<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1997
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------
BWAY CORPORATION
ARMSTRONG CONTAINERS, INC.
BROCKWAY STANDARD, INC.
BROCKWAY STANDARD (CANADA), INC.
BROCKWAY STANDARD (NEW JERSEY), INC.
BROCKWAY STANDARD (OHIO), INC.
MATERIALS MANAGEMENT, INC.
MILTON CAN COMPANY, INC.
PLATE MASTERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3411 36-3624491
DELAWARE 3411 36-3493902
DELAWARE 3411 25-1364972
ONTARIO, CANADA
NONE
DELAWARE 3411 58-2241193
DELAWARE 3411 65-0666452
DELAWARE 2796 58-2295302
DELAWARE 3411 58-2264009
DELAWARE 2796 58-2262496
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
---------------
8607 ROBERTS DRIVE, SUITE 250
ATLANTA, GEORGIA 30350
TELEPHONE: (770) 587-0888
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
---------------
BLAIR G. SCHLOSSBERG
8607 ROBERTS DRIVE, SUITE 250
ATLANTA, GEORGIA 30350
TELEPHONE: (770) 587-0888
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
ALAN G. BERKSHIRE
KIRKLAND & ELLIS
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
TELEPHONE: (312) 861-2035
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING PRICE REGISTRATION
REGISTERED REGISTERED PER UNIT (1) (1) FEE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10 1/4% Senior Subordi-
nated Notes due 2007,
Series B.............. $100,000,000 100% $100,000,000 $30,304
- ---------------------------------------------------------------------------------
Guarantees of 10 1/4%
Senior Subordinated
Notes due 2007, Series
B..................... $100,000,000 (2) (2) None
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</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(f).
(2) No further fee is payable pursuant to Rule 457(n).
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 28, 1997
PRELIMINARY PROSPECTUS
, 1997
LOGO
OFFER TO EXCHANGE ITS 10 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING 10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1997, UNLESS EXTENDED.
BWAY Corporation, a Delaware corporation ("BWAY" or the "Company") hereby
offers (the "Exchange Offer"), upon the terms and conditions set forth in this
Prospectus (the "Prospectus") and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), to exchange $1,000 principal amount of its 10 1/4%
Senior Subordinated Notes due 2007, Series B (the "Exchange Notes"), registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant
to a Registration Statement of which this prospectus is a part, for each $1,000
principal amount of its outstanding 10 1/4% Senior Subordinated Notes due 2007
(the "Old Notes"), of which $100,000,000 principal amount is outstanding. The
form and terms of the Exchange Notes are the same as the form and term of the
Old Notes except that (i) the Exchange Notes will bear a Series B designation,
(ii) the issuance of the Exchange Notes will have been registered under the
Securities Act and, therefore, the Exchange Notes will not bear legends
restricting the transfer thereof and (iii) holders of the Exchange Notes will
not be entitled to certain rights of holders of Old Notes under the
Registration Rights Agreement (as defined). The Old Notes and the Exchange
Notes are sometimes referred to herein collectively as the "Notes." The
Exchange Notes will evidence the same debt as the Old Notes (which they
replace) and will be issued under and be entitled to the benefits of the
Indenture dated as of April 11, 1997 (the "Indenture") by and among the
Company, the Subsidiary Guarantors (as defined) and Harris Trust and Savings
Bank, as trustee, governing the Notes. See "The Exchange Offer" and
"Description of Exchange Notes."
The Company will accept for exchange any and all Old Notes validly tendered
and not withdrawn prior to 5:00 p.m., New York City time on , 1997,
unless extended by the Company in its sole discretion (the "Expiration Date").
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m. on the
Expiration Date. The Exchange Offer is subject to certain customary conditions.
See "The Exchange Offer."
The Old Notes were sold by the Company on April 11, 1997 to BT Securities
Corporation, Bankers Trust International plc, Bear, Stearns & Co. Inc. and
NationsBanc Capital Markets, Inc. (the "Initial Purchasers") in a transaction
not registered under the Securities Act in reliance upon an exemption under the
Securities Act (the "Initial Offering"). The Initial Purchasers subsequently
placed the Old Notes with (i) qualified institutional buyers in reliance upon
Rule 144A under the Securities Act, (ii) a limited number of institutional
accredited investors that agreed to comply with certain transfer restrictions
and other conditions and (iii) qualified buyers outside the United States in
reliance upon Regulation S under the Securities Act. Accordingly, the Old Notes
may not be reoffered, resold or otherwise transferred in the United States or
to U.S. Persons (as defined in Regulation S under the Securities Act) unless
registered under the Securities Act or unless an applicable exemption from the
registration requirements of the Securities Act is available. The Exchange
Notes are being offered hereunder in order to satisfy the obligations of the
Company and the Subsidiary Guarantors under the Registration Rights Agreement
entered into by the Company, the Subsidiary Guarantors and the Initial
Purchasers in connection with the Initial Offering (the "Registration Rights
Agreement"). See "The Exchange Offer."
(Continued on following page)
SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DESCRIPTION OF CERTAIN RISKS TO
BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD NOTES IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
(continued from previous page)
Interest on the Notes will accrue from their date of original issuance and
will be payable semi-annually in arrears on April 15 and October 15 of each
year, commencing October 15, 1997, at the rate of 10 1/4% per annum. The Notes
will be redeemable, in whole or in part, at the option of the Company on or
after April 15, 2002, at the redemption prices set forth herein plus accrued
and unpaid interest to the date of redemption. In addition, at any time and
from time to time prior to April 15, 2000, the Company may, at its option,
redeem up to 33 1/3% of the aggregate principal amount of the Notes with the
net cash proceeds of one or more Equity Offerings (as defined), at a
redemption price equal to 110 1/4% of the principal amount thereof plus
accrued and unpaid interest to the date of redemption; provided, however, that
after giving effect to any such redemption, at least 66 2/3% of the aggregate
principal amount of the Notes originally issued remains outstanding. Upon a
Change in Control (as defined), the Company will be required to make an offer
to repurchase the Notes at a price equal to 101% of the principal amount
thereof plus accrued and unpaid interest to the date of repurchase. In
addition, the Company will be obligated to offer to repurchase the Notes at
100% of the principal amount thereof plus accrued and unpaid interest to date
of repurchase in the event of certain Asset Sales (as defined). See
"Description of Exchange Notes."
The Notes will be general unsecured senior subordinated obligations of the
Company and will be subordinated in right of payment to all existing and
future Senior Indebtedness (as defined) of the Company and will be effectively
subordinated to all secured Indebtedness (as defined) of the Company to the
extent of the value of the assets securing any such Indebtedness. The Notes
will rank pari passu with any future senior subordinated indebtedness of the
Company and will rank senior to all other subordinated indebtedness of the
Company. The Notes will be unconditionally guaranteed (the "Guarantees") on a
senior subordinated basis by all direct and indirect Restricted Subsidiaries
(as defined) of the Company, whether now owned or hereafter acquired (subject
to certain exceptions) (the "Subsidiary Guarantors"). The Guarantees will be
general unsecured senior subordinated obligations of the Subsidiary Guarantors
and will be subordinated in right of payment to all existing and future
Guarantor Senior Indebtedness (as defined) (including Indebtedness outstanding
under the Credit Agreement). The Guarantees will rank pari passu with any and
all future senior subordinated Indebtedness of the Subsidiary Guarantors and
will rank senior to all other subordinated Indebtedness of the Subsidiary
Guarantors. As of December 31, 1996, on a pro forma basis after giving affect
to the Initial Offering, the Company would have had outstanding approximately
$43.2 million of Senior Indebtedness and no Indebtedness subordinated to the
Notes. See "Description of Exchange Notes--Guarantees" and "--Certain
Covenants--Additional Subsidiary Guarantees."
Based upon an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") set forth in certain no-action letters issued to
third parties, the Company believes that the Exchange Notes issued pursuant to
the Exchange Offer in exchange for Old Notes may be offered for resale, resold
and otherwise transferred by any holder thereof (other than any such holder
that is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Notes
are acquired in the ordinary course of such holder's business and such holder
has no arrangement or understanding with any person to participate in the
distribution of such Exchange Notes. See "The Exchange Offer--Resale of the
Exchange Notes." Holders of Old Notes wishing to accept the Exchange Offer
must represent to the Company, as required by the Registration Rights
Agreement, that such conditions have been met. Each broker-dealer (a
"Participating Broker-Dealer") that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of Exchange Notes
received in exchange for Old Notes where such Old Notes were acquired by such
Participating Broker-Dealer as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 180 days
after the Expiration Date, it will make this Prospectus available to any
Participating Broker-Dealer for use in connection with any such resale. See
"Plan of Distribution."
The Company will not receive any proceeds from the Exchange Offer. The
Company has agreed to bear the expenses of the Exchange Offer. No underwriter
is being used in connection with the Exchange Offer.
<PAGE>
Holders of Old Notes not tendered and accepted in the Exchange Offer will
continue to hold such Old Notes and will be entitled to all the rights and
benefits and will be subject to the limitations applicable thereto under the
Indenture and with respect to transfer under the Securities Act. See "The
Exchange Offer."
There has not previously been any public market for the Old Notes or the
Exchange Notes. The Company does not intend to list the Exchange Notes on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurance that an active market for the
Exchange Notes will develop. See "Risk Factors--Absence of a Public Market
Could Adversely Affect the Value of Exchange Notes." Moreover, to the extent
that Old Notes are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Old Notes could be adversely
affected.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SUBSIDIARY GUARANTORS. NEITHER THE DELIVERY
OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, NOR ANY EXCHANGE
MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
UNTIL , 1997 (90 DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER),
ALL DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THE EXCHANGE NOTES WILL BE AVAILABLE INITIALLY ONLY IN BOOK-ENTRY FORM.
EXCEPT AS DESCRIBED UNDER "BOOK-ENTRY; DELIVERY AND FORM", THE COMPANY EXPECTS
THAT THE EXCHANGE NOTES ISSUED PURSUANT TO THE EXCHANGE OFFER WILL BE
REPRESENTED BY A GLOBAL NOTE (AS DEFINED), WHICH WILL BE DEPOSITED WITH, OR ON
BEHALF OF, THE DEPOSITORY TRUST COMPANY ("DTC") AND REGISTERED IN ITS NAME OR
IN THE NAME OF CEDE & CO., ITS NOMINEE. BENEFICIAL INTERESTS IN THE GLOBAL
NOTE REPRESENTING THE EXCHANGE NOTES WILL BE SHOWN ON, AND TRANSFERS THEREOF
WILL BE EFFECTED THROUGH, RECORDS MAINTAINED BY DTC AND ITS PARTICIPANTS.
AFTER THE INITIAL ISSUANCE OF THE GLOBAL NOTE, NOTES IN CERTIFICATED FORM WILL
BE ISSUED IN EXCHANGE FOR THE GLOBAL NOTE ONLY UNDER LIMITED CIRCUMSTANCES AS
SET FORTH IN THE INDENTURE. SEE "BOOK-ENTRY; DELIVERY AND FORM."
PROSPECTIVE INVESTORS IN THE EXCHANGE NOTES ARE NOT TO CONSTRUE THE CONTENTS
OF THIS PROSPECTUS AS INVESTMENT, LEGAL OR TAX ADVICE. EACH INVESTOR SHOULD
CONSULT ITS OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO LEGAL, TAX,
BUSINESS, FINANCIAL AND RELATED ASPECTS OF THE EXCHANGE NOTES. NEITHER THE
COMPANY OR ANY OF THE SUBSIDIARY GUARANTORS IS MAKING ANY REPRESENTATION TO
ANY PROSPECTIVE INVESTOR IN THE EXCHANGE NOTES REGARDING THE LEGALITY OF AN
INVESTMENT THEREIN BY SUCH PERSON UNDER APPROPRIATE LEGAL INVESTMENT OR
SIMILAR LAWS.
i
<PAGE>
MARKET DATA USED THROUGHOUT THIS PROSPECTUS WERE OBTAINED FROM INTERNAL
COMPANY SURVEYS AND INDUSTRY PUBLICATIONS, WHICH THE COMPANY BELIEVES TO BE
RELIABLE. THE COMPANY HAS NOT INDEPENDENTLY VERIFIED THIS MARKET DATA.
SIMILARLY, INTERNAL COMPANY SURVEYS, WHILE BELIEVED BY THE COMPANY TO BE
RELIABLE, HAVE NOT BEEN VERIFIED BY ANY INDEPENDENT SOURCES.
THROUGHOUT THIS PROSPECTUS, REFERENCES TO THE COMPANY'S "SHARE" OR "SALES
SHARE" REFER TO THE COMPANY'S ESTIMATE OF ITS UNIT SALES AS A PERCENTAGE OF
ALL UNITS SOLD IN THE UNITED STATES ON A PRO FORMA BASIS AFTER GIVING EFFECT
TO THE RECENT ACQUISITIONS. "SHARE" AND "SALES SHARE," UNLESS SPECIFICALLY
STATED TO THE CONTRARY, HAVE BEEN DERIVED FROM THE MOST RECENTLY PUBLISHED CAN
MANUFACTURERS INSTITUTE AND U.S. DEPARTMENT OF COMMERCE CENSUS BUREAU DATA AND
THE COMPANY'S ESTIMATE OF SUBSEQUENT CHANGES IN MARKET SHARE BASED UPON
CHANGES IN THE COMPANY'S NET SALES FROM SUCH PRODUCT LINES.
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE UNITED STATES
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ALL
STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED IN THIS
PROSPECTUS, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S
FUTURE FINANCIAL POSITION, BUSINESS STRATEGY, BUDGETS, PROJECTED COSTS AND
PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, ARE FORWARD-LOOKING
STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN
SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT
SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S
EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED UNDER "RISK FACTORS" AND
ELSEWHERE IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, IN CONJUNCTION
WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS. ALL
SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE
ISSUER, THE SUBSIDIARY GUARANTORS, OR PERSONS ACTING ON THEIR BEHALF, ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Exchange Offer Registration Statement," which term shall encompass
all amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act, and the rules and regulations promulgated thereunder, covering
the Exchange Notes being offered hereby. This Prospectus does not contain all
the information set forth in the Exchange Offer Registration Statement. For
further information with respect to the Company and the Exchange Offer,
reference is made to the Exchange Offer Registration Statement. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Exchange
Offer Registration Statement, reference is made to the exhibit for a more
complete description of the document or matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports and other information with the
Commission. The Exchange Offer Registration Statement, including the exhibits
thereto, and periodic reports and other information filed by the Company with
the Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, or at its regional offices located at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of such materials
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The address of such site is
http://www.sec.com.
ii
<PAGE>
In addition, the Company has agreed that, whether or not it is required to
do so by the rules and regulations of the Commission, for so long as any Notes
remain outstanding, it will furnish to the holders of the Notes and, to the
extent permitted by applicable law or regulation, file with the Commission (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company was required to file such Forms, including for each a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereof by the Company's
independent certified public accountants and (ii) all reports that would be
required to be filed on Form 8-K if it were required to file such reports. In
addition, for so long as any of the Notes remain outstanding, the Company has
agreed to make available to any prospective purchaser of the Notes or
beneficial owner of the Notes, in connection with any sale thereof, the
information required by Rule 144A(d)(4) under the Securities Act.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Company will provide without charge to each
person, including any beneficial owner, to whom a prospectus is delivered a
copy of any and all of the information that has been incorporated by reference
in this Prospectus (not including exhibits to the information incorporated by
reference into the information that the Prospectus incorporates) upon written
or oral request from Blair G. Schlossberg, General Counsel and Secretary of
BWAY Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350,
telephone: (770) 587-0888. In order to ensure timely delivery of the
documents, any request should be made by , 1997 (five business
days prior to the Expiration Date).
The Company, a corporation organized under the laws of Delaware, has its
principal executive offices located at 8607 Roberts Drive, Suite 250, Atlanta,
Georgia 30350; its telephone number is (770) 587-0888.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission pursuant to the
Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 29, 1996 (File No. 0-26178), excluding the financial statements
included therein.
2. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended December 29, 1996 (File No. 0-26178).
3. The Company's Current Report on Form 8-K/A dated August 30, 1996 (File
No. 0-26178) and the Company's Current Reports on Form 8-K dated November
12, 1996 and March 25, 1997 (File No. 0-26178).
4. The description of the Company's common stock and preferred share
purchase rights under the caption "Item 1. Description of Registrant's
Securities to be Registered" contained in each of the Company's
Registration Statements on Form 8-A (File No. 0-26178) that were filed with
the Commission on November 5, 1996 pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including any amendments or
reports filed for the purpose of updating such descriptions.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the Expiration Date, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein (or in any other subsequently filed document which also is incorporated
or deemed to be incorporated by reference herein) modifies or supersedes such
previous statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
iii
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial data, including
the Consolidated Financial Statements and the notes thereto included elsewhere
in this Prospectus. Unless otherwise stated in this Prospectus or unless the
context otherwise requires, the "Company" shall mean BWAY Corporation and its
subsidiaries.
THE COMPANY
BWAY Corporation is a holding company whose principal subsidiaries, Brockway
Standard, Inc., Brockway Standard (New Jersey), Inc., Milton Can Company, Inc.
and Brockway Standard (Ohio), Inc., are leading developers, manufacturers and
marketers of steel containers for the general line segment of the North
American metal container industry. The Company has six major product lines: (i)
paint cans, (ii) aerosol cans, (iii) oblong cans, (iv) steel pails, (v) food
cans and (vi) specialty cans. The Company's principal products are used for
packaging paint and related products, lubricants, cleaners, roof and driveway
sealants, food (principally coffee, vegetable oil and vegetable shortening) and
household and personal care aerosol products. The Company also provides metal
coating and decorating services. The Company reported net sales for fiscal 1996
of $283.1 million and, on a consolidated pro forma basis assuming the
consummation of the Recent Acquisitions (as defined) as if they had occurred on
October 2, 1995, the Company would have had net sales for fiscal 1996 of $413.8
million. For fiscal 1996, the Company had EBITDA (as defined in Note 6 on page
12) of $32.1 million and would have had EBITDA of $38.7 million on the same pro
forma basis. The Company's business is focused on product lines and geographic
areas where the Company has, or management believes it can develop, a leading
market presence and achieve a low cost manufacturing position. See "Summary
Consolidated Historical and Pro Forma Financial Data."
The Company believes it is an industry leader in each of its major product
lines (other than aerosol cans, a product line the Company entered as a part of
the Recent Acquisitions) due to a number of competitive advantages, including
highly efficient and technologically advanced manufacturing facilities,
strategically located operations and a reputation for quality and service. The
Company's products are sold to over 750 customers, including diverse groups of
manufacturers of nationally branded products for the hardware, automotive,
personal care, consumer and food industries. The Company's major customers
include Benjamin Moore & Company, CL Smith Company, Colgate-Palmolive Company,
PPG Industries, Inc., The Procter & Gamble Company and The Sherwin-Williams
Company. For fiscal 1996, on a consolidated pro forma basis including the
Recent Acquisitions, no single customer would have accounted for more than 10%
of net sales.
The Company is the successor to a business founded in 1875. In January 1989,
the Company was purchased from Owens-Illinois Corporation ("Owens-Illinois") in
a leveraged transaction led by management and other industry investors. Over
the past seven years, the Company's net sales have grown from $131.9 million in
fiscal 1990 to $283.1 million in fiscal 1996. The successful application of
management's 3R strategic initiative to Rationalize, Reengineer and
Recapitalize its existing and acquired operations has resulted in meaningful
growth in EBITDA. In fiscal 1993, the Company acquired and successfully
integrated Armstrong Containers, Inc., DK Container, Inc., and the Monotop(R)
business of Ellisco, Inc., which was the primary reason for the net sales
increase from fiscal 1992 to fiscal 1994 of approximately 67%. In fiscal 1996,
the Company completed the strategic acquisitions of Milton Can Company, Inc.
and the Davies Can division of the Van Dorn Company, a wholly owned subsidiary
of Crown Cork & Seal Company, Inc., and, in fiscal 1997, the Company completed
the strategic acquisition of the aerosol can business of Ball Metal Food
Container Corporation, a wholly owned subsidiary of Ball Corporation
(collectively, the "Recent Acquisitions"). Since 1989 the Company has purchased
21 facilities, opened two new facilities, sold or closed nine facilities and
plans to close three facilities by the end of calendar 1997. Consequently, at
the end of calendar 1997 the Company anticipates it will be operating 11
manufacturing facilities.
1
<PAGE>
The Company believes that metal cans are the preferred container for
significant portions of the solvent, paint and coatings industry due to the
attractive strength and non-permeable characteristics of steel versus other
materials, such as plastic. Steel containers offer a number of significant
advantages over alternative materials, including fire safety, efficiencies in
packaging and transport, the capacity for vacuum or pressure packaging and the
ability to hold highly volatile or oil-based liquids. In addition, management
believes that steel containers are easier and less costly to recycle and have a
higher rate of recycling than alternative materials. The Company believes that
the metal can's position in the market will be enhanced by increasing
environmental awareness and recycling efforts.
The Company has its principal executive offices located at 8607 Roberts
Drive, Atlanta, Georgia 30350; its telephone number is (770) 587-0888.
COMPETITIVE STRENGTHS
Strong Market Positions. The Company has established a leading position in
each of its major product lines (other than aerosol cans, a product line the
Company entered as part of the Recent Acquisitions). The Company estimates that
it holds the number one share in round paint cans, oblong cans, and steel
pails, with unit shares of approximately 60%, 50% and 31%, respectively. The
Company attributes its leadership position primarily to its broad product
offering, low cost manufacturing position, reputation for quality and high
levels of customer service. These qualities have enabled the Company to
establish long-standing relationships with existing customers and to attract
new customers.
Proven Management Team. The Company has assembled a strong management team at
both the corporate and operating levels with extensive experience in the
packaging industry. Since 1989, the Company's management team has successfully
implemented a focused strategy to complete strategic acquisitions, successfully
integrate and rationalize acquisitions, maintain a strong financial position,
broaden its product offerings and strengthen its key customer relationships. As
a result, the Company has increased its fiscal 1990 EBITDA (as defined in Note
6 on page 8) of $11.4 million to $32.1 million for fiscal 1996.
State-of-the-Art Manufacturing Technologies. The Company employs leading edge
manufacturing methods to consistently improve its process efficiency, product
quality and product performance. The Company has converted substantially all of
its production lines from soldered to welded technology. Welding lines operate
at higher speeds, greater efficiency and lower costs. In addition to the
benefits inherent to the welded technology conversion, the Company has
internally developed equipment technology and modifications that allow the
majority of the Company's assembly lines to operate significantly faster than
original design specifications. The Company has also invested in design and
process technology that enable it to improve product quality. For the five
fiscal years ended September 30, 1996, the Company has invested approximately
$47 million in capital expenditures which have meaningfully enhanced
manufacturing efficiency, increased line speeds and lowered scrap levels.
Examples include conversion to the "powder striping" process of coating the
inside of cans at the weld to improve can performance and the development of
high performance light weight pails meeting the stricter United Nations
performance test criteria for pails containing volatile materials. The Company
will continue to make targeted capital investments to improve product quality,
manufacturing throughput and efficiency and increase sales.
Low-Cost Production. The Company believes that its manufacturing costs are
among the lowest in its industry primarily due to: (i) the economies of scale
provided by the Company's high production volumes, (ii) high plant utilization
attained by the rationalization of less efficient facilities, (iii) an industry
leading safety record which dramatically lowers workers' compensation costs and
related expenses, (iv) manufacturing techniques that minimize raw materials
requirements, reduce scrap and enhance productivity, (v) the ability to attain
favorable steel prices based on its significant raw material purchases, (vi)
the low transportation costs resulting from the proximity of manufacturing
facilities to its major customers and (vii) continued capital investment
directed at achieving the highest levels of operating efficiency and
productivity.
2
<PAGE>
STRATEGY
Rationalize, Reengineer, and Recapitalize. The Company implements a 3R
business strategy designed to Rationalize, Reengineer and Recapitalize its
existing and acquired operations to facilitate sales and EBITDA growth.
Consistent with its business strategy, the Company rationalizes operations by
closing less efficient facilities, relocating production lines and optimizing
production levels within efficiently loaded facilities. Through continued
reengineering of process and equipment, the Company has increased line speeds,
enhanced product quality, improved plant safety and reduced scrap. Investments
in state-of-the-art technology and equipment allow the Company to recapitalize
operations and develop world class production facilities providing the highest
quality products to its customers at competitive pricing.
The Company has a successful track record of achieving cost reductions and
productivity enhancements through consolidation of manufacturing operations and
selected capital investments in state-of-the-art manufacturing equipment. Since
1989 the Company has purchased 21 facilities, opened two new facilities, sold
or closed nine facilities and plans to close three facilities by the end of
calendar 1997. Consequently, at the end of calendar 1997 the Company
anticipates it will be operating 11 manufacturing facilities. For the five
fiscal years ended September 30, 1996, the Company has invested approximately
$47 million in capital expenditures which have meaningfully enhanced
manufacturing efficiency, increased line speeds and lowered scrap levels.
New Products and Markets. The Company continues to enhance current product
lines and expand into new product lines in an effort to provide its existing
customers with a comprehensive offering of general line products. In late 1994,
new Department of Transportation regulations became effective in the United
States requiring stricter performance criteria for steel pails. The Company
responded to this regulatory change by developing a unique pail design and
manufacturing process. The Company has increased unit sales by approximately
20% over its fiscal 1994 unit sales and the Company estimates it is now the
leading provider of steel pails. The Company also provides metal cutting,
coating and lithography services ("Materials Center Services") for its can
assembly facilities and third party customers. To enhance its offering of
Materials Center Services, the Company has initiated a major capital investment
program in state-of-the-art lithography and coating equipment. The Company
believes this investment will significantly enhance its ability to expand third
party sales of Materials Center Services.
Strategic Acquisitions. The Company has a successful history of making
strategic acquisitions in core or complementary product lines. The Company will
continue to evaluate and selectively pursue acquisitions which it believes are
strategically important in meeting its customers' needs, attracting new
customers, adding new products, complementing its existing business, expanding
its geographic reach in North America and enhancing the Company's
profitability.
Leverage Strong Customer Relationships. The Company enjoys long-standing
relationships with the majority of its customers. The Company intends to
enhance these relationships by delivering a broader range of products and
services. With the BSNJ Acquisition (as defined) and the MCC Acquisition (as
defined), the Company now has the ability to offer aerosol cans to its
customers. The Company estimates that this product line will increase the
volume of cans that it sells to many of its major general line customers. The
Company also believes its recent commitment to increasing its Materials Center
Services capabilities will enhance existing relationships with these customers
through the offering of high quality lithographed containers.
3
<PAGE>
THE INITIAL OFFERING
<TABLE>
<S> <C>
Notes..................... The Old Notes were sold by the Company on April 11,
1997 to BT Securities Corporation, Bankers Trust
International plc, Bear, Stearns & Co. Inc. and
NationsBanc Capital Markets, Inc. (the "Initial
Purchasers") pursuant to a Purchase Agreement dated
April 8, 1997 (the "Purchase Agreement"). The
Initial Purchasers subsequently resold the Old Notes
to (i) qualified institutional buyers pursuant to
Rule 144A under the Securities Act, (ii) a limited
number of institutional accredited investors that
agreed to comply with certain transfer restrictions
and other conditions and (iii) qualified buyers
outside the United States in reliance upon
Regulation S under the Securities Act.
Registration Rights Pursuant to the Purchase Agreement, the Company, the
Agreement................ Subsidiary Guarantors and the Initial Purchasers
entered into a Registration Rights Agreement dated
as of April 11, 1997 (the "Registration Rights
Agreement"), which grants the holder of the Old
Notes certain exchange and registration rights. The
Exchange Offer is intended to satisfy such exchange
rights which terminate upon the consummation of the
Exchange Offer.
THE EXCHANGE OFFER
Securities Offered........ $100,000,000 aggregate principal amount of 10 1/4%
Senior Subordinated Notes due 2007, Series B, of the
Company (the "Exchange Notes").
The Exchange Offer........ $1,000 principal amount of Exchange Notes in
exchange for each $1,000 principal amount of Old
Notes. As of the date hereof, $100,000,000 aggregate
principal amount of Old Notes are outstanding. The
Company will issue the Exchange Notes to holders on
or promptly after the Expiration Date.
Based on an interpretation by the staff of the
Commission set forth in no-action letters issued to
third parties, the Company believes that Exchange
Notes issued pursuant to the Exchange Offer in
exchange for Old Notes may be offered for resale,
resold and otherwise transferred by any holder
thereof (other than any such holder which is an
"affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without
compliance with the registration and prospectus
delivery provisions of the Securities Act, provided
that such Exchange Notes are acquired in the
ordinary course of such holder's business and that
such holder does not intend to participate and has
no arrangement or understanding with any person to
participate in the distribution of such Exchange
Notes.
Any Participating Broker-Dealer that acquired Old
Notes for its own account as a result of market-
making activities or other trading activities may be
a statutory underwriter. Each
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
Participating Broker-Dealer that receives Exchange
Notes for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such
Exchange Notes. The Letter of Transmittal states
that by so acknowledging and by delivering a
prospectus, a Participating Broker-Dealer will not
be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of Exchange
Notes received in exchange for Old Notes where such
Old Notes were acquired by such Participating
Broker-Dealer as a result of market-making
activities or other trading activities. The Company
has agreed that, for a period of 180 days after the
Expiration Date, they will make this Prospectus
available to any Participating Broker-Dealer for use
in connection with any such resale. See "Plan of
Distribution."
Any holder who tenders in the Exchange Offer with
the intention to participate, or for the purpose of
participating, in a distribution of the Exchange
Notes could not rely on the position of the staff of
the Commission enunciated in no-action letters and,
in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery
requirements of the Securities Act in connection
with any resale transaction. Failure to comply with
such requirements in such instance may result in
such holder incurring liability under the Securities
Act for which the holder is not indemnified by the
Company.
Expiration Date........... 5:00 p.m., New York City time, on ,
1997 unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended.
Accrued Interest on the
Exchange Notes and the Each Exchange Note will bear interest from its
Old Notes................ issuance date. Holders of Old Notes that are
accepted for exchange will receive, in cash, accrued
interest thereon to, but not including, the issuance
date of the Exchange Notes. Such interest will be
paid with the first interest payment on the Exchange
Notes. Interest on the Old Notes accepted for
exchange will cease to accrue upon issuance of the
Exchange Notes.
Conditions to the Exchange The Exchange Offer is subject to certain customary
Offer.................... conditions, which may be waived by the Company. See
"The Exchange Offer--Conditions."
Procedures for Tendering Each holder of Old Notes wishing to accept the
Old Notes................ Exchange Offer must complete, sign and date the
accompanying Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with the Old Notes and any other
required documentation to the
</TABLE>
5
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<TABLE>
<S> <C>
Exchange Agent (as defined) at the address set forth
herein. By executing the Letter of Transmittal, each
holder will represent to the Company that, among
other things, the Exchange Notes acquired pursuant
to the Exchange Offer are being obtained in the
ordinary course of business of the person receiving
such Exchange Notes, whether or not such person is
the holder, that neither the holder nor any such
other person has any arrangement or understanding
with any person to participate in the distribution
of such Exchange Notes and that neither the holder
nor any such other person is an "affiliate," as
defined under Rule 405 of the Securities Act, of the
Company. See "The Exchange Offer--Purpose and Effect
of the Exchange Offer" and "--Procedures for
Tendering."
Untendered Old Notes...... Following the consummation of the Exchange Offer,
holders of Old Notes eligible to participate but who
do not tender their Old Notes will not have any
further exchange rights and such Old Notes will
continue to be subject to certain restrictions on
transfer. Accordingly, the liquidity of the market
for such Old Notes could be adversely affected.
Consequences of Failure to The Old Notes that are not exchanged pursuant to the
Exchange................. Exchange Offer will remain restricted securities.
Accordingly, such Old Notes may be resold only (i)
to the Company, (ii) pursuant to Rule 144A or Rule
144 under the Securities Act or pursuant to some
other exemption under the Securities Act, (iii)
outside the United States to a foreign person
pursuant to the requirements of Rule 904 under the
Securities Act, or (iv) pursuant to an effective
registration statement under the Securities Act. See
"The Exchange Offer--Consequences of Failure to
Exchange."
Shelf Registration If any holder of the Old Notes (other than any such
Statement................ holder which is an "affiliate" of the Company or a
Subsidiary Guarantor within the meaning of Rule 405
under the Securities Act) is not eligible under
applicable securities laws to participate in the
Exchange Offer, and such holder has satisfied
certain conditions relating to the provision of
information to the Company for use therein, the
Company and the Subsidiary Guarantors have agreed to
register the Old Notes on a shelf registration
statement (the "Shelf Registration Statement") and
use their best efforts to cause it to be declared
effective by the Commission as promptly as practical
on or after the consummation of the Exchange Offer.
The Company and Subsidiary Guarantors have agreed to
maintain the effectiveness of the Shelf Registration
Statement for, under certain circumstances, a
maximum of two years, to cover resales of the Old
Notes held by any such holders.
Special Procedures for Any beneficial owner whose Old Notes are registered
Beneficial Owners........ in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender should contact such registered holder
promptly and instruct such registered holder to
tender on such beneficial owner's behalf. If such
beneficial owner wishes
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
to tender on such owner's own behalf, such owner
must, prior to completing and executing the Letter
of Transmittal and delivering its Old Notes, either
make appropriate arrangements to register ownership
of the Old Notes in such owner's name or obtain a
properly completed bond power from the registered
holder. The transfer of registered ownership may
take considerable time. The Company will keep the
Exchange Offer open for not less than twenty
business days in order to provide for the transfer
of registered ownership.
Guaranteed Delivery Holders of Old Notes who wish to tender their Old
Procedures............... Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes, the
Letter of Transmittal or any other documents
required by the Letter of Transmittal to the
Exchange Agent (or comply with the procedures for
book-entry transfer) prior to the Expiration Date
must tender their Old Notes according to the
guaranteed delivery procedures set forth in "The
Exchange Offer--Guaranteed Delivery Procedures."
Withdrawal Rights......... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
Acceptance of Old Notes
and Delivery of Exchange The Company will accept for exchange any and all Old
Notes.................... Notes which are properly tendered in the Exchange
Offer prior to 5:00 p.m., New York City time, on the
Expiration Date. The Exchange Notes issued pursuant
to the Exchange Offer will be delivered promptly
following the Expiration Date. See "The Exchange
Offer--Terms of the Exchange Offer."
Use of Proceeds........... There will be no cash proceeds to the Company from
the exchange pursuant to the Exchange Offer.
Exchange Agent............ Harris Trust and Savings Bank.
</TABLE>
THE EXCHANGE NOTES
<TABLE>
<S> <C>
General.................... The form and terms of the Exchange Notes are the
same as the form and terms of the Old Notes (which
they replace) except that (i) the Exchange Notes
bear a Series B designation, (ii) the Exchange Notes
have been registered under the Securities Act and,
therefore, will not bear legends restricting the
transfer thereof, and (iii) the holders of Exchange
Notes will not be entitled to certain rights under
the Registration Rights Agreement, including the
provisions providing for an increase in the interest
rate on the Old Notes in certain circumstances
relating to the timing of the Exchange Offer, which
rights will terminate when the Exchange Offer is
consummated. See "The Exchange Offer--Purpose and
Effect of the Exchange Offer." The Exchange Notes
will evidence the same debt as the Old Notes and
will be entitled to the benefits of the Indenture.
See "Description of Exchange Notes." The Old Notes
and the Exchange Notes are referred to herein
collectively as the "Notes."
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
Securities Offered......... $100,000,000 aggregate principal amount of 10 1/4%
Senior Subordinated Notes due 2007, Series B.
Issuer..................... BWAY Corporation.
Maturity Date.............. April 15, 2007.
Interest Payment Dates..... Interest on the Exchange Notes will accrue from the
date of original issuance (the "Issue Date") and
will be payable semi-annually in arrears on April 15
and October 15 of each year, commencing on October
15, 1997.
Ranking.................... The Exchange Notes will be general unsecured senior
subordinated obligations of the Company and will be
subordinated in right of payment to all existing and
future Senior Indebtedness of the Company and will
be effectively subordinated to all secured
Indebtedness of the Company to the extent of the
value of the assets securing any such Indebtedness.
The Exchange Notes will rank pari passu with any
future senior subordinated indebtedness of the
Company and will rank senior to all other
subordinated indebtedness of the Company. As of
December 31, 1996, on a pro forma basis, the Company
would have had approximately $43.2 million of Senior
Indebtedness outstanding and no indebtedness
subordinated to the Notes. See "Management's
Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital
Resources."
Guarantees................. The Exchange Notes will be unconditionally
guaranteed on a senior subordinated basis by all
current direct and indirect Restricted Subsidiaries
of the Company (subject to certain exceptions). In
addition, the Exchange Notes will be unconditionally
guaranteed by certain future Restricted
Subsidiaries. The Guarantees will be general
unsecured senior subordinated obligations of the
Subsidiary Guarantors and will be subordinated in
right of payment to all existing and future
Guarantor Senior Indebtedness (including
Indebtedness outstanding under the Credit
Agreement). See "Description of Exchange Notes--
Guarantees" and "--Certain Covenants--
Additional Subsidiary Guarantees."
Optional Redemption........ The Exchange Notes will be redeemable, in whole or
in part, at the option of the Company on or after
April 15, 2002, at the redemption prices set forth
herein plus accrued and unpaid interest to the date
of redemption. In addition, at any time and from
time to time prior to April 15, 2000, the Company
may, at its option, redeem up to 33 1/3% of the
aggregate principal amount of the Notes with the net
cash proceeds of one or more Equity Offerings, at a
redemption price equal to 110 1/4% of the principal
amount thereof plus accrued and unpaid interest to
the date of redemption; provided, however, that
after giving effect to any such redemption at least
66 2/3% of the aggregate principal amount of the
Notes remains outstanding.
</TABLE>
8
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<TABLE>
<S> <C>
Change of Control.......... Upon a Change of Control, the Company will be
required to make an offer to repurchase the Notes at
a price equal to 101% of the principal amount
thereof, together with accrued and unpaid interest,
if any, to the date of repurchase.
Certain Covenants.......... The indenture governing the Notes (the "Indenture")
will contain certain covenants that limit the
ability of the Company and its Restricted
Subsidiaries to, among other things, incur
additional indebtedness, pay dividends or make
certain other restricted payments, consummate
certain asset sales, enter into certain transactions
with affiliates, incur indebtedness that is
subordinate in right of payment to any Senior
Indebtedness and senior in right of payment to the
Notes, incur liens, impose restrictions on the
ability of a Restricted Subsidiary to pay dividends
or make certain payments to the Company and its
Restricted Subsidiaries, merge or consolidate with
any other person or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially
all of the assets of the Company. In addition, under
certain circumstances, the Company will be required
to offer to purchase the Notes at a purchase price
equal to 100% of the principal amount thereof plus
accrued and unpaid interest to the date of
repurchase with the Net Cash Proceeds (as defined)
of certain Asset Sales.
