention: Sabine Wendt
Telephone No.: (212) 745-1559
Facsimile No.: (212) 745-1556
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES, as a Lender
By: /s/ John W. Sweeney
------------------------------------
Name: JOHN W. SWEENEY
Title: ASSISTANT VICE PRESIDENT
By: /s/ Christopher E. Sarisky
------------------------------------
Name: CHRISTOPHER E. SARISKY
Title: Assistant Vice President
Address:
190 South LaSalle Street
Suite 2700
Chicago, IL 60603
Attention: James Jerz
Telephone No.: (312) 444-1314
Facsimile No.:
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
ERSTE BANK DER
OESTERREICHISCHEN SPARKASSEN AG
By /s/ Rima Terradista
--------------------------------
Name: RIMA TERRADISTA
Title: Vice President
By /s/ John S. Runnion
--------------------------------
Name: JOHN S. RUNNION
Title: FIRST VICE PRESIDENT
Address for notices
280 Park Avenue, West Building
New York, N.Y. 10017
Attention: Rima Torradista
Telephone No.: (212) 984-5638
Facsimile No.: (212) 984-5627
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
FIRST COMMERCIAL BANK, NEW YORK
AGENCY, as a Lender
By /s/ Jia-Shyang Ou
--------------------------------
Name: Jia-Shyang Ou
Title: Assistant Vice President
& Deputy General Manager
Address:
Two World Trade Center
Suite 7868
New York, NY 10048
Attention: Jeffrey Wang
Telephone No.: (212) 432-6590
Facsimile No.: (212) 432-7250
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
FIRST HAWAIIAN BANK, as a Lender
By /s/ Travis Ruetenik
--------------------------------
Name: Travis Ruetenik
Title: Corporate Banking Officer
Address:
999 Bishop Street
11th Floor
Honolulu, HI 96813
Attention: Travis Reutenik
Telephone No.: (808) 525-7074
Facsimile No.: (808) 525-6372
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
FIRST UNION NATIONAL BANK, as a
Lender
By /s/ Scott Santa Cruz
--------------------------------
Name: Scott Santa Cruz
Title: VP
Address:
301 South College Street, DC-5
Charlotte, NC 28288-0737
Attention: Scott Santa Cruz
Telephone No.: (704) 383-1988
Facsimile No.: (704) 374-3300
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
FLEET NATIONAL BANK, as a Lender
By /s/ Jeffrey C. Lynch
--------------------------------
Name: Jeffrey C. Lynch
Title: V.P.
Address:
One Federal Street
Boston, MA 02110
Attention: Jeffrey Lynch
Telephone No.: (617) 346-5061
Facsimile No.: (617) 346-0145
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE FUJI BANK, LIMITED, as a Lender
By /s/ Peter L. Chinnici
--------------------------------
Name: Peter L. Chinnici
Title: Joint General Manager
Address:
225 West Wacker Drive
Suite 2000
Chicago, IL 60606
Attention: James R. Fayen
Telephone No.: (312) 621-0397
Facsimile No.: (312) 621-0530
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender
By /s/ J K. Williams
--------------------------------
Name: Janet K. Williams
Title: Duly Authorized Signatory
Address:
201 High Ridge Road
Stamford, CT 06927-5100
Attention: David Rich
Telephone No.: (203) 961-2993
Facsimile No.: (203) 316-7978
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
HIBERNIA NATIONAL BANK, as a Lender
By /s/ Angela Bentley
--------------------------------
Name: Angela Bentley
Title: Banking Officer
Address:
313 Carondelet Street
12th Floor
New Orleans, LA 70130
Attention: Angela Bentley
Telephone No.: (504) 533-2319
Facsimile No.: (504) 533-5344
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
IMPERIAL BANK, as a Lender
By /s/ Ray Vadalma
--------------------------------
Name: RAY VADALMA
Title: SENIOR VICE PRESIDENT
Address:
9920 South La Cienega Boulevard, 14th Floor
Inglewood, CA 90301
Attention: Mark W. Campbell
Telephone No.: (310) 417-5886
Facsimile No.: (310) 417-5997
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, CHICAGO BRANCH, as a Lender
By /s/ Walter R. Wolff
--------------------------------
Name: Walter R. Wolff
Title: Joint General Manager
Address:
227 West Monroe Street
Suite 2600
Chicago, IL 60606
Attention: Steve Ryan
Telephone No.: (312) 855-6251
Facsimile No.: (312) 855-8200
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KBC BANK N.V., as a Lender
By /s/ Robert Snauffer
--------------------------------
Name: ROBERT SNAUFFER
Title: VICE PRESIDENT
By /s/ Marcel Claes
--------------------------------
Name: MARCEL CLAES
Title: DEPUTY GENERAL MANAGER
Address:
125 West 55th Street
10th Floor
New York, NY 10019
Attention: Michael Curran
Telephone No.: (212) 541-0708
Facsimile No.: (212) 956-5580
with a copy to:
515 South Figueroa Street
Suite 1920
Los Angeles, CA 90071
Attention: Luc Cools
Telephone No.: (213) 624-0401
Facsimile No.: (213) 629-5801
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KEYBANK NATIONAL ASSOCIATION, as a
Lender
By /s/ Mary K. Young
--------------------------------
Name: Mary K. Young
Title: Commercial Banking Officer
Address:
700 Fifth Avenue
46th Floor
Seattle, WA 98104
Attention: Mary K. Young
Telephone No.: (206) 684-6085
Facsimile No.: (206) 684-6035
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., as a Lender
By /s/ Brady S. Sadak
--------------------------------
Name: Brady S. Sadak
Title: Senior Vice President
Address:
165 Broadway
48th Floor
New York, NY 10006
Attention: Claire Kowalski
Telephone No.: (212) 335-4853
Facsimile No.: (212) 335-4441
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
MARINE MIDLAND BANK, as a Lender
By /s/ Gina Sidorsky
--------------------------------
Name: Gina Sidorsky
Title: Authorized Signatory
Address:
140 Broadway
5th Floor
New York, NY 10005
Attention: Gina Sidorsky
Telephone No.: (212) 658-2750
Facsimile No.: (212) 658-2586
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
MITSUBISHI TRUST & BANKING CORP.,
CHICAGO BRANCH, as a Lender
By /s/ Nobuo Tominaga
--------------------------------
Name: Nobuo Tominaga
Title: Chief Manager
Address:
311 South Wacker Drive
Suite 6300
Chicago, IL 60606
Attention: John Zimmerman
Telephone No.: (312) 408-6014
Facsimile No.: (312) 663-0863
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
NATEXIS BANQUE, NEW YORK BRANCH,
as a Lender
By /s/ G. Kevin Dooley
--------------------------------
Name: G. Kevin Dooley
Title: Vice President
By /s/ William C. Maier
--------------------------------
Name: William C. Maier
Title: VP-Group Manager
Address:
645 Fifth Avenue
20th Floor
New York, NY 10022
Attention: Kevin Dooley
Telephone No.: (212) 872-5195
Facsimile No.: (212) 872-5045
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
NATIONAL CITY BANK, as a Lender
By /s/ Barry C. Robinson
--------------------------------
Name: Barry C. Robinson
Title: Vice President
Address:
1900 East Ninth Street
Loc 2077
Cleveland, OH 44114
Attention: Barry C. Robinson
Telephone No.: (216) 575-9322
Facsimile No.: (216) 222-0003
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION, as a Lender
By /s/ Randall Schmidt
--------------------------------
Name: Randall Schmidt
Title: Vice President
Address:
1740 Broadway
MS 8673
Denver, CO 80274
Attention: Randall Schmidt
Telephone No.: (303) 863-6033
Facsimile No.: (303) 863-6670
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
PNC BANK, NATIONAL ASSOCIATION, as
a Lender
By /s/ David F. Knuth
--------------------------------
Name: David F. Knuth
Title: Vice President
Address:
201 East Fifth Street
Cincinnati, OH 45202
Attention: David F. Knuth
Telephone No.: (513) 651-8675
Facsimile No.: (513) 651-8951
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By /s/ Dana W. Hemenway
--------------------------------
Name: Dana W. Hemenway
Title: Vice President
By /s/ W. Pieter C. Kodde
--------------------------------
Name: W. Pieter C. Kodde
Title: Vice President
Address:
245 Park Avenue
New York, NY 10167
Attention: Corporate Services Dept.
Telephone No.: (212) 916-7800
Facsimile No.: (212) 818-0233
with a copy to:
Gordon Arnold
13355 Noel Road
Suite 1000
Dallas, TX 75240-6645
Telephone No.: (972) 419-5260
Facsimile No.: (972) 419-6315
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
ROYAL BANK OF CANADA, as a Lender
By: /s/ Michael Korine
--------------------------------
Name: Michael Korine
Title: Senior Manager
Address:
One Liberty Plaza
5th Floor
New York, NY 10006-1404
Attention: Michael Korine
Telephone No.: (212) 428-6258
Facsimile No.: (212) 428-2319
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE SANWA BANK, LTD., as a Lender
By: /s/ Richard H. Ault
--------------------------------
Name: Richard H. Ault
Title: Vice President
Address:
10 S. Wacker Drive
31st Floor
Chicago, IL 60606
Attention: Richard Ault
Telephone No.: (312) 368-3011
Facsimile No.: (312) 346-6677
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
SOCIETE GENERALE, as a Lender
By: /s/ Michael O. Lincoln
--------------------------------
Name: Michael Lincoln
Title: Director
Address:
181 West Madison Street
Suite 3400
Chicago, IL 60602
Attention: Michael Lincoln
Telephone No.: (312) 578-5056
Facsimile No.: (312) 578-5099
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
SOUTHERN PACIFIC BANK, as a Lender
By: /s/ Charles D. Martorano
--------------------------------
Name: Charles D. Martorano
Title: Senior Vice President
Address:
150 S. Rodeo Drive
Beverly Hills, CA 90212
Attention: Cheryl Wasilewski/Chuck Martorano
Telephone No.: (310) 246-3739/3770
Facsimile No.: (310) 246-3666
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
STAR BANK, N.A., as a Lender
By: /s/ Thomas D. Gibbons
--------------------------------
Name: Thomas D. Gibbons
Title: VP
Address:
425 Walnut Street, ML8160
Cincinnati, OH 45201-1038
Attention: Thomas D. Gibbons
Telephone No.: (513) 287-8313
Facsimile No.: (513) 632-2068
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH, as a Lender
By: /S/ JOHN H. KEMPER
------------------------------------
Name: John H. Kemper
Title: Senior Vice President
Address:
233 South Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Attention: James Beckett
Telephone No.: (312) 876-7794
Facsimile No.: (312) 876-6436
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
BALL CORPORATION
LONG-TERM CREDIT AGREEMENT DATED AS OF AUGUST 10,1998
THE SUMITOMO TRUST & BANKING CO.,
LTD., NEW YORK BRANCH, as a Lender
By: /s/ SURAJ SHATIA
------------------------------------
Name: Suraj Shatia
Title: Senior Vice President
Address:
527 Madison Avenue
New York, NY 10022
Attention: Tim Ng
Telephone No.: (212) 326-0751
Facsimile No.: (212) 418-4848
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
SUNTRUST BANK, CENTRAL FLORIDA, N.A.,
as a Lender
By: /s/ CHRIS BLACK
------------------------------------
Name: CHRIS BLACK
Title: FIRST VICE PRESIDENT
Address:
200 South Orange Avenue
10th Floor
Orlando, FL 32801
Attention: Chris Black
Telephone No.: (407) 237-2467
Facsimile No.: (407) 237-6894
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE TOKAI BANK, LIMITED
NEW YORK BRANCH, as a Lender
By: /s/ SHINICHI KONDO
------------------------------------
Name: Shinichi Kondo
Title: Deputy General Manager
Address:
55 East 52nd Street
12th Floor
New York, NY 10055
Attention: Haruyo Niki
Telephone No.: (212) 339-1123
Facsimile No.: (212) 832-1428
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
TORONTO DOMINION (TEXAS), INC., as a
Lender
By: /s/ DAVID G. PARKER
------------------------------------
Name: DAVID G. PARKER
Title: VICE PRESIDENT
Address:
909 Fannin Street
17th Floor
Houston, TX 77010
Attention: Sonja R. Jordan
Telephone No.: (713) 653-8244
Facsimile No.: (713) 951-9921
with copy to:
Stephen Watts
Three First National Plaza
70 West Madison
Suite 5430
Chicago, IL 60602-4227
Telephone No.: (312) 977-2105
Facsimile No.: (312) 782-6337
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
TORONTO DOMINION (NEW YORK), INC., as
a Lender
By: /s/ DAVID G. PARKER
------------------------------------
Name: DAVID G. PARKER
Title: SENIOR VICE PRESIDENT
Address:
909 Fannin Street
17th Floor
Houston, TX 77010
Attention: David G. Parker
Telephone No.: (713) 653-8248
Facsimile No.: (713) 951-9921
with copy to:
Hal Holappa
The Toronto Dominion Bank
31 West 52nd Street
New York, NY 10019
Telephone No.: (212) 827-7375
Facsimile No.: (212) 307-0750
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
WACHOVIA BANK, as a Lender
By: /s/ WILLIAM F. HAMLET
------------------------------------
Name: WILLIAM F. HAMLET
Title: SENIOR VICE PRESIDENT
Address:
191 Peachtree Street N.E.
Atlanta, GA 30303
Attention: Michael S. Sims
Telephone No.: (404) 332-4403
Facsimile No.: (404) 332-6898
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
ALLSTATE INSURANCE COMPANY, as a
Lender
By: /s/ PATRICIA W. WILSON
------------------------------------
Name: PATRICIA W. WILSON
Title: AUTHORIZED SIGNATORY
By: /s/ DANIEL C. LEIMBACH
------------------------------------
Name: DANIEL C. LEIMBACH
Title: AUTHORIZED SIGNATORY
Address:
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Attention: Jerry Zinkula
Telephone No.: (847) 402-8383
Facsimile No.: (847) 402-3092
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
ALLSTATE LIFE INSURANCE COMPANY, as a
Lender
By: /s/ PATRICIA W. WILSON
------------------------------------
Name: PATRICIA W. WILSON
Title: AUTHORIZED SIGNATORY
By: /s/ DANIEL C. LEIMBACH
------------------------------------
Name: DANIEL C. LEIMBACH
Title: AUTHORIZED SIGNATORY
Address:
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Attention: Jerry Zinkula
Telephone No.: (847) 402-8383
Facsimile No.: (847) 402-3092
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/ WILLIAM M. SWENSON
------------------------------------
Name: WILLIAM M. SWENSON
Title: EXECUTIVE DIRECTOR
Address:
425 Lexington Avenue, 7th Floor
New York, NY 10017
Attention: William M. Swenson
Telephone No.: 212-856-3935
Facsimile No.: 212-856-3799
with a copy to:
First Dominion Capital
1330 Avenue of the Americas, 37th Floor
New York, NY 10019
Attention: Credit Analyst
Telephone No.: 212-603-8500
Facsimile No.: 212-603-8506
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
CREDIT LYONNAIS NEW YORK BRANCH, as
a Lender
By: /s/ Alain Papiasse
---------------------------------
Name: ALAIN PAPIASSE
Title: EXECUTIVE VICE PRESIDENT
Address:
1301 Avenue of the Americas
17th Floor
New York, NY 10019
Attention: Mike Henderlong
Telephone No.: (212) 261-7073
Facsimile No.: (212) 261-3776
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
CRESCENT/MACH 1 PARTNERS, L.P., as
a Lender
By: TCW Asset Management Company, its
Investment Manager
By: /s/ Jonathan R. Insull
---------------------------------
Name: Jonathan R. Insull
Title: Vice President
Address:
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Attention: Mark L. Gold
Telephone No.: (212) 297-4000
Facsimile No.: (212) 297-4159
with copy to:
Crescent/Mach 1 Partners, L.P.
c/o State Street Bank & Trust Co.
Two International Place
Boston, MA 02110
Attention: Howie Gorman
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
FLOATING RATE PORTFOLIO, as a Lender
By: INVESCO Senior Secured Management,
Inc., as attorney-in-fact
By: /s/ Anne M. McCarthy
---------------------------------
Name: Anne M. McCarthy
Title: Authorized Signatory
Address:
INVESCO Senior Secured Management, Inc.
1166 Avenue of the Americas
New York, NY 10036-2789
Attention: Anne McCarthy
Telephone No.: (212) 278-9850
Facsimile No.: (212) 278-9619
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
JACKSON NATIONAL LIFE INSURANCE COMPANY,
as a Lender
By: PPM America, Inc.,
as attorney-in-fact
By: /s/ Michael Dills
-------------------------------
Name: Michael Dills
Title: Managing Director
Address:
PPM America, Inc.
225 West Wacker Drive
Suite 1200
Chicago, IL 60606-1228
Attention: Michael DiRe
Telephone No.: (312) 634-2509
Facsimile No.: (312) 634-0054
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KEYPORT LIFE INSURANCE COMPANY, as a
Lender
By: Stein Roe & Farnham Incorporated,
its Agent
By: /s/ Brian W. Good
-------------------------------
Name: Brian W. Good
Title: Vice President & Portfolio
Manager
Address:
Stein Roe & Farnham
One South Wacker Drive
33rd Floor
Chicago, IL 60606
Attention: Brian W. Good
Telephone No.: (312) 368-7644
Facsimile No.: (312) 368-7857
with copy to:
State Street Bank and Trust Co.