</TABLE>
For additional information regarding the Exchange Notes, see "Description of
Exchange Notes."
9
<PAGE>
USE OF PROCEEDS
There will be no cash proceeds to the Company or the Subsidiary Guarantors
from the exchange pursuant to the Exchange Offer. The net proceeds from the
Initial Offering were used to repay approximately $96.0 million of Indebtedness
outstanding under the Credit Agreement. See "Use of Proceeds."
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered before tendering Old Notes in exchange for Exchange Notes. These
risk factors are generally applicable to the Old Notes as well as the Exchange
Notes.
10
<PAGE>
SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA
The following selected historical consolidated financial data have been
derived from the consolidated financial statements of the Company. The data as
of and for the years ended September 30, 1994, 1995 and 1996 are derived from
the financial statements of the Company audited by Deloitte & Touche LLP. The
selected historical consolidated financial data of the Company as of and for
the three months ended December 31, 1995 and 1996 were derived from unaudited
consolidated financial statements of the Company, which, in the opinion of the
Company, reflect all adjustments necessary for a fair presentation of the
results for the unaudited periods. The results of operations include the
results of acquisitions described under "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Recent Acquisitions" and have
been included in the Company's consolidated financial statements from the date
of the related acquisitions. The unaudited consolidated pro forma condensed
statements of income include the historical results of the Company and give
effect to the Recent Acquisitions and to the Initial Offering and the
application of the net proceeds therefrom as if they had occurred as of October
2, 1995 and as supplementally adjusted for fiscal 1996 for certain realized
cost savings related to the Recent Acquisitions. The information contained in
this table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Consolidated
Financial Statements and accompanying notes thereto included elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, (1) DECEMBER 31, (1)
--------------------------------------- -----------------------------
PRO FORMA PRO FORMA
1994 1995 1996 1996 1995 1996 1996
-------- -------- -------- --------- -------- -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................ $224,701 $247,480 $283,105 $413,750 $ 58,154 $ 91,166 $ 95,492
Costs, Expenses and Other Income:
Cost of products sold (excluding
depreciation and amortization)........ 191,836 206,262 234,518 340,078 48,623 77,590 80,854
Depreciation and amortization.......... 5,057 5,940 7,425 13,334 1,684 3,452 3,592
Selling and administrative expense..... 11,659 12,164 16,812 24,700 3,307 5,472 5,554
Provision for restructuring (2)........ 12,860 12,860
AB Leasing fees, expenses and
termination (3)....................... 1,318 3,384
Interest expense, net.................. 5,730 5,211 4,872 13,300 847 2,049 3,325
Other, net............................. 100 (275) (340) 90 (48) 199 215
-------- -------- -------- -------- -------- -------- --------
215,700 232,686 276,147 404,362 54,413 88,762 93,540
Income before income taxes, extraordinary
item and cumulative effect of change in
accounting.............................. 9,001 14,794 6,958 9,388 3,741 2,404 1,952
Provision for income taxes............. 3,756 6,021 3,239 4,364 1,522 986 810
Extraordinary loss resulting from the
extinguishment of debt, net of related
tax benefit (4)......................... (2,535) (2,535)
Cumulative effect of change in accounting
for postemployment benefits--
Net of related tax benefit of $137 (5). (213)
-------- -------- -------- -------- -------- -------- --------
Net income............................... $ 5,032 $ 8,773 $ 1,184 $ 2,489 $ 2,219 $ 1,418 $ 1,142
======== ======== ======== ======== ======== ======== ========
OTHER FINANCIAL DATA:
EBITDA (6)............................. $ 19,788 $ 25,945 $ 32,115 $ 48,882(9) $ 6,272 $ 7,905 8,869(9)
Capital expenditures................... 8,698 13,593 12,671 15,050 4,091 3,590 3,590
Depreciation and amortization (7)...... 5,680 6,549 7,950 13,934 1,834 3,521 3,742
Cash Interest Expense, Net (7)......... 5,107 4,602 4,347 12,700 697 1,980 3,175
Ratio of Earnings to Fixed Charges (8). 2.4x 3.3x 2.1x 1.7x 3.2x 2.0x 1.5x
Ratio of EBITDA to Cash Interest
Expense, Net (6)...................... 3.9x 5.6x 7.4x 3.8x 9.0x 4.0x 2.8x
Ratio of total debt to EBITDA (6)...... 2.8x 1.9x 3.0x 2.9x
BALANCE SHEET DATA:
Cash and cash equivalents................ $ 4,618 $ 23,538 $ 1,852 $ 1,852 $ 25,087 $ 864 $ 864
Working capital.......................... 14,371 38,811 20,509 20,509 38,208 38,578 38,578
Property, plant and equipment, net....... 58,996 67,668 94,800 94,800 70,346 112,040 112,040
Total assets............................. 137,220 167,958 245,133 294,133 175,787 288,254 292,254
Total debt............................... 55,476 50,218 95,198 144,198 50,167 139,157 143,157
Redeemable common stock.................. 2,682
Stockholders' equity..................... 27,015 65,837 72,629 72,629 67,727 74,047 74,047
</TABLE>
11
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- --------
(1) The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to September 30 of the applicable year. For simplicity of
presentation, the Company has presented year ends as September 30 and all
other periods as the nearest month end.
(2) During the fourth quarter of fiscal 1996, the Company recorded a non-
recurring, non-cash restructuring charge comprised of a write-down of
certain assets. The restructuring charge was due to increased volumes
resulting from the BSNJ Acquisition and the BSO Acquisition providing the
opportunity for the Company to consolidate certain of its manufacturing
processes to meet customer demand and improve efficiencies, which will
result in the disposal of surplus equipment and currently productive
manufacturing equipment for an estimated nominal value beginning in early
fiscal 1997 and ending in fiscal 1998. See Note 13 of the Notes to
Consolidated Financial Statements included elsewhere in this Prospectus.
(3) The Company was party to a management agreement (the "Management
Agreement") with AB Leasing and Management, Inc. ("AB Leasing") whereby the
Company paid to AB Leasing an annual fee (the "AB Leasing Fee") based upon
a formula, plus reimbursement for expenses. See Note 12 of the Notes to
Consolidated Financial Statements included elsewhere in this Prospectus.
The Company and AB Leasing terminated the Management Agreement upon the
consummation of the Initial Public Offering (as defined). Pursuant to the
termination agreement the Company issued 133,000 shares of Common Stock to
AB Leasing prior to the effectiveness of the Initial Public Offering (as
defined). The Company recorded a non-recurring, non-cash, pre-tax charge to
operations of $2.0 million ($1.2 million net of tax effect) in connection
therewith in the period in which such shares were issued.
(4) The Company recorded an extraordinary loss related to the prepayment of the
$50 million principal amount of 8.35% Senior Secured Notes during the third
quarter of fiscal 1996.
(5) Effective October 1, 1993, the Company changed its method of accounting for
post employment benefits as a result of adopting Statement of Financial
Accounting Standards No. 112 which resulted in a onetime non-cash charge of
$213,000 and had no material subsequent impact on income from operations.
(6) EBITDA represents income before income taxes, extraordinary item,
cumulative effect of change in accounting, and before interest expense,
provision for restructuring, provision for income taxes, and depreciation
and amortization. EBITDA does not include non-recurring charges related to
the provision for restructuring, the extraordinary loss resulting from the
extinguishment of debt, and cumulative effect of change in accounting,
which are primarily non-cash items. EBITDA is not a measure of financial
performance under generally accepted accounting principles and does not
necessarily indicate that cash flow will be sufficient to fund cash
requirements. The Company understands that certain investors believe EBITDA
represents a company's ability to service debt and to utilize cash for
other purposes. EBITDA should not be considered in isolation or as a
substitute for net income, cash flows from operations, or other income or
cash flow data prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability or liquidity.
(7) For presentation in Other Financial Data, amortization of deferred
financing costs is included in depreciation and amortization and excluded
from Cash Interest Expense, Net.
(8) For purposes of this computation, Earnings are defined as income before
income taxes plus Fixed Charges. Fixed Charges consist of interest
(including amortization of deferred financing costs) and that portion of
rental expense that is representative of interest (deemed to be one-third
of operating lease rental expense).
(9) Pro forma EBITDA for the fiscal year ended September 30, 1996 and the three
months ended December 31, 1996 include the supplemental cost savings
relating to the Recent Acquisitions as described in Note 3 on page 24.
12
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the following factors in
addition to the other information set forth in this Prospectus before
tendering Old Notes in exchange for Exchange Notes. The risk factors set forth
below are generally applicable to the Old Notes as well as the Exchange Notes.
LEVERAGED FINANCIAL POSITION; RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS
The Company has incurred significant indebtedness. As of December 31, 1996,
on a pro forma basis, after giving effect to the Initial Offering and the
application of the net proceeds therefrom, the Company would have had
approximately $143.2 million of indebtedness outstanding and its stockholders'
equity would have been $74.0 million. See "Capitalization," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Description of Credit Agreement."
The level of the Company's indebtedness could have important consequences to
holders of the Exchange Notes, including: (i) a substantial portion of the
Company's cash flow from operations must be dedicated to debt service and will
not be available for other purposes, (ii) the Company's ability to obtain
additional debt financing in the future for working capital, capital
expenditures or acquisitions may be limited and (iii) the Company's level of
indebtedness could limit its flexibility in reacting to changes in the
industry and economic conditions generally. Certain of the Company's
competitors may currently operate on a less leveraged basis and therefore
could have significantly greater operating and financing flexibility than the
Company.
The Company's ability to pay interest on the Exchange Notes, to repay
portions of its long-term indebtedness (including the Exchange Notes and the
Credit Agreement) and to satisfy its other debt obligations will depend upon
the future operating performance and the availability of refinancing
indebtedness, which will be affected by prevailing economic conditions and
financial, business and other factors, certain of which are beyond its
control. Based on the current level of operations and anticipated future
growth, the Company anticipates that its operating cash flow, together with
borrowings under the Credit Agreement, will be sufficient to meet its
anticipated requirements for working capital, capital expenditures, interest
payments and scheduled principal payments. There can be no assurance, however,
that the Company's business will generate cash flow at or above projected
levels or that anticipated future growth can be achieved. If the Company is
unable to service its indebtedness it will be forced to adopt an alternative
strategy that may include actions such as reducing or delaying capital
expenditures, selling assets, restructuring or refinancing its indebtedness,
or seeking additional equity capital. There can be no assurance that any of
these strategies could be effected on satisfactory terms, if at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," "Description of Credit
Agreement" and "Description of Exchange Notes."
The Indenture and the Credit Agreement contain certain covenants that
restrict, among other things, the Company's ability to incur additional
indebtedness, incur liens, pay dividends or make certain other restricted
payments, consummate certain asset sales, enter into certain transactions with
affiliates, impose restrictions on the ability of a subsidiary to pay
dividends or make certain payments to the Company, merge or consolidate with
any other person or sell, assign, transfer, lease, convey, or otherwise
dispose of all or substantially all of the assets of the Company. In addition,
the Credit Agreement contains certain other and more restrictive covenants and
also requires the Company to maintain specified financial ratios and to
satisfy certain financial condition tests. The Company's ability to meet these
financial ratio and financial condition tests can be affected by events beyond
its control and there can be no assurance that the Company will meet those
tests. A breach of any of these covenants could result in a default under the
Credit Agreement or the Indenture. In the event of an event of default under
the Credit Agreement or the Indenture the lenders thereunder could elect to
declare all amounts outstanding thereunder, together with accrued and unpaid
interest, to be immediately due and payable. If the indebtedness under the
Credit Agreement were to be accelerated, there can be no assurance that the
assets of the Company would be sufficient to repay in full that indebtedness
and the other indebtedness of the Company, including the Exchange Notes. See
"Description of Credit Agreement," "Description of Exchange Notes--
Subordination" and "--Certain Covenants."
13
<PAGE>
SUBORDINATION; HOLDING COMPANY STRUCTURE
The payment of principal, premium, if any, and interest on, and any other
amounts owing in respect of, the Exchange Notes will be subordinated to the
prior payment in full of all existing and future Senior Indebtedness of the
Company (including, without limitation, indebtedness incurred under the Credit
Agreement). In the event of the bankruptcy, liquidation, dissolution,
reorganization or other winding-up of the Company, the assets of the Company
will be available to pay obligations on the Exchange Notes only after all
Senior Indebtedness (including amounts incurred under the Credit Agreement)
has been so paid in full; accordingly, there may not be sufficient assets
remaining to pay amounts due on any or all of the Exchange Notes then
outstanding. In addition, under certain circumstances, the Company may not pay
principal of, premium, if any, or interest on, or any other amounts owing in
respect of the Exchange Notes, or purchase, redeem or otherwise retire the
Exchange Notes, in the event of certain defaults with respect to certain
classes of Senior Indebtedness, including Senior Indebtedness incurred under
the Credit Agreement. As of December 31, 1996, on a pro forma basis after
giving effect to the Initial Offering and the application of the net proceeds
therefrom, there would have been approximately $43.2 million of Senior
Indebtedness outstanding (represented primarily by borrowings under the Credit
Agreement). Additional Senior Indebtedness may be incurred by the Company from
time to time, subject to certain restrictions. See "Description of Credit
Agreement" and "Description of Exchange Notes--Certain Covenants--Limitation
on Incurrence of Additional Indebtedness."
BWAY Corporation is a holding company which has no significant assets other
than its direct and indirect investments in its operating subsidiaries, which
have guaranteed the Company's obligations under the Exchange Notes.
Accordingly, the Company must rely on its subsidiaries to generate the funds
necessary to meet its obligations, including the payment of principal and
interest on the Exchange Notes. The ability of the subsidiaries of the Company
to pay dividends or make other payments or advances to the Company will depend
upon their operating results and will be subject to applicable laws and
contractual restrictions contained in the instruments governing any
indebtedness of such subsidiaries (including the Credit Agreement). Although
the Indenture limits the ability of such subsidiaries to enter into consensual
restrictions on their ability to pay dividends and make other payments, such
limitations are subject to a number of significant qualifications. See
"Description of Exchange Notes--Certain Covenants--Limitation on Dividend and
Other Payment Restrictions Affecting Restricted Subsidiaries."
ACQUISITIONS AND INTEGRATION OF ADDITIONAL BUSINESSES
The Company has acquired and seeks to acquire other companies that can
benefit from the Company's manufacturing operations, management and
distribution infrastructure. The Company's ability to grow by acquisition is
dependent upon, and may be limited by, the availability of suitable
acquisition candidates and capital, and the restrictions contained in the
Indenture and the Credit Agreement. In addition, growth by acquisition
involves risks that could adversely affect the Company's operating results,
including difficulties in integrating the operations and personnel of acquired
companies and the potential loss of key employees and customers of acquired
companies. While management has experience in identifying and integrating
acquisitions, there can be no assurance that the Company will be able to
obtain the capital necessary to pursue its growth strategy, consummate
acquisitions on satisfactory terms or, if any such acquisitions are
consummated, satisfactorily integrate such acquired businesses into the
Company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources."
COMPETITION
The markets for the Company's products are competitive, and the Company
faces competition from a number of sources in most of its product lines.
Competition is based primarily on price, quality, service, and, to a lesser
extent, product innovation. Competition may require the Company to match
competitors' prices to retain business or market share. Competition in the
Company's product markets is aggressive and may have a negative impact on the
prices the Company may charge for its products. Certain of the Company's
competitors are larger and may have greater financial and other resources than
the Company and there can be no assurance that the
14
<PAGE>
Company will continue to be able to compete successfully with them. The
Company also faces competition in certain of its product lines from producers
of plastic, glass and aluminum containers. See "Business--Competition."
DEPENDENCE ON MAJOR CUSTOMERS
For each of fiscal 1996 and fiscal 1995, approximately 39% and 43%,
respectively, of the Company's net sales were to the Company's ten largest
customers. Sales to the Company's largest customer, The Procter & Gamble
Company (including its wholly owned subsidiary, The Folger Coffee Company),
were approximately 13% of the Company's net sales for both fiscal 1996 and
fiscal 1995. The Company supplies The Folger Coffee Company's requirements for
coffee cans at its New Orleans, Louisiana facility. In fiscal 1996 on a pro
forma basis, after giving effect to the Recent Acquisitions, no single
customer would have accounted for more than 10% of net sales. Although in most
instances, the Company is not the sole supplier to its customers, the loss of,
or major reduction in business from, one or more of the Company's major
customers could have a material adverse effect on the Company's sales volumes
and profitability. See "Business--Customers."
IMPACT OF STEEL COST INCREASES
Steel products (including tinplate, cold-rolled and blackplate steel)
represent the largest component of the Company's raw material costs. Tinplate
consumers typically negotiate with steel suppliers late in the calendar year
for the next calendar year with respect to volume and price terms. Negotiated
terms have historically held through the following year, but there can be no
assurance that this practice will remain unchanged in the future. Steel prices
have historically been adjusted as of January 1 of a calendar year. Most steel
producers have announced their intentions to increase prices for tinmill
products by approximately 2.5% to 3.0%, and cold rolled products by
approximately 3.0% to 5.0% effective January 1, 1997. There can be no
assurance that the Company will be successful in passing through any steel
price increases to its customers. Any limitation on the Company's ability to
pass through any such increases could have a material adverse effect on the
Company's operating results.
LABOR RELATIONS
As of March 1, 1997, approximately 34% of the Company's employees worked
under various collective bargaining agreements. The Company is currently
negotiating the terms of a new contract with International Union of
Electronic, Electrical, Salaried Machine and Furniture Workers, AFL-CIO Local
No. 729 with respect to approximately 200 employees whose current contract
expires on April 30, 1997. In addition, three other collective bargaining
agreements will expire during calendar 1997, covering a total of approximately
190 employees. While the Company believes that its relations with its
employees are good, there can be no assurance that a new agreement with such
employees will be reached or that other collective bargaining agreements will
be renewed in the future. A prolonged labor dispute (which could include a
work stoppage) could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Employees."
ENVIRONMENTAL MATTERS
The Company is subject to a broad range of federal, state and local
environmental and workplace health and safety requirements, including those
governing discharges to air and water, the handling and disposal of solid and
hazardous wastes, and the remediation of contamination associated with the
releases of hazardous substances. In the course of its operations, the Company
handles hazardous substances. As is the case with any industrial operation, if
a release of hazardous substances occurs on or from the Company's facilities
or at offsite waste disposal sites, the Company may be required to remedy such
release. From time to time, the Company is involved in certain environmental
matters as described in "Business--Environmental, Health and Safety Matters."
There can be no assurance that no material environmental liability exists or
will arise in the future. See "Business--Environmental, Health and Safety
Matters."
15
<PAGE>
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the continued services of its senior management
team. Although the Company believes it could replace key employees in an
orderly fashion should the need arise, the loss of such key personnel could
have a material adverse effect on the Company. The Company does not maintain
key-person insurance for any of its officers, employees or directors. See
"Management--Directors and Executive Officers."
CONTROL BY MANAGEMENT
As of February 28, 1997, the directors and Named Executive Officers and
certain related parties of the Company owned or controlled approximately 34%
of the outstanding Common Stock (as defined). Such stockholders, if acting
together, would have significant influence on the election of the Company's
Board of Directors (the "Board of Directors" or the "Board") and, therefore,
significant influence on the affairs and management of the Company.
Circumstances may occur in which the interests of management, as stockholders
of the Company, could be in conflict with the interests of the holders of the
Exchange Notes. In addition, management, as stockholders of the Company, may
have an interest in pursuing acquisitions, divestitures or other transactions
that, in their judgment, could enhance their equity investment, even though
such transactions might involve risks to the holders of the Exchange Notes.
LIMITATIONS ON CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Company will be required to
make an offer for cash to repurchase the Exchange Notes at a price equal to
101% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of repurchase. If a Change of Control were to
occur, there can be no assurance that the Company would have sufficient funds
to pay the purchase price for all of the Exchange Notes that the Company might
be required to purchase. Certain events involving a Change of Control may
result in an event of default under the Credit Agreement or other indebtedness
of the Company that may be incurred in the future. In the event a Change of
Control occurs at a time when the Company is prohibited from purchasing the
Exchange Notes, the Company could seek the consent of its lenders to purchase
the Exchange Notes or could attempt to refinance the borrowings that contain
such prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company would remain prohibited from purchasing the Exchange
Notes. In such case, the Company's failure to purchase tendered Exchange Notes
would constitute an Event of Default under the Indenture. If, as a result
thereof, a default occurs with respect to any Senior Indebtedness, the
subordination provisions of the Exchange Notes would require payment in full
of the Credit Agreement and any other such Senior Indebtedness before
repurchase of the Exchange Notes. See "Description of Credit Agreement,"
"Description of Exchange Notes--Subordination" and "--Change of Control."
FRAUDULENT CONVEYANCE
Various fraudulent conveyance laws enacted for the protection of creditors
may apply to the Subsidiary Guarantors' issuance of the Guarantees. To the
extent that a court were to find that (x) a Guarantee was incurred by a
Subsidiary Guarantor with actual intent to hinder, delay or defraud any
present or future creditor or (y) such Subsidiary Guarantor did not receive
fair consideration or reasonably equivalent value for issuing its Guarantee
and such Subsidiary Guarantor (i) was insolvent, (ii) was rendered insolvent
by reason of the issuance of such Guarantee, (iii) was engaged or about to
engage in a business or transaction for which the remaining assets of such
Subsidiary Guarantor constituted unreasonably small capital to carry on its
business or (iv) intended to incur, or believed that it would incur, debts
beyond its ability to pay such debts as they matured, the court could avoid or
subordinate such Guarantee in favor of the Subsidiary Guarantor's creditors.
Among other things, a legal challenge of a Guarantee on fraudulent conveyance
grounds may focus on the benefits, if any, realized by the Subsidiary
Guarantor as a result of the issuance by the Company of the Exchange Notes. To
the extent any Guarantees were avoided as a fraudulent conveyance or held
unenforceable for any other reason, the claims of holders of the Exchange
Notes in respect of such Subsidiary Guarantor would be adversely affected and
such holders would, to such extent, be creditors solely of the Company and any
Subsidiary Guarantor whose
16
<PAGE>
Guarantee was not avoided or held unenforceable. To the extent the claims of
the holders of the Exchange Notes against the issuer of an invalid Guarantee
were subordinated, they would be subject to the prior payment of all
liabilities of such Subsidiary Guarantor. There can be no assurance that,
after providing for all prior claims, there would be sufficient assets to
satisfy the claims of the holders of the Exchange Notes relating to any voided
portions of any of the Guarantees.
The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the law applied in any such proceeding. Under one measure,
a Subsidiary Guarantor may be considered insolvent if the sum of its debts,
including contingent liabilities, is greater than the fair marketable value of
all of its assets at a fair valuation or if the present fair marketable value
of its assets is less than the amount that would be required to pay its
probable liability on its existing debts, including contingent liabilities, as
they become absolute and mature.
Based upon financial and other information, the Company believes that the
Exchange Notes and the Guarantees are being incurred for proper purposes and
in good faith and that the Company and each Subsidiary Guarantor is solvent
and will continue to be solvent after issuing the Exchange Notes or its
Guarantee, as the case may be, will have sufficient capital for carrying on
its business after such issuance and will be able to pay its debts as they
mature. There can be no assurance, however, that a court passing on such
standards would agree with the Company.
ABSENCE OF A PUBLIC MARKET COULD ADVERSELY AFFECT THE VALUE OF EXCHANGE NOTES
The Old Notes were issued to, and the Company believes are currently owned
by, a relatively small number of beneficial owners. Prior to the Exchange
Offer, there has not been any public market for the Old Notes. The Old Notes
have not been registered under the Securities Act and will be subject to
restrictions on transferability to the extent that they are not exchanged for
Exchange Notes by holders who are entitled to participate in this Exchange
Offer. The holders of Old Notes (other than any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) who are not eligible to participate in the Exchange Offer are entitled to
certain registration rights, and the Company is required to file a Shelf
Registration Statement with respect to such Old Notes. The Exchange Notes will
constitute a new issue of securities with no established trading market. The
Company does not intend to list the Exchange Notes on any national securities
exchange or seek the admission thereof to trading in the National Association
of Securities Dealers Automated Quotation System. The Initial Purchasers have
advised the Company that they currently intend to make a market in the
Exchange Notes, but they are not obligated to do so and may discontinue such
market making at any time. In addition, such market making activity will be
subject to the limits imposed by the Securities Act and the Exchange Act and
may be limited during the Exchange Offer and the pendency of the Shelf
Registration Statement. Accordingly, no assurance can be given that an active
public or other market will develop for the Exchange Notes or as to the
liquidity of the trading market for the Exchange Notes. If a trading market
does not develop or is not maintained, holders of the Exchange Notes may
experience difficulty in reselling the Exchange Notes or may be unable to sell
them at all. If a market for the Exchange Notes develops, any such market may
be discontinued at any time.
If a public trading market develops for the Exchange Notes, future trading
prices of such securities will depend on many factors, including, among other
things, prevailing interest rates, the Company's results of operations and
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Company, the Exchange Notes may trade at a discount from
their principal amount.
FAILURE TO FOLLOW EXCHANGE OFFER PROCEDURES COULD ADVERSELY AFFECT HOLDERS
Issuance of the Exchange Notes in exchange for the Old Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Company of such
Old Notes, a properly completed and duly executed Letter of Transmittal and
all other required documents. Therefore, holders of the Old Notes desiring to
tender such Old
17
<PAGE>
Notes in exchange for Exchange Notes should allow sufficient time to ensure
timely delivery. The Company is under no duty to give notification of defects
or irregularities with respect to the tenders of Old Notes for exchange. Old
Notes that are not tendered or are tendered but not accepted will, following
the consummation of the Exchange Offer, continue to be subject to the existing
restrictions upon transfer thereof, and, upon consummation of the Exchange
Offer certain registration rights under the Registration Rights Agreement will
terminate. In addition, any holder of Old Notes who tenders in the Exchange
Offer for the purpose of participating in a distribution of the Exchange Notes
may be deemed to have received restricted securities, and if so, will be
required to comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction. Each broker-
dealer that receives Exchange Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution." To the extent that Old Notes are tendered
and accepted in the Exchange Offer, the trading market for untendered and
tendered but unaccepted Old Notes could be adversely affected. See "The
Exchange Offer."
DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical facts included in this
Prospectus, including those regarding the Company's financial position,
business strategy, projected costs, and plans and objectives of management for
future operations, are forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, there can be no assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") are
disclosed under "Risk Factors" and elsewhere in this Prospectus including,
without limitation, in conjunction with the forward-looking statements
included in this Prospectus. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on behalf of the
Company are expressly qualified in their entirety by the Cautionary
Statements.
18
<PAGE>
USE OF PROCEEDS
This Exchange Offer is intended to satisfy certain of the Company's
obligations under the Purchase Agreement and the Registration Rights
Agreement. The Company will not receive any cash proceeds from the issuance of
the Exchange Notes offered hereby. In consideration for issuing the Exchange
Notes contemplated in this Prospectus, the Company will receive Old Notes in
like principal amount, the form and terms of which are the same as the forms
and terms of the Exchange Notes (which replace the Old Notes), except as
otherwise described herein. The Old Notes surrendered in exchange for Exchange
Notes will be retired and canceled and cannot be reissued. Accordingly,
issuance of the Exchange Notes will not result in any increase or decrease in
the indebtedness of the Company. As such, no effect has been given to the
Exchange Offer in the pro forma statements or capitalization tables.
The net proceeds from the Initial Offering of $96 million (after deduction
of fees and expenses) were used to pay Indebtedness outstanding under the
Credit Agreement, and with respect to which the interest rate then being paid
by the Company was approximately 6.75% per annum. A portion of the borrowings
under the Credit Agreement that were repaid were used to effect the Recent
Acquisitions.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of December 31, 1996, on an actual basis and as adjusted to give
effect to the sale of the Notes and the application of the net proceeds
thereof. The information in this table should be read in conjunction with
"Selected Historical Consolidated Financial Data," "Unaudited Consolidated Pro
Forma Condensed Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements and accompanying notes thereto appearing elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
HISTORICAL AS ADJUSTED
---------- -----------
(IN THOUSANDS
EXCEPT FOR SHARE DATA)
<S> <C> <C>
Total debt:
Credit Agreement (1)............................ $134,769 $ 38,769
10 1/4% Senior Subordinated Notes due 2007...... 100,000
Other........................................... 4,388 4,388
-------- --------
Total debt.................................... 139,157 143,157
Stockholders' equity:
Common Stock, $.01 par value; 24,000,000
authorized and 6,531,755 issued and
outstanding.................................... 66 66
Additional paid-in capital...................... 37,612 37,612
Retained earnings............................... 36,987 36,987
Treasury stock.................................. (618) (618)
-------- --------
Total stockholders' equity.................... 74,047 74,047
-------- --------
Total capitalization.......................... $213,204 $217,204
======== ========
</TABLE>
- --------
(1) Following the repayment of approximately $96.0 million of borrowings under
the Credit Agreement with the net proceeds of the Initial Offering, the
maximum borrowing available under the Credit Agreement was reduced from
$150.0 million to $100.0 million.
19
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following selected historical consolidated financial data have been
derived from the consolidated financial statements of the Company. The data as
of and for the years ended September 30, 1992, 1993, 1994, 1995 and 1996 are
derived from the consolidated financial statements of the Company audited by
Deloitte & Touche LLP. The selected historical consolidated financial data of
the Company as of and for the three months ended December 31, 1995 and 1996
were derived from unaudited consolidated financial statements of the Company,
which, in the opinion of the Company, reflect all adjustments necessary for a
fair presentation of the results for the unaudited periods. The results of
operations include the results of acquisitions described under "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Recent Acquisitions" and have been included in the Company's consolidated
financial statements from the date of the related acquisitions. The
information contained in this table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and accompanying notes
thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED DECEMBER
FISCAL YEAR ENDED SEPTEMBER 30, (1) 31,(1)
------------------------------------------------ ----------------
1992 1993 1994 1995 1996 1995 1996
-------- -------- -------- -------- -------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................. $134,282 $180,963 $224,701 $247,480 $283,105 $58,154 $91,166
Costs, Expenses and Other Income:
Cost of products sold (excluding
depreciation and amortization)......... 115,054 156,078 191,836 206,262 234,518 48,623 77,590
Depreciation and amortization........... 1,686 3,150 5,057 5,940 7,425 1,684 3,452
Selling and administrative expense (2).. 8,517 8,761 11,659 12,164 16,812 3,307 5,472
Provision for restructuring (3)......... 12,860
Provision for settlement costs (4)...... 1,300
AB Leasing fees, expenses and
termination (5)........................ 1,126 1,284 1,318 3,384
Interest expense, net................... 1,132 2,795 5,730 5,211 4,872 847 2,049
Other, net.............................. (7) 8 100 (275) (340) (48) 199
-------- -------- -------- -------- -------- ------- -------
128,808 172,076 215,700 232,686 276,147 54,413 88,762
Income before income taxes, extraordinary
item and cumulative effect of change in
accounting............................... 5,474 8,887 9,001 14,794 6,958 3,741 2,404
Provision for income taxes.............. 2,052 3,731 3,756 6,021 3,239 1,522 986
Extraordinary loss resulting from the
extinguishment of debt, net of related
tax benefit (6).......................... (2,535)
Cumulative effect of change in accounting
for postemployment Benefits-
Net of related tax benefit of $137 (7)... (213)
-------- -------- -------- -------- -------- ------- -------
Net income................................ $ 3,422 $ 5,156 $ 5,032 $ 8,773 $ 1,184 $ 2,219 $ 1,418
======== ======== ======== ======== ======== ======= =======
OTHER FINANCIAL DATA:
EBITDA (8).............................. $ 8,037 $ 14,833 $ 19,788 $ 25,945 $ 32,115 $ 6,272 $ 7,905
Capital expenditures.................... 6,291 5,779 8,698 13,593 12,671 4,091 3,590
Depreciation and amortization (9)....... 1,686 3,498 5,680 6,549 7,950 1,834 3,521
Cash Interest Expense, Net (9).......... 877 2,448 5,107 4,602 4,347 697 1,980
Ratio of Earnings to Fixed Charges (10). 4.9x 3.7x 2.4x 3.3x 2.1x 3.2x 2.0x
Ratio of EBITDA to Cash Interest
Expense, Net (8)....................... 9.2x 6.1x 3.9x 5.6x 7.4x 9.0x 4.0x
Ratio of total debt to EBITDA (8)....... 0.9x 3.8x 2.8x 1.9x 3.0x
BALANCE SHEET DATA:
Cash and cash equivalents................. $ 905 $ 3,234 $ 4,618 $ 23,538 $ 1,852 $25,087 $ 864
Working capital........................... 2,830 8,938 14,371 38,811 20,509 38,208 38,578
Property, plant and equipment, net........ 26,193 54,816 58,996 67,668 94,800 70,346 112,040
Total assets.............................. 54,823 136,507 137,220 167,958 245,133 175,787 288,254
Total debt................................ 7,096 55,797 55,476 50,218 95,198 50,167 139,157
Redeemable common stock................... 2,682
Stockholders' equity...................... 18,711 23,917 27,015 65,837 72,629 67,727 74,047
</TABLE>
20
<PAGE>
- --------
(1) The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to September 30 of the applicable year. For simplicity of
presentation, the Company has presented year ends as September 30 and all
other periods as the nearest month end.
(2) In fiscal 1992, selling and administrative expenses included $698,000 of
bad debt expense relating to the bankruptcy of a major customer.
(3) During the fourth quarter of fiscal 1996, the Company recorded a non-
recurring, non-cash restructuring charge comprised of a write-down of
certain assets. The restructuring charge was due to increased volumes
resulting from the BSNJ Acquisition and the BSO Acquisition providing the
opportunity for the Company to consolidate certain of its manufacturing
processes to meet customer demand and improve efficiencies, which will
result in the disposal of surplus equipment and currently productive
manufacturing equipment for an estimated nominal value beginning in early
fiscal 1997 and ending in fiscal 1998. See Note 13 of the Notes to
Consolidated Financial Statements included elsewhere in this Prospectus.
(4) Provision for costs related to a negotiated settlement of litigation.
(5) The Company was party to a management agreement (the "Management
Agreement") with AB Leasing and Management, Inc. ("AB Leasing") whereby
the Company paid to AB Leasing an annual fee (the "AB Leasing Fee") based
upon a formula, plus reimbursement for expenses. See Note 12 of the Notes
to Consolidated Financial Statements included elsewhere in this
Prospectus. The Company and AB Leasing terminated the Management
Agreement upon the consummation of the Initial Public Offering (as
defined). Pursuant to the termination agreement the Company issued
133,000 shares of Common Stock to AB Leasing prior to the effectiveness
of the Initial Public Offering. The Company recorded a non-recurring,
non-cash, pre-tax charge to operations of $2.0 million ($1.2 million net
of tax effect) in connection therewith in the period in which such shares
were issued.
(6) The Company recorded an extraordinary loss related to the prepayment of
the $50.0 million principal amount of 8.35% Senior Secured Notes during
the third quarter of fiscal 1996.
(7) Effective October 1, 1993, the Company changed its method of accounting
for post employment benefits as a result of adopting Statement of
Financial Accounting Standards No. 112 which resulted in a onetime non-
cash charge of $213,000 and had no material subsequent impact on income
from operations.
(8) EBITDA represents income before income taxes, extraordinary item,
cumulative effect of change in accounting, and before interest expense,
provision for restructuring, provision for income taxes, and depreciation
and amortization. EBITDA does not include non-recurring charges related
to the provision for restructuring, the extraordinary loss resulting from
the extinguishment of debt, and cumulative effect of change in
accounting, which are primarily non-cash items. EBITDA is not a measure
of financial performance under generally accepted accounting principles
and does not necessarily indicate that cash flow will be sufficient to
fund cash requirements. The Company understands that certain investors
believe EBITDA represents a company's ability to service debt and to
utilize cash for other purposes. EBITDA should not be considered in
isolation or as a substitute for net income, cash flows from operations,
or other income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's
profitability or liquidity.
(9) For presentation in Other Financial Data, amortization of deferred
financing costs is included in depreciation and amortization and excluded
from Cash Interest Expense, Net.
(10) For purposes of this computation, earnings are defined as income before
income taxes plus Fixed Charges. Fixed Charges consist of interest
(including amortization of deferred financing costs) and that portion of
rental expense that is representative of interest (deemed to be one-third
of operating lease rental expense).
21
<PAGE>
UNAUDITED CONSOLIDATED PRO FORMA CONDENSED FINANCIAL DATA
Set forth on the following page are the unaudited consolidated pro forma
condensed statements of income of the Company for the year ended September 30,
1996 and the three months ended December 31, 1996 and the unaudited
consolidated pro forma condensed balance sheet of the Company at December 31,
1996. The unaudited consolidated pro forma condensed statements of income
include the historical results of the Company and give effect to the Recent
Acquisitions and to the Initial Offering and the application of the net
proceeds therefrom as if they had occurred as of October 2, 1995 and as
supplementally adjusted for fiscal 1996 for certain realized cost savings
related to the Recent Acquisitions. The unaudited consolidated pro forma
condensed balance sheet gives effect to the Initial Offering and the
application of the net proceeds therefrom as if it had occurred as of December
31, 1996. The unaudited consolidated pro forma financial data do not purport
to be indicative of the Company's financial position or results of operations
that would actually have been obtained had the Recent Acquisitions and the
Initial Offering and the use of proceeds therefrom been completed as of the
date or for the periods presented, or to project the Company's financial
position or results of operations at any future date or for any future period.
The unaudited consolidated pro forma adjustments are based upon available
information and upon certain assumptions that the Company believes are
reasonable. The unaudited consolidated pro forma condensed financial
statements should be read in conjunction with "Capitalization," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements of the Company and the accompanying
notes thereto included elsewhere in this Prospectus.