Two International Place
5th Floor
Boston, MA 02110
Attention: Anthony McKendry
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KZH-CNC CORPORATION, as a Lender
By: /s/ Virginia Conway
-------------------------------
Name: Virginia Conway
Title: Authorized Agent
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone No.: (212) 946-7575
Facsimile No.: (212) 946-7776
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KZH-ING-2 CORPORATION, as a Lender
By: /s/ V Conway
------------------------------
Name: Virginia Conway
Title: Authorized Agent
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone No.: (212) 946-7575
Facsimile No.: (212) 946-7776
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KZH-ING-3 CORPORATION, as a Lender
By: /s/ V Conway
------------------------------
Name: Virginia Conway
Title : Authorized Agent
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone No.: (212) 946-7575
Facsimilie No.: (212) 946-7776
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
KZH-SOLEIL CORPORATION, as a Lender
By: /s/ V Conway
------------------------------
Name: Virginia Conway
Title: Authorized Agent
Address:
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, NY 10001
Attention: Virginia Conway
Telephone No.: (212) 946-7575
Facsimilie No.: (212) 946-7776
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
MASSACHUSETTS MUTUAL LIFE
INSURANCE CO., as a Lender
By: /s/ Thomas Siki
------------------------------
Name: Thomas Siki
Title: Managing Director
Address:
1295 State Street
Springfield, MA 01111
Attention: John Wheeler
Telephone No.: (413) 744-6228
Facsimile No.: (413) 744-6127
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
MASSMUTUAL HIGH YIELD PARTNERS II,
LLC, as a Lender
By: HYP Management Inc., as Managing
Member
By: /s/ Thomas Siki
------------------------------
Name: Thomas Siki
Title: VICE PRESIDENT
Address:
1295 State Street
Springfield, MA 01111
Attention: John Wheeler
Telephone No.: (413) 744-6228
Facsimile No.: (413) 744-6127
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC., as a Lender
By: /s/ Joseph P. Matteo
---------------------------------
Name: Joseph P. Matteo
Title: Authorized Signatory
Address:
c/o Merrill Lynch Asset Management
800 Scudders Mill Raod - Area 1B
Plainsboro, NJ 08536
Attention: Janet S. Hansen
Telephone No.: (609) 282-3136
Facsimile No.: (609) 282-3542
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
NEW YORK LIFE INSURANCE COMPANY, as
a Lender
By: /s/ Lisa Scuderi
------------------------------
Name: Lisa Scuderi
Title: Director
Address:
51 Madison Avenue
New York, NY 10010
Attention: Lisa Scuderi
Telephone No.: (212) 576-7825
Facsimile No.: (212) 447-4122
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
OAK HILL SECURITIES FUND, L.P., as a
Lender
By: Oak Hill Securities GenPar, L.P.,
its General Partner
By: Oak Hill Securities MGP, Inc.,
its General Partner
By: /s/ Scott Krase
------------------------------
Name: Scott Krase
Title: Vice President
Address:
65 East 55th Street
32nd Floor
New York, NY 10022
Attention: Scott Krase
Telephone No.: (212) 326-1551
Facsimile No.: (212) 593-3596
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
OCTAGON LOAN TRUST
By: Octagon Credit Investors,
as Manager
By: /s/ Andrew D. Gordon
------------------------------
Name: Andrew D. Gordon
Title: Managing Director
Address:
380 Madison Avenue
9th Floor
New York, NY 10017
Attention: Andrew D. Gordon
Telephone No.: (212) 622-3104
Facsimile No.: (212) 622-3979
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
TRANSAMERICA LIFE INSURANCE AND
ANNUITY COMPANY, as a Lender
By: /s/ John M. Casparian
------------------------------
Name: John M. Casparian
Title: Investment Officer
Address:
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
Attention: John M. Casparian
Telephone No.: (213) 742-3554
Facsimile No.: (213) 741-7110
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
THE TRAVELERS INSURANCE COMPANY, as
a Lender
By: /s/ Robert M. Mills
---------------------------------
Name: Robert M. Mills
Title:
Address:
1 Tower Square
Securities Department, 10-PB
Hartford, CT 06183-2030
Attention: John J. Console
Telephone No.: (860) 277-0940
Facsimile No.: (860) 277-2299
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT DATED AUGUST [10], 1998
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST, as a Lender
By: /s/ Jeffrey W. Maillet
------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President &
Director
Address:
One Parkview Plaza
Oakbrook Terrace, IL 50131
Attention: Sean Kelley
Telephone No.: (630) 684-6262
Facsimile No.: (630) 684-5740
with copy to:
State Street Bank & Trust
Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Attention: Sean Emerson
<PAGE>
SIGNATURE PAGE TO LONG-TERM
CREDIT AGREEMENT
CONTINENTAL ASSURANCE COMPANY SEPARATE
ACCOUNT, as a Lender
By: TCW Asset Management Company, as
Attorney-in-Fact
By: /s/ Mark L. Gold
---------------------------------
Name: Mark L. Gold
Title: Managing Director
By: /s/ Justin L. Driscoll
---------------------------------
Name: Justin L. Driscoll
Title: Senior Vice President
Address:
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Attention: Mark L. Gold/Justin L. Driscoll
Telephone No.: (212) 297-4137
Facsimile No.: (212) 297-4159
<PAGE>
Exhibit 15.1
Acknowledgment Letter Of Ernst & Young, LLP
Independent Accountants
August 25, 1998
Board of Directors
Reynolds Metals Company
We are aware of the incorporation by reference in each Prospectus constituting
part of each Post-Effective Amendment No. 1 on Form S-3 to Form S-16
Registration Statement (Registration Nos. 2-62247 and 2-65638) and in each
Prospectus constituting part of each Form S-3 Registration Statement or
Post-Effective Amendment (Registration Nos. 33-3027, 33-16674, 33-19035,
33-40196 and 33-58741) and in each Form S-8 Registration Statement or
Post-Effective Amendment (Registration Nos. 33-21506, 33-40199, 33-37548,
33-28064, 33-15639, 33-61986, 33-51121, 333-26361 and 333-32393) of Ball
Corporation of our report dated May 28, 1998, relating to the March 31, 1998
unaudited combined interim financial statements of North American Can
Operations (a component of Reynolds Metals Company) that are included in Ball
Corporation's Current Report on Form 8-K filed with the Securities and
Exchange Commission on August 25, 1998.
/s/ Ernst & Young LLP
---------------------------------
Richmond, Virginia
<PAGE>
Exhibit 23.1
Consent of Ernst & Young, LLP
Independent Auditors
We consent to the incorporation by reference in each Prospectus constituting
part of each Post-Effective Amendment No. 1 on Form S-3 to Form S-16
Registration Statement (Registration Nos. 2-62247 and 2-65638) and in each
Prospectus constituting part of each Form S-3 Registration Statement or
Post-Effective Amendment (Registration Nos. 33-3027, 33-16674, 33-19035,
33-40196 and 33-58741) and in each Form S-8 Registration Statement or
Post-Effective Amendment (Registration Nos. 33-21506, 33-40199, 33-37548,
33-28064, 33-15639, 33-61986, 33-51121, 333-26361 and 333-32393) of Ball
Corporation of our report dated April 28, 1998, with respect to the combined
financial statements of North American Can Operations (a component of
Reynolds Metals Company) that are included in Ball Corporation's Current
Report on Form 8-K filed with the Securities and Exchange Commission on
August 25, 1998.
/s/ Ernst & Young, LLP
---------------------------------
Richmond, Virginia
August 25, 1998
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Reynolds Metals Company
We have audited the accompanying combined balance sheets of North
American Can Operations (a component of Reynolds Metals Company) as defined
in Note 1 (the "Operation") as of December 31, 1997 and 1996, and the related
combined statements of income and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Operation's management. Our responsibility is to
express an opinion on these combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the combined financial position of the
Operation, as defined in Note 1, at December 31, 1997 and 1996, and the
combined results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
Richmond, Virginia
April 28, 1998
<PAGE>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
COMBINED BALANCE SHEET
(IN MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Customer receivables, less allowances of $0.2
(1996-$0.1)...................................... $ 54.5 $ 49.7
Receivables from Reynolds' Latin American
affiliate........................................ 6.2 5.0
Inventories........................................ 115.8 95.5
Deferred taxes..................................... 4.6 7.7
Other.............................................. 3.3 3.1
--------- ---------
Total current assets................................. 184.4 161.0
Property, plant and equipment........................ 741.1 730.3
Less allowances for depreciation and amortization.... 404.5 355.3
--------- ---------
336.6 375.0
Assets held for sale................................. 6.2 8.0
Other assets......................................... 38.9 38.6
--------- ---------
Total assets........................................... $ 566.1 $ 582.6
--------- ---------
--------- ---------
LIABILITIES AND OWNER'S EQUITY
Current liabilities:
Accounts payable................................... $ 26.9 $ 35.3
Accounts payable -- Reynolds plant
locations (net).................................. 43.2 34.9
Accrued compensation and related amounts........... 10.4 12.2
Restructuring liabilities.......................... 4.6 10.1
Other liabilities.................................. 4.6 4.3
--------- ---------
Total current liabilities............................ 89.7 96.8
Long-term debt....................................... 54.4 54.6
Deferred taxes....................................... 38.5 31.7
Restructuring liabilities............................ -- 8.8
Environmental liabilities............................ 8.5 8.8
Owner's equity....................................... 375.0 381.9
Contingent liabilities...............................
--------- ---------
Total liabilities and owner's equity................... $ 566.1 $ 582.6
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
<PAGE>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
COMBINED STATEMENT OF INCOME
(IN MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES
Net sales.................................... $ 1,182.8 $ 1,146.4 $ 1,211.5
Net sales to Reynolds' Latin American
affiliate.................................. 9.9 10.2 33.9
---------- ---------- ----------
1,192.7 1,156.6 1,245.4
COSTS AND EXPENSES
Cost of products sold........................ 1,053.2 1,066.8 1,096.1
Selling, administrative and general.......... 32.1 33.9 36.2
Depreciation and amortization................ 56.7 53.8 53.4
Interest..................................... 2.1 -- 0.9
Operational restructuring costs.............. -- 37.2 15.9
---------- ---------- ----------
1,144.1 1,191.7 1,202.5
EARNINGS
Income (loss) before income taxes............ 48.6 (35.1) 42.9
Taxes on income (credit)..................... 19.9 (13.0) 17.6
---------- ---------- ----------
NET INCOME (LOSS).............................. $ 28.7 $ (22.1) $ 25.3
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
See accompanying notes.
<PAGE>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
COMBINED STATEMENT OF CASH FLOWS
(IN MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).................................. $ 28.7 $ (22.1) $ 25.3
Adjustments to reconcile to net cash provided
by operating activities:
Depreciation and amortization.................... 56.7 53.8 53.4
Operational restructuring costs.................. -- 37.2 15.9
Operational restructuring payments............... (9.1) (2.5) (1.8)
Deferred taxes................................... 9.9 (4.4) (0.3)
Changes in operating assets and liabilities:
Decrease (increase) in receivables............. (6.0) 21.9 6.5
Decrease (increase) in inventories............. (20.3) 35.4 (33.1)
Increase (decrease) in payables................ (1.6) (26.4) 12.7
Other.......................................... (1.9) 2.6 (3.6)
--------- --------- ---------
Net cash provided by operating activities............ 56.4 95.5 75.0
INVESTING ACTIVITIES:
Expenditures for property, plant and equipment..... (21.3) (67.9) (59.1)
Proceeds from sales of assets...................... 0.7 6.7 --
--------- --------- ---------
Net cash used in investing activities................ (20.6) (61.2) (59.1)
FINANCING ACTIVITIES:
Cash changes in owner's equity..................... (35.6) (34.1) (15.6)
Debt payments...................................... (0.2) (0.2) (0.3)
--------- --------- ---------
Net cash used in financing activities................ (35.8) (34.3) (15.9)
--------- --------- ---------
CASH AT BEGINNING AND END OF PERIOD.................. $ -- $ -- $ --
--------- --------- ---------
--------- --------- ---------
</TABLE>
See accompanying notes.
<PAGE>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
NOTES TO COMBINED FINANCIAL STATEMENTS
(IN THE TABLES, DOLLARS ARE MILLIONS)
1. BASIS OF PRESENTATION
North American Can Operations is a component of Reynolds Metals Company
("Reynolds") that primarily produces aluminum beverage cans and ends. The
North American Can Operations (the "Operation") consist of 15 can and end
plants in the U.S. and a can plant in Puerto Rico.
The accompanying special-purpose combined financial statements have been
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in a registration statement
of Ball Corporation. They have been prepared on a historical cost basis from
the books and records of the Operation and Reynolds on the basis of
established accounting methods, practices, procedures and policies (see Note
2) and the accounting judgments and estimation methodologies used by the
Operation and Reynolds.
The combined statement of income includes all items of revenue and income
generated by the Operation, all items of expense directly incurred by it and
expenses charged or allocated to it by Reynolds in the normal course of
business. In addition, certain Reynolds corporate expenses were allocated by
Reynolds to the Operation for the sole purpose of preparing these
special-purpose combined financial statements. For additional information
concerning expenses charged or allocated to the Operation by Reynolds, see
Note 3.
The Operation's results have been included in Reynolds' combined U.S.
federal and applicable state income tax returns. The amount of taxes payable
or receivable due to/from Reynolds for 1997, 1996 and 1995 is included as a
component of Owner's Equity and equals the current provision for taxes (see
Note 7). The provision for income taxes, the related assets and liabilities
and the disclosures in the footnotes are presented as if the Operation had
filed separate tax returns and are in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes."
The debt of the Operation consists of obligations that are specifically
identifiable with associated capital expenditures of the Operation. No other
debt of Reynolds (or related interest expense) has been allocated to the
Operation.
Because of the special purpose of the Operation's combined financial
statements and the significant related party transactions (as described in
Note 3), these special-purpose combined financial statements may not
necessarily be indicative of the combined financial position, results of
operations or cash flows that would have resulted if the Operation had been
operated as a separate entity. Management believes that the accounting
judgments, estimations and allocations made in preparing these
special-purpose combined financial statements were reasonable.
2. ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION
These special-purpose combined financial statements include the accounts
of the Operation after eliminating profits and losses on transactions within
the Operation.
REVENUE RECOGNITION
Revenues are recognized when products are shipped and ownership risk and
title pass to the customer.
<PAGE>
2. ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories are stated at the lower of cost or market. Inventory costs
were determined by the first-in, first-out method and principally consist of
finished goods.
DEPRECIATION AND AMORTIZATION
The straight-line method is used to depreciate plant and equipment over
their estimated useful lives (buildings -- 10 to 40 years, machinery and
equipment -- 5 to 20 years).
ENVIRONMENTAL EXPENDITURES
Remediation costs are accrued when it is probable that such efforts will
be required and the related costs can be reasonably estimated.
STATEMENT OF CASH FLOWS
Reynolds utilizes a centralized cash management system for all of its
domestic operations, including the Operation. Cash receipts are transferred
to Reynolds while the cash disbursements are made by Reynolds on behalf of
the Operation, each on a current basis. The net cash generated by the
Operation in the combined statement of cash flows is reflected as a change in
the Owner's Equity account.
USE OF ESTIMATES
Generally accepted accounting principles require management to make
estimates and assumptions that affect assets and liabilities, contingent
assets and liabilities, and revenues and expenses. Actual results could
differ from those estimates.
3. RELATED PARTY TRANSACTIONS
REYNOLDS' LATIN AMERICAN AFFILIATE
The Operation sells cans to a Reynolds' affiliate that produces and
markets cans in Latin America. The Operation sells cans to the affiliate, as
necessary, to cover production shortages.
NET INVENTORY PURCHASES FROM REYNOLDS
Reynolds has been a primary supplier of aluminum sheet to the Operation.
The Operation also sells aluminum scrap to Reynolds (which is accounted for
as a credit to aluminum sheet purchases). The following is a summary of these
transactions (which were made at market prices) for each of the last three
years.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Aluminum sheet purchases............................ $ 539.5 $ 517.7 $ 468.6
Aluminum scrap sales................................ (31.3) (30.8) (38.5)
--------- --------- ---------
Total............................................. $ 508.2 $ 486.9 $ 430.1
--------- --------- ---------
--------- --------- ---------
</TABLE>
<PAGE>
3. RELATED PARTY TRANSACTIONS (CONTINUED)
OPERATING EXPENSES
The expenses charged or allocated to the Operation by Reynolds in the
normal course of business consist of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Employee benefits:
Pensions......................................... $ 7.8 $ 6.6 $ 6.4
Other postretirement benefits.................... 4.0 5.1 5.8
Insurance -- principally medical for
active personnel............................... 17.0 17.8 16.0
Workers' compensation............................ 4.0 3.9 3.3
Information system usage......................... 2.1 2.4 2.1
Other.............................................. 3.0 2.5 3.0
--------- --------- ---------
$ 37.9 $ 38.3 $ 36.6
--------- --------- ---------
--------- --------- ---------
</TABLE>
Reynolds maintains several noncontributory defined benefit pension plans
(including the Operation, Reynolds and certain consolidated subsidiaries of
Reynolds) that cover substantially all of the Operation's employees. Plans
covering salaried employees provide pension benefits based on a formula. The
formula considers length of service and earnings during years of service.
Plans covering hourly employees generally provide a specific amount of
benefits for each year of service.
Reynolds also maintains postretirement benefits plans (including the
Operation, Reynolds and certain consolidated subsidiaries of Reynolds) that
provide most of the Operation's retired employees with health care and life
insurance benefits. Substantially all employees may become eligible for these
benefits if they work for the Operation until retirement age.
The Operation recognizes employee benefit costs based on allocations from
Reynolds. These allocations were determined in a fair and equitable manner
and have been consistently applied to the Operation and to Reynolds' other
operations. Information system usage is charged based on actual computer time
used by the Operation.
ALLOCATION OF CORPORATE SELLING, ADMINISTRATIVE AND GENERAL EXPENSES
In addition to the operating expenses discussed above, certain Reynolds
corporate expenses were allocated to the Operation by Reynolds for the sole
purpose of preparing these special-purpose combined financial statements.
These expenses were allocated to the Operation based on the relationship of
the aggregate of the Operation's net sales, fixed assets and equity
investments compared to that of Reynolds. These expenses amounted to $13.7
million in 1997 ($12.1 million in 1996 and $17.3 million in 1995).