22
<PAGE>
UNAUDITED CONSOLIDATED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
AND OTHER FINANCIAL DATA
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30, 1996 (1)
-------------------------------------------------------------
HISTORICAL
FOR ADJUSTMENTS
ACQUIRED TO RECORD
COMPANIES RECENT SUPPLEMENTAL PRO
HISTORICAL (2) ACQUISITIONS ADJUSTMENTS FORMA
---------- ---------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Net sales.......... $283,105 $130,645 $ $ $413,750
Costs, Expenses and
Other Income:
Cost of products
sold (excluding
depreciation and
amortization).... 234,518 115,090 (9,530) (3) 340,078
Depreciation and
amortization..... 7,425 5,082 827 (4) 13,334
Selling and
administrative
expense.......... 16,812 8,534 (646) (3) 24,700
Provision for
restructuring.... 12,860 12,860
Interest expense,
net.............. 4,872 1,634 4,074 (5) 2,720 (6) 13,300
Other, net........ (340) 430 90
-------- -------- ------- ------- --------
Total costs,
expenses and
other income... 276,147 130,770 4,901 (7,456) 404,362
-------- -------- ------- ------- --------
Income before
income taxes and
extraordinary
item.............. 6,958 (125) (4,901) 7,456 9,388
Provision for
income taxes (7).. 3,239 (33) (2,279) 3,437 4,364
-------- -------- ------- ------- --------
Extraordinary loss
resulting from
extinguishment of
debt--Net of
related tax
benefit of $1,683. (2,535) (2,535)
-------- -------- ------- ------- --------
Net Income......... $ 1,184 $ (92) $(2,622) $ 4,019 $ 2,489
======== ======== ======= ======= ========
OTHER FINANCIAL
DATA:
EBITDA (8)......... $ 32,115 $ 6,591 $ $10,176 $ 48,882
Capital
expenditures...... 12,671 2,379 15,050
Depreciation and
amortization (9).. 7,950 5,082 827 75 13,934
Cash Interest
Expense, Net (9).. 4,347 1,634 4,074 2,645 12,700
Ratio of Earnings
to Fixed Charges
(10).............. 2.1x 1.7x
Ratio of EBITDA to
Cash Interest
Expense, Net (8).. 7.4x 3.8x
Ratio of total debt
to EBITDA (8)..... 3.0x 2.9x
<CAPTION>
THREE MONTHS ENDED DECEMBER 31, 1996 (1)
------------------------------------------------------------
HISTORICAL
FOR ADJUSTMENTS
ACQUIRED TO RECORD
COMPANIES RECENT SUPPLEMENTAL PRO
HISTORICAL (2) ACQUISITIONS ADJUSTMENTS FORMA
---------- ---------- -------------- -------------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Net sales.......... $91,166 $4,326 $ $ $95,492
Costs, Expenses and
Other Income:
Cost of products
sold (excluding
depreciation and
amortization).... 77,590 3,628 (364) (3) 80,854
Depreciation and
amortization..... 3,452 227 (87) (4) 3,592
Selling and
administrative
expense.......... 5,472 136 (54) (3) 5,554
Provision for
restructuring....
Interest expense,
net.............. 2,049 241 (5) 1,035 (6) 3,325
Other, net........ 199 16 215
---------- ---------- -------------- -------------- --------
Total costs,
expenses and
other income... 88,762 4,007 154 617 93,540
---------- ---------- -------------- -------------- --------
Income before
income taxes and
extraordinary
item.............. 2,404 319 (154) (617) 1,952
Provision for
income taxes (7).. 986 61 (237) 810
---------- ---------- -------------- -------------- --------
Extraordinary loss
resulting from
extinguishment of
debt--Net of
related tax
benefit of $1,683.
---------- ---------- -------------- -------------- --------
Net Income......... $ 1,418 $ 319 $(215) $(380) $ 1,142
========== ========== ============== ============== ========
OTHER FINANCIAL
DATA:
EBITDA (8)......... $ 7,905 $ 546 $ $ 418 $ 8,869
Capital
expenditures...... 3,590 3,590
Depreciation and
amortization (9).. 3,521 227 (87) 81 3,742
Cash Interest
Expense, Net (9).. 1,980 241 954 3,175
Ratio of Earnings
to Fixed Charges
(10).............. 2.0x 1.5x
Ratio of EBITDA to
Cash Interest
Expense, Net (8).. 4.0x 2.8x
Ratio of total debt
to EBITDA (8).....
</TABLE>
See Notes to Unaudited Consolidated Pro Forma Condensed Statements of
Operations and Other Financial Data on the following page.
23
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
AND OTHER FINANCIAL DATA
(1) The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to September 30 of the applicable year. For simplicity of
presentation, the Company has presented year ends as September 30 and all
other periods as the nearest month end.
(2) Represents the historical results of the Recent Acquisitions from the
beginning of each period presented until their respective dates of
acquisition.
(3) Reflects supplemental costs savings, as a result of the Recent
Acquisitions, that were fully implemented prior to the date of this
Prospectus and have a continuing impact on the Company. Such supplemental
cost savings primarily consist of a reduction of personnel costs and fixed
costs from plant closings that have been implemented prior to the date of
this Prospectus, and a net reduction in raw materials costs resulting from
the Company's existing contractual arrangements compared to the acquired
companies' historical raw materials costs. The amounts of these
supplemental cost savings by acquired company are as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
--------------------------
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1996
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BSO............................................. $ 6,844 $281
BSNJ............................................ 3,786 175
MCC............................................. (454) (38)
------- ----
$10,176 $418
======= ====
</TABLE>
(4) Reflects purchase allocation adjustments of the Recent Acquisitions as if
they had occurred on October 2, 1995 until their respective dates of
acquisition. The adjustments primarily relate to amortization of goodwill
and additional interest expense. Also included are adjustments for
depreciation expense and amortization of other intangible assets. Goodwill
is amortized over 30 years on a straight-line basis.
(5) Reflects pro forma interest expense related to the Recent Acquisitions as
if they had occurred on the beginning of each period presented until their
respective dates of acquisition.
(6) The supplemental adjustments to interest expense, net consist of the
following:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
--------------------------
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1996
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Historical interest expense, net.............. $ 4,872 $ 2,049
======= =======
Elimination of interest expense related to:
Old credit facility and old senior secured
notes...................................... $ 5,000 $ 2,018
Interest income............................. (653) (38)
Amortization of deferred financing costs on
retired debt............................... 525 69
------- -------
Decrease in interest expense.............. (4,872) (2,049)
------- -------
Interest expense on new indebtedness:
Senior Subordinated Notes due 2007.......... 10,250 2,563
Acquisition debt (a)........................ 2,450 612
Amortization of costs on new debt (b)....... 600 150
------- -------
Increase in interest expense.............. 13,300 3,325
------- -------
Net increase in interest expense............ 8,428 1,276
Less: Historical interest expense for
acquired companies.................... (1,634) (241)
Adjustment to record acquisitions......... (4,074)
------- -------
Supplemental adjustment to interest expense. $ 2,720 $ 1,035
======= =======
</TABLE>
--------
(a) Represents additional interest expense on indebtedness incurred to
fund the MCC Acquisition as if such acquisition occurred on October
2, 1995.
(b) Debt issuance costs related to the Notes will be amortized over
their 10-year life.
(7) For pro forma purposes, the income tax provision was calculated at 46% of
pre-tax income for the year ended September 30, 1996, and at 41% of pre-
tax income for the three months ended December 31, 1996. The effective
income tax rates exceed statutory rates principally due to nondeductible
amortization of certain intangible assets related to recent and prior
acquisitions.
(8) EBITDA represents income before income taxes, extraordinary item,
cumulative effect of change in accounting and before interest expense,
provision for restructuring, provision for income taxes, and depreciation
and amortization. EBITDA does not include non-recurring charges related to
the provision for restructuring, the extraordinary loss resulting from the
extinguishment of debt, and cumulative effect of change in accounting,
which are primarily non-cash items. EBITDA is not a measure of financial
performance under generally accepted accounting principles and does not
necessarily indicate that cash flow will be sufficient to fund cash
requirements. The Company understands that certain investors believe
EBITDA represents a company's ability to service debt and to utilize cash
for other purposes. EBITDA should not be considered in isolation or as a
substitute for net income, cash flows from operations, or other income or
cash flow data prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability or liquidity.
(9) For presentation in Other Financial Data, amortization of deferred
financing costs is included in depreciation and amortization and excluded
from Cash Interest Expense, Net.
(10) For purposes of this computation, Earnings are defined as income before
income taxes plus Fixed Charges. Fixed Charges consist of interest
(including amortization of deferred financing costs) and that portion of
rental expense that is representative of interest (deemed to be one-third
of operating lease rental expense).
24
<PAGE>
UNAUDITED CONSOLIDATED PRO FORMA CONDENSED BALANCE SHEET (1)
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
----------------------------------
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
ASSETS (DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current assets:
Cash....................................... $ 864 $ $ 864
Accounts receivable........................ 41,023 41,023
Inventories................................ 48,087 48,087
Deferred tax asset......................... 2,405 2,405
Other current assets....................... 3,289 3,289
--------- -------- ---------
Total current assets..................... 95,668 95,668
Property, plant and equipment, net........... 112,040 112,040
Other assets, net............................ 80,546 4,000(2) 84,546
--------- -------- ---------
Total assets............................. $ 288,254 $ 4,000 $ 292,254
========= ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................... $ 33,167 $ $ 33,167
Accrued expenses........................... 23,779 23,779
Current maturities of long-term debt....... 144 144
--------- -------- ---------
Total current liabilities................ 57,090 57,090
Long-term debt............................... 139,013 4,000(2) 143,013
Other liabilities............................ 3,969 3,969
Deferred income taxes........................ 14,135 14,135
--------- -------- ---------
Total liabilities........................ 214,207 218,207
Stockholders' equity......................... 74,047 74,047
--------- -------- ---------
Total liabilities and stockholders'
equity.................................. $ 288,254 $ 4,000 $ 292,254
========= ======== =========
</TABLE>
NOTES TO UNAUDITED CONSOLIDATED PRO FORMA CONDENSED BALANCE SHEET
(1) Reflects adjustments to record the Initial Offering and the transactions
contemplated thereby as if they had occurred on December 31, 1996.
(2) Reflects deferred financing costs associated with the sale of the Old Notes
and the additional indebtedness required as if the transaction had occurred
on December 31, 1996.
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's results of
operations, financial condition and liquidity should be read in conjunction
with "Unaudited Consolidated Pro Forma Condensed Financial Data," "Selected
Historical Consolidated Financial Data" and the Company's Consolidated
Financial Statements and Notes thereto included elsewhere herein.
GENERAL
The Company currently derives substantially all of its net sales from the
sale of steel containers in the general line segment of the North American
metal packaging industry which are manufactured at the Company's plants. The
metal packaging market in which the Company competes is generally mature and
stable. On average, domestic industry growth rates for products sold by the
Company have historically followed US GDP growth rates. Management believes
that companies that have managed sustained growth in these product lines above
the GDP level have typically accomplished this growth primarily through
acquisitions. The Company's net sales have grown at a compounded annual rate
of 16.5% from 1991 through 1996, significantly in excess of GDP over that same
period.
RECENT ACQUISITIONS
The Company completed two strategic acquisitions during fiscal 1996 and one
strategic acquisition during fiscal 1997.
On May 28, 1996, a newly created subsidiary of the Company named Milton
Acquisition Corp. acquired all the outstanding stock of Milton Can Company,
Inc. ("Milton Can") (the "BSNJ Acquisition"). Subsequent to the acquisition,
Milton Acquisition Corp. changed its name to Milton Can Company, Inc. and
thereafter changed its name again to Brockway Standard (New Jersey), Inc.
("BSNJ"). BSNJ participates in the general line segment of the North American
metal container industry, producing products similar to those of the Company.
This acquisition provided geographic expansion for the Company into the
northeast United States, enabling the Company to provide expanded coverage for
many of its products and to many of its customers. The acquired business had
revenues of approximately $55 million for the year ended December 31, 1995,
and operated three facilities, one in Peabody, Massachusetts, and two in
Elizabeth, New Jersey. The Company paid the shareholders of Milton Can
approximately $29 million in approximately equal portions of cash and the
Company's stock, and the Company assumed approximately $12.3 million of debt
of the acquired company, which was retired by the Company at the time of
acquisition. The transaction was accounted for using the purchase method of
accounting.
On June 17, 1996, a newly created subsidiary of Brockway Standard, Inc.
("BSI"), named Davies Acquisition Corp. acquired substantially all of the
assets of the Davies Can division of the Van Dorn Company, a wholly owned
subsidiary of Crown Cork & Seal Company, Inc. (the "BSO Acquisition").
Subsequent to the acquisition, Davies Acquisition Corp. changed its name to
Davies Can Company, Inc. and thereafter changed its name again to Brockway
Standard (Ohio), Inc ("BSO"). BSO participates in the general line segment of
the North American metal container industry, producing products similar to
those of the Company. The acquired business had revenues of approximately $55
million for the year ended December 31, 1995, and operated three facilities,
in Covington, Georgia, Solon, Ohio and York, Pennsylvania. The Company paid
approximately $42 million in cash for the assets. The transaction was
accounted for using the purchase method of accounting.
On October 28, 1996, a newly created subsidiary of the Company named Milton
Can Company, Inc. ("MCC") acquired the assets of the aerosol can business of
Ball Metal Food Container Corporation ("BMFCC"), a wholly owned and indirect
subsidiary of Ball Corporation, in an asset purchase transaction (the "MCC
Acquisition"). The acquired business had revenues of approximately $45 million
for the year ended December 31, 1995 and operates a single manufacturing
facility in Cincinnati, Ohio. MCC produces a wide range of aerosol cans and
operates a materials center providing Materials Center Services. The Company
paid approximately $45 million for the business. The transaction was accounted
for using the purchase method of accounting.
Management has committed to a plan to exit certain facilities of the
acquired companies and integrate acquired assets and businesses with the
Company's facilities. In connection with recording the purchases, the
26
<PAGE>
Company established a reorganization liability of approximately $2.77 million
which is classified in other current liabilities. The liability represents the
direct costs expected to be incurred which have no future economic benefit to
the Company. These costs include charges relating to the closing of
manufacturing facilities and severance costs. Finalization of the Company's
integration plan may result in further adjustments to this reserve. As of
December 31, 1996, the Company had charged approximately $1.09 million against
the reorganization liability.
The Recent Acquisitions represent a continuation of the Company's strategy of
growth in sales and profitability through acquisitions, and provide product and
geographic expansion. Management intends to employ the Company's 3R strategic
initiative to Rationalize, Reengineer and Recapitalize the Recent Acquisitions.
In fiscal 1996, the Company's facilities existing prior to the Recent
Acquisitions realized reductions in cost of products sold as a percent of sales
as a result of ongoing initiatives to reduce cost and increase productivity
through rationalization, reengineering and focused capital expenditures and as
a result of more effective steel purchasing. These efficiency gains were more
than offset by higher costs at the recently acquired facilities where the
Company has initiated an aggressive rationalization program. Although employee
termination costs in connection with plant rationalizations, administrative
workforce reductions, and other plant exit costs associated with the Recent
Acquisitions have been accrued for through purchase accounting adjustments, the
Company incurred in fiscal 1996, and will incur in fiscal 1997, other non-
recurring costs which, under current accounting pronouncements, will be charged
against operating income and will increase reported cost of products sold as a
percent of net sales.
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, information
expressed as a percentage of net sales for such period and has been derived
from the consolidated statements of income of the Company included elsewhere in
this Prospectus.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
YEAR ENDED DECEMBER
SEPTEMBER 30, 31,
------------------- ------------
1994 1995 1996 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales................................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of products sold (excluding
depreciation and
amortization)........................... 85.4 83.3 82.8 83.6 85.1
Depreciation and amortization............ 2.3 2.4 2.6 2.9 3.8
Provision for restructuring.............. 4.5
AB Leasing fees, expenses and
termination............................. 0.6 1.4
Selling and administrative expenses...... 5.2 4.9 5.9 5.7 6.0
Interest expense, net.................... 2.6 2.1 1.7 1.5 2.2
Income before taxes...................... 4.0 6.0 1.6 6.4 2.6
Net income............................... 2.2 3.5 0.4 3.8 1.6
EBITDA (as defined in Note 6 on page 12). 8.8 10.5 11.3 10.8 8.7
</TABLE>
THREE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO THREE MONTHS ENDED DECEMBER
31, 1995.
Net Sales. Net sales during the first quarter of fiscal 1997 increased 56.8%
to $91.2 million compared to $58.2 million in the first quarter of fiscal 1996.
The increase in net sales resulted primarily from the Recent Acquisitions
during the second half of fiscal 1996 and the acquisition of the aerosol can
business from BMFCC in October 1996.
Cost of Products Sold. Cost of products sold increased 59.6% in the first
quarter of fiscal 1997 to $77.6 million from $48.6 million in the same period
of fiscal 1996. The increase is due primarily to the increase in net sales.
Cost of products sold as a percentage of net sales increased from 83.6% in the
first quarter of fiscal 1996 to 85.1% in the first quarter of fiscal 1997. The
Company's facilities existing prior to the acquisitions realized reductions in
cost of products sold as a percent of net sales as a result of ongoing
initiatives to reduce cost and increase productivity through rationalization
and capital initiatives, and as a result of more effective steel purchasing.
These gains were more than offset by higher costs at the recently acquired
facilities where the Company has initiated an aggressive rationalization
program. Although employee termination costs in connection with plant
rationalizations, administrative workforce reductions, and other plant exit
costs associated with the
27
<PAGE>
Recent Acquisitions have been accrued for through purchase accounting
adjustments, the Company incurred in fiscal 1996, and will incur in fiscal
1997, other non-recurring costs which, under current accounting pronouncements,
will be charged against operating income.
Depreciation and Amortization. Depreciation and amortization expenses
increased 105.0% to $3.5 million in the quarter ended December 31, 1996
compared to $1.7 million in the quarter ended December 31, 1995. The increase
is due to increased depreciation and amortization resulting from the Recent
Acquisitions, and depreciation on capital expenditures placed in service during
fiscal 1996 and the first quarter of fiscal 1997.
Selling and Administrative Expenses. Selling and administrative expenses for
the first quarter of fiscal 1997 increased 65.5% to $5.5 million from $3.3
million in the first quarter of fiscal 1996. The increase is due primarily to
the Recent Acquisitions and corporate infrastructure supporting acquisitions
and continued growth plans. Selling and administrative expenses as a percent of
net sales increased to 6.0% from 5.7%.
Interest Expense, Net. Interest expense increased $0.8 million to $2.0
million in the first quarter of fiscal 1997 compared to $1.2 million in the
same period of fiscal 1996. This increase is primarily attributable to the
increase in the outstanding funded indebtedness used to finance the Recent
Acquisitions. Net interest expense reported in the first quarter of fiscal 1996
was further offset by $0.4 million of interest income from cash on hand.
Net Income. Net income for the first quarter of fiscal 1997 decreased $0.8
million to $1.4 million from $2.2 million in the first quarter of fiscal 1996.
This decrease is attributable to the rationalization and integration of the
acquired businesses which increased cost of products sold as a percentage of
net sales, interest expense and depreciation and amortization expense.
YEAR ENDED SEPTEMBER 30, 1996 (FISCAL 1996) COMPARED TO YEAR ENDED SEPTEMBER
30, 1995 (FISCAL 1995).
Net Sales. Net sales for fiscal 1996 were $283.1 million, an increase of
$35.6 million or 14.4% from $247.5 million in fiscal 1995. The increase
resulted primarily from the BSNJ Acquisition and the BSO Acquisition late in
the third quarter of fiscal 1996. Fiscal 1996 net sales excluding the
acquisitions were up slightly over fiscal 1995.
Cost of Products Sold. Cost of products sold (excluding depreciation and
amortization) in fiscal 1996 was $234.5 million, an increase of $28.3 million
or 13.7% from $206.3 million in fiscal 1995. The increase is primarily
attributable to increased sales from the acquisitions. Cost of products sold as
a percent of sales decreased to 82.8% in fiscal 1996 from 83.3% in fiscal 1995.
The Company's facilities existing prior to the BSNJ Acquisition and the BSO
Acquisition realized reductions in cost of products sold as a percent of sales
as a result of ongoing initiatives to reduce cost and increase productivity
through rationalization and capital initiatives, and as a result of more
effective steel purchasing. Gains were more than offset by higher costs at the
recently acquired facilities where the Company has initiated an aggressive
rationalization program. Although employee termination costs in connection with
plant rationalizations, administrative workforce reductions, and other plant
exit costs associated with the recent acquisitions have been accrued for
through purchase accounting adjustments, the Company incurred in fiscal 1996,
and will incur in fiscal 1997, other non-recurring costs which, under current
accounting pronouncements, will be charged against operating income.
Depreciation and Amortization. Depreciation and amortization increased from
$5.9 million in fiscal 1995 to $7.4 million in fiscal 1996 due to the BSNJ
Acquisition and the BSO Acquisition and as a result of capital spending related
to the Company's cost reduction and productivity improvement initiatives.
Selling and Administrative Expenses. Selling and administrative expenses of
$16.8 million for fiscal 1996 increased from $12.2 million in fiscal 1995,
primarily due to the the BSNJ Acquisition and the BSO Acquisition and building
corporate infrastructure to support the Recent Acquisitions, continued growth
plans and the increased costs associated with being a public company.
28
<PAGE>
Interest Expense, Net. Interest expense, net decreased to $4.9 million in
fiscal 1996 from $5.2 million in fiscal 1995, as the benefits accrued from the
cash received from the initial public offering (the "Initial Public Offering")
of the Company's common stock, par value $0.01 per share (the "Common Stock")
were partially offset by interest on borrowings to finance the acquisitions
late in the year.
Income before Income Taxes, Extraordinary Item and Cumulative Effect of
Change in Accounting. Income before income taxes, extraordinary item and
cumulative effect of change in accounting for fiscal 1996 was $7.0 million, a
decrease of $7.8 million or 53.0% from $14.8 million in fiscal 1995. The
achieved gains described above were more than offset by a non-cash
restructuring charge of $12.9 million (before taxes) recorded during fiscal
1996. The restructuring charge was due to increased volumes resulting from the
acquisitions providing the opportunity for the Company to consolidate certain
of its manufacturing processes to improve efficiencies, which will result in
the disposal of surplus equipment and currently productive manufacturing
equipment beginning in early fiscal 1997 and ending in fiscal 1998. When fully
implemented, the rationalization is expected on an overall basis to result in
reduced overhead expense and enhanced operational efficiencies.
Net Income. Net Income for fiscal 1996 was $1.2 million, a decrease of $7.6
million from fiscal 1995. In addition to the factors mentioned above, the
Company recorded an extraordinary charge of $2.5 million (after tax) associated
with the early repayment of the Company's debt.
YEAR ENDED SEPTEMBER 30, 1995 (FISCAL 1995) COMPARED TO YEAR ENDED SEPTEMBER
30, 1994 (FISCAL 1994).
Net Sales. Net sales for fiscal 1995 were $247.5 million, an increase of
$22.8 million or 10.1% from $224.7 million in fiscal 1994. The increase
resulted primarily from higher unit sales for nearly all products due to
increased market demand and, to a lesser extent, a price increase implemented
on most products effective January 1, 1995 in response to steel cost increases.
Higher unit sales resulted in part from the Company's October 1994 introduction
of newly designed steel pails meeting the new U.S. Department of Transportation
("DOT") regulations for pails containing certain volatile materials.
Cost of Products Sold. Cost of products sold in fiscal 1995 was $206.3
million, an increase of $14.4 million or 7.5% from $191.8 million in fiscal
1994. The increase resulted from higher unit sales and increases in raw
material prices. Cost of products sold as a percent of sales decreased to 83.3%
in fiscal 1995 from 85.4% in fiscal 1994. The improvement is largely
attributable to realized efficiencies from recent capital projects and
rationalization programs.
Depreciation and Amortization. Depreciation and amortization increased from
$5.1 million in fiscal year 1994 to $5.9 million in fiscal 1995 as the result
of capital spending related to the Company's cost reduction and productivity
improvement initiatives.
Selling and Administrative Expenses. Selling and administrative expenses of
$12.2 million for fiscal year 1995 increased from $11.7 million in fiscal 1994,
primarily due to the requirements of being a public company. Fiscal year 1995
included a one-time, non-cash charge of $2.0 million associated with the
Company's termination of AB Leasing management contract.
Interest Expense, Net. Interest expense, net decreased to $5.2 million in
fiscal 1995 from $5.7 million in fiscal 1994 due to the reduction of the
Company's debt through application of the proceeds of the Initial Public
Offering.
Income before Income Taxes, Extraordinary Item and Cumulative Effect of
Change in Accounting. Income before income taxes, extraordinary item and
cumulative effect of change in accounting for fiscal 1995 was $14.8 million, an
increase of $5.8 million or 64.4% from $9.0 million in fiscal 1994. The
increase was partially due to the reasons described above.
Net Income. Net Income for fiscal 1995 was $8.8 million, an increase of $3.7
million over fiscal 1994. The first quarter of fiscal 1994 included a charge
for the cumulative effect of change in accounting of $0.2 million (after tax)
as a result of the Company adopting Statement of Financial Accounting Standards
No. 112 in fiscal 1994.
29
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically financed its operations through cash provided by
operations and by borrowings under its credit agreements. The Company's primary
uses of cash will be the payment of operating expenses, funding capital
investments, payment for additional acquisitions, repurchase of Common Stock
and payments in respect of lease obligations.
During fiscal 1996, net cash provided by operating activities was $26.2
million. This amount included $4.2 million from a decrease in primary working
capital (excluding working capital acquired from the BSNJ Acquisition and the
BSO Acquisition). Deferred income taxes decreased by $4.8 million largely the
result of the $12.9 million restructuring charge discussed above. During the
first quarter of fiscal 1997, the Company's operating activities provided $1.8
million of cash. The Company's working capital increased $16.3 million to $38.6
million from $22.3 million for the quarter. The increase is primarily
attributable to the MCC Acquisition and a decrease in accounts payable relating
to timing of payments.
During fiscal 1996, the Company generated $34.4 million from net financing
activities. During the third quarter of fiscal 1996, the Company repaid its
existing debt, and established a new Credit Agreement with Bankers Trust
Company, NationsBank, N.A. (South) and the other lenders party thereto pursuant
to which the Company and its subsidiaries may borrow up to $150.0 million or up
to $175.0 million providing certain conditions are met. The Credit Agreement
expires June 17, 2001. Interest rates under the Credit Agreement are based on
rate margins for either prime rate as announced by NationsBank from time to
time or LIBOR, at the option of the Company. The applicable rate margin is
determined on a quarterly basis by a review of the Company's leverage ratio.
Loans under the Credit Agreement are unsecured and can be repaid at the option
of the Company without premium or penalty.
The Credit Agreement is subject to certain restrictive covenants, including
covenants which require the Company to maintain a certain minimum level of net
worth and certain leverage ratios. In addition, the Company is restricted in
its ability to pay dividends and other restricted payments. Funds provided
under the Credit Agreement were used to repay the Company's $50 million of
8.35% senior notes due 2001, repay the Company's then existing revolving credit
facility, finance acquisitions and meet operating needs. The Company incurred a
$2.5 million, after tax, one-time charge associated with its 1996 debt
restructuring. In connection with the Offering, the Company will reduce the
commitment amount of the Credit Agreement to $100.0 million, which may be
increased by an additional $25.0 million and will have approximately $61.0
million available for additional borrowings upon the satisfaction of certain
conditions.
During fiscal 1996, the Company used $9.5 million to purchase treasury stock
prior to the BSNJ Acquisition. This treasury stock was reissued along with new
shares as part of the consideration in acquiring Milton Can.
Cash provided by financing activities during the first quarter of fiscal 1997
was $42.6 million. The funds were provided by borrowings under the Credit
Agreement. At December 31, 1996, the outstanding borrowings under the Credit
Agreement were approximately $134.8 million.
As of September 30, 1996, the Company's future minimum annual rental payments
under capitalized leases and noncancelable operating leases were approximately
$18.0 million in the aggregate.
The Company used $82.3 million in cash for investment activities during
fiscal 1996, including $69.7 million of cash for the BSNJ Acquisition and the
BSO Acquisition. Capital expenditures of $12.7 million in fiscal 1996 were
primarily focused on improving the Company's manufacturing processes and have
enabled the Company to reduce operating costs, which has had a positive effect
on operating margins. The Company also invested in computer hardware and
software to improve administrative systems. Management expects to spend an
aggregate of $75 million to $100 million on capital expenditures during the
next five fiscal years. Capital expenditures will focus on, among other things,
continued cost reductions, operating efficiencies, implementation of a state-
of-the-art integrated computer system and investments in technology associated
with the Company's fiscal 1996 restructuring charge and 3R strategic initiative
to Rationalize, Reengineer and Recapitalize. Consistent with recent years,
planned capital spending is significantly higher than depreciation.
30
<PAGE>
The Company used approximately $41.3 million of cash for investment
activities to complete the MCC Acquisition during the first quarter of fiscal
1997. Capital expenditures were $3.6 million in the first quarter of fiscal
1997. During the quarter, the Company took delivery and began the installation
of the first of its new coaters, which is expected to be operational during
the second quarter of fiscal 1997. It is the Company's intention to accelerate
the rate of spending on its targeted capital investment program, designed to
increase productivity and reduce operating costs.
Cash and cash equivalents were $23.5 million at the beginning of fiscal
1996, $1.9 million at the end of fiscal 1996, and $0.9 million at December 31,
1996. At December 31, 1996, the Company had availability under the existing
Credit Agreement to borrow an additional $15.2 million, plus an additional $25
million if certain conditions were met.
At December 31, 1996, the Company was restricted in its ability to pay
dividends and make other restricted payments in an amount greater than
approximately $6.7 million. The Company's subsidiaries are restricted in their
ability to transfer funds to the Company, except for funds to be used to
effect approved acquisitions, pay dividends in specified amounts, reimburse
the Company for operating and other expenditures made on behalf of the
subsidiaries and repay permitted intercompany indebtedness. Restricted net
assets of the Company's subsidiaries collectively amounted to approximately
$67 million at December 31, 1996.
Management believes that cash provided from operations and borrowings
available under the Credit Agreement will provide it with sufficient liquidity
to meet its operating needs and continue the Company's capital expenditure
initiatives for the next twelve months. The Company continues to pursue
acquisition opportunities in the North American container industry and in
connection therewith may incur additional indebtedness to finance such
acquisitions.
On November 21, 1995, the Company announced Board approval of a limited
Common Stock Repurchase Program to accommodate employee and open market
transactions. The Company has utilized this program to facilitate acquisitions
and to fund its benefit programs. Subject to restrictions contained in the
Indenture, the Company expects to continue making periodic repurchases of
stock. The cash used for these activities will be provided by cash generated
through operations and borrowings under the Credit Agreement.
ENVIRONMENTAL MATTERS
For information regarding environmental matters, see "Business--
Environmental, Health and Safety Matters."
EFFECT OF INFLATION
Historically, the Company has generally been able to recover increased costs
of raw materials through price increases for the Company's products, although
there can be no assurances that this practice will continue. This ability,
together with cost reductions achieved through line rationalization and
productivity improvements, have mitigated the impact of inflation on the
Company's results of operations. Management currently believes that inflation
will not have a material adverse impact on the Company.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, "Earnings per Share." The Company has considered the impact
of this new standard and does not believe earnings per share determined under
this statement are materially different than earnings per share determined in
accordance with current accounting standards. The statement is effective for
financial statements for periods ending after December 15, 1997.
In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation." The Company adopted only
the disclosure provisions of Statement No. 123 during fiscal 1997.
In March 1995, the FASB issued Statement of Financial Accounting Standards
No. 121, "Accounting for Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of." The Company adopted Statement No. 121 during fiscal
1996. There was no cumulative effect adjustment recorded upon adoption.
31
<PAGE>
BUSINESS
GENERAL
BWAY Corporation is a holding company whose principal subsidiaries, Brockway
Standard, Inc., Brockway Standard (New Jersey), Inc., Milton Can Company, Inc.
and Brockway Standard (Ohio), Inc., are leading developers, manufacturers and
marketers of steel containers for the general line segment of the North
American metal container industry. The Company has six major product lines:
(i) paint cans, (ii) aerosol cans, (iii) oblong cans, (iv) steel pails, (v)
food cans and (vi) specialty cans. The Company's principal products are used
for packaging paint and related products, lubricants, cleaners, roof and
driveway sealants, food (principally coffee, vegetable oil and vegetable
shortening) and household and personal care aerosol products. The Company also
provides metal coating and decorating services. The Company reported net sales
for fiscal 1996 of $283.1 million and, on a consolidated pro forma basis
assuming the consummation of the Recent Acquisitions (as defined) as if they
had occurred on October 2, 1995, the Company would have had net sales for
fiscal 1996 of $413.8 million. For fiscal 1996, the Company had EBITDA (as
defined in Note 6 on page 8) of $32.1 million and would have had EBITDA of
$38.7 million on the same pro forma basis. The Company's business is focused
on product lines and geographic areas where the Company has, or management
believes it can develop, a leading market presence and achieve a low cost
manufacturing position. The Company's sales to customers located outside of
the United States were less than 5 percent for fiscal 1996. See "Summary
Consolidated Historical and Pro Forma Financial Data."
The Company believes it is an industry leader in each of its major product
lines (other than aerosol cans, a product line the Company entered as part of
the Recent Acquisitions) due to a number of competitive advantages, including
highly efficient and technologically advanced manufacturing facilities,
strategically located operations and a reputation for quality and service. The
Company's products are sold to over 750 customers, including diverse groups of
manufacturers of nationally branded products for the hardware, automotive,
personal care, consumer and food industries. The Company's major customers
include Benjamin Moore & Company, CL Smith Company, Colgate-Palmolive Company,
PPG Industries, Inc., The Procter & Gamble Company and The Sherwin-Williams
Company. For fiscal 1996, on a pro forma basis including the Recent
Acquisitions, no single customer would have accounted for more than 10% of net
sales.
The Company is the successor to a business founded in 1875. In January 1989,
the Company was purchased from Owens-Illinois Corporation in a leveraged
transaction led by management and other industry investors. Over the past
seven years, the Company's net sales have grown from $131.9 million in fiscal
1990 to $283.1 million in fiscal 1996. The successful application of
management's 3R strategic initiative to Rationalize, Reengineer and
Recapitalize its existing and acquired operations has resulted in meaningful
growth in EBITDA. In fiscal 1993, the Company acquired and successfully
integrated Armstrong Containers, Inc., DK Container, Inc., and the Monotop(R)
business of Ellisco, Inc., which was the primary reason for the net sales
increase from fiscal 1992 to fiscal 1994 by approximately 67%. In fiscal 1996,
the Company completed the strategic acquisitions of Milton Can Company, Inc.
and the Davies Can division of the Van Dorn Company, a wholly owned subsidiary
of Crown Cork & Seal Company, Inc., and, in fiscal 1997, the Company completed
the strategic acquisition of the aerosol can business of Ball Metal Food
Container Corporation, a wholly owned subsidiary of Ball Corporation. Since
1989 the Company has purchased 21 facilities, opened two new facilities, sold
or closed nine facilities and plans to close three facilities by the end of
calendar 1997. Consequently, at the end of calendar 1997 the Company
anticipates it will be operating 11 manufacturing facilities.
The Company believes that metal cans are the preferred container for
significant portions of the solvent, paint and coatings industry due to the
attractive strength and non-permeable characteristics of steel versus other
materials, such as plastic. Steel containers offer a number of significant
advantages over alternative materials, including fire safety, efficiencies in
packaging and transport, the capacity for vacuum or pressure packaging and the
ability to hold highly volatile or oil-based liquids. In addition, management
believes that steel containers are easier and less costly to recycle and have
a higher rate of recycling than alternative materials. The Company believes
that the metal can's position in the market will be enhanced by increasing
environmental awareness and recycling efforts.
32
<PAGE>
COMPETITIVE STRENGTHS
Strong Market Positions. The Company has established a leading position in
each of its major product lines (other than aerosol cans, a product line the
Company entered as part of the Recent Acquisitions). The Company estimates
that it holds the number one share in round paint cans, oblong cans, and steel
pails, with unit shares of approximately 60%, 50% and 31%, respectively. The
Company attributes its leadership position primarily to its broad product
offering, low cost manufacturing position, reputation for quality and high
levels of customer service. These qualities have enabled the Company to
establish long-standing relationships with existing customers and to attract
new customers.
Proven Management Team. The Company has assembled a strong management team
at both the corporate and operating levels with extensive experience in the
packaging industry. Since 1989, the Company's management team has successfully
implemented a focused strategy to complete strategic acquisitions,
successfully integrate and rationalize acquisitions, maintain a strong
financial position, broaden its product offerings and strengthen its key
customer relationships. As a result, the Company has increased its fiscal 1990
EBITDA (as defined in Note 6 on page 8) of $11.4 million to $32.1 million for
fiscal 1996.
State-of-the-Art Manufacturing Technologies. The Company employs leading
edge manufacturing methods to consistently improve its process efficiency,
product quality and product performance. The Company has converted
substantially all of its production lines from soldered to welded technology.
Welding lines operate at higher speeds, greater efficiency and lower costs. In
addition to the benefits inherent to the welded technology conversion, the
Company has internally developed equipment technology and modifications that
allow the majority of the Company's assembly lines to operate significantly
faster than original design specifications. The Company has also invested in
design and process technology that enable it to improve product quality. For
the five fiscal years ended September 30, 1996, the Company has invested
approximately $47 million in capital expenditures which has meaningfully
enhanced manufacturing efficiency, increased line speeds and lowered scrap
levels. Examples include conversion to the "powder striping" process of
coating the inside of cans at the weld to improve can performance and the
development of high performance light weight pails meeting the stricter United
Nations performance test criteria for pails containing volatile materials. The
Company will continue to make targeted capital investments to improve product
quality, manufacturing throughput and efficiency and increase sales.
Low-Cost Production. The Company believes that its manufacturing costs are
among the lowest in its industry primarily due to: (i) the economies of scale
provided by the Company's high production volumes, (ii) high plant utilization
attained by the rationalization of less efficient facilities, (iii) an
industry leading safety record which dramatically lowers workers' compensation
costs and related expenses, (iv) manufacturing techniques that minimize raw
materials requirements, reduce scrap and enhance productivity, (v)
ability to attain favorable steel prices based on its significant raw material
purchases, (vi) the low transportation costs resulting from the proximity of
manufacturing facilities to its major customers and (vii) continued capital
investment directed at achieving the highest levels of operating efficiency
and productivity.
STRATEGY
Rationalize, Reengineer, and Recapitalize. The Company implements a 3R
business strategy designed to Rationalize, Reengineer and Recapitalize its
existing and acquired operations to facilitate sales and EBITDA growth.
Consistent with its business strategy, the Company rationalizes operations by
closing less efficient facilities, relocating production lines and optimizing
production levels within efficiently loaded facilities. Through continued
reengineering of process and equipment, the Company has increased line speeds,
enhanced product quality, improved plant safety and reduced scrap. Investments
in state-of-the-art technology and equipment allow the Company to recapitalize
operations and develop world class production facilities providing the highest
quality products to its customers at competitive pricing.
The Company has a successful track record of achieving cost reductions and
productivity enhancements through consolidation of manufacturing operations
and selected capital investments in state-of-the-art
33
<PAGE>
manufacturing equipment. Since 1989 the Company has purchased 21 facilities,
opened two new facilities, sold or closed nine facilities and plans to close
three facilities by the end of calendar 1997. Consequently, at the end of
calendar 1997 the Company anticipates it will be operating 11 manufacturing
facilities. For the five fiscal years ended September 30, 1996, the Company
has invested approximately $47 million in capital expenditures which have
meaningfully enhanced manufacturing efficiency, increased line speeds and
lowered scrap levels.