ACCOUNTS PAYABLE
Accounts Payable -- Reynolds plant locations (net) reflects the net
liability to Reynolds for purchases of aluminum sheet less the receivable
from Reynolds for sales of scrap. The net liability assumes normal payment
terms existed between Reynolds and the Operation. All other related party
transactions are accounted for as changes to the Owner's Equity account.
4. OPERATIONAL RESTRUCTURING COSTS
The operational restructuring costs for 1996 and 1995 resulted from the
closings and modernizations of certain domestic can plants of the Operation.
Two plants were closed as their capacities were in excess of
<PAGE>
4. OPERATIONAL RESTRUCTURING COSTS (CONTINUED)
the Operation's customer needs. Productivity gains from modernizations within
the Operation's can-making system and slower overall growth in the domestic
can market lead to this rationalization. The significant components of these
costs were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------
1996 1995
---------- -----------
<S> <C> <C>
Employee termination costs................................. $ 30.3 $ 2.4
Asset revaluations......................................... 5.2 10.2
Other...................................................... 1.7 3.3
---------- -----------
$ 37.2 $ 15.9
---------- -----------
---------- -----------
</TABLE>
The employee termination costs represent approximately 475 personnel
(principally hourly employees). Included in the employee termination amount
for 1996 is $18.9 million related to pension and other post-retirement
liabilities. As these liabilities will be funded over time by Reynolds, the
amounts are included as a component of Owner's Equity in the combined balance
sheet. Most of the remaining cash requirements were paid as of the end of
1997, with the balance ($4.6 million) to be paid in 1998.
The asset revaluations were for assets to be sold (property, plant and
equipment) as a result of the restructuring of operations. These assets were
revalued to their estimated recoverable value.
5. PROPERTY, PLANT AND EQUIPMENT (AT COST)
<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1997 1996
--------- ---------
<S> <C> <C>
Land and land improvements........................... $ 19.2 $ 19.2
Buildings............................................ 93.2 85.8
Machinery and equipment.............................. 621.5 588.0
Construction in progress............................. 7.2 37.3
--------- ---------
741.1 730.3
Less allowances for depreciation and amortization.... 404.5 355.3
--------- ---------
Net property, plant and equipment.................... $ 336.6 $ 375.0
--------- ---------
--------- ---------
</TABLE>
6. FINANCING ARRANGEMENTS
The Operation's debt at December 31, 1997 consists of $49.2 million of
industrial and environmental control revenue bonds (including $41.2 million
at the Puerto Rico can plant) and a mortgage of $5.4 million (which includes
$0.2 million in Other current liabilities in the Combined Balance Sheet).
The industrial and environmental control revenue bonds bear interest at a
variable rate (averaging approximately 3.8% at December 31, 1997). These
bonds require principal repayments in a lump sum in 2013 ($41.2 million) and
2015 ($8.0 million). Letters of credit issued to Reynolds by banks support
these bonds. The mortgage bears interest at a fixed rate of 10%. The mortgage
requires principal repayments through 2009 (approximately $0.2 to $0.3
million a year for the next five years).
Interest expense incurred was $2.6 million in 1997 ($2.8 million in 1996
and $3.0 million in 1995). Interest capitalized amounted to $0.5 million in
1997 ($2.8 million in 1996 and $2.1 million in 1995).
<PAGE>
6. FINANCING ARRANGEMENTS (CONTINUED)
The financing arrangements contain compliance requirements, such as
maintaining and operating the associated facilities in good repair during
their useful lives. Upon the occurrence of certain events, including
cessation of operation of the Puerto Rican plant, the maturities of the
Operation's debt could be accelerated. These requirements do not inhibit
operations or the use of fixed assets. At December 31, 1997, the Operation
met all such compliance requirements.
The fair value of the Operation's debt was approximately equal to book
value at the end of 1997 and 1996.
7. TAXES ON INCOME
The significant components of the provision for taxes on income (credit)
were:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Current:
Federal............................................ $ 9.1 $ (8.0) $ 14.9
State.............................................. 0.9 (0.6) 3.0
--------- --------- ---------
Total current...................................... 10.0 (8.6) 17.9
--------- --------- ---------
Deferred:
Federal............................................ 7.4 (2.8) (0.2)
State.............................................. 2.5 (1.6) (0.1)
--------- --------- ---------
Total deferred..................................... 9.9 (4.4) (0.3)
--------- --------- ---------
Total................................................ $ 19.9 $ (13.0) $ 17.6
--------- --------- ---------
--------- --------- ---------
</TABLE>
The effective income tax rate varied from the statutory rate as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Federal statutory rate........................ 35% (35)% 35%
State income taxes............................ 4 (4) 4
Goodwill and other............................ 2 2 2
--- --- ---
Effective rate................................ 41% (37)% 41%
--- --- ---
--- --- ---
</TABLE>
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. At
December 31, 1997, the Operation had $7.9 million (1996 -- $14.9 million) of
deferred tax
<PAGE>
7. TAXES ON INCOME (CONTINUED)
assets and $41.8 million (1996 -- $38.9 million) of deferred tax liabilities.
The significant components of deferred tax assets and liabilities reflected
in the combined balance sheet are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------------------------------
1997 1996
-------------------------- -------------------------
CURRENT NONCURRENT CURRENT NONCURRENT
ASSET LIABILITY ASSET LIABILITY
----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Tax over book depreciation........... $ -- $ 41.8 $ -- $ 38.9
Environmental and restructuring
costs.............................. 1.8 (3.3) 4.0 (7.2)
Other................................ 2.8 -- 3.7 --
------- ------- ------ -------
Total................................ $ 4.6 $ 38.5 $ 7.7 $ 31.7
------- ------- ------ -------
------- ------- ------ -------
</TABLE>
Included in the Operation is a corporation (Latas de Aluminio Reynolds,
Inc.) which for all years joined in the filing of a U.S. federal consolidated
income tax return with Reynolds and its affiliated group members. Each entity
included in a consolidated return is severally liable for any resultant tax
reflected on such consolidated return.
8. CONTINGENT LIABILITIES
LEGAL
Various suits, claims and actions are pending against the Operation. In
the opinion of management, after consultation with legal counsel, disposition
of these suits, claims and actions, either individually or in the aggregate,
will not have a material adverse effect on the Operation's competitive or
financial position or its expected ongoing results of operations.
ENVIRONMENTAL
The Operation is involved in various environmental improvement activities
resulting from past operations including where Reynolds has been designated
as a potentially responsible party ("PRP"), with others, at various
Environmental Protection Agency-designated Superfund sites.
Amounts have been recorded (on an undiscounted basis) which, in
management's best estimate, will be sufficient to satisfy anticipated costs
of known remediation requirements. At December 31, 1997, the accrual for
environmental remediation costs was $8.4 million. This amount is expected to
be spent over the next 10 to 15 years with the majority to be spent by the
year 2002.
Estimated environmental remediation costs are developed after
considering, among other things, the following:
- currently available technological solutions
- alternative cleanup methods
- risk-based assessments of the contamination
- estimated proportionate share of remediation costs (if applicable)
The Operation may also use external consultants, and consider, when
available, estimates by other PRPs and governmental agencies and information
regarding the financial viability of other PRPs. Based on information
currently available, the Operation believes it is unlikely that it will incur
substantial additional costs as a result of failure by other PRPs to satisfy
their responsibilities for remediation costs.
<PAGE>
8. CONTINGENT LIABILITIES (CONTINUED)
Estimated costs for future environmental compliance and remediation are
necessarily imprecise because of factors such as:
- continuing evolution of environmental laws and regulatory requirements
- availability and application of technology
- identification of presently unknown remediation requirements
- cost allocations among PRPs
Further, it is not possible to predict the amount or timing of future
costs of environmental remediation that may subsequently be determined. Based
on information presently available, such future costs are not expected to
have a material adverse effect on the Operation's competitive or financial
position or its expected ongoing results of operations.
9. OTHER
MAJOR CUSTOMERS
The Operation has two major customers. Sales to Philip Morris Companies,
Inc. ("PM") represented 45% of customer net sales in 1997 (47% in 1996 and
41% in 1995). The combined sales to Coca-Cola bottlers (as a group)
represented 20% of customer net sales in 1997 (19% in 1996 and 20% in 1995).
At December 31, 1997, receivables from PM and the Coca-Cola bottlers (as a
group) were 21% and 10%, respectively, as a percentage of total customer
receivables.
RESEARCH AND DEVELOPMENT
The Operation incurred $6.1 million in research and development costs in
1997 ($7.2 million in 1996 and $6.6 million in 1995).
CONSIGNMENT INVENTORIES
The Operation holds certain materials (principally aluminum sheet
inventory) at its facilities on consignment from Reynolds and certain outside
vendors. At December 31, 1997, the total value of aluminum sheet inventory on
consignment was $23.9 million ($14.4 million at December 31, 1996). Under
these consignment agreements, the Operation takes title to the materials at
the time they are placed into the production process. Additionally, any
consignment inventory held in excess of certain periods of time (whether used
or not) becomes the Operation's inventory. Aluminum sheet inventory on
consignment from Reynolds at December 31, 1997 totaled $18.1 million ($10.9
million at December 31, 1996).