New Products and Markets. The Company continues to enhance current product
lines and expand into new product lines in an effort to provide its existing
customers with a comprehensive offering of general line products. In late
1994, new Department of Transportation regulations became effective in the
United States requiring stricter performance criteria for steel pails. The
Company responded to this regulatory change by developing a unique pail design
and manufacturing process. The Company has increased unit sales by
approximately 20% over its fiscal 1994 unit sales and the Company estimates it
is now the leading provider of steel pails. The Company also provides metal
cutting, coating and lithography services for its can assembly facilities and
third party customers. To enhance its offering of Materials Center Services,
the Company has initiated a major capital investment program in state-of-the-
art lithography and coating equipment. The Company believes this investment
will significantly enhance its ability to expand third party sales of
Materials Center Services.
Strategic Acquisitions. The Company has a successful history of making
strategic acquisitions in core or complementary product lines. The Company
will continue to evaluate and selectively pursue acquisitions which it
believes are strategically important in meeting its customers' needs,
attracting new customers, adding new products, complementing its existing
business, expanding its geographic reach in North America and enhancing the
Company's profitability.
Leverage Strong Customer Relationships. The Company enjoys long-standing
relationships with the majority of its customers. The Company intends to
enhance these relationships by delivering a broader range of products and
services. With the BSNJ Acquisition and the MCC Acquisition, the Company now
has the ability to offer aerosol cans to its customers. The Company estimates
that this product line will increase the volume of cans that it sells to many
of its major general line customers. The Company also believes its recent
commitment to increasing its Materials Center Services capabilities will
enhance existing relationships with these customers through the offering of
high quality lithographed containers.
INDUSTRY OVERVIEW
The metal container industry is divided broadly into three segments:
beverage, food and general line (which includes containers for such products
as aerosol, paint and varnish, and automotive products). Management estimates,
based on industry data published by the Can Manufacturers Institute and the
United States Bureau of Statistics, that 1995 industry shipments totaled
approximately 98 billion units to the beverage segment, 31 billion units to
the food segment and 4 billion units to the general line segment. Although the
general line segment constitutes approximately 3% of the unit volume in the
metal container industry, management estimates that it represents
approximately 10% of industry revenues. Few companies compete in all three
segments, and most of the companies which serve the beverage and food segments
do not compete in the general line segment.
The metal container industry has experienced continuing consolidation over
the past few years, resulting in improved line utilization and lower unit
costs. Management expects this trend to continue, resulting in a more
favorable operating environment. Portions of the metal container industry are
configured on a regional basis due to the high cost of freight as a percentage
of the total cost of sales. Management believes that customers prefer nearby
suppliers to ensure timely delivery, flexible inventory and attentive service.
PRODUCTS AND MARKETS
The following table sets forth the percentage of net sales of the Company
contributed by the product lines indicated for fiscal 1994, 1995 and 1996. The
Company's sales distribution by product line has been affected to
34
<PAGE>
some extent by the Recent Acquisitions. Materials Center Services have
historically accounted for less than two percent of net sales.
<TABLE>
<CAPTION>
PERCENTAGE OF
NET SALES YEAR
ENDED
SEPTEMBER 30,
----------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
General line containers................................... 76% 73% 78%
Food cans................................................. 19 23 17
Ammunition Boxes.......................................... 5 4 5
--- --- ---
Total................................................. 100% 100% 100%
=== === ===
</TABLE>
General Line Containers
The primary uses for the Company's containers are for paint and related
products, lubricants, cleaners, roof and driveway sealants, charcoal lighter
fluid, household and personal care products. Specific products include round
cans with rings and plugs (typical paint cans), oblong or "F" style cans
(typical paint thinner cans), specialty cans (typical PVC or rubber cement
cans, brake fluid and other automotive after-market product cans and an
assortment of other specialty containers) and pails. The Company produces a
full line of these products to serve the specific requirements of a wide range
of customers. The Company's products are typically coated on the inside to
customer specifications based on intended use and are either decorated on the
outside to customer specifications or sold undecorated. Prior to May 1996, the
only significant general line product which the Company did not sell was
aerosol containers. The BSNJ Acquisition gave the Company a niche position in
the container market for the sale of aerosol products. The Company increased
its position for the sale of aerosol can products with the acquisition of the
aerosol can business of BMFCC. Most of the Company's products are manufactured
in facilities that are strategically located to allow the Company to deliver
product to a majority of customer filling locations for such products within a
one day transit time.
Paint Cans. The Company produces round paint cans in sizes ranging from one-
quarter pint to one gallon, with one gallon paint cans representing the
majority of all paint can sales. The paint can market has traditionally been a
regional one due to the high transportation costs for large metal containers,
which cannot be inserted into each other for efficient shipping. Paint cans
are manufactured to a variety of performance specifications and may be printed
on the outside for customer marketing purposes, although most paint
manufacturers use paper labels rather than printed cans. Management estimates
that the Company sold approximately 60% of all paint cans sold in the United
States in fiscal 1996, which the Company believes is the number one market
share for such products.
Oblong or "F" Style Cans. Oblong or "F" style cans are typically used for
packaging paint thinners, lacquer thinners, turpentine, deglossers and similar
paint related products, charcoal lighter fluid, waterproofing sealers and
vegetable oil. The Company produces oblong cans in a wider range of sizes than
any of its competitors, with sizes ranging from three ounces to one imperial
gallon. The one gallon size represents approximately 70% of all oblong can
sales in the Unites States. Oblong cans are generally printed to customer
specifications. Management estimates that the Company sold approximately 50%
of all oblong cans sold in the United States during 1996, which the Company
believes is the number one market share for such products.
Specialty Cans. Utility cans include small screw top cans which typically
have an applicator or brush attached to a screw cap and are used for PVC pipe
cleaner, PVC cement and rubber cement. Cone top cans are typically used for
packaging specialty oils and automotive after-market products including brake
fluid, gasoline additives and radiator flushes. The Company also produces
various other specialty containers.
Aerosol Cans. Aerosol cans are typically used for packaging various
household and industrial products, including paint and related products,
personal care products, lubricants and insecticides. The Company produces a
variety of sizes, which are generally decorated to customer specifications.
Aerosol cans are currently manufactured at the Company's facilities in
Elizabeth, New Jersey and Cincinnati, Ohio.
Pails. Pails are typically used for packaging paint and related products,
roof and driveway sealants, marine coatings, vegetable oil, and water
repellent. Pails may be either "closed head" for easy pouring products, or
35
<PAGE>
"open head" for more viscous products, with a lid which is crimped on after
filling. The pail market is served by producers of both steel and plastic
pails, with steel pails representing approximately 20% of the pails sold. The
Company manufactures steel pails in sizes ranging from 2.5 to 7 gallons. Steel
pails are manufactured from either blackplate or cold rolled steel, are
typically lined with rust inhibitors or other materials depending on the
nature of customers contents and are often printed to customer specifications.
The Company estimates that it increased its market share between 1994 and 1996
from approximately 18% to 31%, respectively, of all steel pails sold in the
United States through market share gains and the introduction of its pails
conforming to the stricter United Nations performance test criteria.
Food Products/Coffee Cans
The food segment includes "sanitary" cans in which soups, stews, pie
fillings and other foods are actually cooked in the can. Also included in this
segment are cans for food products such as coffee, shortening and nuts, which
are not cooked in the can. The Company does not participate in the sanitary
portion of the food segment. The Company's most significant food segment
product is coffee cans. The Company produces cans for coffee, vegetable oil
and vegetable shortening, with coffee accounting for the majority of sales.
The Company produces coffee cans in sizes commonly referred to as 1 pound, 2
pound and 3 pound, and various smaller specialty coffee can sizes and shapes.
Coffee cans are generally sold to nationally known coffee processing and
marketing companies and are typically printed to customer specifications.
Coffee beans are imported into the United States for processing primarily
through four ports of entry: New Orleans, Louisiana; Norfolk, Virginia;
Jacksonville, Florida and San Francisco, California. The Company focuses
primarily on the New Orleans, Louisiana, region, where it estimates it has
over a 90% share (representing approximately 25% of units sold in the United
States).
Ammunition Boxes
The Company is a leading manufacturer of a variety of ammunition boxes.
These containers provide a hermetic seal, are coated with a corrosion-
resistant finish and are used to package small arms ammunitions and other
ordnance products. The Company sells ammunition boxes to the U.S. Department
of Defense as well as to major domestic and foreign producers of ordnance. The
Company believes it is the leading supplier of a variety of sizes of
ammunition boxes.
Materials Center Services
The Company also provides Materials Center Services for its can assembly
facilities and third party customers. To enhance its offering of Materials
Center Services, the Company has initiated a major capital investment program
in state-of-the-art lithography and coating equipment. The Company believes
this investment will significantly enhance its ability to expand third party
sales of Materials Center Services.
SALES AND MARKETING
The Company markets its products primarily in North America. Sales are made
either by the Company's direct sales force or through an agent and distributor
network. The Company's direct sales force consists of 31 salespersons, each
assigned to a territory or to national accounts. The sales force is supported
by order entry and scheduling personnel at each plant and by a centralized
credit and billing organization. Most of the Company's sales are made by the
Company's direct sales force and to distributors for resale. Distributors
determine their own prices and assume credit risks. No single distributor
represented more than 2% of sales in fiscal 1996. The Company's sales to
customers located outside of the United States were less than 5% for fiscal
1996.
CUSTOMERS
The Company sells its products to a large number of customers in numerous
industry sectors. Sales to the Company's ten largest customers accounted for
approximately 39% of sales in fiscal 1996, with one customer, The Procter &
Gamble Company (including its wholly-owned subsidiary, The Folger Coffee
Company) ("P&G"), accounting for approximately 13% of sales during the period.
For fiscal 1996, on a pro forma basis, including the Recent Acquisitions, no
single customer represents more than 10% of net sales. Substantially all of
P&G's purchases are for coffee cans and are made pursuant to a multi-year
agreement with the Company for the supply of P&G's requirements at its New
Orleans, Louisiana facility. See "Risk Factors--Dependence on Major
Customers."
36
<PAGE>
A list of the Company's ten largest customers (in alphabetical order) for
fiscal 1996 and the products they purchase is shown below.
<TABLE>
<CAPTION>
CUSTOMER PRODUCTS
-------- --------
<S> <C>
Benjamin Moore &
Company................ paint cans
Cal Western Packaging
Corp. ................. pails and food cans
CL Smith Company........ paint cans, pails, oblong cans and specialty cans
Oatey Company........... specialty cans
Paramount Can Company,
Inc. ................... paint cans, oblong cans, pails and specialty cans
RPM, Inc. .............. paint cans, oblong cans, pails, aerosol cans and specialty cans
PPG Industries, Inc. ... paint cans, oblong cans and pails
The Procter & Gamble
Company................ coffee cans and other food cans
The Sherwin-Williams
Company................ paint cans, oblong cans, pails and specialty cans
WM Barr & Co. .......... paint cans, oblong cans, pails and specialty cans
</TABLE>
The largest customers of the aerosol business acquired through the MCC
Acquisition are Colgate-Palmolive Company and The Sherwin-Williams Company.
Consistent with industry practice, the Company enters into multi-year supply
agreements with many of its larger customers. Most of such agreements are non-
exclusive, and many allow the customer to purchase containers from other
suppliers if such other suppliers offer lower prices and identical terms for
products of the same quality and the Company does not match such lower prices.
The Company has strong relationships with most of its major customers as a
result of its dedication to meeting its customers' specific quality and
service goals.
MANUFACTURING PROCESS
The Company generally employs the industry's typical manufacturing process
in production of its products, although certain technologies differ from
competitors. Following is a sequential list of the specific steps in the can
making process. Not all products require coating and printing.
<TABLE>
<CAPTION>
PROCESS DESCRIPTION
------- -----------
<C> <S>
Shearing............. A large coil of tin-coated, blackplate or cold rolled steel
is cut into sheets of a specified size depending on the end
use of the product.
Coating.............. A coating is sometimes applied to the side of the sheets
which becomes the outside of the containers as a base coat
for printing and to the side that becomes the inside of the
containers to protect the contents from contact with the
steel or tinplate.
Printing............. Sheets are decorated with the customer's design. (Also known
as lithography).
Slitting............. Sheets are cut into individual body blanks, which will be
formed into cans.
Body-Forming......... Body blanks are fed into a body-making machine where they are
formed into cylinders or oblong cans and joined at their side
seams, by welding or soldering. Handles or nozzles may be
attached.
End-Forming.......... Ends are stamped out of sheets or strips.
Flanging and Seaming. The metal on both ends of the can is rolled to form a flange
and the end is attached to the body by folding or seaming.
Testing.............. The cans are tested for potential leakage.
Packaging............ Cans are stacked onto pallets and shrink-wrapped or packaged
in cartons or bags for delivery to customers.
</TABLE>
37
<PAGE>
RAW MATERIALS
The Company's principal raw materials consist of tinplate, blackplate and
cold rolled steel, various coatings, inks and compounds. Steel products
represent the largest component of raw material costs. Essentially all of the
Company's products are manufactured from tinplate steel, except for pails and
ammunition boxes, which are manufactured from blackplate and cold rolled
steel.
Various domestic steel producers supply the Company with tinplate steel.
Procurement from suppliers depends on the suppliers' product offering, product
quality, service and price. Because a significant number of reliable suppliers
produce the steel used in the Company's process, management believes that it
would be able to obtain adequate replacement supplies in the market should one
of the current suppliers discontinue supplying the Company. The Company is
working with other companies to lower the overall cost of its steel
requirements. Tinplate consumers typically negotiate late in the year for the
next calendar year on terms of volumes and price. Terms agreed to have
historically held through the following year, but there is no assurance that
this practice will remain unchanged in the future.
Steel prices have historically been adjusted as of January 1 of a calendar
year. The Company has historically arranged for raw material prices which are
lower than those publicly announced by its suppliers, although there can be no
assurances that this practice will continue.
In addition to steel products, the Company purchases various coatings, inks,
and compounds used in the manufacturing process. Based on ready availability
of these materials in the past and the number of current manufacturers,
management does not anticipate any shortages or supply problems in the future.
EMPLOYEES
As of March 1, 1997, the Company employed approximately 1,590 hourly workers
and 420 salaried employees. Management believes labor relations at all
facilities are satisfactory and believes that the flexibility of its work
force enhances the Company's efficient use of labor on production lines with
uneven or seasonal demand and its responsiveness to customer needs. Certain of
the Company's employees are represented by various unions. As of March 1,
1997, BSI and its subsidiary BSO together had 184 union-represented employees
at two facilities covered by three separate collective bargaining agreements.
As of March 1, 1997, BSNJ had 190 union-represented employees at two
facilities covered by three separate collective bargaining agreements. On
March 1, 1997, MCC had 318 union employees at one facility covered by three
separate collective bargaining agreements. During fiscal 1997, three
collective bargaining agreements will expire, covering in the aggregate
approximately 225 employees. See "Risk Factors--Labor Relations."
Management believes that safety performance, which is often considered as an
indicator of worker involvement, training and attitude, has been excellent at
the Company's facilities. In addition to worker attentiveness to safety,
employees are also actively involved in various quality and productivity
initiatives. The Company believes that safety is a strong indicator of
management competence and knowledge of daily operations. Over the last five
years, the Company's injury frequency rate, measured as total recordable
injuries per 100 employees, has been less than one-half the industry average,
according to the Can Manufacturers Institute (CMI). The Company's injury
record has continued to improve in that over the last two years, the Company's
injury frequency rate has been less than one-third the industry average.
COMPETITION
The markets for the Company's products are competitive and the Company faces
competition from a number of sources in most of its product lines. Competition
is based primarily on price, quality, service and, to a lesser extent, product
innovation. Competition may require the Company to match competitors' prices
to retain business or market share. The Company believes that its low cost of
production and high quality products, the
38
<PAGE>
geographic location of the Company facilities which provide national coverage
for most products to most customers, and its commitment to strong customer
relationships enable it to compete effectively. The Company faces competition
from a number of different competitors for the products it sells. In paint,
aerosol and general line products, the Company competes primarily with U.S.
Can Corporation.
Manufacturers of steel containers have historically faced competition from
other materials, primarily plastic, glass and aluminum. Steel containers offer
a number of significant advantages over alternative materials, including fire
safety (critical in many products packaged in paint, oblong and specialty
cans), the capacity for vacuum packaging (important to coffee producers) and
ability to contain certain solvent-based products.
SEASONALITY
Sales of certain of the Company's products are to some extent seasonal, with
sales levels generally higher in the second half of the Company's fiscal year.
On an aggregate basis, however, the Company's sales have not been
significantly affected by seasonality.
PROPERTIES
The following table sets forth certain information with respect to the
Company's headquarters and manufacturing plants, as of March 1, 1997.
<TABLE>
<CAPTION>
APPROXIMATE
LOCATION SQUARE FOOTAGE TYPE OF INTEREST
-------- -------------- ----------------
<S> <C> <C>
Atlanta, Georgia (Headquarters)........... 24,000 Leased
Chicago, Illinois......................... 141,000 Owned
Dallas, Texas (Thompson).................. 110,000 Owned
Dallas, Texas (Southwestern).............. 73,000 Owned
Fontana, California....................... 72,000 Leased
Franklin Park, Illinois................... 92,000 Leased
Garland, Texas............................ 78,000 Leased
Homerville, Georgia....................... 427,000 Owned
Memphis, Tennessee........................ 75,000 Leased
Picayune, Mississippi..................... 60,000 Leased
Elk Grove, Illinois....................... 15,000 Leased
Solon, Ohio............................... 220,000 Owned
York, Pennsylvania........................ 97,000 Owned
Elizabeth, New Jersey..................... 209,000 Leased
Elizabeth, New Jersey..................... 41,000 Leased
Cincinnati, Ohio.......................... 469,000 Owned
</TABLE>
During the fourth quarter of fiscal 1996, management announced plans to
close six facilities and open one new plant for strategic expansion of the
Company's business by the end of 1997. As part of this rationalization
strategy, the acquired Covington, Georgia plant was closed in September 1996
and the acquired Peabody, Massachusetts plant ceased production in December
1996. The majority of the equipment and business has been assigned to other
Company locations. The Company also has moved its Memphis, Tennessee operation
to a larger facility to accommodate production changes and the strategic
expansion of the Company's business. In addition to these actions, the Company
took steps to rationalize operations at its recently acquired Solon, Ohio
facility. Management continues to review opportunities to consolidate
operations and to maximize production efficiencies by rationalizing
overlapping facilities.
39
<PAGE>
The Company believes that its facilities are adequate for its present needs
and that its properties are generally in good condition, well maintained and
suitable for their intended use.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
The Company is subject to a broad range of federal, state and local
environmental and workplace health and safety requirements, including those
governing discharges to air and water, the handling and disposal of solid and
hazardous wastes, and the remediation of contamination associated with the
releases of hazardous substances. The Company believes that it is in
substantial compliance with all material environmental, health and safety
requirements. In the course of its operations, the Company handles hazardous
substances. As is the case with any industrial operation, if a release of
hazardous substances occurs on or from the Company's facilities or at offsite
waste disposal sites, the Company may be required to remedy such release.
There were no material capital expenditures relating to environmental
compliance in fiscal 1996, and none are expected for fiscal 1997.
Pursuant to the terms of the Company's 1989 acquisition of certain
facilities from Owens-Illinois, its fiscal 1996 acquisition of facilities from
Van Dorn Company ("Van Dorn"), the BSNJ Acquisition and the MCC Acquisition,
the sellers in each transaction are obligated, subject to certain limitations,
to indemnify the Company for certain environmental matters related to the
facilities or businesses they conveyed. Notwithstanding such indemnifications,
the Company could bear liability in the first instance for indemnified
environmental matters, subject to obtaining reimbursement. There can be no
assurance that the Company will receive reimbursement with respect to the
indemnified environmental matters.
Environmental investigations voluntarily conducted by the Company at its
Homerville, Georgia facility in 1993 and 1994 detected certain conditions of
soil and groundwater contamination, that predated the Company's 1989
acquisition of the facility from Owens-Illinois. Such contamination is subject
to indemnification by Owens-Illinois. The Company and Owens-Illinois have
entered into a supplemental agreement affirming Owens-Illinois' responsibility
for this matter and establishing procedures for Owens-Illinois' investigation
and remediation of the contamination. In 1994, the Georgia Department of
Natural Resources ("DNR") determined that further investigation must be
completed before DNR decides whether corrective action is needed. Owens-
Illinois' investigation of the contamination is continuing. Management does
not believe that the final resolution of this matter will have a material
adverse effect on the results of operations or financial condition of the
Company.
The Cincinnati facility, which was acquired in the MCC Acquisition, is
listed on environmental agency lists as a site that may require investigation
for potential contamination. The listings could result in a requirement for
the Company to investigate and remediate the facility. To date, no agency has
required such action and the cost of any investigation or remediation can not
be reasonably estimated. BMFCC has agreed to indemnify the Company for certain
costs associated with any such required investigation or remediation. At the
Peabody, Massachusetts facility, which is currently leased by BSNJ,
groundwater remediation is underway. The owner of the facility has agreed to
retain all liability for the remediation. In addition, the former shareholders
of Milton Can, subject to certain limitations, indemnified the Company for
liabilities associated with the contamination. Management believes that
neither of these matters are likely to have a material adverse effect on the
results of operations or financial condition of the Company.
Certain facilities of the Company have been identified as potentially
responsible parties ("PRP") at six waste disposal sites and received a request
for information for a seventh site pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"). These matters are,
subject to certain limitations, indemnified by the sellers of the relevant
facilities. Management believes that none of these
40
<PAGE>
matters will have a material adverse effect on the results of operations or
financial condition of the Company. Because liability under CERCLA is
retroactive, it is possible that in the future the Company may be identified
as a PRP with respect to other sites.
The Company believes that safety is a strong indicator of management
competence and knowledge of daily operations. Over the last five years, the
Company's injury frequency rate, measured as total recordable injuries per 100
employees, has been less than one-half the industry average, according to the
Can Manufacturers Institute (CMI). The Company's injury record has continued
to improve in that over the last two years, the Company's injury frequency
rate has been less than one-third the industry average.
LEGAL PROCEEDINGS
The Company is involved in certain proceedings relating to environmental
matters as described under""--Environmental, Health and Safety Matters." The
Company is also involved in legal proceedings from time to time in the
ordinary course of its business. There are no such currently pending
proceedings which are expected to have a material adverse effect on the
Company.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information as of April 1, 1997, with
respect to the directors and officers of the Company (including all executive
officers of the Company). Officers of the Company serve at the discretion of
the board of directors of the Company (the "Board of Directors" or the
"Board").
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Warren J. Hayford.... 67 Chairman of the Board, Chief Executive Officer,
and Director of the Company
John T. Stirrup...... 61 President, Chief Operating Officer and Director
of the Company
David P. Hayford..... 40 Senior Vice President and Chief Financial
Officer of the Company
James W. Milton...... 57 Executive Vice President and Director of the
Company
Harry F. Payton...... 60 Executive Vice President of the Company
Kevin C. Kern........ 38 Vice President and Corporate Controller of the
Company
Blair G. Schlossberg. 30 General Counsel and Secretary of the Company
Robert R. Plante..... 58 Vice President--Engineering and Technology of
the Company
Thomas A. Donahoe.... 61 Director
Alexander P. Dyer.... 64 Director
Jean-Pierre M. Ergas. 57 Director
John E. Jones........ 62 Director
John W. Puth......... 68 Director
</TABLE>
41
<PAGE>
The following table sets forth certain information as of April 1, 1997 with
respect to the directors and officers of the Subsidiary Guarantors. Officers
of the Subsidiary Guarantors serve at the discretion of the respective board
of directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Warren J. Hayford........ 67 Chairman of the Board and Chief Executive
Officer of BSI; Director of MCC, BSNJ, BSO,
Armstrong Containers, Inc. ("ACI") and Plate
Masters, Inc. ("PMI")
John T. Stirrup.......... 61 President of BSI, BSNJ, BSO, ACI and PMI;
Director of BSI, MCC, BSNJ, BSO, ACI and PMI
James W. Milton.......... 57 President and Director of MCC
David P. Hayford......... 40 Senior Vice President of BSI, MCC and BSNJ;
Executive Vice President and Director of
Brockway Standard (Canada), Inc. ("BSC"); Vice
President of BSO, ACI and PMI
Michael J. Tobin......... 44 Director of BSC
Blair G. Schlossberg..... 30 Secretary of each Subsidiary Guarantor; Director
of Materials Management, Inc. ("MMI")
Daniel Sitler............ 58 President and Director of MMI
Barry L. Treadwell....... 54 Executive Vice President of MCC
Harry F. Payton.......... 60 Executive Vice President and Group President--
Government Business of BSI
Robert C. Coleman........ 51 Vice President--Marketing of BSI; President of
BSC
Marguerite E. Ferrazzano. 48 Vice President--Operations Analysis and Business
Development of BSI
Richard E. Jakubecy...... 50 Vice President--Sales and Marketing of BSI
Patrick J. Rourke........ 38 Vice President--Purchasing and Logistics of BSI
Clarence W. Wellman...... 52 Vice President--Sales of BSI
</TABLE>
The Company's by-laws provide that the size of the Board shall be fixed from
time to time by resolution of the Board and that vacancies on the Board may be
filled by the remaining directors. The Board currently consists of eight
directors, who are divided into three classes, each class consisting of up to
three directors, with staggered three-year terms. Class I consists of James W.
Milton, John E. Jones and John W. Puth, whose terms expire at the 1999 Annual
Meeting. Class II consists of John T. Stirrup and Jean-Pierre M. Ergas, whose
terms expire at the 2000 Annual Meeting, and one vacant directorship. The
Board has not yet identified and nominated any person to fill the vacant Class
II directorship. Class III consists of Warren J. Hayford, Alexander P. Dyer
and Thomas A. Donahoe, whose terms expire at the 1998 Annual Meeting. Each
director is elected to serve for the remaining term of any vacancy filled by
the director or for a three-year term (if elected at an annual meeting of
stockholders) or until a successor is duly elected. Officers of the Company
serve at the discretion of the Board of Directors. There are two standing
Committees of the Board of Directors: the Compensation Committee (the
"Compensation Committee") and the Audit Committee (the "Audit Committee").
Warren J. Hayford has been Chairman of the Board, Chief Executive Officer
and a director of the Company since 1989. Mr. Hayford is also Chairman of the
Board and Chief Executive Officer of BSI and a director of MCC, BSNJ, BSO, ACI
and PMI. Mr. Hayford has held a number of senior positions within the
packaging industry over the past thirty-five years including President and
Chief Operating Officer of Gaylord Container Corporation ("Gaylord"), a
manufacturer of paper packaging products, 1986 to 1988, and Vice Chairman of
Gaylord, 1988 through 1992. Prior to Gaylord, Mr. Hayford served as President
and a director of Gencorp, Inc., President and a director of Navistar
International Corporation and Executive Vice President and a director of the
Continental Group, Inc. Mr. Hayford has also been a director of Gaylord since
1986.
42
<PAGE>
John T. Stirrup has served as President and Chief Operating Officer of the
Company since 1995 and has served as a director of the Company since 1989. Mr.
Stirrup is also President and a director of BSI, BSNJ, BSO, ACI and PMI as
well as a director of MCC. Mr. Stirrup joined Brockway, Inc. (later acquired
by Owens-Illinois Corporation) in 1980 and has held a variety of positions
including: Executive Vice President of the Company, 1989 to 1995; Group Vice
President of Metal & Plastic Packaging, Corporate Purchasing and Regional
Airlines of Brockway, Inc., 1985 to 1988; Vice President of Sales and
Marketing Brockway Glass Containers of Brockway, Inc., 1983 to 1985; Vice
President of Operations Brockway Glass Containers of Brockway, Inc., 1981 to
1983; and Vice President of Manufacturing Brockway Glass Containers of
Brockway, Inc., 1980 to 1981. Prior to joining Brockway, Inc., Mr. Stirrup
held several positions at Kerr Glass Manufacturing Corp., including Vice
President of Manufacturing.
David P. Hayford has been Senior Vice President and Chief Financial Officer
of the Company since May 1996. Mr. Hayford is also Senior Vice President of
BSI, MCC and BSNJ, Executive Vice President and a director of BSC, and Vice
President of BSO, ACI and PMI. From June 1995 to May 1996, Mr. Hayford served
as Vice President, Treasurer and Secretary of the Company. From June 1994 to
June 1995, Mr. Hayford served as an independent consultant to the Company.
From August 1992 to June 1994, Mr. Hayford attended the Kellogg Graduate
School of Management at Northwestern University and graduated with a Master of
Management degree. From January 1992 until August 1992, Mr. Hayford provided
independent corporate and financial consulting services.
James W. Milton has served as Executive Vice President and a director of the
Company since May 1996 and as President and a director of MCC since October
1996. From May 1996 to October 1996, Mr. Milton also served as President of
BSNJ. Prior thereto, Mr. Milton held several positions, including President,
at Milton Can from 1963 until it merged with and into BSNJ in May 1996. Mr.
Milton also served as Vice President of Van Dorn Company from 1983 to 1988 and
as a director of Van Dorn Company from 1984 to 1988. Mr. Milton is Chairman of
the Board of Directors of New Jersey Manufacturers Institute and a director of
the Can Manufacturers Institute.
Harry F. Payton has served as Executive Vice President of the Company and
Executive Vice President of BSI since 1989 and as Group President--Government
Business of BSI since May 1994. From 1994 to 1995, Mr. Payton served as
Treasurer of BSI and has worked for the BSI organization for over thirty years
in various managerial positions. Prior thereto, Mr. Payton was employed by a
major public accounting firm.
Barry L. Treadwell has served as Executive Vice President of MCC since
October 1996. From May 1996 to October 1996, Mr. Treadwell served as Executive
Vice President of BSNJ. Prior thereto, Mr. Treadwell served as Executive Vice
President and a director of Milton Can from 1988 until it was merged with and
into BSNJ in May 1996.
Kevin C. Kern has been Vice President and Corporate Controller of the
Company since May 1995. From 1991 to May 1995, Mr. Kern was Controller of
McKechnie Plastics Components, Inc. From 1981 to 1991, Mr. Kern was employed
by Ernst & Young, most recently as a Senior Audit Manager from 1988 to 1991.
Blair G. Schlossberg has served as General Counsel of the Company since
December 1995 and has served as Secretary of the Company since May 1996. Mr.
Schlossberg is also Secretary of each Subsidiary Guarantor and a director of
MMI. From 1991 to December 1995, Mr. Schlossberg was a transactional attorney
at the law firm of Alston & Bird in its Atlanta, Georgia offices.
Robert C. Coleman has been Vice President of Marketing for BSI since 1987.
Mr. Coleman is also President of BSC. Mr. Coleman joined BSI in January 1987
after a 15 year career in sales, marketing, and manufacturing with American
Can Company.
Marguerite E. Ferrazzano has been Vice President of Operations Analysis and
Business Development for BSI since April 1994. From 1990 to May 1994, she
served as Manager of Business Analysis and Development for BSI. Ms. Ferrazzano
served in a number of other managerial financial positions with Brockway, Inc.
(later acquired by Owens-Illinois Corporation) from 1981 to 1990, including
Manager of Cost Accounting and
43
<PAGE>
Budgeting and Corporate Manager of Planning and Divisional Accounting. From
1974 to 1981, Ms. Ferrazzano held various financial positions at Borden, Inc.
Richard E. Jakubecy has served as Vice President--Sales and Marketing for
BSI since 1991 and has been with the Company since 1991. From 1987 to 1991,
Mr. Jakubecy was general manager of the Total Quality Performance process for
Continental Beverage Packaging. Prior thereto, he spent 18 years in direct
sales and marketing positions with Continental Beverage Packaging, most
recently as Area Manager for the Southeastern and Midwestern regions.
Robert R. Plante has served as Vice President--Engineering and Technology
for the Company since March 1996. From June 1995 to March 1996, Mr. Plante
served as Vice President--Operations of BSI. From 1992 to 1995, Mr. Plante was
General Manager of Doerfer Engineering Company. From 1987 to 1992, Mr. Plante
was President and owner of Boating Center of Baltimore, Inc., a full service
marina. From 1984 to 1987, Mr. Plante served as Vice President of Operations
of Maryland Cup Corporation, a subsidiary of Fort Howard Paper Company. Prior
thereto, Mr. Plante was employed by Boise Cascade and served in several
positions, including Manager of Manufacturing from 1977 to 1984, Area
Manufacturing Manager from 1974 to 1977 and Assistant to the Manager of
Manufacturing from 1972 to 1973.
Patrick J. Rourke joined BSI in November 1994 as Vice President--Purchasing
and Logistics. From March 1993 to November 1994, Mr. Rourke was Director of
Purchasing for Ball Corporation's metal container division. From 1987 to March
1993, Mr. Rourke was employed by Heekin Can, serving as General Manager of
Purchasing from 1992 to March 1993, as Director of Purchasing from 1989 to
1992 and as Purchasing Manager from 1987 to 1989. From 1980 to 1987 Mr. Rourke
held positions of increasing responsibility within the purchasing organization
of Marathon Oil Company.
Clarence W. Wellman has served as Vice President--Sales for BSI since June
1995. He joined BSI in May 1985 and served as National Sales Manager of BSI
from May 1985 to June 1995.
Thomas A. Donahoe has served as a director of the Company since August 1996.
Mr. Donahoe was a partner in the accounting firm Price Waterhouse LLP (the
"Firm") from 1970 until he retired as an active partner in June 1996. As a
partner in the Firm, Mr. Donahoe held a variety of positions including:
Managing Partner--Operations of the Firm's Audit Business Advisory Practice,
July 1995 to June 1996; Vice Chairman of the Firm, 1988 to June 1995; member
of the Price Waterhouse World Firm General Council, 1985 to June 1995;
Managing Partner of the Great Lakes Region, 1978 to June 1995; member of the
Firm's Management Committee, 1978 to June 1995; member of the Firm's Policy
Board, 1976 to June 1985; and Managing Partner of the Chicago Office, 1976 to
June 1994. Mr. Donahoe also serves as an Officer or Trustee of a number of
not-for-profit entities, including: Chicago Botanic Garden, Chicago Central
Area Committee and Rush-Presbyterian-St. Luke's Medical Center.
Alexander P. Dyer has served as a director of the Company since August 1995.
Mr. Dyer served as Chairman of Bunzl plc. from May 1993 to July 1996 and
currently serves as its Deputy Chairman and as Chairman of its Remuneration
Committee. Mr. Dyer also currently serves as consultant to The BOC Group plc.,
having retired in January 1996 as its Chief Executive Officer and Deputy
Chairman, in which capacities he served from November 1993 to January 1996.
Prior thereto, Mr. Dyer served as Managing Director--Gases of The BOC Group
plc. from 1989 to 1993 and worked for Air Products and Chemicals Inc. for 26
years, serving most recently as Executive Vice President responsible for
worldwide gases and equipment businesses from 1987 to 1989.
Jean-Pierre M. Ergas has served as a director of the Company since August
1995. Mr. Ergas has also served as Executive Vice President, Europe of Alcan
Aluminium Limited, President of Alcan Europe Limited, Executive Chairman of
British Alcan Aluminium plc. and Chief Executive Officer of Alcan Deutschland
GmbH since June 1996. Mr. Ergas served as Senior Advisor to the Chief
Executive Officer of Alcan Aluminium Limited from January 1995 to June 1996
and served as a Trustee of DePaul University from February 1994 to December
1994. Prior thereto, Mr. Ergas served as Senior Executive Vice President of
Pechiney S.A. and as a member of the Pechiney Group Executive Committee from
1987 to January 1994 and also held several management positions with various
subsidiaries of Pechiney S.A., serving as: Chief Executive Officer of American
National Can
44
<PAGE>
Company from 1989 to January 1994 and Chairman of the Board from 1991 to
January 1994; Chief Executive Officer of Cegedur Pechiney from 1982 to 1988
and Chairman of the Board from 1987 to 1988; Chief Executive Officer of Cebal
S.A. from 1974 to 1982 and Chairman of the Board during 1982; and Marketing
Manager for Pechiney Aluminum from 1967 to 1974. Mr. Ergas is a director of
ABC Rail Products Corporation and Dover Corporation.
John E. Jones has served as a director of the Company since August 1996.
From 1989 until his retirement in 1996, Mr. Jones served as Chairman,
President and CEO of CBI Industries, Inc. Mr. Jones is a director of Amsted
Industries, Inc., Allied Products Corporation, Interlake Corp., NICOR Inc. and
Valmont Industries, Inc. Mr. Jones also serves as Trustee or Director on a
number of not-for-profit entities, including: The Robert Crown Center,
Glenwood School for Boys, IMSA, Rush-Presbyterian-St. Luke's Medical Center
and Brookfield Zoo.
John W. Puth has served as a director of the Company since August 1995.
Since December 1987 Mr. Puth has served as President of J.W. Puth Associates,
an industrial consulting firm. From 1983 to 1987, Mr. Puth was Chairman and
President of Clevite Industries, Inc., a manufacturer of industrial products.
From 1975 to 1983, Mr. Puth was President and Chief Executive Officer of Vapor
Corporation. Mr Puth is a director of Allied Products Corporation, A.M. Castle
& Co., L.B. Foster Company, Lindberg Corporation, System Software Associates,
Inc. and USFreightways Corporation as well as several privately-held
corporations.
Following the receipt of the requisite approval from its security holders,
Gaylord filed a "prepackaged" bankruptcy plan under the Bankruptcy Code in
September 1992. The plan was confirmed by the Bankruptcy Court in October
1992, and was consummated in November 1992. Warren J. Hayford served as an
executive officer of Gaylord in 1992.
David P. Hayford, Senior Vice President and Chief Financial Officer of the
Company and BSI, is the son of Warren J. Hayford, Chairman and Chief Executive
Officer of the Company and BSI. There are no other family relationships
between any of the foregoing persons.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company or its subsidiaries are not
entitled to receive any fees for serving as directors. Non-employee directors
of the Company do not receive cash fees for serving as directors. Non-employee
directors were entitled to participate in the Brockway Standard Holdings
Corporation Formula Plan for Non-Employee Directors (the "Formula Plan") until
the Board acted to freeze the Formula Plan at its August 20, 1996 meeting with
respect to any future option grants thereunder. Instead, the Company intends
to grant non-employee directors options to purchase Common Stock under the
BWAY Corporation Amended and Restated 1995 Long-Term Incentive Plan (the
"Amended Long-Term Incentive Plan"). All directors are reimbursed for out-of-
pocket expenses related to their service as directors.
Amended Long-Term Incentive Plan. The Board adopted the Amended Long-Term
Incentive Plan in August 1996 and the stockholders of the Company approved the
Amended Long-Term Incentive Plan in February 1997. Under the Amended Long-Term
Incentive Plan, the Compensation Committee may grant to directors (including
non-employee directors) of the Company and its subsidiaries nonqualified stock
options, stock appreciation rights in tandem with options, restricted stock
awards, performance awards, or any combination thereof as the Compensation
Committee shall determine. Options may be exercised in whole or in part upon
the payment of the exercise price of the shares to be acquired and the
Compensation Committee shall determine the term of the exercise period. The
Company intends to grant each non-employee director, under the Amended Long-
Term Incentive Plan, an option to purchase 25,000 shares of Common Stock when
he or she is elected or appointed to the Board, with each director's right to
exercise 5,000 options vesting at each of the five next succeeding annual
meetings of the Board after the date of grant. The Company intends to grant
such options (i) at an option price per share of Common Stock at 100% of the
fair market value of the Common Stock at the date of grant and (ii) with an
expiration date ten years from the date of grant.
45
<PAGE>
Formula Plan. Under the Formula Plan, each non-employee director was to be
granted an option to purchase 10,000 shares of Common Stock when he or she was
elected or appointed to the Board (the "Initial Grant") and was to be granted
an option to purchase an additional 10,000 shares at the fifth annual meeting
of the Board following the Initial Grant (the "Subsequent Grant"), so long as
such person was still serving as a director of the Company. A director's right
to exercise 1,000 shares of the Initial Grant vested immediately upon grant.
Thereafter, the right to exercise an additional 1,800 shares of the Initial
Grant vested at each of the five next succeeding annual meetings of the Board.
Options granted pursuant to a Subsequent Grant vested in equal installments of
2,000 shares at the five next succeeding annual meetings of the Board
following such grant. The option price per share of Common Stock under the
Formula Plan was 100% of the fair market value of the Common Stock at the date
of grant. Each option granted under the Formula Plan was exercisable for ten
years after the date of grant. The Board acted to freeze the Formula Plan in
August 1996 with respect to any future option grants thereunder.
Currently, all the unvested options owned by each non-employee director will
vest at an equal rate of 5,000 options at each of the 1998, 1999, 2000 and
2001 annual meetings of the Board.
COMPENSATION OF EXECUTIVE OFFICERS
The compensation of executive officers of the Company will be determined by
the Board of Directors of the Company. The following table sets forth
information regarding the compensation paid or accrued by the Company to the
Chief Executive Officer and each of the Company's other executive officers
whose total annual salary and bonus for fiscal 1996 exceeded $100,000 (the
"Named Executive Officers") for services rendered to the Company in all
capacities during fiscal years 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------- ---------------------------------
AWARDS PAYOUTS
----------------------- -------
ALL
RESTRICTED SECURITIES OTHER
OTHER ANNUAL STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS SATION
POSITION YEAR ($) ($)(1) ($) ($) (#) ($) ($)
------------------ ------ ------- ------- ------------ ---------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warren J. Hayford (2)... 1996 400,000 400,000 -- -- 22,500(3) -- 30,861(4)
Chairman of the Board 1995 133,000 200,000 -- -- 120,000(5) -- 352(6)
and Chief Executive 1994 -- -- -- -- -- -- --
Officer of the Company
and BSI
John T. Stirrup......... 1996 226,875 170,153 -- -- 22,500(3) -- 22,141(7)
President and Chief 1995 218,180 175,000 -- -- 36,000(5) -- 4,542(8)
Operating Officer of 1994 195,000 66,300 -- -- -- -- 13,164(9)
the Company and
President of BSI
David P. Hayford (10)... 1996 139,619 59,625 -- -- 18,000(3) -- 2,933(11)
Senior Vice President 1995 45,329 13,125 -- -- 25,000(12) -- 61,527(13)
and Chief Financial 1994 -- -- -- -- -- -- --
Officer of the Company
and BSI
James W. Milton (14).... 1996 75,000 50,000 -- -- 18,000(3) -- 118(15)
Executive Vice 1995 -- -- -- -- -- -- --
President of the 1994 -- -- -- -- -- -- --
Company and President
of MCC
</TABLE>
- --------
(1) Amounts shown for fiscal 1994, 1995 and 1996 were earned during fiscal
1994, 1995 and 1996, respectively, under the Company's Management
Incentive Plan and were paid during fiscal 1995, 1996 and 1997,
respectively.
(2) Warren J. Hayford became an employee of the Company effective June 1,
1995. Prior to such date, Mr. Hayford had not been paid a salary or bonus
by the Company but was a stockholder and director of AB
46
<PAGE>
Leasing and Management, Inc., which has provided management services to the
Company in exchange for the payment of a fee. See "Certain Relationships
and Related Transactions." Mr. Hayford also participated in certain benefit
plans of the Company prior to June 1, 1995.
(3) Options become exercisable in three equal annual installments with the
first installment exercisable on May 14, 1997, and were granted pursuant to
the Original Plan.
(4) The amount shown includes a $3,881 contribution under the Brockway
Standard, Inc. Profit Sharing and Savings Plan (the "Profit Sharing Plan"),
$1,248 of premium for life insurance and $25,732 of premium for additional
optional life insurance for which Mr. W. Hayford was reimbursed by the
Company pursuant to his employment agreement.
(5) Options become exercisable in three equal annual installments with the
first installment exercisable on June 1, 1996, and were granted pursuant to
the Original Plan and the terms of the respective employment agreements
with Messrs. Hayford and Stirrup.
(6) The amount shown is $352 of premium for life insurance.
(7) The amount shown includes a $4,025 contribution under the Profit Sharing
Plan, $4,500 of Company matching 401(k) contributions under the Profit
Sharing Plan, $748 of premium for life insurance, $2,386 of premium for
Group Term Life Insurance and $10,482 of premium for additional optional
life insurance for which Mr. Stirrup was reimbursed by the Company pursuant
to his employment agreement.
(8) The amount shown includes a $2,970 contribution under the Profit Sharing
Plan earned during fiscal 1995 but paid during fiscal 1996 in the form of
156.316 shares of Common Stock, $991 of Company matching 401(k)
contributions under the Profit Sharing Plan and $581 of premium for life
insurance.
(9) The amount shown includes amounts contributed under the Profit Sharing Plan
and $156 of premium for life insurance.
(10) David P. Hayford became an employee of the Company effective June 15,
1995.
(11) The amount shown includes a $1,096 contribution under the Profit Sharing
Plan, $1,400 of Company matching 401(k) contributions under the Profit
Sharing Plan and $437 of premium for life insurance.
(12) Options become exercisable in three annual installments, with an
installment of options to acquire 15,000 shares of Common Stock
exercisable on June 20, 1996 and installments of options to acquire 5,000
shares of Common Stock exercisable on each of June 20, 1997 and June 20,
1998, and were granted pursuant to the Original Plan.
(13) The amount shown includes $61,387 in reimbursements for relocation and
moving expenses and $140 of premium for life insurance.
(14) James W. Milton became an employee of the Company effective May 28, 1996.
(15) The amount shown is $118 of premium for life insurance.
The Company originally adopted the Brockway Standard Holdings Corporation
1995 Long-Term Incentive Plan (the "Original Plan") for its directors, officers
and key employees of the Company and its subsidiaries in May 1995 and the
Company's stockholders approved the Original Plan in June 1995. The Original
Plan has since been superseded by the Amended Long-Term Incentive Plan. The
Amended Long-Term Incentive Plan provides for the award of stock options,
restricted shares of Common Stock, stock appreciation rights, units valued on
the basis of the long-term performance of the Company, or some combination of
the foregoing to participants. The Amended Long-Term Incentive Plan covers an
aggregate of 750,000 shares of Common Stock.
47
<PAGE>
The following tables set forth, for the Named Executive Officers,
information regarding stock options granted or exercised during, or held at
the end of, fiscal 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
--------------------------------------------------- ------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR PRICE ($/SH) DATE 5%($)(2) 10%($)(2)
---- -------------- ------------ ------------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Warren J. Hayford....... 22,500 8.0% $19 5/13/06 $268,852 $681,325
John T. Stirrup......... 22,500 8.0% 19 5/13/06 268,852 681,325
David P. Hayford........ 18,000 6.4% 19 5/13/06 215,082 545,060
James W. Milton......... 18,000 6.4% 19 5/13/06 215,082 545,060
</TABLE>
- --------
(1) Options become exercisable in three equal annual installments with the
first installment exercisable on May 14, 1997, and were granted pursuant
to the Original Plan. In the event of a change of control all options
become fully vested and exercisable. In order to prevent dilution or
enlargement of rights under the options, in the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, distribution of assets or other change in the
corporate structure of shares of the Company, the type and number of
shares available upon exercise and the exercise price will be adjusted
accordingly. The Compensation Committee may, subject to specified
limitations, advance the date on which an option shall become exercisable.
(2) Amounts reflect assumed rates of appreciation from the fair market value
on the date of grant as set forth in the Commission's executive
compensation disclosure rules. Actual gains, if any, on stock option
exercises depend on future performance of the Common Stock and overall
stock market conditions. No assurance can be made that the amounts
reflected in these columns will be achieved.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-THE-
UNEXERCISED MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)
ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(1) ($)(1) UNEXERCISABLE UNEXERCISABLE
---- -------------- -------- ------------------- ------------------- ---
<S> <C> <C> <C> <C> <C>
Warren J. Hayford....... -- -- 40,000 $145,000
102,500 290,000
John T. Stirrup......... -- -- 12,000 43,500
46,500 87,000
David P. Hayford........ -- -- 15,000 54,375
28,000 36,250
James W. Milton......... -- -- -- --
18,000 0
</TABLE>
- --------
(1) As of the end of the fiscal year, none of the options held by the Named
Executive Officers had been exercised.
48
<PAGE>
MANAGEMENT EMPLOYMENT AGREEMENTS
Warren J. Hayford is party to an employment agreement with the Company dated
as of June 1, 1995. Under the agreement, Mr. Hayford will receive an annual
base salary of $400,000 (or such higher amount determined by the Board of
Directors), and will be eligible to receive an annual bonus of between 50% and
100% of his base salary, based on the achievement of goals and objectives
determined by the Board of Directors, and will be eligible to participate in
all of the Company's employee benefits plans for which senior executive
employees of the Company are generally eligible. Mr. Hayford will also be
entitled to life insurance providing a death benefit of not less than three
times the amount of his base salary. Under the agreement, Mr. Hayford received
options to purchase 120,000 shares of Common Stock. The term of the employment
agreement is six years, unless terminated earlier by the resignation, death,
or permanent disability or incapacity of Mr. Hayford or by the Company with or
without cause. In the event Mr. Hayford's employment is terminated by the
Company without cause prior to the sixth anniversary of the agreement, Mr.
Hayford will be entitled to receive his base salary, health benefits and an
annual bonus equal to 50% of his base salary until the later of the sixth
anniversary of the agreement or the first anniversary of the date of such
termination, subject to certain conditions. In the event Mr. Hayford's
employment terminates other than for cause or as a result of his death,
beginning on his 74th birthday, Mr. Hayford (and, following his death, his
surviving spouse) will be entitled to a monthly supplemental retirement
benefit until his death (and, following his death, until the death of his
surviving spouse). The monthly benefit will be equal to one-twelfth of 20 to
50 percent (depending upon Mr. Hayford's age at retirement or death and
subject to adjustment upon a change in control) of Mr. Hayford's base salary
in effect immediately preceding his retirement or death. Mr. Hayford has
agreed not to compete with the Company during the term of his employment and
so long as he is receiving salary and bonus under the agreement as a result of
his termination by the Company without cause (but in no event for less than
three years after the termination of his employment).
John T. Stirrup is party to an employment agreement with the Company dated
as of June 1, 1995. Mr. Stirrup will receive an annual base salary of $220,000
(or such higher amount determined by the Board of Directors), and will be
eligible to receive an annual bonus of between 50% and 75% of his base salary,
based on the achievement of goals and objectives determined by the Board of
Directors, and will be eligible to participate in all of the Company's
employee benefits plans for which senior executive employees of the Company
are generally eligible. Mr. Stirrup is also entitled to life insurance
providing a death benefit of not less than two times the amount of his base
salary. The Company will nominate, and use its best efforts to elect, Mr.
Stirrup to serve as a member of the Board of Directors. Under the agreement,
Mr. Stirrup received options to purchase 36,000 shares of Common Stock. The
term of the employment agreement is three years, unless terminated earlier by
the resignation, death, or permanent disability or incapacity of Mr. Stirrup
or by the Company with or without cause. In the event Mr. Stirrup's employment
is terminated by the Company without cause prior to the third anniversary of
the agreement, Mr. Stirrup will be entitled to receive his base salary, health
benefits and an annual bonus equal to 50% of his base salary until the later
of the third anniversary of the agreement or the second anniversary of the
date of such termination, subject to certain conditions. In the event Mr.
Stirrup's employment has not been terminated for cause, and subject to certain
conditions, Mr. Stirrup will be entitled to deferred payments of $75,000 per
year for a period of 10 years beginning on Mr. Stirrup's 70th birthday or, in
the event of Mr. Stirrup's death, Mr. Stirrup's surviving spouse will be
entitled to receive 50% of such deferred payments during such period. Mr.
Stirrup has agreed not to compete with the Company during the term of his
employment and so long as he is receiving salary and bonus under the agreement
as a result of his termination by the Company without cause (but in no event
for less than two years after the consummation of the Initial Public Offering
in June 1995 or one year after the termination of his employment).
David P. Hayford is party to an employment agreement with the Company dated
as of June 15, 1995. Under the agreement, Mr. Hayford receives an annual base
salary of $120,000 (or such higher amount determined by the Board of
Directors), and is eligible to receive an annual bonus based on his
performance, the amount of which will be determined by the Board, and is
eligible to participate in all of the Company's employee benefits plans for
which senior executive employees of the Company are generally eligible. Mr.
Hayford is also entitled to participate in the Amended Plan. The term of the
employment agreement is three years, unless terminated earlier by the
resignation, death, or permanent disability or incapacity of Mr. Hayford or by
the Company with or
49
<PAGE>
without cause. Mr. Hayford has agreed not to compete with the Company during
the term of his employment and so long as he is receiving salary and bonus
under the agreement as a result of his termination by the Company without
cause (but in no event for less than twelve months after the termination of
his employment).
James W. Milton entered into an employment agreement with the Company and
BSNJ (formerly known as Milton Acquisition Corp.), a wholly-owned subsidiary
of the Company, on May 28, 1996. Mr. Milton, the Company, BSNJ and MCC amended
this agreement, effective as of November 1, 1996, to reflect the fact that Mr.
Milton now serves as President of MCC, rather than President of BSNJ. Under
the agreement, Mr. Milton will receive an annual base salary of $200,000 (or
such higher amount determined by the Board of Directors), and will be eligible
to receive an annual bonus of between 50% and 75% of his base salary, based on
the achievement of goals and objectives determined by the Board of Directors,
and will be eligible to participate in all of MCC's employee benefits plans
for which senior executive employees of MCC are generally eligible. Such
employee benefit programs shall be substantially similar to those benefit
programs available to the senior executive employees of the Company. Under the
agreement, the Company will pay all premiums and expenses payable to maintain
the life insurance policy for Mr. Milton that was purchased by Milton Can
prior to its merger with and into BSNJ. The term of the employment agreement
is five years, unless terminated earlier by the resignation, death, or
permanent disability or incapacity of Mr. Milton or by MCC with or without
cause. In the event Mr. Milton's employment is terminated by MCC without cause
prior to the fifth anniversary of the agreement, Mr. Milton will be entitled
to receive his base salary, health benefits and an annual bonus equal to 50%
of his base salary until the later of the fifth anniversary of the agreement
or the first anniversary of the date of such termination, subject to certain
conditions. In the event Mr. Milton's employment terminates other than for
cause or as a result of his death, beginning on his 65th birthday, Mr. Milton
will be entitled to a monthly supplemental retirement benefit until his death.
The monthly benefit will be equal to one-twelfth of 5 to 50 percent (depending
upon Mr. Milton's age at retirement or death and subject to adjustment upon a
change in control) of Mr. Milton's base salary in effect immediately preceding
his retirement or death. In the event Mr. Milton's spouse survives Mr. Milton,
she will be entitled until her death to a monthly benefit equal to 50% of the
monthly benefit that Mr. Milton (i) would have been entitled to had Mr. Milton
retired on the date of his death or (ii) was receiving at the time of his
death. However, if Mr. Milton dies before his 60th birthday, she will be
entitled until her death to a monthly benefit equal to one-twelfth of 10
percent of Mr. Milton's base salary in effect immediately preceding his death.
Mr. Milton has agreed not to compete with the Company, MCC or their
subsidiaries for a period of three years after the termination of his
employment. In addition, Mr. Milton is party to a non-competition agreement
with the Company and BSNJ dated as of May 28, 1996, pursuant to which Mr.
Milton has (among other things) agreed not to compete with the Company, BSNJ
or their subsidiaries prior to the fifth anniversary of the non-competition
agreement in exchange for certain compensation. See "Certain Relationships and
Related Transactions."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Puth, Dyer and Ergas served as members of the Compensation Committee
during all of fiscal 1996. Messrs. Donahoe and Jones have served as members of
the Compensation Committee since August 20, 1996. The Company has no
Compensation Committee interlocks or insider participation relationships of
such persons with the Company to report.
401(K) PLAN
The Company maintains a savings plan (the "Savings Plan") qualified under
Sections 401(a) and 401(k) of the Internal Revenue Code. Generally, all
employees of the Company in the United States who have completed one year of
service are eligible to participate in the Savings Plan. For each employee who
elects to participate in the Savings Plan and makes a contribution thereto,
the Company makes a matching contribution of 100% of the first 2% of annual
compensation contributed and 50% of the next 2% of annual compensation
contributed. The maximum contribution for any participant for any year is 10%
of such participant's eligible compensation.
50
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of February 28, 1997 by
(i) each stockholder known by the Company to own beneficially 5 percent or
more of the outstanding shares of such Common Stock, (ii) each director and
nominee for director of the Company, (iii) each Named Executive Officer of the
Company and (iv) all directors of the Company and executive officers of the
Company and BSI as a group. As of February 28, 1997, there were 6,555,115
shares of Common Stock outstanding. To the knowledge of the Company, each
stockholder has sole voting and investment power with respect to the shares
indicated as beneficially owned, unless otherwise indicated in a footnote.
Unless otherwise indicated, the business address of each person is the
Company's corporate address.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON PERCENT OF
BENEFICIAL OWNER STOCK (1) CLASS (2)
---------------- --------- ----------
<S> <C> <C>
Warren J. Hayford (3)............................... 1,336,127 20.3%
Mary Lou Hayford (4)................................ 1,234,182 18.8
John T. Stirrup (5)................................. 310,402 4.7
David P. Hayford (6)................................ 17,804 *
James W. Milton (7)................................. 436,392 6.7
Thomas A. Donahoe (8)............................... 10,000 *
Alexander P. Dyer (9)............................... 55,980 *
Jean-Pierre M. Ergas (10)........................... 35,980 *
John E. Jones (11).................................. 12,000 *
John W. Puth (12)................................... 48,980 *
Dimensional Fund Advisors Inc. (13)................. 364,700 5.6
PNC Bank Corp. (14)................................. 357,190 5.4
T. Rowe Price Associates, Inc. (15)................. 517,500 7.9
Wellington Management Company, LLP (16)............. 366,000 5.6
All Directors and Executive Officers as a Group (9
persons)............................................ 2,263,565 34.0
</TABLE>
- --------
(1) The number of shares includes shares of Common Stock subject to options
exercisable within 60 days of February 28, 1997.
(2) Shares subject to options exercisable within 60 days of February 28, 1997
are considered outstanding for the purpose of determining the percent of
the class held by the holder of such option, but not for the purpose of
computing the percentage held by others. Percentages less than one
percent are denoted by an asterisk.
(3) The shares of Common Stock beneficially owned by Mr. W. Hayford include
1,234,182 shares owned directly by his wife, Mary Lou Hayford, and 61,945
shares owned directly by Mr. W. Hayford. In addition, the shares of
Common Stock beneficially owned by Mr. W. Hayford include 40,000 shares
subject to options. Mr. W. Hayford disclaims beneficial ownership of the
shares owned directly by his wife.
(4) The shares of Common Stock beneficially owned by Mrs. Hayford do not
include 61,945 shares owned directly by her husband, Warren J. Hayford,
and do not include 40,000 shares subject to options owned directly by her
husband.
(5) The shares of Common Stock beneficially owned by Mr. Stirrup include
12,000 shares subject to options. The shares shown as beneficially owned
by Mr. Stirrup do not include 34,000 shares owned directly by his wife.
Mr. Stirrup disclaims beneficial ownership of the shares owned directly
by his wife.
(6) The shares of Common Stock beneficially owned by Mr. D. Hayford include
15,000 shares subject to options.
(7) The shares of Common Stock shown as beneficially owned by Mr. Milton
include 30,027 shares that have been deposited with an escrow agent under
a Stock Escrow Agreement to secure performance of certain obligations of
Mr. Milton as agent for the Selling Stockholders (as defined below) under
an Agreement and Plan of Merger and Reorganization among the Company,
Milton Can, Mr. Milton and the other
51
<PAGE>
stockholders of Milton Can (the "Selling Stockholders"). All dividend
income and other distributions paid on such shares shall be distributed,
and all voting rights of such shares shall be exercised, by the escrow
agent according to the instructions of Mr. Milton, as agent for the
Selling Stockholders. These shares will be released from the escrow on May
28, 1997. The shares of Common Stock shown as beneficially owned by Mr.
Milton do not include 70,813 shares owned directly by his wife, 50,991
owned by his wife as trustee of a trust for the benefit of Sean A. Milton
and 50,091 owned by his wife as trustee of a trust for the benefit of
Daniel T. Milton. Mr. Milton disclaims beneficial ownership of the shares
owned directly by his wife and the shares owned by his wife as trustee of
these trusts.
(8) The shares of Common Stock beneficially owned by Mr. Donahoe include
5,000 shares subject to options.
(9) The shares of Common Stock beneficially owned by Mr. Dyer include 7,800
shares subject to options.
(10) The shares of Common Stock beneficially owned by Mr. Ergas include 7,800
shares subject to options.
(11) The shares of Common Stock beneficially owned by Mr. Jones include 5,000
shares subject to options.
(12) The shares of Common Stock beneficially owned by Mr. Puth include 7,800
shares subject to options. The shares of Common Stock shown as
beneficially owned by Mr. Puth also include 5,000 shares owned by JDA
Partners, L.P., of which Mr. Puth is the general partner. Mr. Puth
disclaims beneficial ownership of the shares owned by JDA Partners, L.P.
except to the extent of his pecuniary interest therein.
(13) Based solely upon a Schedule 13G dated February 5, 1997 filed by
Dimensional Fund Advisors Inc. ("Dimensional"), Dimensional, a registered
investment advisor, is deemed to have beneficial ownership of 364,700
shares of Common Stock as of December 31, 1996, all of which shares are
held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares. Such
person's address is 1299 Ocean Avenue, 11th Floor, Santa Monica, CA
90401.
(14) Based solely upon a Schedule 13G dated February 14, 1997 filed jointly by
each of PNC Bank Corp. and its subsidiaries PNC Bancorp, Inc., PNC Bank,
National Association, PNC Asset Management Group, Inc. and Provident
Capital Management, Inc., each of such entities has sole voting power
with respect to 347,920 shares of Common Stock and sole dispositive power
with respect to 357,190 shares of Common Stock. Such person's address is
One PNC Plaza, 249 5th Avenue, Pittsburgh, PA 15222-2707.
(15) Based solely upon a Schedule 13G dated February 14, 1997 filed jointly by
each of T. Rowe Price Associates, Inc. ("Price Associates") and T. Rowe
Price Small Cap Value Fund, Inc. ("Small Cap"), the shares of Common
Stock shown as beneficially owned by Price Associates are owned by
various individual and institutional investors including Small Cap (which
owns 477,500 shares, representing 7.3% of the shares of Common Stock
outstanding), which Price Associates serves as an investment adviser with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Exchange Act, Price
Associates is deemed to be a beneficial owner of such securities;
however, Price Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities. Such person's address is 100 E.
Pratt Street, Baltimore, MD 21202.
(16) Based solely upon a Schedule 13G dated January 24, 1997, Wellington
Management Company, LLP has shared voting power with respect to 132,000
shares of Common Stock and shared dispositive power with respect to
366,000 shares of Common Stock. In its capacity as an investment advisor,
Wellington Management Company, LLP may be deemed beneficial owner of such
shares, which are owned by numerous investment counseling clients. Such
person's address is 75 State Street, Boston, MA 02109.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Warren J. Hayford was a stockholder, employee and director of AB Leasing and
Management, Inc. ("AB Leasing") until its dissolution in December 1995. From
1989 to the date of the Initial Public Offering, BSI and the Company had been
parties to a Management Agreement with AB Leasing pursuant to which BSI paid
AB
52
<PAGE>
Leasing an annual management fee in an amount equal to the greater of $200,000
or 15% of the Company's net income, as defined, and AB Leasing provided
various management services, including management consulting, advising and
strategic and financial planning services. BSI was also obligated under the
Management Agreement to reimburse AB Leasing for all reasonable expenses
incurred by or on behalf of AB Leasing and its representatives in providing
services under such agreement. During fiscal 1995 and fiscal 1994, BSI
expensed management fees to AB Leasing of $1,080,000 and $989,000,
respectively, and reimbursed AB Leasing $309,000 and $329,000, respectively,
for expenses incurred pursuant to the Management Agreement. Upon the
consummation of the Initial Public Offering, the Management Agreement was
canceled, and in connection therewith, the Company paid to AB Leasing
$1,995,000 through the issuance of 133,000 shares of Common Stock to AB
Leasing prior to the effectiveness of the Initial Public Offering. The Company
recorded a non-recurring non-cash pre-tax charge to operations of $1,995,000
in connection therewith in the period in which such shares were issued. At the
time the Management Agreement was terminated, the Company also paid AB Leasing
$1,080,000 in cash, which was equal to the accrued management fee for the
period from October 1, 1994 to and including the date of termination. AB
Leasing sold 71,155 shares of Common Stock in the Initial Public Offering and
distributed the remaining 61,845 to Mr. Hayford in December 1995 in connection
with the dissolution of AB Leasing.
In December 1995, pursuant to the Company's employee stock repurchase
program then in effect, the Company repurchased 20,000 shares of Common Stock
owned by Mr. Stirrup at a price per share equal to $15.50, which price was
determined based upon the closing price of the Company's Common Stock on the
date immediately preceding the date the Company received Mr. Stirrup's notice
of his intent to sell. In January 1996, pursuant to the Company's employee
stock repurchase program then in effect, the Company again repurchased another
20,000 shares of Common Stock owned by Mr. Stirrup at a price per share equal
to $15.50, which price was determined based upon the closing price of the
Company's Common Stock on the date immediately preceding the date the Company
received Mr. Stirrup's notice of his intent to sell.
Prior to becoming an employee of the Company in June 1995, David P. Hayford
provided financial consulting services to the Company from time to time on an
hourly basis as requested by the Company. As a consultant to the Company in
fiscal 1995 and 1994, Mr. Hayford received approximately $137,560 and $72,000,
respectively, in fees from the Company for consulting services. David P.
Hayford is the son of Warren J. Hayford, Chairman and Chief Executive Officer
of the Company.
Mr. Milton is party to a non-competition agreement with the Company and BSNJ
dated as of May 28, 1996. Pursuant to the terms of the agreement, Mr. Milton
may not compete with, induce any employee to leave their employ with, hire any
person who was an employee of, own, manage, control or render services to any
business in competition with or induce any supplier, licensor or other
business relation to cease doing business with the Company, BSNJ or any of
their respective subsidiaries. In consideration of the non-competition
covenants, Mr. Milton will be entitled to $2,000,000 paid by BSNJ in twenty
equal installments of $100,000 per quarter during the term of the agreement
payable on the first day of each June, October, January and April. The
agreement will continue for five years from the date of the agreement.
BSNJ is party to a lease agreement with Division Street Partners ("DSP"), a
limited partnership, pursuant to which BSNJ leases its headquarters and
manufacturing facility. Mr. Milton, his brother George Milton, his brother
Patrick Milton and another brother of Mr. Milton each hold (i) a 12.5% limited
partnership interest in DSP and (ii) a 12.5% interest in the general partner
of DSP. George Milton is an employee of MCC and Patrick Milton is an employee
of BSI. BSNJ is obligated to pay annual rent in the amount of $629,484 through
the term of the lease, which ends in September 1999. BSNJ has the option to
extend the term of the lease for two additional five-year periods.
BSNJ is party to another lease agreement pursuant to which BSNJ leases a
warehouse. Mr. Milton and certain of his immediate family members are part of
a group that has an option to purchase this property from the lessor through
September 1999. BSNJ is obligated to pay annual rent in the amount of $137,038
through the term of the lease, which ends in September 1999.
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In connection with the Company's acquisition of Milton Can in May 1996, BSNJ
assumed a $125,000 mortgage on Mr. Treadwell's home. Subsequent to the
consummation of the acquisition transactions, the Company canceled the total
amount owed by Mr. Treadwell to BSNJ.
As an employee of the Company in fiscal 1996, Susan Luciu received $64,000
in salary and bonuses from the Company. Susan Luciu is the daughter of Warren
J. Hayford, Chairman and Chief Executive Officer of the Company, and the
sister of David P. Hayford, Senior Vice President and Chief Financial Officer
of the Company.
In the ordinary course of its business, the Company purchases from Gaylord
certain corrugated containers used to ship the Company's products to its
customers. Such purchases amounted to $25,860, $182,607 and $161,873 during
fiscal 1996, fiscal 1995 and fiscal 1994, respectively. All such purchases are
made at the prevailing market price for such containers. Warren J. Hayford is
a stockholder and director of Gaylord.
In fiscal 1996 and fiscal 1995, the Company purchased computer software and
incurred related implementation costs totaling approximately $1.2 million and
$2.5 million, respectively, from a software company which has a director who
is also a director of the Company.
DESCRIPTION OF CREDIT AGREEMENT
On June 17, 1996 (the "Borrowing Date"), the Company, BSI and BSNJ entered
into a credit agreement (the "Credit Agreement") with Bankers Trust Company,
as administrative agent and syndication agent, and NationsBank, N.A. (South),
as documentation agent and paying agent, and certain other financial
institutions (the "Banks"). BSO and MCC joined as additional borrowers under
the Revolving Credit Facility (as defined) on June 17, 1996 and October 6,
1996, respectively.
The Credit Agreement provides for a revolving credit facility (the
"Revolving Credit Facility") to BSI, BSNJ, MCC and BSO (collectively, the
"Borrowers") for up to $100.0 million of revolving loans (including letter of
credit and swingline subfacilities), which facility was permanently reduced
from $150.0 million contemporaneous with the Initial Offering. Subject to
certain restrictions, the Revolving Credit Facility may be used to finance
acquisitions, investments and capital expenditures and for ongoing working
capital and general corporate purposes of the Company.
Repayment. Outstanding loans under the Revolving Credit Facility must be
repaid on the fifth anniversary of the Borrowing Date. Loans made pursuant to
the Revolving Credit Facility may be borrowed, repaid and reborrowed, without
premium or penalty, from time to time until the fifth anniversary of the
Borrowing Date, subject to the satisfaction of certain conditions on the date
of any such borrowing. In addition, the Credit Agreement provides for
mandatory repayments (with a corresponding permanent reduction on revolving
loan commitments) of any outstanding borrowings out of any proceeds received
from a sale of assets (other than sales of inventory in the ordinary course of
business and sales of certain obsolete assets) having a value (when combined
with all assets disposed of by the Company subsequent to the Borrowing Date)
exceeding 15% of consolidated total assets of the Company.
Security; Guaranty. The obligations of the Borrowers under the Credit
Agreement are unsecured, but are guaranteed by the Company, each of the
Borrowers and certain of the Company's other now-existing and future
subsidiaries.
Interest. At the Borrowers' option, the interest rates per annum applicable
to the loans under the Credit Agreement will be a fluctuating rate of interest
measured by reference to one or a combination (at the Company's election) of
the following: (i) the Prime Rate (as defined in the Credit Agreement), plus
the applicable borrowing margin, or (ii) the relevant Eurodollar Rate (as
defined in the Credit Agreement), plus the applicable borrowing margin. The
applicable borrowing margin under the Revolving Credit Facility will range
from 0.00% to 1.25% for Prime Rate-based borrowings and 0.50% to 2.25% for
Eurodollar Rate-based borrowings, in each case based
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on the Company's consolidated Leverage Ratio (defined in the Credit Agreement
as the ratio of Consolidated Indebtedness (as defined in the Credit Agreement)
to Consolidated EBITDA (as defined in the Credit Agreement)); provided that if
the Company achieves an Investment Grade Rating (as defined in the Credit
Agreement) of BBB or Baa2 or better, the applicable borrowing margin will be
0.00% for Prime Rate-based borrowings and 0.375% for Eurodollar Rate-based
borrowings.
Fees. The Borrowers have agreed to pay certain fees in connection with the
Revolving Credit Facility, including (i) letter of credit fees, (ii) agency
fees and (iii) commitment fees. Commitment fees are payable at a rate per
annum ranging from 0.20% to 0.50% on the undrawn amounts of the Revolving
Credit Facility based on the Leverage Ratio (as defined in the Credit
Agreement) of the Company and its subsidiaries; provided that at such time as
the Company achieves an Investment Grade Rating of BBB/Baa2 or better the
commitment fee rate will be reduced to 0.15%.
Covenants. The Credit Agreement requires the Company and the Borrowers to
meet certain financial tests, including a maximum leverage ratio, a minimum
interest coverage ratio and a minimum consolidated net worth. The Credit
Agreement also contains covenants which, among other things, restrict the
ability of the Company and the Borrowers (subject to certain exceptions) to
incur liens, transact with affiliates, incur indebtedness, declare dividends
or redeem or repurchase capital stock, make loans and investments, engage in
mergers, acquisitions and asset sales, acquire assets, stock or debt
securities of any person, have additional subsidiaries, amend its certificate
of incorporation and bylaws and make capital expenditures. The Credit
Agreement also requires the Company and the Borrowers to satisfy certain
customary affirmative covenants and to make certain customary indemnifications
to the Banks and the agents under the Credit Agreement.
Events of Default. The Credit Agreement contains customary events of
default, including payment defaults, breach representations or warranties,
covenant defaults, certain events of bankruptcy and insolvency, ERISA
violations, judgment defaults, cross-default to certain other indebtedness and
a change in control of the Company.
DESCRIPTION OF EXCHANGE NOTES
The Exchange Notes offered hereby will be issued as a separate series under
the indenture (the "Indenture"), dated as of April 11, 1997 by and among the
Company, the Subsidiary Guarantors and Harris Trust and Savings Bank, as
Trustee (the "Trustee"). The form and terms of the Exchange Notes are the same
as the form and terms of the Old Notes (which they replace) except that (i)
the Exchange Notes bear a Series B designation, (ii) the Exchange Notes have
been registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof, and (iii) the holders of Exchange Notes will
not be entitled to certain rights under the Registration Rights Agreement,
including the provisions providing for an increase in the interest rate on the
Old Notes in certain circumstances relating to the timing of the Exchange
Offer, which rights will terminate when the Exchange Offer is consummated. The
following summary of certain provisions of the Indenture does not purport to
be complete and is subject to, and is qualified in its entirety by reference
to, the Trust Indenture Act of 1939, as amended (the "TIA"), and to all of the
provisions of the Indenture, including the definitions of certain terms
therein and those terms made a part of the Indenture by reference to the TIA
as in effect on the date of the Indenture. A copy of the Indenture may be
obtained from the Company or the Initial Purchasers. The definitions of
certain capitalized terms used in the following summary are set forth below
under "--Certain Definitions." For purposes of this section, references to the
"Company" include only the Company and not its Subsidiaries.
The Notes will be unsecured obligations of the Company, ranking subordinate
in right of payment to all Senior Indebtedness of the Company.
The Notes will be issued in fully registered form only, without coupons, in
denominations of $1,000 and integral multiples thereof. Initially, the Trustee
will act as Paying Agent and Registrar for the Notes. The Notes may be
presented for registration or transfer and exchange at the offices of the
Registrar, which initially will be
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the Trustee's corporate trust office. The Company may change any Paying Agent
and Registrar without notice to holders of the Notes (the "Holders"). The
Company will pay principal (and premium, if any) on the Notes at the Trustee's
corporate office in New York, New York. At the Company's option, interest may
be paid at the Trustee's corporate trust office or by check mailed to the
registered address of Holders. Any Old Notes that remain outstanding after the
completion of the Exchange Offer, together with the Exchange Notes issued in
connection with the Exchange Offer, will be treated as a single class of
securities under the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes are limited in aggregate principal amount to $100,000,000 and will
mature on April 15, 2007. Interest on the Notes will accrue at the rate of 10
1/4% per annum and will be payable semiannually in cash on each April 15 and
October 15 commencing on October 15, 1997, to the persons who are registered
Holders at the close of business on the April 1 and October 1 immediately
preceding the applicable interest payment date. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from and including the date of issuance.
The Notes will not be entitled to the benefit of any mandatory sinking fund.
REDEMPTION
Optional Redemption. The Notes will be redeemable, at the Company's option,
in whole at any time or in part from time to time, on and after April 15,
2002, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof)
if redeemed during the twelve-month period commencing on April 15 of the year
set forth below, plus, in each case, accrued and unpaid interest thereon, if
any, to the date of redemption:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2002........................................................... 105.125%
2003........................................................... 103.417%
2004........................................................... 101.708%
2005 and thereafter............................................ 100.000%
</TABLE>
Optional Redemption upon Equity Offerings. At any time, or from time to
time, on or prior to April 15, 2000, the Company may, at its option, use the
net cash proceeds of one or more Equity Offerings (as defined below) to redeem
up to 33 1/3% of the Notes at a redemption price equal to 110 1/4% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided, however, that at least 66 2/3% of the
principal amount of Notes originally issued remain outstanding immediately
after any such redemption (it being expressly agreed that for purposes of
determining whether this condition is satisfied, Notes owned by the Company or
any of its Affiliates shall be deemed not to be outstanding). In order to
effect the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 120 days after the
consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a public or
private offering of Qualified Capital Stock of the Company.
SELECTION AND NOTICE OF REDEMPTION
In the event that less than all of the Notes are to be redeemed at any time,
selection of such Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed or, if such Notes are not
then listed on a national securities exchange, on a pro rata basis, by lot or
by such method as the Trustee shall deem fair and appropriate; provided,
however, that no Notes of a principal amount of $1,000 or less shall be
redeemed in part; provided, further, that if a partial redemption is made with
the proceeds of an Equity Offering, selection of the Notes or portions thereof
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<PAGE>
for redemption shall be made by the Trustee only on a pro rata basis or on as
nearly a pro rata basis as is practicable (subject to DTC procedures), unless
such method is otherwise prohibited. Notice of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Notes to be redeemed at its registered address. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Note. On and after the redemption date, interest will cease to
accrue on Notes or portions thereof called for redemption as long as the
Company has deposited with the Paying Agent funds in satisfaction of the
applicable redemption price pursuant to the Indenture.