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors
Reynolds Metals Company
We have reviewed the accompanying combined balance sheet of North American
Can Operations (a component of Reynolds Metals Company) as defined in Note 1
("the Operation") as of March 31, 1998, and the related combined statements of
income and cash flows for the three-month periods ended March 31, 1998 and 1997.
These financial statements are the responsibility of the Operation's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying combined financial statements referred to
above, for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the combined balance sheet of the Operation as of December 31, 1997,
and the related combined statements of income and cash flows for the year then
ended (not separately presented herein) and in our report dated April 28, 1998,
we expressed an unqualified opinion on those combined financial statements. In
our opinion, the information set forth in the accompanying combined balance
sheet as of December 31, 1997, is fairly stated, in all material respects, in
relation to the combined balance sheet from which it has been derived.
Ernst & Young LLP
Richmond, Virginia
May 28, 1998
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
COMBINED BALANCE SHEET
(IN MILLIONS OF DOLLARS)
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
Current assets:
Customer receivables, less allowances of $0.2 (1997 - $0.2)....................... $ 66.0 $ 54.5
Receivables from Reynolds' Latin American affiliate............................... 5.0 6.2
Inventories....................................................................... 138.5 115.8
Deferred taxes.................................................................... 3.9 4.6
Other............................................................................. 2.8 3.3
----------- ------
Total current assets................................................................ 216.2 184.4
Property, plant and equipment....................................................... 744.6 741.1
Less allowances for depreciation and amortization................................... 418.2 404.5
----------- ------
326.4 336.6
Assets held for sale................................................................ 6.2 6.2
Other assets........................................................................ 38.4 38.9
----------- ------
Total assets.......................................................................... $ 587.2 $ 566.1
----------- ------
----------- ------
LIABILITIES AND OWNER'S EQUITY
Current liabilities:
Accounts payable.................................................................. $ 34.5 $ 26.9
Accounts payable - Reynolds plant locations (net)................................. 45.0 43.2
Accrued compensation and related amounts.......................................... 13.1 10.4
Restructuring liabilities......................................................... 3.8 4.6
Other liabilities................................................................. 3.7 4.6
----------- ------
Total current liabilities........................................................... 100.1 89.7
Long-term debt...................................................................... 54.3 54.4
Deferred taxes...................................................................... 38.7 38.5
Environmental liabilities........................................................... 8.6 8.5
Owner's equity...................................................................... 385.5 375.0
Contingent liabilities..............................................................
----------- ------
Total liabilities and owner's equity.................................................. $ 587.2 $ 566.1
----------- ------
----------- ------
</TABLE>
Note: The combined balance sheet at December 31, 1997 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
COMBINED STATEMENT OF INCOME
(IN MILLIONS OF DOLLARS)
(UNAUDITED)
QUARTERS ENDED MARCH
31
--------------------
1998 1997
--------- ---------
<S> <C> <C>
REVENUES
Net sales.................................................................................... $ 277.4 $ 274.5
Net sales to Reynolds' Latin American affiliate.............................................. 1.0 3.1
--------- ---------
278.4 277.6
COSTS AND EXPENSES
Cost of products sold........................................................................ 245.9 250.5
Selling, administrative and general.......................................................... 7.1 6.9
Depreciation and amortization................................................................ 14.5 13.7
Interest..................................................................................... 0.6 0.3
--------- ---------
268.1 271.4
--------- ---------
EARNINGS
Income before income taxes................................................................... 10.3 6.2
Taxes on income.............................................................................. 4.2 2.6
--------- ---------
NET INCOME..................................................................................... $ 6.1 $ 3.6
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
COMBINED STATEMENT OF CASH FLOWS
(IN MILLIONS OF DOLLARS)
(UNAUDITED)
QUARTERS ENDED MARCH
31
--------------------
1998 1997
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income..................................................................................... $ 6.1 $ 3.6
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization................................................................ 14.5 13.7
Operational restructuring payments........................................................... (0.8) (3.1)
Deferred taxes............................................................................... 0.9 2.6
Changes in operating assets and liabilities:
Increase in receivables.................................................................... (10.3) (11.2)
Increase in inventories.................................................................... (22.7) (4.4)
Increase in payables....................................................................... 11.6 13.6
Other...................................................................................... (1.0) (2.0)
--------- ---------
Net cash provided by (used in) operating activities.............................................. (1.7) 12.8
INVESTING ACTIVITIES:
Expenditures for property, plant and equipment................................................. (4.0) (6.8)
Proceeds from sales of assets.................................................................. 1.4 0.3
--------- ---------
Net cash used in investing activities............................................................ (2.6) (6.5)
FINANCING ACTIVITIES:
Cash changes in owner's equity................................................................. 4.4 (6.2)
Debt payments.................................................................................. (0.1) (0.1)
--------- ---------
Net cash provided by (used in) financing activities.............................................. 4.3 (6.3)
--------- ---------
CASH AT BEGINNING AND END OF PERIOD.............................................................. $ -- $ --
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
<PAGE>
NORTH AMERICAN CAN OPERATIONS
(A COMPONENT OF REYNOLDS METALS COMPANY)
NOTES TO COMBINED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
North American Can Operations is a component of Reynolds Metals Company
("Reynolds") that primarily produces aluminum beverage cans and ends. The North
American Can Operations (the "Operation") consist of 15 can and end plants in
the U.S. and a can plant in Puerto Rico.
The accompanying unaudited special-purpose interim combined financial
statements are presented in accordance with generally accepted accounting
principles for interim financial statements and have been prepared on a basis
consistent with the annual statements. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management of
the Operation, the statements include all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation. Operating
results for the interim period of 1998 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998. For further
information, refer to the special-purpose combined financial statements and
footnotes thereto included in North American Can Operations' report for the year
ended December 31, 1997.
2. CONTINGENT LIABILITIES
ENVIRONMENTAL
The Operation is involved in various environmental improvement activities
resulting from past operations including where Reynolds has been designated as a
potentially responsible party ("PRP"), with others, at various Environmental
Protection Agency-designated Superfund sites.
Amounts have been recorded (on an undiscounted basis) which, in management's
best estimate, will be sufficient to satisfy anticipated costs of known
remediation requirements.
Estimated costs for future environmental compliance and remediation are
necessarily imprecise because of factors such as:
- continuing evolution of environmental laws and regulatory requirements
- availability and application of technology
- identification of presently unknown remediation requirements
- cost allocations among PRPs
Further, it is not possible to predict the amount or timing of future costs
of environmental remediation that may subsequently be determined. Based on
information presently available, such future costs are not expected to have a
material adverse effect on the Operation's competitive or financial position or
its expected ongoing results of operations.
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The Unaudited Pro Forma Condensed Combined Financial Data is based on the
consolidated financial statements of Ball and the combined financial
statements of Reynolds included elsewhere in this Offering Memorandum. The
unaudited pro forma condensed combined balance sheet at March 29, 1998 is
based on the consolidated financial statements of Ball, adjusted to give
effect to the Transactions as if they had occurred on March 29, 1998. The
unaudited pro forma condensed combined statements of income for the year
ended December 31, 1997, the three-month period ended March 29, 1998 and the
twelve-month period ended March 29, 1998 are based on the consolidated
financial statements of Ball and adjusted to give effect to the Transactions
as if they had occurred on January 1, 1997. During the periods presented,
neither Ball's nor Reynolds' statements of income included any amounts
related to discontinued operations. Adjustments for the Transactions are
based upon historical financial information of Ball and Reynolds and certain
assumptions that management of Ball believes are reasonable. The Acquisition
will be accounted for under the purchase method of accounting. Under this
method, the purchase price has been allocated to the assets and liabilities
acquired based on preliminary estimates of fair value. The actual fair value
will be determined upon the consummation of the Acquisition and may vary from
the preliminary estimates. The pro forma financial data does not necessarily
reflect the results of operations or the financial position of Ball that
actually would have resulted had the Transactions occurred at the date
indicated, or project the results of operations or financial position of the
Company for any future date or period.