SUBORDINATION
The payment of all Obligations on the Notes is subordinated in right of
payment to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Indebtedness including, without limitation, the
Company's obligations under the Credit Agreement. Upon any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to creditors upon any liquidation, dissolution,
winding up, reorganization, assignment for the benefit of creditors or
marshaling of assets of the Company or in a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding relating to the Company
or its property, whether voluntary or involuntary, all Obligations due or to
become due upon all Senior Indebtedness shall first be paid in full in cash or
Cash Equivalents, or such payment duly provided for to the satisfaction of the
holders of Senior Indebtedness, before any payment or distribution of any kind
or character is made on account of any Obligations on the Notes, or for the
acquisition of any of the Notes for cash or property or otherwise. If any
default occurs and is continuing in the payment when due, whether at maturity,
upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Senior Indebtedness, no payment
of any kind or character shall be made by or on behalf of the Company or any
other Person on its or their behalf with respect to any Obligations on the
Notes or to acquire any of the Notes for cash or property or otherwise.
In addition, if any other event of default occurs and is continuing with
respect to any Designated Senior Indebtedness, as such event of default is
defined in the instrument creating or evidencing such Designated Senior
Indebtedness, permitting the holders of such Designated Senior Indebtedness
then outstanding to accelerate the maturity thereof and if the Representative
for the respective issue of Designated Senior Indebtedness gives written
notice of the event of default to the Trustee (a "Default Notice"), then,
unless and until all events of default have been cured or waived or have
ceased to exist or the Trustee receives notice from the Representative for the
respective issue of Designated Senior Indebtedness terminating the Blockage
Period (as defined below), during the 180 days after the delivery of such
Default Notice (the "Blockage Period"), neither the Company nor any other
Person on its behalf shall (x) make any payment of any kind or character with
respect to any Obligations on the Notes or (y) acquire any of the Notes for
cash or property or otherwise. Notwithstanding anything herein to the
contrary, in no event will a Blockage Period extend beyond 180 days from the
date the payment on the Notes was due and only one such Blockage Period may be
commenced within any 360 consecutive days. No event of default which existed
or was continuing on the date of the commencement of any Blockage Period with
respect to the Designated Senior Indebtedness shall be, or be made, the basis
for commencement of a second Blockage Period by the Representative of such
Designated Senior Indebtedness whether or not within a period of 360
consecutive days, unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days (it being acknowledged that
any subsequent action, or any breach of any financial covenants for a period
commencing after the date of commencement of such Blockage Period that, in
either case, would give rise to an event of default pursuant to any provisions
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose).
By reason of such subordination, in the event of the insolvency of the
Company, creditors of the Company who are not holders of Senior Indebtedness,
including the Holders of the Notes, may recover less, ratably, than holders of
Senior Indebtedness.
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After giving effect to the Initial Offering and the application of the
proceeds therefrom, on a pro forma basis, at December 31, 1996, the aggregate
amount of Senior Indebtedness outstanding would have been approximately $43.2
million.
GUARANTEES
Each Subsidiary Guarantor will unconditionally guarantee, on a senior
subordinated basis, jointly and severally, to each Holder and the Trustee, the
full and prompt performance of the Company's obligations under the Indenture
and the Notes, including the payment of principal of and interest on the
Notes. The Guarantees will be subordinated to Guarantor Senior Indebtedness on
the same basis as the Notes are subordinated to Senior Indebtedness.
The obligations of each Subsidiary Guarantor are limited to the maximum
amount which, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Guarantee or pursuant to its contribution obligations under the
Indenture, will result in the obligations of such Subsidiary Guarantor under
the Guarantee not constituting a fraudulent conveyance or fraudulent transfer
under federal or state law.
Each Subsidiary Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Subsidiary
Guarantor in an amount pro rata, based on the net assets of each Subsidiary
Guarantor, determined in accordance with GAAP.
Each Subsidiary Guarantor may consolidate with or merge into or sell its
assets to the Company or another Subsidiary Guarantor without limitation, or
with other Persons upon the terms and conditions set forth in the Indenture.
See "Certain Covenants--Merger, Consolidation and Sale of Assets." In the
event all or substantially all of the assets or the Capital Stock of a
Subsidiary Guarantor is sold by the Company and the sale complies with the
provisions set forth in "--Certain Covenants--Limitation on Asset Sales," the
Subsidiary Guarantor's Guarantee will be automatically discharged and
released.
Separate financial statements of the Subsidiary Guarantors are not included
herein because such Subsidiary Guarantors are jointly and severally liable
with respect to the Company's obligations pursuant to the Notes, and the
aggregate net assets, earnings and equity of the Subsidiary Guarantors and the
Company are substantially equivalent to the net assets, earnings and equity of
the Company on a consolidated basis.
HOLDING COMPANY STRUCTURE
The Company is a holding company for its Subsidiaries, with no material
operations of its own. Accordingly, the Company is dependent upon the
distribution of the earnings of its Subsidiaries, whether in the form of
dividends, advances or payments on account of intercompany obligations, to
service its debt obligations. In addition, the claims of the Holders of the
Notes are subject to the prior payment of all Guarantor Senior Indebtedness of
the Subsidiary Guarantors. There can be no assurance that, after providing for
all prior claims, there would be sufficient assets available from the Company
and its Subsidiaries to satisfy the claims of the Holders of Notes. See "Risk
Factors--Subordination; Holding Company Structure."
CHANGE OF CONTROL
The Indenture provides that upon the occurrence of a Change of Control, each
Holder will have the right to require that the Company purchase all or a
portion of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest to the date of purchase.
The Indenture provides that, prior to the mailing of the notice referred to
below, but in any event within 30 days following any Change of Control, the
Company covenants to (i) repay in full and terminate all commitments
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under Indebtedness under the Credit Agreement and all other Senior
Indebtedness the terms of which require repayment upon a Change of Control or
offer to repay in full and terminate all commitments under all Indebtedness
under the Credit Agreement and all other such Senior Indebtedness and to repay
the Indebtedness owed to each lender which has accepted such offer or (ii)
obtain the requisite consents under the Credit Agreement and all other Senior
Indebtedness to permit the repurchase of the Notes as provided below. The
Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Notes pursuant to the
provisions described below. The Company's failure to comply with the
immediately preceding sentence shall be governed by clause (iii), and not
clause (iv), of "Events of Default" below.
Within 30 days following the date upon which a Change of Control occurs, the
Company must send, by first class mail, a notice to each Holder, with a copy
to the Trustee, which notice shall govern the terms of the Change of Control
Offer. Such notice shall state, among other things, the purchase date, which
must be no earlier than 30 days nor later than 45 days from the date such
notice is mailed, other than as may be required by law (the "Change of Control
Payment Date"). Holders electing to have a Note purchased pursuant to a Change
of Control Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third business day prior to the Change of Control
Payment Date.
If a Change of Control Offer is made, there can be no assurance that the
Company will have available funds sufficient to pay the Change of Control
purchase price for all the Notes that might be delivered by Holders seeking to
accept the Change of Control Offer. In the event the Company is required to
purchase outstanding Notes pursuant to a Change of Control Offer, the Company
expects that it would need to seek third party financing to the extent it does
not have available funds to meet its purchase obligations. However, there can
be no assurance that the Company would be able to obtain any such financing.
Neither the Board of Directors of the Company nor the Trustee may waive the
covenant relating to a Holder's right to redemption upon a Change of Control.
Restrictions in the Indenture described herein on the ability of the Company
and its Restricted Subsidiaries to incur additional Indebtedness, to grant
liens on its property, to make Restricted Payments and to make Asset Sales may
also make more difficult or discourage a takeover of the Company, whether
favored or opposed by the management of the Company. Consummation of any such
transaction in certain circumstances may require redemption or repurchase of
the Notes, and there can be no assurance that the Company or the acquiring
party will have sufficient financial resources to effect such redemption or
repurchase. Such restrictions and the restrictions on transactions with
Affiliates may, in certain circumstances, make more difficult or discourage
any leveraged buyout of the Company or any of its Subsidiaries by the
management of the Company. While such restrictions cover a wide variety of
arrangements which have traditionally been used to effect highly leveraged
transactions, the Indenture may not afford the Holders of Notes protection in
all circumstances from the adverse aspects of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the "Change
of Control" provisions of the Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the "Change of Control" provisions of the
Indenture by virtue thereof.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Incurrence of Additional Indebtedness. The Company will not,
and will not cause or permit any of its Restricted Subsidiaries to, directly
or indirectly, create, incur, assume, guarantee, acquire, become
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liable, contingently or otherwise, with respect to, or otherwise become
responsible for payment of (collectively, "incur") any Indebtedness
(including, without limitation, Acquired Indebtedness) other than Permitted
Indebtedness. Notwithstanding the foregoing, if no Default or Event of Default
shall have occurred and be continuing at the time of or as a consequence of
the incurrence of any such Indebtedness, the Company and its Restricted
Subsidiaries may incur Indebtedness (including, without limitation, Acquired
Indebtedness) if on the date of the incurrence of such Indebtedness, after
giving effect to the incurrence thereof, the Consolidated Fixed Charge
Coverage Ratio of the Company is greater than 2.50 to 1.0. No Indebtedness
incurred pursuant to the next preceding sentence shall be included in
calculating any limitation set forth in the definition of Permitted
Indebtedness. Upon the repayment of Indebtedness which may have been incurred
pursuant to more than one provision of this Indenture, the Company may, in its
sole discretion, designate which provision such Indebtedness shall have been
incurred under.
Limitation on Restricted Payments. The Company will not, and will not cause
or permit any of its Restricted Subsidiaries to, directly or indirectly, (a)
declare or pay any dividend or make any distribution (other than dividends or
distributions payable solely in Qualified Capital Stock of the Company) on or
in respect of shares of the Company's Capital Stock to holders of such Capital
Stock, (b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any warrants, rights or options to purchase or
acquire shares of any class of such Capital Stock (other than the exchange of
such Capital Stock or any warrants, rights or options to acquire shares of any
class of Capital Stock of the Company for Qualified Capital Stock of the
Company), (c) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company that is subordinate or junior in
right of payment to the Notes or (d) make any Investment (other than Permitted
Investments) (each of the foregoing actions set forth in clauses (a), (b), (c)
and (d) being referred to as a "Restricted Payment"), if at the time of such
Restricted Payment or immediately after giving effect thereto, (i) a Default
or an Event of Default shall have occurred and be continuing, or (ii) the
Company is not able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with the "Limitation on Incurrence
of Additional Indebtedness" covenant above, or (iii) the aggregate amount of
all Restricted Payments (including such proposed Restricted Payment) made
subsequent to the Issue Date (the amount expended for such purposes, if other
than in cash, being the fair market value of such property as determined
reasonably and in good faith by the Board of Directors of the Company or the
Company) shall exceed the sum of: (v) 50% of the cumulative Consolidated Net
Income (or if cumulative Consolidated Net Income shall be a loss, minus 100%
of such loss) of the Company earned during the period beginning on the first
day of the fiscal quarter including the Issue Date and ending on the last day
of the fiscal quarter ending at least 30 days prior to the date the Restricted
Payment occurs (the "Reference Date") (treating such period as a single
accounting period); plus (w) 100% of the aggregate net proceeds (including the
fair market value of any business or property other than cash) received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to the Issue Date and on or prior to the
Reference Date of Qualified Capital Stock of the Company, including treasury
stock; plus (x) without duplication of any amounts included in clause (iii)(w)
above, 100% of the aggregate net cash proceeds of any equity contribution
received by the Company from a holder of the Company's Capital Stock
(excluding, in the case of clauses (iii)(w) and (x), any net cash proceeds
from an Equity Offering to the extent used to redeem the Notes); plus (y) an
amount equal to the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, interest payments, repayments of loans or advances,
or other transfers of cash, in each case, to the Company or to any Restricted
Subsidiary of the Company from Unrestricted Subsidiaries (but without
duplication of any such amount included in cumulative Consolidated Net Income
of the Company), or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries (in each case valued as provided in "--Limitation on
Restricted and Unrestricted Subsidiaries" below), not to exceed, in the case
of an Unrestricted Subsidiary, the amount of Investments previously made by
the Company or any Restricted Subsidiary of the Company in such Unrestricted
Subsidiary and which were treated as a Restricted Payment under the Indenture;
plus (z) $25.0 million.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph shall not prohibit: (1) the payment of any dividend or
consummation of irrevocable redemption within 60 days after the
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date of declaration of such dividend or giving of irrevocable redemption
notice if the dividend or redemption would have been permitted on the date of
declaration or giving of irrevocable redemption notice; (2) if no Default or
Event of Default shall have occurred and be continuing, the acquisition of any
shares of Capital Stock of the Company, either (i) solely in exchange for
shares of Qualified Capital Stock of the Company or (ii) through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Company) of shares of Qualified Capital Stock of
the Company; (3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes either (i) solely in
exchange for shares of Qualified Capital Stock of the Company, or (ii) through
the application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of (A) shares of Qualified Capital
Stock of the Company or (B) Refinancing Indebtedness; (4) if no Default or
Event of Default shall have occurred and be continuing, repurchases of Capital
Stock deemed to occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price thereof; (5) if no Default or Event
of Default shall have occurred and be continuing, payments by the Company to
repurchase Capital Stock or other securities of the Company from directors,
officers and other employees of the Company or any of its Restricted
Subsidiaries in an aggregate amount not to exceed in any one year the sum of
(A) $3.0 million and (B) any amounts permitted to have been paid in any
preceding years under subclause (A) above to the extent such amounts were not
so paid in any such prior years; (6) if no Default or Event of Default shall
have occurred and be continuing, payments by the Company to repurchase
Qualified Capital Stock or other securities of the Company for purposes of
making contributions of Qualified Capital Stock of the Company to employees of
the Company pursuant to the Profit Sharing and Savings Plan of the Company or
any of its subsidiaries; and (7) if no Default or Event of Default shall have
occurred and be continuing, payments by the Company to repurchase Qualified
Capital Stock of the Company in connection with a substantially concurrent
transaction in which the Company reissues such repurchased Qualified Capital
Stock as all or a part of the consideration for the acquisition of property or
assets; provided, however, that such acquisition is consummated within 180
days of such repurchase. In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause (iii) of
the immediately preceding paragraph, amounts expended pursuant to clauses (1),
(2)(ii), (3)(ii)(A) and (7) (to the extent that the value of the Qualified
Capital Stock reissued shall have been included in clause (iii)(W) of the
preceding paragraph) shall be included in such calculation.
Limitation on Restricted and Unrestricted Subsidiaries. The Board of
Directors of the Company may, if no Default or Event of Default shall have
occurred and be continuing or would arise therefrom, designate an Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that (i) any such
redesignation shall be deemed to be an incurrence as of the date of such
redesignation by the Company and its Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated Subsidiary for purposes of "--
Limitation on Incurrence of Additional Indebtedness" above, (ii) unless such
redesignated Subsidiary shall not have any Indebtedness outstanding (other
than Permitted Indebtedness), no such designation shall be permitted if
immediately after giving effect to such redesignation and the incurrence of
any such additional Indebtedness, the Company could not incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to "--
Limitation on Incurrence of Additional Indebtedness" above and (iii) such
Subsidiary assumes by execution of a supplemental indenture all of the
obligations of a Subsidiary Guarantor under a Guarantee.
The Board of Directors of the Company also may, if no Default or Event of
Default shall have occurred and be continuing or would arise therefrom,
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if (i)
such designation is at that time permitted under "--Limitation on Restricted
Payments" above and (ii) immediately after giving effect to such designation,
the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to "--Limitation of Incurrence of Additional
Indebtedness" above. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by the filing with the Trustee of a
certified copy of the resolution of the Board of Directors of the Company
giving effect to such designation or redesignation and an officers'
certificate certifying that such designation or redesignation complied with
the foregoing conditions and setting forth in reasonable detail the underlying
calculations. In the
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event that any Restricted Subsidiary is designated an Unrestricted Subsidiary
in accordance with this covenant, such Restricted Subsidiary's Guarantee will
be automatically discharged and released.
The Indenture provides that for purposes of the covenant described under "--
Limitation on Restricted Payments" above, (i) an "Investment" shall be deemed
to have been made at the time any Restricted Subsidiary of the Company is
designated as an Unrestricted Subsidiary in an amount (proportionate to the
Company's equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is
designated as an Unrestricted Subsidiary; (ii) at any date, the aggregate
amount of all Restricted Payments made as Investments since the Issue Date
shall exclude and be reduced by an amount (proportionate to the Company's
equity interest in such Subsidiary) equal to the net worth of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated as a
Restricted Subsidiary, not to exceed, in the case of any such redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary, the amount of
Investments previously made by the Company and its Restricted Subsidiaries in
such Unrestricted Subsidiary (in each case (i) and (ii), "net worth" to be
calculated based upon the fair market value of the assets of such Subsidiary
as of any such date of designation); and (iii) any property transferred to or
from an Unrestricted Subsidiary shall be valued at its fair market value at
the time of such transfer.
The Indenture provides that notwithstanding the foregoing, the Board of
Directors of the Company may not designate any Restricted Subsidiary of the
Company to be an Unrestricted Subsidiary if, after any such designation, (a)
the Company or any Restricted Subsidiary of the Company (i) provides credit
support for, or a guarantee of, any Indebtedness of such Subsidiary (including
any undertaking, agreement or instrument evidencing such Indebtedness) or (ii)
is directly or indirectly liable for any Indebtedness of such Subsidiary or
(b) such Subsidiary owns any Capital Stock of, or holds any Lien on any
property of, the Company or any Restricted Subsidiary of the Company which is
not a Subsidiary of the Subsidiary to be so designated.
The Indenture provides that Subsidiaries of the Company that are not
designated by the Board of Directors of the Company as Restricted or
Unrestricted Subsidiaries will be deemed to be Restricted Subsidiaries of the
Company. Notwithstanding the foregoing, all Subsidiaries of an Unrestricted
Subsidiary will be Unrestricted Subsidiaries.
Limitation on Asset Sales. The Company will not, and will not cause or
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(i) the Company or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined
in good faith by the Company's Board of Directors), (ii) at least 75% of the
consideration received by the Company or the Restricted Subsidiary, as the
case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition; and (iii) upon
the consummation of an Asset Sale, the Company shall apply, or cause such
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
270 days of receipt thereof either (A) to prepay any Senior Indebtedness and,
in the case of any Senior Indebtedness under any revolving credit facility,
effect a reduction in the committed availability under such revolving credit
facility, (B) to make an investment in properties and assets that replace the
properties and assets that were the subject of such Asset Sale or in
properties and assets that will be used in the business of the Company and its
Restricted Subsidiaries as existing on the Issue Date or in businesses
reasonably related or complementary thereto (as determined in good faith by
the Company's Board of Directors) ("Replacement Assets"), or (C) a combination
of prepayment and investment permitted by the foregoing clauses (iii)(A) and
(iii)(B). Pending final application, the Company or the applicable Restricted
Subsidiary may temporarily reduce Indebtedness under any revolving credit
facility or invest in cash or Cash Equivalents. On the 271st day after an
Asset Sale or such earlier date, if any, as the Board of Directors of the
Company or of such Restricted Subsidiary determines not to apply the Net Cash
Proceeds relating to such Asset Sale as set forth in clauses (iii)(A),
(iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds
Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have
not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by the Company
or such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds
Offer") on a date (the "Net Proceeds
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Offer Payment Date") not less than 30 nor more than 45 days following the
applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata
basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price
equal to 100% of the principal amount of the Notes to be purchased, plus
accrued and unpaid interest thereon, if any, to the date of purchase;
provided, however, that if at any time any non-cash consideration received by
the Company or any Restricted Subsidiary of the Company, as the case may be,
in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then such conversion or disposition shall be deemed
to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall
be applied in accordance with this covenant. The Company or any such
Restricted Subsidiary of the Company, as the case may be, may defer the Net
Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer
Amount equal to or in excess of $10.0 million resulting from one or more Asset
Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not
just the amount in excess of $10.0 million, shall be applied as required
pursuant to this paragraph).
Notwithstanding the immediately preceding paragraph, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraph to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Replacement Assets and/or Cash
Equivalents and (ii) such Asset Sale is for fair market value; provided,
however, that any consideration not constituting Replacement Assets received
by the Company or any of its Restricted Subsidiaries in connection with any
Asset Sale permitted to be consummated under this paragraph shall constitute
Net Cash Proceeds subject to the provisions of the preceding paragraph.
Each Net Proceeds Offer will be mailed to the record Holders as shown on the
register of Holders within 25 days following the Net Proceeds Offer Trigger
Date, with a copy to the Trustee, and shall comply with the procedures set
forth in the Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly
tender Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of
tendering Holders will be purchased on a pro rata basis (based on amounts
tendered). A Net Proceeds Offer shall remain open for a period of 20 business
days or such longer period as may be required by law. To the extent the amount
of Notes tendered is less than the offer amount, the Company may use the
remaining Net Proceeds Offer Amount for general corporate purposes and such
Net Proceeds Offer Amount shall be reset to zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset
Sale" provisions of the Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the "Asset Sale" provisions of the Indenture by
virtue thereof.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends or
make any other distributions on or in respect of its Capital Stock; (b) make
loans or advances or to pay any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or (c) transfer any
of its property or assets to the Company or any other Restricted Subsidiary of
the Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) the Indenture; (3) the Credit Agreement;
(4) non-assignment provisions of any contract or any lease governing a
leasehold interest of any Restricted Subsidiary of the Company; (5) any
instrument governing Acquired Indebtedness, which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired;
(6) agreements existing on the Issue Date to the extent and in the manner such
agreements are in effect on the Issue Date; (7) Indebtedness or any other
contractual requirements (including pursuant to any corporate governance
documents in the nature of a charter or by-laws) of a Securitization
Subsidiary arising in connection with a Qualified Securitization Transaction;
provided, however, that any such encumbrances and restrictions
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apply only to such Securitization Subsidiary; or (8) an agreement governing
Indebtedness incurred to Refinance the Indebtedness issued, assumed or
incurred pursuant to an agreement referred to in clause (2), (3), (5), (6) or
(7) above; provided, however, that the provisions relating to such encumbrance
or restriction contained in any such Indebtedness are no less favorable to the
Company in any material respect as determined by the Board of Directors of the
Company in their reasonable and good faith judgment than the provisions
relating to such encumbrance or restriction contained in agreements referred
to in such clause (2), (3), (5), (6) or (7), respectively.
Limitation on Preferred Stock of Restricted Subsidiaries. The Company will
not permit any of its Restricted Subsidiaries to issue any Preferred Stock
(other than to the Company or to a Wholly Owned Restricted Subsidiary of the
Company) or permit any Person (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company) to own any Preferred Stock of any
Restricted Subsidiary of the Company.
Limitation on Liens. The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit or suffer to exist any Liens of any kind against or upon any
property or assets of the Company or any of its Restricted Subsidiaries
whether owned on the Issue Date or acquired after the Issue Date, or any
proceeds therefrom, or assign or otherwise convey any right to receive income
or profits therefrom unless (i) in the case of Liens securing Indebtedness
that is expressly subordinate or junior in right of payment to the Notes, the
Notes are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Liens and (ii) in all other cases, the Notes are
equally and ratably secured, except for (A) Liens existing as of the Issue
Date to the extent and in the manner such Liens are in effect on the Issue
Date; (B) Liens securing Senior Indebtedness and Liens securing Guarantor
Senior Indebtedness; (C) Liens securing the Notes and the Guarantees; (D)
Liens of the Company or a Wholly Owned Restricted Subsidiary of the Company on
assets of any Subsidiary of the Company; (E) Liens securing Refinancing
Indebtedness which is incurred to Refinance any Indebtedness which has been
secured by a Lien permitted under the Indenture and which has been incurred in
accordance with the provisions of the Indenture; provided, however, that such
Liens (1) are no less favorable to the Holders and are not more favorable to
the lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being Refinanced and (2) do not extend to or cover any property
or assets of the Company or any of its Subsidiaries not securing the
Indebtedness so Refinanced (other than property or assets subject to Liens
under clause (B) above); and (F) Permitted Liens.
Prohibition on Incurrence of Senior Subordinated Debt. The Company will not
and will not cause or permit any Subsidiary Guarantor to incur or suffer to
exist Indebtedness that by its terms is senior in right of payment to the
Notes or the Guarantees, as the case may be, and subordinate in right of
payment to any other Indebtedness of the Company or such Subsidiary Guarantor,
as the case may be.
Merger, Consolidation and Sale of Assets. The Company will not, in a single
transaction or series of related transactions, consolidate or merge with or
into any Person, or sell, assign, transfer, lease, convey or otherwise dispose
of (or cause or permit any Restricted Subsidiary of the Company to sell,
assign, transfer, lease, convey or otherwise dispose of) all or substantially
all of the Company's assets (determined on a consolidated basis for the
Company and its Restricted Subsidiaries) unless: (i) either (1) the Company
shall be the surviving or continuing corporation or (2) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the Person which acquires by sale, assignment, transfer, lease,
conveyance or other disposition the properties and assets of the Company and
of the Company's Restricted Subsidiaries substantially as an entirety (the
"Surviving Entity") (x) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the District of
Columbia and (y) shall expressly assume, by supplemental indenture (in form
and substance satisfactory to the Trustee), executed and delivered to the
Trustee, the due and punctual payment of the principal of, and premium, if
any, and interest on all of the Notes and the performance of every covenant of
the Notes, the Indenture and the Registration Rights Agreement on the part of
the Company to be performed or observed, as the case may be; (ii) immediately
after giving effect to such transaction and the assumption contemplated by
clause (i)(2)(y) above (including giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred in connection
with or in respect of such transaction), the Company or such Surviving Entity,
as the case may be, (1) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior to
such
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transaction and (2) shall be able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to the "--Limitation
on Incurrence of Additional Indebtedness" covenant; (iii) immediately before
and immediately after giving effect to such transaction and the assumption
contemplated by clause (i)(2)(y) above (including, without limitation, giving
effect to any Indebtedness and Acquired Indebtedness incurred or anticipated
to be incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and (iv) the Company or the Surviving Entity, as the case may be,
shall have delivered to the Trustee an officers' certificate and an opinion of
counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with the applicable provisions of the Indenture and that all
conditions precedent in the Indenture relating to such transaction have been
satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
The Indenture provides that upon any consolidation, combination or merger or
any transfer of all or substantially all of the assets of the Company in
accordance with the foregoing, in which the Company is not the continuing
corporation, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, lease or transfer is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under the Indenture and the Notes with the same effect
as if such surviving entity had been named as such.
Each Subsidiary Guarantor (other than any Subsidiary Guarantor whose
Guarantee is to be released in accordance with the terms of the Guarantee and
the Indenture in connection with any transaction complying with the provisions
of "--Limitation on Asset Sales" or "--Limitation on Restricted and
Unrestricted Subsidiaries") will not, and the Company will not cause or permit
any Subsidiary Guarantor to, consolidate with or merge with or into any Person
other than the Company or any other Subsidiary Guarantor unless: (i) the
entity formed by or surviving any such consolidation or merger (if other than
the Subsidiary Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and existing under
the laws of the United States or any State thereof or the District of
Columbia; (ii) such entity assumes by supplemental indenture all of the
obligations of the Subsidiary Guarantor on its Guarantee; (iii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and (iv) immediately after giving effect to
such transaction and the use of any net proceeds therefrom on a pro forma
basis, the Company could satisfy the provisions of clause (ii) of the first
paragraph of this covenant. Any merger or consolidation of a Subsidiary
Guarantor with and into the Company (with the Company being the surviving
entity) or another Subsidiary Guarantor that is a Wholly Owned Restricted
Subsidiary of the Company need only comply with clause (iv) of the first
paragraph of this covenant.
Limitations on Transactions with Affiliates. (a) The Company will not, and
will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (each an "Affiliate Transaction"), other
than (x) Affiliate Transactions permitted under paragraph (b) below and (y)
Affiliate Transactions on terms that are no less favorable than those that
might reasonably have been obtained or are obtainable in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary. All Affiliate
Transactions (and each series of related Affiliate Transactions which are
similar or part of a common plan) involving aggregate payments or other
property with a fair market value in excess of $2.0 million shall be approved
by the Board of Directors of the Company or such Restricted Subsidiary, as the
case may be, such approval to be evidenced by a Board Resolution stating that
such Board of Directors has determined that such transaction complies with the
foregoing provisions. If the Company or any Restricted Subsidiary of the
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Company enters into an Affiliate Transaction (or a series of related Affiliate
Transactions related to a common plan) that involves an aggregate fair market
value of more than $7.5 million, the Company or such Restricted Subsidiary, as
the case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Restricted Subsidiary, as the case
may be, from a financial point of view, from an Independent Financial Advisor.
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of,
officers, directors, employees, consultants or agents of the Company or any
Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions between
or among the Company and any of its Wholly Owned Restricted Subsidiaries or
between or among such Wholly Owned Restricted Subsidiaries, provided such
transactions are not otherwise prohibited by the Indenture; (iii) any
agreement as in effect as of the Issue Date or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
or in any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue Date;
(iv) Restricted Payments and Permitted Investments permitted by the Indenture;
and (v) Qualified Securitization Transactions.
Additional Subsidiary Guarantees. If the Company or any of its Restricted
Subsidiaries transfers or causes to be transferred, in one transaction or a
series of related transactions, any property in excess of $1.0 million to any
Restricted Subsidiary that is not a Subsidiary Guarantor, or if the Company or
any of its Restricted Subsidiaries shall organize, acquire or otherwise invest
in another Subsidiary that is not a Subsidiary Guarantor (other than in any
such transaction in compliance with "--Limitation on Restricted Payments"
above), then such transferee or acquired or other Subsidiary shall (i) execute
and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Notes and
the Indenture on the terms set forth in the Indenture and (ii) deliver to the
Trustee an opinion of counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary and constitutes a legal,
valid, binding and enforceable obligation of such Subsidiary, subject to
normal exceptions. Thereafter, such Subsidiary shall be a Subsidiary Guarantor
for all purposes of the Indenture.
Conduct of Business. The Company will not and will not cause or permit any
of its Restricted Subsidiaries to engage in any businesses other than the
businesses in which the Company is engaged on the Issue Date and any
businesses reasonably related or complementary thereto (as determined in good
faith by the Company's Board of Directors).
Reports to Holders. The Company will deliver to the Trustee within 15 days
after the filing of the same with the Commission, copies of the quarterly and
annual reports and of the information, documents and other reports, if any,
which the Company is required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the Commission, to the extent permitted, and
provide the Trustee and the Holders with such annual reports and such
information, documents and other reports specified in Sections 13 and 15(d) of
the Exchange Act. The Company will also comply with the other provisions of
314(a) of the TIA.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default":
(i) the failure to pay interest (including Additional Interest, if any)
on any Notes when the same becomes due and payable and the default
continues for a period of 30 days (whether or not such payment shall be
prohibited by the subordination provisions of the Indenture);
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(ii) the failure to pay the principal on any Notes, when such principal
becomes due and payable, at maturity, upon acceleration, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer)
(whether or not such payment shall be prohibited by the subordination
provisions of the Indenture);
(iii) a default in the observance or performance of any other covenant or
agreement contained in the Indenture which default continues for a period
of 30 days after the Company receives written notice specifying the default
(and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes
(except in the case of a default with respect to the "Merger, Consolidation
and Sale of Assets" covenant, which will constitute an Event of Default
with such notice requirement but without such passage of time requirement);
(iv) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary of the
Company (other than a Securitization Subsidiary), or the acceleration of
the final stated maturity of any such Indebtedness if the aggregate
principal amount of such Indebtedness, together with the principal amount
of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated, aggregates $10.0 million or
more at any time;
(v) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against the Company or any of its
Subsidiaries and such judgments remain undischarged, unpaid or unstayed for
a period of 60 days after such judgment or judgments become final and non-
appealable;
(vi) certain events of bankruptcy affecting the Company or any of its
Significant Subsidiaries; or
(vii) any of the Guarantees ceases to be in full force and effect or any
of the Guarantees is declared to be null and void and unenforceable or any
of the Guarantees is found to be invalid or any of the Subsidiary
Guarantors denies its liability under its Guarantee (other than by reason
of release of a Subsidiary Guarantor in accordance with the terms of the
Indenture).
If an Event of Default (other than an Event of Default specified in clause
(vi) above) shall occur and be continuing, the Trustee or the Holders of at
least 25% in principal amount of outstanding Notes may declare the principal
of and accrued interest on all the Notes to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same shall become immediately due and payable. If an Event of Default
specified in clause (vi) above with respect to the Company occurs and is
continuing, then all unpaid principal of, and premium, if any, and accrued and
unpaid interest on all of the outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.
The Indenture provides that, at any time after a declaration of acceleration
with respect to the Notes as described in the preceding paragraph, the Holders
of a majority in principal amount of the Notes may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due
solely because of the acceleration, (iii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (vi) of the description above
of Events of Default, the Trustee shall have received an officers' certificate
and an opinion of counsel that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
The Holders of a majority in principal amount of the Notes may waive any
existing Default or Event of Default under the Indenture, and its
consequences, except a default in the payment of the principal of or interest
on any Notes.
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Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture and under the TIA. Subject to the provisions of the
Indenture relating to the duties of the Trustee, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee reasonable indemnity. Subject to all provisions of the
Indenture and applicable law, the Holders of a majority in aggregate principal
amount of the then outstanding Notes have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee.
Under the Indenture, the Company is required to provide an officers'
certificate to the Trustee promptly upon any such officer obtaining knowledge
of any Default or Event of Default (provided that such officers shall provide
such certification at least annually whether or not they know of any Default
or Event of Default) that has occurred and, if applicable, describe such
Default or Event of Default and the status thereof.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Subsidiary Guarantors discharged with
respect to the outstanding Notes ("Legal Defeasance"). Such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Notes, except for (i) the rights
of Holders to receive payments in respect of the principal of, premium, if
any, and interest on the Notes when such payments are due, (ii) the Company's
obligations with respect to the Notes concerning issuing temporary Notes,
registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payments, (iii) the rights, powers,
trust, duties and immunities of the Trustee and the Company's obligations in
connection therewith and (iv) the Legal Defeasance provisions of the
Indenture. In addition, the Company may, at its option and at any time, elect
to have the obligations of the Company and its Restricted Subsidiaries
released with respect to certain covenants that are described in the Indenture
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, reorganization and insolvency
events) described under "Events of Default" will no longer constitute an Event
of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders cash in U.S. dollars, non-callable U.S. government obligations,
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, if any, and interest on the Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be; (ii) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable
to the Trustee confirming that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of the 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 will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred; (iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred; (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit or
insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of
deposit (other than a Default or Event of Default resulting from the
incurrence of Indebtedness all or a portion of the proceeds of which will be
used to defease the Notes); (v) such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or
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constitute a default under the Indenture or any other material agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound; (vi) the Company shall
have delivered to the Trustee an 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 other creditors of the Company or
others; (vii) the Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; (viii) the Company shall have delivered to
the Trustee an opinion of counsel 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; and (ix) certain other customary
conditions precedent are satisfied. Notwithstanding the foregoing, the opinion
of counsel required by clause (ii) above need not be delivered if all Notes
not theretofore delivered to the Trustee for cancellation (A) have become due
and payable, (B) will become due and payable on maturity date within one year
or (C) are to be called for redemption by the Trustee in the name, and at the
expense, of the Company.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of the
Notes, as expressly provided for in the Indenture) as to all outstanding Notes
when (i) either (a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the Trustee for
cancellation or (b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may
be; (ii) the Company has paid all other sums payable under the Indenture by
the Company; and (iii) the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel stating that all conditions precedent
under the Indenture relating to the satisfaction and discharge of the
Indenture have been complied with.
MODIFICATION OF THE INDENTURE
From time to time, the Company, the Subsidiary Guarantors and the Trustee,
without the consent of the Holders, may amend the Indenture for certain
specified purposes, including curing ambiguities, defects or inconsistencies,
so long as such change does not, in the opinion of the Trustee, adversely
affect the rights of any of the Holders in any material respect. In
formulating its opinion on such matters, the Trustee will be entitled to rely
on such evidence as it deems appropriate, including, without limitation,
solely on an opinion of counsel. Other modifications, waivers and amendments
of the Indenture may be made with the consent of the Holders of a majority in
principal amount of the then outstanding Notes issued under the Indenture,
except that, without the consent of each Holder affected thereby, no amendment
or waiver may: (i) reduce the amount of Notes whose Holders must consent to an
amendment; (ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any Notes;
(iii) reduce the principal of or change or have the effect of changing the
fixed maturity of any Notes, or change the date on which any Notes may be
subject to redemption or repurchase, or reduce the redemption or repurchase
price therefor; (iv) make any Notes payable in money other than that stated in
the Notes; (v) make any change in provisions of the Indenture protecting the
right of each Holder to receive payment of principal of and interest on such
Note on or after the due date thereof or to bring suit to enforce such
payment, or permitting Holders of a majority in principal amount of Notes to
waive Defaults or Events of Default; (vi) amend, change or modify in any
material respect the obligation of the Company to make and consummate a Change
of Control Offer in the event of a Change of Control or make and consummate a
Net Proceeds Offer with respect to any Asset Sale that has been consummated or
modify any of
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the provisions or definitions with respect thereto; (vii) modify or change any
provision of the Indenture or the related definitions affecting the
subordination or ranking of the Notes or any Guarantee in a manner which
adversely affects the Holders; or (viii) release any Subsidiary Guarantor from
any of its obligations under its Guarantee or the Indenture otherwise than in
accordance with the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it, the Notes and the Guarantees will be
governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the law of another jurisdiction would be
required thereby.
THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set
forth in the Indenture. During the existence of an Event of Default, the
Trustee will exercise such rights and powers vested in it by the Indenture,
and use the same degree of care and skill in its exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
The Indenture and the provisions of the TIA contain certain limitations on
the rights of the Trustee, should it become a creditor of the Company, to
obtain payments of claims in certain cases or to realize on certain property
received in respect of any such claim as security or otherwise. Subject to the
TIA, the Trustee will be permitted to engage in other transactions; provided,
however, that if the Trustee acquires any conflicting interest as described in
the TIA, it must eliminate such conflict or resign.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
of such Person or at the time it merges or consolidates with such Person or
any of its Restricted Subsidiaries or assumed in connection with the
acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of such Person or such acquisition, merger or
consolidation.
"Additional Interest" shall have the meaning set forth under "Exchange
Offer--Purpose and Effect of the Exchange Offer."
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Asset Acquisition" means (a) an Investment by the Company or any Restricted
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other
than a Restricted Subsidiary of the Company) which constitute all or
substantially all of the assets of such Person or comprises any division or
line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
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"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary
course of business), assignment or other transfer for value by the Company or
any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted
Subsidiary of the Company; or (b) any other property or assets of the Company
or any Restricted Subsidiary of the Company other than in the ordinary course
of business; provided, however, that Asset Sales shall not include (i) any
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $15.0
million in any consecutive 12-month period, (ii) the sale, lease, conveyance,
disposition or other transfer of all or substantially all of the assets of the
Company as permitted under "Merger, Consolidation and Sale of Assets" or any
disposition that constitutes a Change of Control, (iii) the contribution or
other transfer of assets or property to a joint venture in which the Company
has an interest; provided, however, that such contribution or other transfer
constitutes an Investment that is either (a) a Permitted Investment or (b) an
Investment that is treated as a Restricted Payment under the Indenture, (iv)
the licensing of intellectual property, (v) disposals or replacements of
obsolete equipment in the ordinary course of business, (vi) the sale, lease,
conveyance, disposition or other transfer by the Company or any Restricted
Subsidiary of assets or property to one or more Wholly Owned Restricted
Subsidiaries in connection with Investments permitted under the "Limitations
on Restricted Payments" covenant, (vii) sales of accounts receivable,
equipment and related assets (including contract rights) of the type specified
in the definition of "Qualified Securitization Transaction" to a
Securitization Subsidiary for the fair market value thereof, including cash in
an amount at least equal to 75% of the fair market value thereof as determined
in accordance with GAAP, and (viii) transfers of accounts receivable,
equipment and related assets (including contract rights) of the type specified
in the definition of "Qualified Securitization Transaction" (or a fractional
undivided interest therein) by a Securitization Subsidiary in a Qualified
Securitization Transaction.
"Board of Directors" means, as to any Person, the board of directors of such
Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person to have
been duly adopted by the Board of Directors of such Person and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each class
of Common Stock and Preferred Stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than
$250,000,000; (v) repurchase obligations with a term of
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not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market funds
which invest substantially all their assets in securities of the types
described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Company to any Person or group of related Persons for purposes of Section
13(d) of the Exchange Act (a "Group"), together with any Affiliates thereof
(whether or not otherwise in compliance with the provisions of the Indenture);
(ii) the approval by the holders of Capital Stock of the Company of any plan
or proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the provisions of the Indenture); (iii) any
Person or Group shall become the owner, directly or indirectly, beneficially
or of record, of shares representing more than 50% of the aggregate ordinary
voting power (except that for purposes of calculating the ownership of any
Person or Group, shares owned by any Permitted Holder who is a part of such
Person or Group shall be excluded from the calculation of the ownership by
such Person or Group) represented by the issued and outstanding Capital Stock
of the Company; or (iv) the replacement of a majority of the Board of
Directors of the Company over a two-year period from the directors who
constituted the Board of Directors of the Company at the beginning of such
period, and such replacement shall not have been approved by a vote of at
least a majority of the Board of Directors of the Company then still in office
who either were members of such Board of Directors at the beginning of such
period or whose election as a member of such Board of Directors was previously
so approved.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on
the Issue Date or issued after the Issue Date, and includes, without
limitation, all series and classes of such common stock.
"Consolidated EBITDA" means, with respect to any Person, for any period, the
sum (without duplication) of (i) Consolidated Net Income and (ii) to the
extent Consolidated Net Income has been reduced thereby, (A) all income taxes
of such Person and its Restricted Subsidiaries paid or accrued in accordance
with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable
to sales or dispositions outside the ordinary course of business), (B)
Consolidated Interest Expense and (C) Consolidated Non-cash Charges.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges
of such Person for the Four Quarter Period. In addition to and without
limitation of the foregoing, for purposes of this definition, "Consolidated
EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation to (i) the
incurrence or repayment of any Indebtedness of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than
the incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of
the Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period and
(ii) any Asset Sales or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition)
incurring, assuming or otherwise being liable for Acquired Indebtedness and
also including any Consolidated EBITDA (including any pro forma expense and
cost reductions calculated on a basis consistent with Regulation S-X under the
Securities Act as in effect on the Issue Date) (provided that such
Consolidated EBITDA shall be included only to the extent includable pursuant
to the definition of "Consolidated Net Income") attributable to the assets
which are the
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subject of the Asset Acquisition or Asset Sale during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to the last
day of the Four Quarter Period and on or prior to the Transaction Date, as if
such Asset Sale or Asset Acquisition (including the incurrence, assumption or
liability for any such Acquired Indebtedness) occurred on the first day of the
Four Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the
preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated
Fixed Charge Coverage Ratio," (1) interest on outstanding Indebtedness
determined on a fluctuating basis as of the Transaction Date and which will
continue to be so determined thereafter shall be deemed to have accrued at a
fixed rate per annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date; (2) if interest on any Indebtedness actually
incurred on the Transaction Date may optionally be determined at an interest
rate based upon a factor of a prime or similar rate, a eurocurrency interbank
offered rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the Four Quarter
Period; and (3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense,
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person (other than dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal, state
and local tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries and Permitted Joint
Ventures for such period determined on a consolidated basis in accordance with
GAAP, including without limitation, (a) any amortization of debt discount, (b)
the net costs under Interest Swap Obligations, (c) all capitalized interest
and (d) the interest portion of any deferred payment obligation; and (ii) the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and its Restricted Subsidiaries
and Permitted Joint Ventures during such period as determined on a
consolidated basis in accordance with GAAP; provided, however, that amounts to
be included in clauses (i) and (ii) above with respect to Permitted Joint
Ventures not constituting Restricted Subsidiaries shall be the product of the
amounts computed in accordance with GAAP and the percentage of the total
outstanding shares of Capital Stock of such Permitted Joint Venture held by
the Company or any Restricted Subsidiary of the Company; and provided,
further, however, that Consolidated Interest Expense with respect to any
Person for any period shall not include any amortization or write-off of
deferred financing costs.
"Consolidated Net Income" means, with respect to any Person, for any period,
the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom (a) gains
(and losses) on an after tax effected basis from asset sales or abandonments
or reserves relating thereto, (b) items classified as extraordinary or
nonrecurring gains or losses (including, without limitation, restructuring
costs related to facilities and/or operating line closings) on an after tax
effected basis, (c) the net income or loss of any Person acquired in a
"pooling of interests" transaction accrued prior to the date it becomes a
Restricted Subsidiary of the referent Person or is merged or consolidated with
the referent Person or any Restricted Subsidiary of the referent Person, (d)
the net income (but not loss) of any Restricted Subsidiary of the referent
Person to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income is restricted by a
contract, operation of law or otherwise (other than restrictions contained in
the Credit Agreement or any Acquired Indebtedness), (e) the net income or loss
of any other Person, other than a Subsidiary of the referent
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Person, except to the extent (in the case of net income) of cash dividends or
distributions paid to the referent Person, or to a Wholly Owned Restricted
Subsidiary of the referent Person, by such other Person, (f) any restoration
to income of any contingency reserve of an extraordinary, non-recurring or
unusual nature, except to the extent that provision for such reserve was made
out of Consolidated Net Income accrued at any time following the Issue Date,
(g) income or loss attributable to discontinued operations (including, without
limitation, operations disposed of during such period whether or not such
operations were classified as discontinued), (h) in the case of a successor to
the referent Person by consolidation or merger or as a transferee of the
referent Person's assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets and (i) any amortization or
write-off of deferred financing costs.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance with
GAAP, less (without duplication) amounts attributable to Disqualified Capital
Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person, for any
period, the aggregate (A) depreciation, (B) amortization and (C) other non-
cash expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP
(excluding for purposes of clause (C) any such charges which require an
accrual of or a reserve for cash charges for any future period).
"Credit Agreement" means the Credit Agreement dated as of June 17, 1996, as
amended, among the Company, Brockway Standard, Inc., Brockway Standard (New
Jersey), Inc., Milton Can Company, Inc., Davies Can Company, Inc., each of the
guarantors party thereto, the lenders party thereto in their capacities as
lenders thereunder and Bankers Trust Company and NationsBank, N.A. (South), as
agents, together with the related documents thereto (including, without
limitation, any guarantee agreements), in each case as such agreements may be
further amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including increasing the amount of available borrowings thereunder (provided,
however, that such increase in borrowings is permitted by the "Limitation on
Incurrence of Additional Indebtedness" covenant above) or adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of
Default.
"Designated Senior Indebtedness" means (i) Indebtedness under or in respect
of the Credit Agreement and (ii) any other Indebtedness constituting Senior
Indebtedness which, at the time of determination, has an aggregate principal
amount of at least $25,000,000 and is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" by the Company.
"Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the sole option of the holder thereof on or prior to the
final maturity date of the Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute or statutes thereto.
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"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary organized
under the laws of a country or jurisdiction other than the United States, any
state or territory thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Guarantees" means the guarantees of the Notes of the Company by the
Subsidiary Guarantors.
"Guarantor Senior Indebtedness" means with respect to any Subsidiary
Guarantor, the principal of, premium, if any, and interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on any Indebtedness of
a Subsidiary Guarantor, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Guarantee of such Subsidiary
Guarantor. Without limiting the generality of the foregoing, "Guarantor Senior
Indebtedness" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
to the extent such interest is an allowed claim under applicable law) on, and
all other amounts owing in respect of, (x) all monetary obligations of every
nature of a Subsidiary Guarantor under the Credit Agreement, including,
without limitation, obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities, (y) all
Interest Swap Obligations and (z) all obligations under Currency Agreements,
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall not
include (i) any Indebtedness of such Subsidiary Guarantor to a Subsidiary of
such Subsidiary Guarantor or any Affiliate of such Subsidiary Guarantor or any
of such Affiliate's Subsidiaries, (ii) Indebtedness to, or guaranteed on
behalf of, any shareholder, director, officer or employee of such Subsidiary
Guarantor or any Subsidiary of such Subsidiary Guarantor (including, without
limitation, amounts owed for compensation), (iii) Indebtedness to trade
creditors and other amounts incurred in connection with obtaining goods,
materials or services, (iv) Indebtedness represented by Disqualified Capital
Stock, (v) any liability for federal, state, local or other taxes owed or
owing by such Subsidiary Guarantor, (vi) Indebtedness incurred in violation of
the Indenture provisions set forth under "Limitation on Incurrence of
Additional Indebtedness," (vii) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11, United States Code,
is without recourse to such Subsidiary Guarantor and (viii) any Indebtedness
which is, by its express terms, subordinated in right of payment to any other
Indebtedness of such Subsidiary Guarantor.
"Holder" means any holder of Notes.
"Indebtedness" means with respect to any Person, without duplication, (i)
all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all
Obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all Obligations under any title
retention agreement (but excluding trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue by
90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted), (v) all Obligations
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (vi) guarantees and other
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contingent obligations in respect of Indebtedness referred to in clauses (i)
through (v) above and clause (viii) below, (vii) all Obligations of any other
Person of the type referred to in clauses (i) through (vi) which are secured
by any lien on any property or asset of such Person, the amount of such
Obligation being deemed to be the lesser of the fair market value of such
property or asset or the amount of the Obligation so secured, (viii) all
Obligations under currency agreements and interest swap agreements of such
Person and (ix) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference
and its maximum fixed repurchase price, but excluding accrued dividends, if
any. For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Disqualified Capital Stock
as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the issuer of such
Disqualified Capital Stock.
"Independent Financial Advisor" means a firm (i) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified
to perform the task for which it is to be engaged.
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated
by applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated
by applying a fixed or a floating rate of interest on the same notional amount
and shall include, without limitation, interest rate swaps, caps, floors,
collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including, without limitation, a guarantee) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit
by the Company and its Restricted Subsidiaries on commercially reasonable
terms in accordance with normal trade practices of the Company or such
Restricted Subsidiary, as the case may be. For the purposes of the "Limitation
on Restricted Payments" covenant, the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments
by the Company or any of its Restricted Subsidiaries, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment, reduced by the payment of dividends or
distributions in connection with such Investment or any other amounts received
in respect of such Investment; provided, however, that no such payment of
dividends or distributions or receipt of any such other amounts shall reduce
the amount of any Investment if such payment of dividends or distributions or
receipt of any such amounts would be included in Consolidated Net Income. If
the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Common Stock of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
the Company no longer owns, directly or indirectly, greater than 50% of the
outstanding Common Stock of such Restricted Subsidiary, the Company 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 Common Stock of such former Restricted
Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the Notes.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof and any agreement
to give any security interest).
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"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents
(other than the portion of any such deferred payment constituting interest)
received by the Company or any of its Restricted Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking
into account any reduction in consolidated tax liability due to available tax
credits or deductions and any tax sharing arrangements, (c) repayment of
Indebtedness that is required to be repaid in connection with such Asset Sale
and (d) appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by the Company or
any Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such Asset Sale.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Permitted Holders" means Warren J. Hayford and his spouse, their lineal
descendants and adopted children and spouses of their lineal descendants and
adopted children, any foundation controlled by any of the foregoing persons,
and trusts for the benefit of any of the foregoing persons.
"Permitted Indebtedness" means, without duplication, each of the following:
(i) Indebtedness under the Notes, the Indenture and the Guarantees;
(ii) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $125.0
million in the aggregate; provided, however, that if at the time of any
repayments under the revolving credit facility under the Credit Agreement
that are required pursuant to the "Limitation on Asset Sales" covenant
(which are accompanied by a corresponding reduction in the aggregate
available commitment), the total consolidated assets of the Company as
reflected on the Company's most recent balance sheet prepared in accordance
with GAAP (and after giving pro forma effect to any Asset Sales and Asset
Acquisitions occurring subsequent to the date of such balance sheet) were
less than $275.0 million, the Indebtedness permitted to be incurred
pursuant to this clause (ii) shall be reduced in an amount equal to such
repayment until such time as both (A) the total consolidated assets of the
Company exceed $275.0 million and (B) the Company could incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to the "Limitation on Incurrence of Additional Indebtedness"
covenant (at which time the aggregate Indebtedness permitted under this
clause (ii) shall be $125.0 million); provided, however, that, in the event
there is at any time more than $125 million available under the Credit
Agreement, the aggregate Indebtedness permitted under this clause (ii)
shall be allocated first to the revolving credit facility portion of the
Credit Agreement;
(iii) Interest Swap Obligations of the Company covering Indebtedness of
the Company or any of its Restricted Subsidiaries; provided, however, that
such Interest Swap Obligations are entered into to protect the Company and
its Restricted Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with the Indenture to the extent the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(iv) Indebtedness under Currency Agreements; provided, however, that in
the case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(v) Indebtedness of a Restricted Subsidiary of the Company to the Company
or to a Wholly Owned Restricted Subsidiary of the Company for so long as
such Indebtedness is held by the Company or a Wholly Owned Restricted
Subsidiary of the Company, in each case subject to no Lien held by a Person
other than the Company or a Wholly Owned Restricted Subsidiary of the
Company; provided, however, that (a) any Indebtedness of a Wholly Owned
Restricted Subsidiary of the Company is unsecured and (b) if as of any
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date any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
issuer of such Indebtedness;
(vi) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except
in the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business; provided, however, that such Indebtedness is
extinguished within two business days of incurrence;
(vii) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with self-
insurance or similar requirements in the ordinary course of business;
(viii) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company or any of its Restricted
Subsidiaries or otherwise incurred to finance the lease or improvement of
real or personal property or equipment in an aggregate principal amount not
to exceed $10.0 million at any one time outstanding;
(ix) the consummation of any Qualified Securitization Transaction;
(x) Refinancing Indebtedness;
(xi) Indebtedness of a Securitization Subsidiary incurred in a Qualified
Securitization Transaction that is not recourse to the Company or any
Restricted Subsidiary of the Company (except for representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in an
accounts receivable or equipment transaction);
(xii) Indebtedness incurred by Foreign Restricted Subsidiaries of the
Company with respect to such Subsidiaries' working capital requirements in
an aggregate principal amount outstanding at any one time not to exceed
$5.0 million; and
(xiii) additional Indebtedness in an aggregate principal amount not to
exceed $20.0 million at any one time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Restricted Subsidiary of the Company or
that will merge or consolidate into the Company or a Restricted Subsidiary of
the Company; (ii) Investments in the Company by any Restricted Subsidiary of
the Company; provided, however, that any Indebtedness evidencing such
Investment is unsecured; (iii) Investments in cash and Cash Equivalents; (iv)
loans and advances to employees and officers of the Company and its Restricted
Subsidiaries in the ordinary course of business for bona fide business
purposes not in excess of $3.0 million at any one time outstanding; (v)
Currency Agreements and Interest Swap Obligations entered into in the ordinary
course of the Company's or its Restricted Subsidiaries' businesses and
otherwise in compliance with the Indenture; (vi) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of such trade
creditors or customers; (vii) Investments made by the Company or its
Restricted Subsidiaries as a result of consideration received in connection
with an Asset Sale made in compliance with the "Limitation on Asset Sales"
covenant; (viii) Investments in Permitted Joint Ventures; and (ix) additional
Investments in (A) unconsolidated joint ventures in businesses reasonably
related or complementary to those of the Company and its Restricted
Subsidiaries (as determined in good faith by the Company's Board of Directors)
made in the ordinary course of business and (B) Unrestricted Subsidiaries in
an aggregate amount for all such Investments made pursuant to this clause (ix)
not to exceed $20.0 million at any one time outstanding.
"Permitted Joint Venture" means any joint venture arrangement (which may be
structured as a corporation, partnership, trust, limited liability company or
any other Person) if (a) no Affiliate (other than a Restricted Subsidiary of
the Company) of the Company or a Restricted Subsidiary has an investment in
such Person, (b) such Person is engaged in the same or a similar line of
business as the Company and its Restricted Subsidiaries were engaged in on the
Issue Date or any business ancillary or reasonably related or complementary
thereto or supportive thereof (as determined in good faith by the Company's
Board of Directors), (c) the Company and/or
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any of its Restricted Subsidiaries at all times (i) is the operator of such
Person and (ii) owns at least 30% of the total outstanding shares of Capital
Stock of such Person entitled to participate in distributions in respect of
the earnings, sale or liquidation of such Person, (d) immediately after giving
effect to such Investment on a pro forma basis (to give effect to the
contribution of any property or assets to such Person or Indebtedness incurred
to fund such Investment or otherwise), the Company could incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) pursuant to the
"Limitation on Incurrence of Additional Indebtedness" covenant, and (e) no
default with respect to any Indebtedness of such Person or any Subsidiary of
such Person (including any right which the holders thereof may have to take
enforcement action against such Person) would permit (upon notice, lapse of
time or both) any holder of any Indebtedness of the Company or its Restricted
Subsidiaries to declare a default on such Indebtedness or cause the payment
thereof to be accelerated or payable prior to its final scheduled maturity.
If, at any time, a Permitted Joint Venture fails to comply with clauses (b)
and (c) above, such Permitted Joint Venture shall constitute an Investment and
must comply with the "Limitation on Restricted Payments" covenant (but only
with respect to the Company's then net Investment in such joint venture).
"Permitted Liens" means the following types of Liens:
(i) Liens in favor of the Trustee in its capacity as trustee for the
Holders;
(ii) Liens securing Indebtedness outstanding under the Credit Agreement;
(iii) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(iv) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(v) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(vi) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(vii) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Subsidiaries;
(viii) any interest or title of a lessor under any Capitalized Lease
Obligation; provided, however, that such Liens do not extend to any
property or assets which is not leased property subject to such Capitalized
Lease Obligation;
(ix) Liens to secure Purchase Money Indebtedness; provided, however, that
(A) the related purchase money Indebtedness shall not exceed the cost of
such property or assets and shall not be secured by any property or assets
of the Company or any Restricted Subsidiary of the Company other than the
property and assets so acquired and (B) the Lien securing such Indebtedness
shall be created within 90 days of such acquisition;
(x) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
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(xi) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to
such letters of credit and products and proceeds thereof;
(xii) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and set-
off;
(xiii) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture;
(xiv) Liens securing Indebtedness under Currency Agreements;
(xv) Liens securing Acquired Indebtedness incurred in accordance with the
"Limitation on Incurrence of Additional Indebtedness" covenant; provided,
however, that (A) such Liens secured such Acquired Indebtedness at the time
of and prior to the incurrence of such Acquired Indebtedness by the Company
or a Restricted Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and
(B) such Liens do not extend to or cover any property or assets of the
Company or of any of its Restricted Subsidiaries other than the property or
assets that secured the Acquired Indebtedness prior to the time such
Indebtedness became Acquired Indebtedness of the Company or a Restricted
Subsidiary of the Company and are no more favorable to the lienholders than
those securing the Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company; and
(xvi) Liens granted in connection with any Qualified Securitization
Transaction.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Purchase Money Indebtedness" means Indebtedness the net proceeds of which
are used to finance the cost (including the cost of construction) of property
or assets acquired in the normal course of business by the Person incurring
such Indebtedness.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Securitization Transaction" means any transaction or series of
transactions that have been or may be entered into by the Company or any of
its Restricted Subsidiaries in connection with or reasonably related to a
transaction or series of transactions in which the Company or any of its
Restricted Subsidiaries may sell, convey or otherwise transfer to (i) a
Securitization Subsidiary or (ii) any other Person, or may grant a security
interest in, any Receivables or interests therein secured by the merchandise
or services financed thereby (whether such Receivables are then existing or
arising in the future) of the Company or any of its Restricted Subsidiaries,
and any assets related thereto including, without limitation, all security
interests in merchandise or services financed thereby, the proceeds of such
Receivables, and other assets which are customarily sold or in respect of
which security interests are customarily granted in connection with
securitization transactions involving such assets.
"Receivables" means any right of payment from or on behalf of any obligor,
whether constituting an account, chattel paper, instrument, general intangible
or otherwise, arising from the financing by the Company or any Restricted
Subsidiary of the Company of merchandise or services, and monies due
thereunder, security in the merchandise and services financed thereby, records
related thereto, and the right to payment of any interest or finance charges
and other obligations with respect thereto, proceeds from claims on insurance
policies related thereto, any other proceeds related thereto, and any other
related rights.
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"Refinance" means, in respect of any security or Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a
security or Indebtedness in exchange or replacement for, such security or
Indebtedness in whole or in part. "Refinanced" and "Refinancing" shall have
correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance
with the "Limitation on Incurrence of Additional Indebtedness" covenant (other
than pursuant to clauses (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix),
(xi), (xii) or (xiii) of the definition of Permitted Indebtedness), in each
case that does not (1) result in an increase in the aggregate principal amount
of Indebtedness of such Person as of the date of such proposed Refinancing
(plus the amount of any premium required to be paid under the terms of the
instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company or such Restricted Subsidiary, as the case
may be, in connection with such Refinancing), except to the extent that any
such increase in Indebtedness is otherwise permitted by the Indenture or (2)
create Indebtedness with (A) a Weighted Average Life to Maturity that is less
than the Weighted Average Life to Maturity of the Indebtedness being
Refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; provided, however, that (x) if such
Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company, (y) if
such Indebtedness being Refinanced is subordinate or junior to the Notes, then
such Refinancing Indebtedness shall be subordinate to the Notes at least to
the same extent and in the same manner as the Indebtedness being Refinanced
and (z) if such Indebtedness being refinanced is subordinated or junior to the
Guarantee of such Subsidiary Guarantor, then such Refinancing Indebtedness
shall be subordinate to the Guarantee of such Subsidiary Guarantor at least to
the same extent and in the same manner as the Indebtedness being refinanced.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Indebtedness; provided,
however, that if, and for so long as, any Designated Senior Indebtedness lacks
such a representative, then the Representative for such Designated Senior
Indebtedness shall at all times constitute the holders of a majority in
outstanding principal amount of such Designated Senior Indebtedness in respect
of any Designated Senior Indebtedness.
"Restricted Subsidiary" of any Person, means any Subsidiary of such Person
which at the time of determination is not an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Restricted Subsidiary of the Company of any
property, whether owned by the Company or any Restricted Subsidiary of the
Company at the Issue Date or later acquired, which has been or is to be sold
or transferred by the Company or such Restricted Subsidiary to such Person or
to any other Person from whom funds have been or are to be advanced by such
Person on the security of such Property.
"Securitization Subsidiary" means a Wholly Owned Restricted Subsidiary of
the Company which engages in no activities other than those reasonably related
to or in connection with the entering into of securitization transactions and
which is designated by the Board of Directors of the Company (as provided
below) as a Securitization Subsidiary (a) no portion of the Indebtedness or
any other obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any other Restricted Subsidiary of the Company, (ii) is
recourse to or obligates the Company or any other Restricted Subsidiary of the
Company in any way other than pursuant to representations, warranties and
covenants (including those related to servicing) entered into in the ordinary
course of business in connection with a Qualified Securitization Transaction
or (iii) subjects any property or assets of the Company or any other
Restricted Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to any Lien or to the satisfaction thereof, other than pursuant to
representations, warranties and covenants (including those related to
servicing) entered into in the ordinary course of business in connection with
a Qualified Securitization Transaction, (b) with which neither of the Company
nor any other Restricted Subsidiary of the Company (i) provides any credit
support or (ii) has any contract, agreement, arrangement or understanding
other than on terms that are fair and reasonable and that are no less
favorable to the Company or
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such Restricted Subsidiary than could be obtained from an unrelated Person
(other than, in the case of subclauses (i) and (ii) of this clause (b),
representations, warranties and covenants (including those relating to
servicing) entered into in the ordinary course of business in connection with
a Qualified Securitization Transaction and intercompany notes relating to the
sale of Receivables to such Securitization Subsidiary) and (c) with which
neither the Company nor any Restricted Subsidiary of the Company has any
obligation to maintain or preserve such Subsidiary's financial condition or to
cause such Subsidiary to achieve certain levels of operating results. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolutions of the
Board of Directors of the Company giving effect to such designation.
"Senior Indebtedness" means, (i) the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on any Indebtedness of the Company, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, to the extent such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature of the
Company under the Credit Agreement, including, without limitation, obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities, (y) all Interest Swap Obligations and
(z) all obligations under Currency Agreements, in each case whether
outstanding on the Issue Date or thereafter incurred. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (i) any Indebtedness of the
Company to a Subsidiary of the Company or any Affiliate of the Company or any
of such Affiliate's Subsidiaries, (ii) Indebtedness to, or guaranteed on
behalf of, any shareholder, director, officer or employee of the Company or
any Subsidiary of the Company (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other amounts
incurred in connection with obtaining goods, materials or services, (iv)
Indebtedness represented by Disqualified Capital Stock, (v) any liability for
federal, state, local or other taxes owed or owing by the Company, (vi)
Indebtedness incurred in violation of the Indenture provisions set forth under
"Limitation on Incurrence of Additional Indebtedness," (vii) Indebtedness
which, when incurred and without respect to any election under Section 1111(b)
of Title 11, United States Code, is without recourse to the Company and (viii)
any Indebtedness which is, by its express terms, subordinated in right of
payment to any other Indebtedness of the Company.
"Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v) of
Regulation S-X under the Securities Act.
"Subsidiary", with respect to any Person, means (i) any corporation of which
the outstanding Capital Stock having at least a majority of the votes entitled
to be cast in the election of directors under ordinary circumstances shall at
the time be owned, directly or indirectly, by such Person or (ii) any other
Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantor" means (i) each of the Company's present Restricted
Subsidiaries (except for BWAY Foreign Sales Corporation, Northeast Tin Plate
Company, Milton Metal Graphics, Inc. and Tin Plate Alliance, L.L.C.) and (ii)
each of the Company's Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Subsidiary agrees to be bound by the
terms of the Indenture as a Subsidiary Guarantor; provided, however, that any
Person constituting a Subsidiary Guarantor as described above shall cease to
constitute a Subsidiary Guarantor when its respective Guarantee is released in
accordance with the terms of the Indenture.
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"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding voting securities
(other than in the case of a foreign Restricted Subsidiary, directors'
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned by such Person or any
Wholly Owned Restricted Subsidiary of such Person.
BOOK-ENTRY; DELIVERY AND FORM
Except as described in the next paragraph, the Notes (and the related
guarantees) initially will be represented by one or more permanent global
certificates in definitive, fully registered form (the "Global Notes"). The
Global Notes will be deposited on the date of issuance with, or on behalf of,
The Depository Trust Company, New York, New York ("DTC") and registered in the
name of a nominee of DTC.
Notes (i) originally purchased by or transferred to "foreign purchasers" or
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) ("Accredited Investors") who are not
"qualified institutional buyers" (as defined in Rule 144A promulgated under
the Securities Act) ("QIBs") or (ii) held by QIBs or institutional Accredited
Investors who are not QIBs who elect to take physical delivery of their
certificates instead of holding their interest through a Global Note (and
which are thus ineligible to trade through DTC) (collectively referred to
herein as the "Non-Global Purchasers") will be issued in registered form (the
"Certificated Security"). Upon the transfer to a QIB or another institutional
Accredited Investor who is not a QIB of any Certificated Security initially
issued to a Non-Global Purchaser, such Certificated Security will, unless the
transferee requests otherwise or the Global Certificates have previously been
exchanged in whole for Certificated Securities, be exchanged for an interest
in a Global Note.
The Global Notes. The Company expects that pursuant to procedures
established by DTC (i) upon the issuance of the Global Notes, DTC or its
custodian will credit, on its internal system, the principal amount of Notes
of the individual beneficial interests represented by such Global Notes to the
respective accounts of persons who have accounts with such depositary and (ii)
ownership of beneficial interests in the Global Notes will be shown on, and
the transfer of such ownership will be effected only through, records
maintained by DTC or its nominee (with respect to interests of participants)
and the records of participants (with respect to interests of persons other
than participants). Such accounts initially will be designated by or on behalf
of the Initial Purchasers and ownership of beneficial interests in the Global
Notes will be limited to persons who have accounts with DTC ("participants")
or persons who hold interests through participants. QIBs and institutional
Accredited Investors who are not QIBs may hold their interests in the Global
Note directly through DTC if they are participants in such system, or
indirectly through organizations which are participants in such system.
So long as DTC, or its nominee, is the registered owner or holder of the
Notes, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Notes for all purposes
under the Indenture. No beneficial owner of an interest in any of the Global
Notes will be able to transfer that interest except in accordance with DTC's
procedures, in addition to those provided for under the Indenture with respect
to the Notes.
Payments of the principal of, premium (if any) and interest (including
Additional Interest) on the Global Notes will be made to DTC or its nominee,
as the case may be, as the registered owner thereof. None of the Company, the
Trustee or any Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Notes or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
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The Company expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest (including Additional Interest) in
respect of the Global Notes, will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of the Global Notes as shown on the records of DTC or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in the Global Notes held through such participants will
be governed by standing instructions and customary practice, as is now the
case with securities held for the accounts of customers registered in the
names of nominees for such customers. Such payments will be the responsibility
of such participants.
Transfers between participants in DTC will be effected in the ordinary way
through DTC's same-day funds system in accordance with DTC rules and will be
settled in same day funds. If a holder requires physical delivery of a
Certificated Security for any reason, including to sell Notes to persons in
states which require physical delivery of the Notes, or to pledge such
securities, such holder must transfer its interest in a Global Note, in
accordance with the normal procedures of DTC and with the procedures set forth
in the Indenture.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Notes (including the presentation of Notes for exchange
as described below) only at the direction of one or more participants to whose
account the DTC interests in the Global Notes are credited and only in respect
of such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if
there is an Event of Default under the Indenture, DTC will exchange the Global
Notes for Certificated Securities, which it will distribute to its
participants.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to others such
as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a participant, either directly or indirectly
("indirect participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Notes among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither the Company nor the Trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
Certificated Securities. If DTC is at any time unwilling or unable to
continue as a depositary for the Global Notes and a successor depositary is
not appointed by the Company within 90 days, Certificated Securities will be
issued in exchange for the Global Notes.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were originally sold by the Company on April 11, 1997 to the
Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Old Notes to (i) qualified institutional buyers in
reliance on Rule 144A under the Securities Act, (ii) a limited number of
institutional accredited investors that agreed to comply with certain transfer
restrictions and other conditions and (iii) qualified buyers outside the
United States in reliance upon Regulation S under the Securities Act. As a
condition to the Purchase Agreement, the Company, the Subsidiary Guarantors
and the Initial Purchasers entered into the Registration Rights Agreement on
the date of the Initial Offering (the "Issue Date") pursuant to which each of
the Company and the Subsidiary Guarantors agreed, for the benefit of the
holders, that it will (i) within 60 days after the Issue Date (the "Filing
Date"), file a registration statement on an appropriate form (the "Exchange
Offer Registration Statement") with the Commission with respect to a
registered offer (the "Exchange Offer") to exchange the Old Notes for notes of
the Company, guaranteed by the Subsidiary Guarantors, which Exchange Notes
will have terms substantially identical in all material respects to the Old
Notes (except that the Exchange Notes will not contain terms with respect to
transfer restrictions) and (ii) use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be declared effective under the
Securities Act within 120 days after the Issue Date. Upon the Exchange Offer
Registration Statement being declared effective, the Company and the
Subsidiary Guarantors will offer the Exchange Notes (and the related
guarantees) in exchange for surrender of the Old Notes (and the related
guarantees). The Company and the Subsidiary Guarantors will keep the Exchange
Offer open for not less than 30 days (or longer if required by applicable law)
after the date notice of the Exchange Offer is mailed to the holders of the
Old Notes. For each of the Old Notes surrendered pursuant to the Exchange
Offer, the holder who surrendered such Old Note will receive an Exchange Note
having a principal amount equal to that of the surrendered Old Note. Interest
on each Exchange Note will accrue (A) from the later of (i) the last interest
payment date on which interest was paid on the Old Note surrendered in
exchange therefor or (ii) if the Old Note is surrendered for exchange on a
date in a period which includes the record date for an interest payment date
to occur on or after the date of such exchange and as to which interest will
be paid, the date of such interest payment date or (B) if no interest has been
paid on such Old Note, from the Issue Date.
Under existing interpretations of the Commission contained in several no-
action letters to third parties, the Exchange Notes (and the related
guarantees) would be freely transferable by holders thereof other than
affiliates of the Company and the Subsidiary Guarantors after the Exchange
Offer without further registration under the Securities Act; provided,
however, that each holder that wishes to exchange its Old Notes for Exchange
Notes will be required to represent (i) that any Exchange Notes to be received
by it will be acquired in the ordinary course of its business, (ii) that at
the time of the commencement of the Exchange Offer it has no arrangement or
understanding with any person to participate in the distribution (within the
meaning of Securities Act) of the Exchange Notes in violation of the
Securities Act, (iii) that it is not an "affiliate" (as defined in Rule 405
promulgated under the Securities Act) of the Company or the Subsidiary
Guarantors, (iv) if such holder is not a broker-dealer, that it is not engaged
in, and does not intend to engage in, the distribution of Exchange Notes and
(v) if such holder is a broker-dealer (a "Participating Broker-Dealer") that
will receive Exchange Notes for its own account in exchange for Notes that
were acquired as a result of market-making or other trading activities, that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Company and the Subsidiary Guarantors will agree for a period of
180 days after consummation of the Exchange Offer to make available a
prospectus meeting requirements of the Securities Act to Participating Broker-
Dealers and other persons, if any, with similar prospectus delivery
requirements for use in connection with any resale of such Exchange Notes.
If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the Commission, the Company and the Subsidiary
Guarantors are not permitted to effect an Exchange Offer, (ii) the Exchange
Offer is not consummated within 165 days of the Issue Date, (iii) in certain
circumstances, certain holders of unregistered Exchange Notes so request or
(iv) in the case of any holder that participates in the Exchange Offer, such
holder does not receive Exchange Notes on the date of the exchange that may be
sold without restriction
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under state and federal securities laws (other than due solely to the status
of such holder as an affiliate of the Company or the Subsidiary Guarantors
within the meaning of the Securities Act), then in each case, the Company and
the Subsidiary Guarantors will (x) promptly deliver to the holders and the
Trustee written notice thereof and (y) at the Company and the Subsidiary
Guarantors' sole expense, (a) as promptly as practicable, file a shelf
registration statement covering resales of the Old Notes (a "Shelf
Registration Statement"), (b) use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective under the Securities Act
and (c) use its reasonable best efforts to keep effective such Shelf
Registration Statement until the earlier of two years after the Issue Date and
such time as all of the applicable Old Notes have been sold thereunder. The
Company will, in the event of the filing of a Shelf Registration Statement,
provide to each holder of the Old Notes copies of the prospectus which is a
part of such Shelf Registration Statement, notify each such holder when such
Shelf Registration Statement has become effective and take certain other
actions as are required to permit unrestricted resales of the Old Notes. A
holder that sells its Old Notes pursuant to a Shelf Registration Statement
generally will be required to be named as a selling securityholder in the
related prospectus and to deliver a prospectus to purchasers, will be subject
to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Rights Agreement which are applicable to such holder (including
certain indemnification obligations).
If the Company and the Subsidiary Guarantors fail to comply with the above
provisions or if such registration statement fails to become effective, then,
as liquidated damages, additional interest (the "Additional Interest") shall
become payable with respect to the Old Notes as follows:
(i) if (A) neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement is filed with the Commission on or prior to
the applicable Filing Date or (B) notwithstanding that the Company and the
Subsidiary Guarantors have consummated or will consummate an Exchange
Offer, the Company and the Subsidiary Guarantors are required to file a
Shelf Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by the Registration Rights
Agreement, then commencing on the day after either such required filing
date. Additional Interest shall accrue on the principal amount of the Old
Notes at a rate of 0.25% per annum for the first 90 days immediately
following each such filing date, such Additional Interest rate increasing
by an additional 0.25% per annum at the beginning of each subsequent 90-day
period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the Commission on or prior
to 120 days after the applicable filing date or (B) notwithstanding that
the Company and the Subsidiary Guarantors have consummated or will
consummate an Exchange Offer, the Company and the Subsidiary Guarantors
have consummated or will consummate an Exchange Offer, the Company and the
Subsidiary Guarantors are required to file a Shelf Registration Statement
and such Shelf Registration Statement is not declared effective by the
Commission on or prior to the 150th day following the date such Shelf
Registration Statement was filed, then, commencing on the day after the
150th day following the applicable filing date. Additional Interest shall
accrue on the principal amount of the Old Notes at a rate of 0.25% per
annum for the first 90 days immediately following such date, such
Additional Interest rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period; or
(iii) if (A) the Company and the Subsidiary Guarantors have not exchanged
Exchange Notes for all Old Notes validly tendered in accordance with the
terms of the Exchange Offer on or prior to the 45th day after the date on
which the Exchange Offer Registration Statement was declared effective or
(B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective at
any time prior to the third anniversary of its effective date (other than
after such time as all Old Notes have been disposed of thereunder), then
Additional Interest shall accrue on the principal amount of the Old Notes
at a rate of 0.25% per annum for the first 90 days commencing on (x) the
46th day after such effective date, in the case of (A) above, or (y) the
day such Shelf Registration Statement ceases to be effective in the case of
(B) above, such Additional Interest rate increasing by an additional 0.25%
per annum at the beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on the Old Notes may not
exceed in the aggregate 1.0% per annum; and provided further, that (1) upon
the filing of the Exchange Offer Registration Statement or Shelf
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Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement or Shelf
Registration Statement (in the case of (ii) above), or (3) upon the exchange
of Exchange Notes for all Old Notes tendered (in the case of clause (iii)(A)
above), or upon the effectiveness of the Exchange Offer Registration Statement
which had ceased to remain effective in the case of clause (iii)(B) above,
additional Interest on the Old Notes as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or
(iii) above will be payable in cash, on the same original interest payment
dates as the Old Notes. The amount of Additional Interest will be determined
by multiplying the applicable Additional Interest rate by the principal amount
of the Old Notes multiplied by a fraction, the numerator of which is the
number of days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by, all the provisions of the Registration Rights Agreement, a
copy of which will be available upon request to the Company.