The unaudited pro forma condensed combined financial data should be read
in conjunction with the consolidated financial statements of Ball and the
combined financial statements of Reynolds, and the notes thereto, included
elsewhere in this Offering Memorandum.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1997
(IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
BALL REYNOLDS PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS TOTAL
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales........................................... $ 2,388.5 $ 1,192.7 $ -- $ 3,581.2
---------- ---------- ------- -----------
Costs and expenses
Cost of sales..................................... 2,121.2 1,109.9 3.3 (1)
(1.6)(2) 3,232.8
Selling, product development, general and
administrative expense.......................... 136.9 32.1 10.9 (3)
1.6 (10) 181.5
Disposition, relocation and other income.......... (9.0) -- -- (9.0)
Interest expense.................................. 53.5 2.1 105.8 (4)
(31.6)(4)
(2.1)(4)
3.8 (4)
1.5 (4) 133.0
---------- ---------- ------- -----------
2,302.6 1,144.1 91.6 3,538.3
---------- ---------- ------- -----------
Earnings before taxes on income..................... 85.9 48.6 (91.6) 42.9
Provision for income tax expense.................... (32.0) (19.9) 36.1 (7) (15.8)
Minority interests.................................. 5.1 -- -- 5.1
Equity in losses of affiliates...................... (0.7) -- -- (0.7)
---------- ---------- ------- -----------
Net income.......................................... 58.3 28.7 (55.5) 31.5
Preferred dividends, net of tax benefit........... (2.8) -- -- (2.8)
---------- ---------- ------- -----------
Net earnings available to common shareholders....... $ 55.5 $ 28.7 $ (55.5) $ 28.7
---------- ---------- ------- -----------
---------- ---------- ------- -----------
Earnings per common share(8):
Basic............................................. $ 1.84 $ 0.95
---------- -----------
---------- -----------
Diluted........................................... $ 1.74 $ 0.91
---------- -----------
---------- -----------
Weighted average common shares outstanding(8):
Basic............................................ 30,234,000 30,234,000
---------- -----------
---------- -----------
Diluted.......................................... 32,311,000 32,311,000
---------- -----------
---------- -----------
</TABLE>
<PAGE>
THREE-MONTH PERIOD ENDED MARCH 29, 1998
(IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
BALL REYNOLDS PRO FORMA PRO FORMA
HISTORICAL HISTORICAL(9) ADJUSTMENTS TOTAL
--------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Net sales..................................................... $ 549.7 $ 278.4 $ -- $ 828.1
--------- ------ ------ -----------
Costs and expenses
Cost of sales............................................... 491.2 260.4 0.8(1)
(0.4)(2) 752.0
Selling, product development, general and administrative
expense................................................... 33.4 7.1 2.7(3)
0.4(10) 43.6
Disposition, relocation and other expense................... 6.3 -- -- 6.3
Interest expense............................................ 12.7 0.6 26.3(5)
(7.4)(5)
(0.6)(5)
0.9(5)
0.4(5) 32.9
--------- ------ ------ -----------
543.6 268.1 23.1 834.8
--------- ------ ------ -----------
Earnings (loss) before taxes on income........................ 6.1 10.3 (23.1) (6.7)
Provision for income tax (expense) benefit.................... (3.1) (4.2) 9.2(7) 1.9
Minority interests............................................ 2.6 -- -- 2.6
Equity in losses of affiliates................................ (0.3) -- -- (0.3)
--------- ------ ------ -----------
Net income (loss)............................................. 5.3 6.1 (13.9) (2.5)
Preferred dividends, net of tax benefit..................... (0.7) -- -- (0.7)
--------- ------ ------ -----------
Net earnings (loss) available to common shareholders.......... $ 4.6 $ 6.1 $ (13.9) $ (3.2)
--------- ------ ------ -----------
--------- ------ ------ -----------
Earnings (loss) per common share (8):
Basic....................................................... $ 0.15 $ (0.11)
--------- -----------
--------- -----------
Diluted..................................................... $ 0.14 $ (0.11)
--------- -----------
--------- -----------
Weighted average common shares outstanding (8):
Basic....................................................... 30,203,000 30,203,000
--------- -----------
--------- -----------
Diluted..................................................... 32,266,000 30,203,000
--------- -----------
--------- -----------
</TABLE>
TWELVE-MONTH PERIOD ENDED MARCH 29, 1998
(IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
BALL REYNOLDS PRO FORMA PRO FORMA
HISTORICAL HISTORICAL(11) ADJUSTMENTS TOTAL
--------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Net sales.................................................... $ 2,458.4 $ 1,193.5 $ -- $ 3,651.9
--------- ------------- ------ -----------
Costs and expenses
Cost of sales.............................................. 2,180.8 1,106.1 3.3(1)
(1.6)(2) 3,288.6
Selling, product development, general and administrative
expense.................................................. 139.9 32.3 10.9(3)
1.6(10) 184.7
Disposition, relocation and other income................... (1.5) -- -- (1.5)
Interest expense........................................... 56.3 2.4 106.1(6)
(32.4)(6)
(2.4)(6)
3.8(6)
1.5(6) 135.3
--------- ------------- ------ -----------
2,375.5 1,140.8 90.8 3,607.1
--------- ------------- ------ -----------
Earnings before taxes on income.............................. 82.9 52.7 (90.8) 44.8
Provision for income tax expense............................. (32.3) (21.5) 35.8(7) (18.0)
Minority interests........................................... 6.1 -- -- 6.1
Equity in losses of affiliates............................... (0.1) -- -- (0.1)
--------- ------------- ------ -----------
Net income................................................... 56.6 31.2 (55.0) 32.8
Preferred dividends, net of tax benefit.................... (2.8) -- -- (2.8)
--------- ------------- ------ -----------
Net earnings available to common shareholders................ $ 53.8 $ 31.2 $ (55.0) $ 30.0
--------- ------------- ------ -----------
--------- ------------- ------ -----------
Earnings per common share(8):
Basic...................................................... $ 1.78 $ 0.99
--------- -----------
--------- -----------
Diluted.................................................... $ 1.68 $ 0.95
--------- -----------
--------- -----------
Weighted average common shares outstanding(8):
Basic...................................................... 30,175,000 30,175,000
--------- -----------
--------- -----------
Diluted.................................................... 32,344,000 32,344,000
--------- -----------
--------- -----------
</TABLE>
<PAGE>
BALL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENTS OF INCOME
(IN MILLIONS)
(1) Represents the incremental depreciation expense on the $47.0 million step-up
of plant and equipment to their respective fair values, as required by
Accounting Principles Board Opinion No. 16. Said step-up amount is being
amortized over periods from ten to twenty years.
(2) To eliminate the historical amortization of goodwill of Reynolds.
(3) Represents: (i) the amortization of goodwill of $375.3 million over a period
of 40 years and (ii) the amortization of other identified intangible assets
of $15.0 million over a period of 10 years.
(4) Interest expense was adjusted to reflect (i) $105.8 million resulting from
the following borrowings:
<TABLE>
<CAPTION>
AVERAGE INTEREST INTEREST
DEBT INSTRUMENT PRINCIPLE RATE EXPENSE
- ---------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Senior Notes.................................................... $ 300.0 7.75% $ 23.3
Senior Subordinated Notes....................................... 250.0 8.25% 20.6
Senior Credit Facility.......................................... 766.8 7.60% 58.3
Canadian Revolving Credit Facility.............................. 49.2 7.27% 3.6
-----------
Total....................................................... $ 105.8
-----------
-----------
</TABLE>
(ii) the elimination of $31.6 million of interest on the existing Ball debt
that will be repaid with proceeds of the Senior Credit Facility, Canadian
Revolving Credit Facility and Notes; (iii) the elimination of $2.1 million
of interest related to the Reynolds debt that will not be assumed by Ball;
(iv) $1.5 million of commitment fees on the average unused portion of the
Senior Credit Facility Revolving Loan; and (v) the amortization of financing
costs of $3.8 million over the life of the indebtedness. Borrowings under
the Senior Credit Facility and the Canadian Revolving Credit Facility
represent floating rate debt. A 1/8 of 1 percent change in the interest rate
on that debt would result in a change in interest expense of approximately
$1.0 million.
(5) Interest expense was adjusted to reflect (i) $26.3 million resulting from
the following borrowings:
<TABLE>
<CAPTION>
AVERAGE INTEREST INTEREST
DEBT INSTRUMENT PRINCIPAL RATE EXPENSE
- ---------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Senior Notes.................................................... $ 300.0 7.75% $ 5.8
Senior Subordinated Notes....................................... 250.0 8.25% 5.2
Senior Credit Facility.......................................... 766.6 7.61% 14.5
Canadian Revolving Credit Facility.............................. 41.5 7.28% 0.8
-----
Total....................................................... $ 26.3
-----
-----
</TABLE>
(ii) the elimination of $7.4 million of interest on the existing Ball debt
that will be repaid with proceeds of the Senior Credit Facility, Canadian
Revolving Credit Facility and Notes; (iii) the elimination of $0.6 million
of interest related to the Reynolds debt that will not be assumed by Ball;
(iv) $0.4 million of commitment fees on the average unused portion of the
Senior Credit Facility Revolving Loan; and (v) the amortization of financing
costs of $0.9 million over the life of the indebtedness. Borrowings under
the Senior Credit Facility and the Canadian Revolving Credit Facility
represent floating rate debt. A 1/8 of 1 percent change in the interest rate
on that debt would result in a change in interest expense of approximately
$0.25 million.
<PAGE>
BALL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENTS OF INCOME (CONTINUED)
(IN MILLIONS)
(6) Interest expense was adjusted to reflect (i) $106.1 million resulting from
the following borrowings:
<TABLE>
<CAPTION>
AVERAGE INTEREST INTEREST
DEBT INSTRUMENT PRINCIPAL RATE EXPENSE
- ---------------------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Senior Notes.................................................... $ 300.0 7.75% $ 23.3
Senior Subordinated Notes....................................... 250.0 8.25% 20.6
Senior Credit Facility.......................................... 771.8 7.63% 58.8
Canadian Revolving Credit Facility.............................. 47.1 7.32% 3.4
-----------
Total......................................................... $ 106.1
-----------
-----------
</TABLE>
(ii) the elimination of $32.4 million of interest on the existing Ball debt
that will be repaid with proceeds of the Senior Credit Facility, Canadian
Revolving Credit Facility and Notes; (iii) the elimination of $2.4 million
of interest related to the Reynolds debt that will not be assumed by Ball;
(iv) $1.5 million of commitment fees on the average unused portion of the
Senior Credit Facility Revolving Loan; and (v) the amortization of financing
costs of $3.8 million over the life of the indebtedness. Borrowings under
the Senior Credit Facility and the Canadian Revolving Credit Facility
represent floating rate debt. A 1/8 of 1 percent change in the interest rate
on that debt would result in a change in interest expense of approximately
$1.0 million.
(7) Income tax expense was adjusted to reflect an effective tax rate of 39.2%,
which is the expected statutory effective tax rate of Ball.
(8) Basic earnings per common share was calculated by dividing Ball historical
or pro forma net earnings available to common shareholders by the weighted
average common shares outstanding. Diluted earnings per common share was
calculated by dividing Ball historical or pro forma net income, as adjusted
for the impact of an assumed conversion of the Ball ESOP (as defined)
preferred shares into common shares, by the weighted average common shares
outstanding, as adjusted for the assumed exercise of dilutive stock options
and the conversion of the ESOP preferred shares into common shares. For the
three months ended March 29, 1998, no adjustment was made for the assumed
conversion of the ESOP shares in the pro forma earnings per share
calculation, as the result would have been anti-dilutive. See Ball "Notes to
Consolidated Financial Statements."
(9) Three-month period ended March 31, 1998.
(10) Represents incremental rent expense on certain of the Company's leases as a
result of the Financings.
(11) Twelve-month period ended March 31, 1998.
<PAGE>
BALL CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 29, 1998
(IN MILLIONS)
<TABLE>
<CAPTION>
BALL REYNOLDS PRO FORMA PRO FORMA
HISTORICAL HISTORICAL(1) ADJUSTMENTS TOTAL
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and temporary investments................................ $ 41.3 $ -- $ -- $ 41.3
Accounts receivable, net...................................... 315.7 71.0 -- 386.7
Inventories, net
Raw materials and supplies.................................. 140.4 2.8 -- 143.2
Work in process and finished goods.......................... 274.3 135.7 1.3(3) 411.3
Deferred income tax benefits and prepaid expenses............. 57.2 6.7 (3.9)(2) 60.0
----------- ------------- ----------- -----------
Total current assets...................................... 828.9 216.2 (2.6) 1,042.5
----------- ------------- ----------- -----------
Property, plant and equipment, at cost.......................... 1,543.7 750.8 (5.5)(2)
47.0(3)
(418.2)(3) 1,917.8
Accumulated depreciation........................................ (662.4) (418.2) 418.2(3) (662.4)
----------- ------------- ----------- -----------
881.3 332.6 41.5 1,255.4
----------- ------------- ----------- -----------
Investment in affiliates........................................ 78.5 -- -- 78.5
Goodwill, net................................................... 212.1 13.0 (13.0)(4)
375.3(4) 587.4
Other assets.................................................... 106.2 25.4 28.0(5)
15.0(5) 174.6
----------- ------------- ----------- -----------
$ 2,107.0 $ 587.2 $ 444.2 $ 3,138.4
----------- ------------- ----------- -----------
----------- ------------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt and current portion of long term debt......... $ 462.7 $ 0.2 $ (0.2)(2) $
(312.7)(7) 150.0
Accounts payable.............................................. 248.3 79.5 -- 327.8
Salaries and wages............................................ 53.6 13.1 (0.4)(2) 66.3
Other current liabilities..................................... 97.0 3.5 (0.2)(2)
(6.3) 10) 94.0
Restructuring liability....................................... -- 3.8 (3.8)(2)
52.0(6) 52.0
----------- ------------- ----------- -----------
Total current liabilities................................. 861.6 100.1 (271.6) 690.1
----------- ------------- ----------- -----------
Noncurrent liabilities
Long-term debt................................................ 359.5 54.3 (54.3)(2)
876.8(7)
312.7(7) 1,549.0
Deferred income taxes......................................... 61.4 38.7 (38.7)(2)
(14.7)(8) 46.7
Employee benefit obligations and other........................ 144.3 8.6 (8.4)(2)
37.6(8) 182.1
----------- ------------- ----------- -----------
Total non-current liabilities............................. 565.2 101.6 1,111.0 1,777.8
----------- ------------- ----------- -----------
Contingencies................................................... -- -- -- --
Minority interests.............................................. 44.0 -- -- 44.0
----------- ------------- ----------- -----------
Shareholders' equity
Series B ESOP Convertible Preferred Stock..................... 59.9 -- -- 59.9
Unearned compensation--ESOP................................... (37.0) -- -- (37.0)
----------- ------------- ----------- -----------
Preferred shareholders' equity.............................. 22.9 -- -- 22.9
----------- ------------- ----------- -----------
Common stock.................................................. 342.0 -- -- 342.0
Retained earnings............................................. 402.4 385.5 (385.5)(9)
(9.7) 10) 392.7
Accumulated other comprehensive loss.......................... (23.5) -- -- (23.5)
Treasury stock, at cost....................................... (107.6) -- -- (107.6)
----------- ------------- ----------- -----------
Common shareholders' equity................................. 613.3 385.5 (395.2) 603.6
----------- ------------- ----------- -----------
Total shareholders' equity.................................... 636.2 385.5 (395.2) 626.5
----------- ------------- ----------- -----------
$ 2,107.0 $ 587.2 $ 444.2 $ 3,138.4
----------- ------------- ----------- -----------
----------- ------------- ----------- -----------
</TABLE>
<PAGE>
BALL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 29, 1998
(1) As of March 31, 1998.
(2) These adjustments reflect the elimination from the Reynolds historical
financial statement balances of the assets and liabilities that will not be
purchased or assumed by Ball, as provided in the Purchase Agreement.
(3) The Reynolds acquisition will be accounted for using the purchase method of
accounting. These amounts reflect the preliminary estimates of adjustments
necessary to record the Reynolds assets acquired and liabilities assumed at
their respective fair values, as required by Accounting Principles Board
Opinion No. 16. The total purchase price was determined and allocated as
follows:
<TABLE>
<CAPTION>
Cash purchase price for Reynolds business......................................................... $ 746.0
<S> <C>
Additional cash paid for working capital.......................................................... 38.8
Incentive loan to RMC............................................................................. 39.0
Acquisition costs(a).............................................................................. 9.0
---------
Total purchase price.............................................................................. $ 832.8
---------
---------
Purchase price allocated to:
Tangible assets................................................................................... $ 613.1
Goodwill.......................................................................................... 375.3
Other intangible assets........................................................................... 15.0
Liabilities....................................................................................... (170.6)
---------
Total purchase price allocated.................................................................... $ 832.8
---------
---------
</TABLE>
- -----------------------------
(a) Represents fees and costs directly associated with the Reynolds
acquisition consisting primarily of investment banking, legal and other
professional fees.
(4) Goodwill was adjusted to reflect: (i) the elimination of existing goodwill
of Reynolds and (ii) the excess of purchase cost over the estimated fair
value of the Reynolds net assets acquired and liabilities assumed, which
amount will be amortized on a straight line basis over an estimated life of
40 years.
(5) Other assets were adjusted to reflect: (i) the capitalization of $28.0
million of financing costs that will be amortized over the life of the Notes
and the Senior Credit Facility and (ii) the allocation of $15.0 million of
purchase price to other intangible assets (primarily related to customer
lists, agreements not to compete and technology licensing agreements) that
will be amortized over an estimated life of ten years.
(6) Pursuant to EITF 95-3, the Company has estimated certain employee severance
and employee relocation costs anticipated in connection with consolidation
of the businesses.
(7) Long-term debt was adjusted to reflect: (i) gross proceeds of $550.0 million
from the issuance of the Notes and additional borrowings of $326.8 million
under the Senior Credit Facility and (ii) the reclassification of $312.7
million of short-term debt to long-term debt.
(8) Represents an adjustment to reflect the estimated liability for certain
Reynolds employee benefit obligations assumed by Ball. These obligations,
primarily for certain pension and medical benefits, were recorded on the
books of RMC, the seller, and not pushed down to Reynolds. All expenses
related to these benefit plans were recorded on the books of Reynolds. A
corresponding deferred tax asset related to this liability has also been
established in this pro forma balance sheet.
(9) The adjustment reflects the elimination of the former owner's equity of
Reynolds.
(10) The adjustment reflects an estimate of the non-recurring cost ($16.0
million, net of a $6.3 million tax benefit) on refinancing Ball's existing
borrowings under the Senior Credit Facility as a net reduction of
shareholders' equity.