Following the consummation of the Exchange Offer, holders of the Old Notes
who were eligible to participate in the Exchange Offer but who did not tender
their Old Notes will not have any further registration rights and such Old
Notes will continue to be subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for such Old Notes could be adversely
affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Company will issue $1,000 principal amount
of Exchange Notes in exchange for each $1,000 principal amount of outstanding
Old Notes accepted in the Exchange Offer. Holders may tender some or all of
their Old Notes pursuant to the Exchange Offer. However, Old Notes may be
tendered only in integral multiples of $1,000.
The form and terms of the Exchange Notes are the same as the form and terms
of the Old Notes except that (i) the Exchange Notes bear a Series B
designation and a different CUSIP Number from the Old Notes, (ii) the Exchange
Notes have been registered under the Securities Act and hence will not bear
legends restricting the transfer thereof and (iii) the holders of the Exchange
Notes will not be entitled to certain rights under the Registration Rights
Agreement, including the provisions providing for an increase in the interest
rate on the Old Notes in certain circumstances relating to the timing of the
Exchange Offer, all of which rights will terminate when the Exchange Offer is
terminated. The Exchange Notes will evidence the same debt as the Old Notes
and will be entitled to the benefits of the Indenture.
As of the date of this Prospectus, $100,000,000 aggregate principal amount
of Old Notes were outstanding. This Prospectus and the Letter of Transmittal
are being mailed to persons who were holders of Old Notes on the close of
business on the date of this Prospectus.
Holders of Old Notes do not have any appraisal or dissenters' rights under
the General Corporation Law of Delaware or the Indenture in connection with
the Exchange Offer. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the Exchange Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Old Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
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Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection
with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
1997, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "--Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral
or written notice thereof to the registered holders.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest from their date of issuance. Holders
of Old Notes that are accepted for exchange will receive, in cash, accrued
interest thereon to, but not including, the date of issuance of the Exchange
Notes. Such interest will be paid with the first interest payment on the
Exchange Notes on October 15, 1997. Interest on the Old Notes accepted for
exchange will cease to accrue upon issuance of the Exchange Notes.
Interest on the Exchange Notes is payable semi-annually on each April 15 and
October 15, commencing on October 15, 1997.
PROCEDURES FOR TENDERING
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Old
Notes and any other required documents, to the Exchange Agent prior to 5:00
p.m., New York City time, on the Expiration Date. To be tendered effectively,
the Old Notes, Letter of Transmittal and other required documents must be
completed and received by the Exchange Agent at the address set forth below
under "Exchange Agent" prior to 5:00 p.m., New York City time, on the
Expiration Date. Delivery of the Old Notes may be made by book-entry transfer
in accordance with the procedures described below. Confirmation of such book-
entry transfer must be received by the Exchange Agent prior to the Expiration
Date.
By executing the Letter of Transmittal, each holder will make to the Company
the representations set forth above in the second paragraph under the heading
"--Purpose and Effect of the Exchange Offer."
The tender by a holder and the acceptance thereof by the Company will
constitute agreement between such holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
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SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY
WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE
COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH
HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See
"Instructions to Registered Holder and/or Book-Entry Transfer Facility
Participant from Beneficial Owner" included with the Letter of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantee must be by a member firm
of the Medallion System (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered
holder as such registered holder's name appears on such Old Notes with the
signature thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, offices of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Company of their authority to so act must be submitted with the Letter of
Transmittal.
The Company understands that the Exchange Agent will make a request promptly
after the date of this Prospectus to establish accounts with respect to the
Old Notes at the book-entry transfer facility, The Depository Trust Company
(the "Book-Entry Transfer Facility"), for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Old Notes by causing such Book-Entry Transfer
Facility to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. Although delivery of the Old Notes may be
effected through book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility, an appropriate Letter of Transmittal properly
completed and duly executed with any required signature guarantee and all
other required documents must in each case be transmitted to and received or
confirmed by the Exchange Agent at its address set forth below on or prior to
the Expiration Date, or, if the guaranteed delivery procedures described below
are complied with, within the time period provided under such procedures.
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute
right to reject any and all Old Notes not properly tendered or any Old Notes
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right in their sole
discretion to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Company's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be
cured
89
<PAGE>
within such time as the Issuer shall determine. Although the Company intends
to notify holders of defects or irregularities with respect to tenders of Old
Notes, neither the Issuer, the Exchange Agent nor any other person shall incur
any liability for failure to give such notification. Tenders of Old Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in the Letter of Transmittal, as soon as
practicable following the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Old Notes and the principal amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within three
New York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof) together with the certificate(s)
representing the Old Notes (or a confirmation of book-entry transfer of
such Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility), and any other documents required by the Letter of Transmittal
will be deposited by the Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (of
facsimile thereof), as well as the certificate(s) representing all tendered
Old Notes in proper form for transfer (or a confirmation of book-entry
transfer of such Old Notes into the Exchange Agent's account at the Book-
Entry Transfer Facility), and all other documents required by the Letter of
Transmittal are received by the Exchange Agent upon three New York Stock
Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a telegram, telex,
letter or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person having deposited the Old Notes to be withdrawn
(the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number(s) and principal amount of such Old Notes, or, in the case
of Old Notes transferred by book-entry transfer, the name and number of the
account at the Book-Entry Transfer Facility to be credited), (iii) be signed
by the holder in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Old Notes register the transfer of such
Old Notes into the name of the person withdrawing the tender and (iv) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer and no Exchange Notes will be issued with respect
90
<PAGE>
thereto unless the Old Notes so withdrawn are validly retendered. Any Old
Notes which have been tendered but which are not accepted for exchange will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following
one of the procedures described above under "--Procedures for Tendering" at
any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange Exchange Notes for, any Old
Notes, and may terminate or amend the Exchange Offer as provided herein before
the acceptance of such Old Notes, if:
(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or any material
adverse development has occurred in any existing action or proceeding with
respect to the Company or any of its subsidiaries;
(b) any law, statute, rule, regulation or interpretation by the staff of
the Commission is proposed, adopted or enacted, which, in the sole judgment
of the Company, might materially impair the ability of the Company to
proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval the
Company shall, in its sole discretion, deem necessary for the consummation
of the Exchange Offer as contemplated hereby.
If the Company determines in its sole discretion that any of the conditions
are not satisfied, the Company may (i) refuse to accept any Old Notes and
return all tendered Old Notes to the tendering holders, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the expiration of
the Exchange Offer, subject, however, to the rights of holders to withdraw
such Old Notes (see "--Withdrawal of Tenders") or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn.
EXCHANGE AGENT
Harris Trust and Savings Bank has been appointed as Exchange Agent for the
Exchange Offer. Questions and requests for assistance, requests for additional
copies of this Prospectus or of the Letter of Transmittal and requests for
Notice of Guaranteed Delivery should be directed to the Exchange Agent
addressed as follows:
HARRIS TRUST AND SAVINGS BANK, DEPOSITARY
C/O HARRIS TRUST COMPANY OF NEW YORK
By Overnight Courier:
77 Water Street, 4th Floor
New York, NY 10005
By Mail: By Facsimile Transmission By Hand:
Wall Street (for Eligible Institutions only): Receive Window
Station (212) 701-7636 77 Water Street, 5th
P.O. Box 1010 (212) 701-7637 Floor
New York, NY 10268-1010 New York, NY 10005
Confirm by Telephone:
(212) 701-7649
DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
91
<PAGE>
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others to
solicit acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection
therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs,
among others.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the Old
Notes, which is face value, as reflected in the Company's accounting records
on the date of exchange. Accordingly, no gain or loss for accounting purposes
will be recognized by the Company. The expenses of the Exchange Offer will be
amortized over the term of the Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Old Notes
may be resold only (i) to the Company (upon redemption thereof or otherwise),
(ii) so long as the Old Notes are eligible for resale pursuant to Rule 144A,
to a person inside the United States whom the seller reasonably believes is a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act in a transaction meeting the requirements of Rule 144A, in
accordance with Rule 144 under the Securities Act, or pursuant to another
exemption from the registration requirements of the Securities Act (and based
upon an opinion of counsel reasonably acceptable to the Company), (iii)
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or (iv) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States.
RESALE OF THE EXCHANGE NOTES
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third
parties, the Company believes that a holder or other person who receives
Exchange Notes, whether or not such person is the holder (other than a person
that is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act) who receives Exchange Notes in exchange for Old Notes in the
ordinary course of business and who is not participating, does not intend to
participate, and has no arrangement or understanding with any person to
participate, in the distribution of the Exchange Notes, will be allowed to
resell the Exchange Notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Notes
a prospectus that satisfies the requirements of Section 10 of the Securities
Act. However, if any holder acquires Exchange Notes in the Exchange Offer for
the purpose of distributing or participating in a distribution of the Exchange
Notes, such holder cannot rely on the position of the staff of the Commission
enunciated in such no-action letters or any similar interpretive letters, and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available. Further, each Participating Broker-
Dealer that receives Exchange Notes for its own account in exchange for Old
Notes, where such Old Notes were acquired by such Participating Broker-Dealer
as a result of market-making activities or
92
<PAGE>
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Notes.
As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent
to the Company in the Letter of Transmittal that (i) the Exchange Notes are to
be acquired by the holder or the person receiving such Exchange Notes, whether
or not such person is the holder, in the ordinary course of business, (ii) the
holder or any such other person (other than a broker-dealer referred to in the
next sentence) is not engaging and does not intend to engage, in the
distribution of the Exchange Notes, (iii) the holder or any such other person
has no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iv) neither the holder nor any such other
person is an "affiliate" of the Company within the meaning of Rule 405 under
the Securities Act, and (v) the holder or any such other person acknowledges
that if such holder or other person participates in the Exchange Offer for the
purpose of distributing the Exchange Notes it must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale of the Exchange Notes and cannot rely on those no-
action letters. As indicated above, each Participating Broker-Dealer that
receives a New Note for its own account in exchange for Old Notes must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. For a description of the procedures for such resales by
Participating Broker-Dealers, see "Plan of Distribution."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is based on the current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), applicable Treasury
regulations, judicial authority and administrative rulings and practice. There
can be no assurance that the Internal Revenue Service (the "Service") will not
take a contrary view, and no ruling from the Service has been or will be
sought. Legislative, judicial or administrative changes or interpretations may
be forthcoming that could alter or modify the statements and conditions set
forth herein. Any such changes or interpretations may or may not be
retroactive and could affect the tax consequences to holders. Certain holders
(including insurance companies, tax-exempt organizations, financial
institutions, broker-dealers, foreign corporations and persons who are not
citizens or residents of the United States) may be subject to special rules
not discussed below. The Company recommends that each holder consult such
holder's own tax advisor as to the particular tax consequences of exchanging
such holder's Old Notes for Exchange Notes, including the applicability and
effect of any state, local or foreign tax laws.
The Company believes that the exchange of Old Notes for Exchange Notes
pursuant to the Exchange Offer will not be treated as an "exchange" for
federal income tax purposes because the Exchange Notes will not be considered
to differ materially in kind or extent from the Old Notes. Rather, the
Exchange Notes received by a holder will be treated as a continuation of the
Old Notes in the hands of such holder. As a result, there will be no federal
income tax consequences to holders exchanging Old Notes for Exchange Notes
pursuant to the Exchange Offer.
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of Exchange
Notes received in exchange for Old Notes where such Old Notes were acquired as
a result of market-making activities or other trading activities. The Company
has agreed that for a period of 180 days after the Expiration Date, they will
make this Prospectus, as amended or supplemented, available to any
Participating Broker-Dealer for use in connection with any such resale. In
addition, until , 1997 (90 days after the commencement of the Exchange
Offer), all dealers effecting transactions in the Exchange Notes may be
required to deliver a prospectus.
93
<PAGE>
The Company will not receive any proceeds from any sales of the Exchange
Notes by Participating Broker Dealers. Exchange Notes received by
Participating Broker-Dealers for their own account pursuant to the Exchange
Offer may be sold from time to time in one or more transactions in the over-
the-counter market, in negotiated transactions, through the writing of options
on the Exchange Notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such Participating Broker-
Dealer and/or the purchasers of any such Exchange Notes. Any Participating
Broker-Dealer that resells the Exchange Notes that were received by it for its
own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
For a period of 180 days after the Expiration Date the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any Participating Broker-Dealer that requests such
documents in the Letter of Transmittal.
EXPERTS
The Company's consolidated balance sheets as of September 30, 1996 and 1995,
and the consolidated statements of operations, of cash flows, and of changes
in stockholders' equity (deficit) for each of the three years in the period
ended September 30, 1996 included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report
appearing herein and have been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The Statements of Financial Position of Davies Can (a division of Crown Cork
& Seal Company, Inc.) as of December 31, 1995 and 1994 and the Statements of
Operations, of Cash Flows and of Owner's Net Investment for the years then
ended incorporated herein by reference to the Company's Current Report on Form
8-K/A dated August 30, 1996 have been so incorporated by reference in reliance
upon the report of Price Waterhouse LLP, independent accountants, given upon
the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the Exchange Notes offered hereby will be
passed upon for the Company by Kirkland & Ellis, Chicago, Illinois. Certain
partners of Kirkland & Ellis beneficially own shares of the Company's Common
Stock.
94
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report.......................................... F-2
Consolidated Balance Sheets at September 29, 1996 and October 1, 1995. F-3
Consolidated Statements of Operations for each of the three years in
the period ended September 29, 1996.................................. F-4
Consolidated Statements of Stockholders' Equity for each of the three
years in the period ended September 29, 1996......................... F-5
Consolidated Statements of Cash Flows for each of the three years in
the period ended September 29, 1996.................................. F-6
Notes to Consolidated Financial Statements............................ F-7
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets at December 29, 1996 and September 29,
1996 (Unaudited)..................................................... F-19
Consolidated Statements of Operations for the three months ended
December 29, 1996 and December 31, 1995 (Unaudited).................. F-20
Consolidated Statements of Cash Flows for the three months ended
December 29, 1996 and December 31, 1995 (Unaudited).................. F-21
Notes to Consolidated Financial Statements (Unaudited)................ F-22
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors of BWAY Corporation:
We have audited the accompanying consolidated balance sheets of BWAY
Corporation and subsidiaries (the "Company") as of September 29, 1996 and
October 1, 1995 and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended September 29, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of September
29, 1996 and October 1, 1995 and the results of its operations and its cash
flows for each of the three years in the period ended September 29, 1996 in
conformity with generally accepted accounting principles.
As discussed in Note 1 of Notes to Consolidated Financial Statements, in
1994 the Company changed its method of accounting for postemployment benefits.
DELOITTE & TOUCHE LLP
Atlanta, Georgia
November 8, 1996
(except for Note 18, which is dated April 11, 1997)
F-2
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER
1996 1, 1995
------------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................ $ 1,852 $ 23,538
Accounts receivable, net of allowance for doubtful
accounts of $390 (1996) and $386 (1995)............. 39,011 29,782
Inventories.......................................... 37,044 19,388
Other current assets................................. 1,293 1,103
Deferred tax asset................................... 2,405 389
-------- --------
Total current assets............................... 81,605 74,200
PROPERTY, PLANT, AND EQUIPMENT--Net.................... 94,800 67,668
OTHER ASSETS:
Intangible assets, net............................... 64,807 22,011
Deferred financing costs, net of accumulated
amortization of $83 (1996) and $1,400 (1995)........ 1,336 2,908
Other assets......................................... 2,585 1,171
-------- --------
Total other assets................................. 68,728 26,090
-------- --------
$245,133 $167,958
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable..................................... $ 36,206 $ 22,194
Accrued salaries and wages........................... 4,252 3,134
Accrued income taxes................................. 759 910
Other current liabilities............................ 14,581 6,415
Accrued rebates...................................... 3,382 2,581
Current maturities of long-term debt................. 1,916 155
-------- --------
Total current liabilities.......................... 61,096 35,389
LONG-TERM DEBT......................................... 93,282 50,063
LONG-TERM LIABILITIES:
Deferred income taxes................................ 14,135 14,632
Other................................................ 3,991 2,037
-------- --------
Total long-term liabilities........................ 18,126 16,669
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, authorized 5,000,000
shares.............................................. -- --
Common stock, $.01 par value; authorized 24,000,000
shares, issued 6,564,546 (1996) and 6,409,750
(1995).............................................. 66 64
Additional paid-in capital........................... 37,612 31,734
Retained earnings.................................... 35,569 34,385
-------- --------
73,247 66,183
Less treasury stock, at cost, 32,791 (1996) and
69,563 (1995)....................................... (618) (346)
-------- --------
Total stockholders' equity......................... 72,629 65,837
-------- --------
$245,133 $167,958
======== ========
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------
SEPTEMBER 29, OCTOBER OCTOBER
1996 1, 1995 2, 1994
------------- -------- --------
<S> <C> <C> <C>
NET SALES.................................... $283,105 $247,480 $224,701
COSTS, EXPENSES, AND OTHER INCOME:
Cost of products sold (excluding
depreciation and amortization)............ 234,518 206,262 191,836
Depreciation and amortization.............. 7,425 5,940 5,057
Selling and administrative expense......... 16,812 12,164 11,659
Provision for restructuring ............... 12,860
Interest expense, net...................... 4,872 5,211 5,730
AB leasing fees and expenses............... 1,389 1,318
AB leasing termination expense ............ 1,995
Other, net................................. (340) (275) 100
-------- -------- --------
Total costs, expenses, and other income.. 276,147 232,686 215,700
-------- -------- --------
INCOME BEFORE INCOME TAXES, EXTRAORDINARY
ITEM, AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING.................................. 6,958 14,794 9,001
PROVISION FOR INCOME TAXES................... 3,239 6,021 3,756
-------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING... 3,719 8,773 5,245
EXTRAORDINARY LOSS RESULTING FROM THE
EXTINGUISHMENT OF DEBT--Net of related tax
benefit of $1,683........................... (2,535)
-------- -------- --------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING.................................. 1,184 8,773 5,245
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR
POSTEMPLOYMENT BENEFITS--Net of related tax
benefit of $137............................. (213)
--------
NET INCOME................................... $ 1,184 $ 8,773 $ 5,032
======== ======== ========
EARNINGS PER COMMON SHARE:
Income before extraordinary item and
cumulative effect of change in accounting. $ 0.59 $ 1.85 $ 1.27
Extraordinary item......................... (0.40)
Change in accounting....................... (0.05)
-------- -------- --------
Net income............................... $ 0.19 $ 1.85 $ 1.22
======== ======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING... 6,273 4,731 4,137
======== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
NUMBER OF
SHARES
--------------- ADDITIONAL
COMMON TREASURY COMMON PAID-IN RETAINED TREASURY
STOCK STOCK STOCK CAPITAL EARNINGS STOCK TOTAL
------ -------- ------ ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE October 3, 1993. 4,049 (27) $40 $ 3,374 $20,580 $ (77) $23,917
Net income............ 5,032 5,032
Issuance of common
stock................ 146 2 916 918
Transfer of redeemable
common stock......... (4) (296) (2,382) (2,682)
Purchase of treasury
stock................ (28) (170) (170)
----- ---- --- ------- ------- ------- -------
BALANCE October 2, 1994. 4,195 (55) 38 3,994 23,230 (247) 27,015
Net income............ 8,773 8,773
Issuance of common
stock before Initial
Public Offering...... 65 1 504 505
Accretion of
redeemable common
stock................ (372) (372)
Lapse of put on
redeemable common
stock................ 4 296 2,754 3,054
Initial Public
Offering of common
stock................ 2,017 20 24,946 24,966
Common stock issued to
AB Leasing for
termination of
management contract.. 133 1 1,994 1,995
Purchase of treasury
stock................ (15) (99) (99)
----- ---- --- ------- ------- ------- -------
BALANCE October 1, 1995. 6,410 (70) 64 31,734 34,385 (346) 65,837
Net income............ 1,184 1,184
Issuance of common
stock for
acquisitions......... 155 656 2 5,984 8,614 14,600
Issuance of treasury
stock under employee
savings plan......... 31 6 583 589
Purchase of treasury
stock................ (650) (9,469) (9,469)
Other................. (112) (112)
----- ---- --- ------- ------- ------- -------
BALANCE September 29,
1996................... 6,565 (33) $66 $37,612 $35,569 $ (618) $72,629
===== ==== === ======= ======= ======= =======
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------
SEPTEMBER 29, OCTOBER 1, OCTOBER 2,
1996 1995 1994
------------- ---------- ----------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income............................... $ 1,184 $ 8,773 $ 5,032
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation........................... 5,656 4,853 3,922
Amortization of intangibles............ 1,769 1,087 1,135
Amortization of deferred financing
costs................................. 525 609 623
Write-off of deferred loan fees related
to debt extinguishment................ 2,466
Common stock issued under employee
savings plan.......................... 589
Provision for doubtful accounts........ 188 (224) 250
Restructuring charge................... 12,860
(Gain) loss on disposition of property,
plant, and equipment.................. (21) 68 112
Deferred income taxes.................. (4,837) 1,314 954
Termination of AB Leasing contract
through issuance of common shares..... 1,995
Changes in assets and liabilities, net
of effects of business acquisitions:
Accounts receivable.................. 3,271 (4,836) 2,337
Inventories.......................... (2,962) (730) 776
Other assets......................... (54) 623 (583)
Accounts payable..................... 3,847 (1,597) 2,598
Accrued liabilities.................. 1,628 (506) (3,428)
Income taxes, net.................... 131 642 (461)
-------- -------- -------
Net cash provided by operating
activities......................... 26,240 12,071 13,267
INVESTING ACTIVITIES:
Acquisitions, net of cash acquired....... (69,697)
Capital expenditures..................... (12,671) (13,593) (8,698)
Proceeds from disposition of property,
plant, and equipment.................... 21
Other.................................... (55)
-------- -------- -------
Net cash used in investing
activities......................... (82,347) (13,593) (8,753)
FINANCING ACTIVITIES:
Net borrowings (repayments) under bank
revolving credit agreement.............. 93,770 (5,000) 5,000
Extinguishment of long term debt......... (50,000)
Net proceeds from Initial Public
Offering................................ 24,966
Proceeds from issuance of common stock
before Initial Public Offer............. 505 918
Repayments on long term debt............. (2,095) (258) (5,321)
Increase (decrease) in unpresented bank
drafts.................................. 4,335 403 (3,426)
Purchases of treasury stock.............. (9,469) (99) (170)
Financing costs incurred................. (1,419) (75) (131)
Common stock issued under employee
savings plan............................ (589)
Other.................................... (112)
-------- -------- -------
Net cash provided by (used in)
financing activities............... 34,421 20,442 (3,130)
-------- -------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS. (21,686) 18,920 1,384
CASH AND CASH EQUIVALENTS--Beginning of
year..................................... 23,538 4,618 3,234
-------- -------- -------
CASH AND CASH EQUIVALENTS--End of year.... $ 1,852 $ 23,538 $ 4,618
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest............................... $ 6,010 $ 4,636 $ 5,084
======== ======== =======
Income taxes........................... $ 6,544 $ 4,054 $ 2,723
======== ======== =======
Details of businesses acquired were as
follows:
Fair value of assets acquired.......... $107,710
Liabilities assumed.................... (22,256)
Value of common stock issued........... (14,600)
Long term note issued.................. (1,000)
--------
Net cash paid for acquisitions...... $ 69,854
========
NONCASH INVESTING AND FINANCING
ACTIVITIES:
Common stock issued for acquisitions..... $ 14,600
========
Common stock issued under employee
savings plan............................ $ 589
========
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 29, 1996 AND OCTOBER 1, 1995 AND
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED
SEPTEMBER 29, 1996
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Operations--BWAY Corporation ("BWAY") is a holding company whose
subsidiaries, Brockway Standard, Inc. ("BSI"), Milton Can Company, Inc.
("MCC"), and Brockway Standard (Canada), Inc. ("BSCI") (collectively the
"Company") manufacture and distribute metal containers in the United States
and Canada. On May 28, 1996, BWAY acquired 100% of MCC's outstanding stock and
on June 17, 1996, BSI acquired the Davies Can Division of Van Dorn Company, a
wholly owned subsidiary of Crown Cork and Seal Company, Inc. ("Crown").
On June 20, 1995, in connection with the public offering of the Company's
stock, the Company increased the number of shares of common stock outstanding
through an approximately 374-for-1 stock split. Accordingly, earnings per
share and share data have been adjusted to give retroactive effect to the
stock split for all periods presented.
Principles of Consolidation--The consolidated financial statements of the
Company include the accounts of BWAY and its wholly owned subsidiaries, BSI,
MCC, and BSCI. All material intercompany balances and transactions have been
eliminated in consolidation.
Fiscal Year--The Company operates on a 52/53-week fiscal year ending on the
Sunday closest to September 30 of the applicable year.
Inventories--Inventories are carried at the lower of cost or market, with
cost determined under the last-in, first-out (LIFO) method of inventory
valuation.
Property, Plant, and Equipment--Property, plant, and equipment is recorded
at cost. Depreciation is provided over the estimated useful lives of the
assets on a straight-line basis for financial reporting purposes. Expenditures
for major renewals and replacements are capitalized. Expenditures for
maintenance and repairs are charged to income as incurred. When property items
are retired or otherwise disposed of, amounts applicable to such units are
removed from the related asset and accumulated depreciation accounts and any
resulting gain or loss is credited or charged to income. Useful lives are
generally as follows:
<TABLE>
<S> <C>
Buildings and improvements.................................... 17-20 years
Machinery and equipment....................................... 12-20 years
Furniture and fixtures........................................ 5-20 years
Computer systems.............................................. 5-7 years
</TABLE>
Computer Information Systems--Costs directly associated with the initial
purchase, development, and implementation of computer information systems are
deferred and included in property, plant, and equipment. Such costs are
amortized on a straight-line basis over the expected useful life of the
systems, principally five to seven years. Ongoing maintenance costs of
computer information systems are expensed.
Intangible Assets--Intangible assets consist of identifiable intangibles
(trademarks, customer lists, and covenants not-to-compete) and goodwill.
Identifiable intangibles are amortized over the term of the agreement (5 to 7
years) or estimated useful life (2 to 17 years). Goodwill is amortized over 30
years on a straight-line basis.
Deferred Financing Costs--Deferred financing costs are being amortized over
the term of the related loan agreement using the straight-line method, which
approximates the effective yield method.
Revenue Recognition--The Company recognizes revenue at the time the product
is shipped to the customer.
F-7
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Income Taxes--The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"). SFAS No. 109 requires, among other things, the use of
the liability method of computing deferred income taxes. Under the liability
method, the effect of changes in corporate tax rates on deferred income taxes
is recognized currently as an adjustment to income tax expense. The liability
method also requires that deferred tax assets or liabilities be recorded based
on the difference between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of--The
Company adopted SFAS 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets To Be Disposed of," as of October 1, 1995. In
accordance with SFAS 121, the Company has elected to review for impairment, on
a quarterly basis, long-lived assets and certain identifiable intangibles
whenever events or changes in circumstances indicate that the carrying amount
of any asset may not be reasonable based on estimates of future undiscounted
cash flows without interest expense. In the event of an impairment, the asset
is written down to its fair market value. Impairment of goodwill and write-
down, if any, is measured based on estimates of future undiscounted cash flows
without interest expense. Assets to be disposed of are recorded at the lower
of net book value or fair market value less cost to sell at the date
management commits to a plan of disposal. There was no cumulative effect
adjustment recorded upon adoption.
Postemployment Benefits--The Company adopted SFAS 112, "Employers'
Accounting for Postemployment Benefits," as of October 4, 1993, which resulted
in an after-tax cumulative effect charge of $213 thousand to fiscal 1994 first
quarter earnings.
Cash and Cash Equivalents--For purposes of the presentation of the
consolidated statements of cash flows, the Company considers all highly liquid
investments purchased with original maturities of three months or less to be
cash equivalents.
Accounting for Stock Options--The Company accounts for its stock options
under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees." In October 1995, the Financial Standards Board issued Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation." This
Standard is required to be implemented in fiscal year 1997. The Company will
continue to account for stock options in accordance with APB No. 25,
"Accounting for Stock Issued to Employees."
Earnings Per Common Share--Earnings per common share are based on the
weighted average number of common shares (including redeemable common shares)
and common stock equivalents outstanding during each year. Common stock sold
during the twelve-month period prior to the initial filing of the Registration
Statement has been included in the earnings per share calculation for all
periods presented in accordance with Staff Accounting Bulletin No. 83. Common
stock equivalents represent the dilutive effect of the assumed exercise of the
outstanding stock options.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Reclassification--Certain previously reported amounts have been reclassified
to conform with the current period presentation.
2. ACQUISITIONS
Milton Can Company--On May 28, 1996, the Company acquired all of the
outstanding stock of Milton Can Company, Inc. ("MCC"). MCC is a manufacturer
of paint, oblong, and specialty cans within the general
F-8
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
line segment of the North American metal container industry. The Company paid
$13.4 million in cash, $1 million in notes, and $14.6 million in BWAY stock
subject to an adjustment based on the change in working capital from December
31, 1995 through May 28, 1996. The Company issued a total of 810,970 shares in
connection with the merger, comprised of 656,174 shares of its treasury stock
and 154,796 newly issued shares. In addition, the Company repaid MCC's
approximately $12.3 million in term and revolving bank debt concurrent with
consummation of the purchase transaction.
Davies Can Company--On June 17, 1996, the Company acquired substantially all
of the assets and assumed certain of the liabilities of Davies Can Company
("Davies"), an unincorporated division of the Van Dorn Company (a wholly owned
subsidiary of Crown Cork & Seal Company, Inc.). Davies manufactures paint,
oblong, and utility cans within the general line segment of the North American
metal container industry. The Company paid approximately $41.7 million in
cash, subject to an adjustment based on the change in working capital from
December 31, 1995 through June 17, 1996.
The purchase method of accounting was used to establish and record a new
cost basis for the assets acquired and liabilities assumed. The allocation of
the purchase price and acquisition costs to the assets acquired and
liabilities assumed is preliminary at September 29, 1996, and is subject to
change pending finalization of appraisals and other studies of fair value and
finalization of management's plans which may result in the recording of
additional liabilities as part of the allocation of purchase price. The
operating results for both MCC and Davies have been included in the Company's
consolidated financial statements since the date of acquisition. The excess
purchase price over the fair market value of net identifiable assets acquired
was, in aggregate, approximately $42 million.
The following pro forma results assume the acquisitions of MCC and Davies
occurred at the beginning of the fiscal year ended October 1, 1995 after
giving affect to certain pro forma adjustments, including an adjustment to
reflect the amortization of cost in excess of the net assets acquired,
increased interest expense, and the estimated related income tax effects.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
------------------------
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Net sales.............................................. $362,044 $367,311
Income (loss) before extraordinary item................ (1,926) 4,642
Net income (loss)...................................... (4,201) 4,642
Earnings (loss) per common share:
Income (loss) before extraordinary item.............. $ (0.28) $ 0.84
Net income (loss).................................... $ (0.62) $ 0.84
</TABLE>
The pro forma financial information is not necessarily indicative of the
operating results that would have occurred had the acquisition been
consummated as of the beginning of the fiscal year ended October 1, 1995, nor
is it necessarily indicative of future operating results.
F-9
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
3. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
<S> <C> <C>
Inventories at FIFO cost:
Raw materials........................................ $ 9,300 $ 4,183
Work-in-progress..................................... 18,601 11,189
Finished goods....................................... 9,189 5,020
------- -------
37,090 20,392
Reduction to LIFO valuation............................ (46) (1,004)
------- -------
$37,044 $19,388
======= =======
</TABLE>
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
<S> <C> <C>
Land................................................... $ 2,288 $ 988
Building and improvements.............................. 14,145 7,205
Machinery and equipment................................ 80,328 65,655
Furniture and fixtures................................. 2,531 2,244
Construction in progress............................... 12,423 6,441
-------- --------
111,715 82,533
Less accumulated depreciation.......................... (16,915) (14,865)
-------- --------
Property, plant, and equipment--net.................... $ 94,800 $ 67,668
======== ========
</TABLE>
5. INTANGIBLE ASSETS
Intangible assets consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
<S> <C> <C>
Goodwill............................................... $52,943 $22,027
Customer lists......................................... 7,071
Tradename.............................................. 4,629 310
Noncompete agreements.................................. 4,494 2,244
------- -------
69,137 24,581
Less accumulated amortization.......................... (4,330) (2,570)
------- -------
$64,807 $22,011
======= =======
</TABLE>
6. ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES
Included in accounts payable at September 29, 1996 and October 1, 1995 are
bank drafts issued and outstanding of approximately $7.9 million and $3.6
million, respectively, for which no rights of offset exist to cash and cash
equivalents.
F-10
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
7. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
<S> <C> <C>
8.35% Notes............................................ $50,000
Credit agreement....................................... $92,000
Other borrowings....................................... 3,198 218
------- -------
95,198 50,218
Less current maturities of long-term debt.............. (1,916) (155)
------- -------
Long-term debt......................................... $93,282 $50,063
======= =======
</TABLE>
On June 17, 1996, the Company terminated its existing bank agreement and
entered into a new credit agreement with Bankers Trust Company and
NationsBank, N.A. (the "Credit Agreement"). Initial borrowings under the
Credit Agreement were used to repay all obligations under the Company's
previous revolving credit facility. Funds from the Credit Agreement were also
used to prepay the $50 million private placement of 8.35% Senior Secured Notes
maturing September 1, 2001 ("Senior Secured Notes"). In conjunction with the
prepayment of the Senior Secured Notes, the Company recorded an extraordinary
loss related to the early extinguishment of debt in the amount of $2.5
million, net of taxes.
The Credit Agreement, which expires June 17, 2001, allows the Company to
borrow up to $175 million. The interest rates under the Credit Agreement are
based on rate margins for either prime rate as announced by NationsBank from
time to time ("Prime") or LIBOR, at the option of the Company. The applicable
rate margin is determined on a quarterly basis by a review of the Company's
leverage ratio. The Company's initial borrowing rate is at its option either
LIBOR plus 1.0%, or Prime. Loans under the Credit Agreement are unsecured and
can be prepaid at the option of the Company without premium or penalty. The
Credit Agreement is subject to certain restrictive covenants, including
covenants which require the Company to maintain a certain minimum level of net
worth and a maximum ratio for leverage. In addition, the Company is restricted
in its ability to pay dividends and other restricted payments in an amount
greater than approximately $6.0 million at September 29, 1996 and to incur
additional indebtedness. The Company's subsidiaries are restricted in their
ability to transfer funds to the Company, except for funds to be used to
effect approved acquisitions, pay dividends, reimburse the Company for
operating and other expenditures made on behalf of the subsidiaries and repay
permitted intercompany indebtedness. Restricted net assets of the Company's
subsidiaries collectively amounted to approximately $67 million at September
29, 1996.
Scheduled maturities of long-term debt as of September 29, 1996 are as
follows (in thousands):
<TABLE>
<S> <C>
FISCAL YEAR
1997........................... $ 1,916
1998........................... 1,282
1999........................... --
2000........................... --
2001........................... 92,000
-------
$95,198
=======
</TABLE>
Based on the borrowing rates currently available to the Company for bank
loans with similar terms and maturities, the fair value of long-term debt at
September 29, 1996 was estimated to approximate book value and at October 1,
1995 was estimated at $50.9 million.
F-11
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
8. STOCKHOLDERS' EQUITY
Initial Public Offering
On June 20, 1995, the Company completed its Initial Public Offering with the
sale of 1,657,866 shares of common stock and realized net proceeds of
approximately $20.3 million. On July 25, 1995, an additional 359,086 shares of
the Company's stock were sold to cover overallotments, providing additional
net proceeds of approximately $4.7 million.
Stock Options
Immediately prior to the Initial Public Offering in June 1995, the Company
adopted the Brockway Standard Holdings Corporation 1995 Long-Term Incentive
Plan and the Formula Plan for Non-Employee Directors (the "Formula Plan") for
its directors, officers, and key employees. On August 20, 1996, the Board of
Directors i) adopted, subject to shareholders approval, the Amended and
Restated 1995 Long-Term Incentive Plan (the "Amended Incentive Plan"), which
Amended Incentive Plan increased the aggregate number of shares of common
stock authorized for issuance under the Amended Incentive Plan from 490,000 to
750,000, and ii) froze the Formula Plan with only 30,000 of the available
100,000 shares of common stock being granted thereunder. Included in options
granted for the year ended September 29, 1996 are 107,600 options which are
subject to shareholder approval of the Amended Incentive Plan. The options
expire ten years from date of grant; none of the options had been exercised as
of September 29, 1996.
The following table summarized the activity in common shares subject to
options for the two years ended September 29, 1996:
<TABLE>
<S> <C>
Outstanding--October 2, 1994......................................
Granted ($14.50-$16.00 per share)............................... 213,000
-------
Outstanding--October 1, 1995...................................... 213,000
Granted, net ($17.50-$19.00 per share).......................... 382,200
-------
Outstanding--September 29, 1996................................... 595,200
=======
Exercisable--September 29, 1996................................... 96,067
=======
</TABLE>
Shareholder Rights Plan
The Company has a Shareholder Rights Plan, as amended by Amendment No. 1 to
the Rights Plan dated February 12, 1996 (as amended, the "Rights Plan"), under
which one preferred share purchase right is presently attached to and trades
with each outstanding share of the Company's common stock. The rights become
exercisable and transferable apart from the common stock after a person or
group other than an Exempt Person (as defined in the Rights Plan), without the
Company's consent, acquires beneficial ownership of, or the right to obtain
beneficial ownership of, 15% or more of the Company's common stock or ten
business days after a person or group announces or commences a tender offer or
exchange offer that could result in 15% ownership. Once exercisable, each
right entitles the holder to purchase one one-thousandth share of Junior
Participating Series A Preferred Stock at an exercise price of $60 per share
subject to adjustment to prevent dilution. The rights have no voting power and
no current dilutive effect on earnings per common share. The rights expire on
June 15, 2005 and are redeemable at the discretion of the Board of Directors
at $.01 per share.
If a person acquires 15% ownership, except in an offer approved by the
Company under the Rights Plan, then each right not owned by the acquirer or
related parties will entitle its holder to purchase, at the right's exercise
price, common stock or common stock equivalents having a market value
immediately prior to the triggering of the right of twice that exercise price.
In addition, after an acquirer obtains 15% ownership, if the Company is
involved in certain mergers, business combinations, or asset sales, each right
not owned by the
F-12
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
acquirer or related persons will entitle its holder to purchase, at the
right's exercise price, shares of common stock of the other party to the
transaction having a market value immediately prior to the triggering of the
right of twice that exercise price.
9. INCOME TAXES
The Company files a consolidated federal income tax return. Deferred income
taxes are provided to recognize the differences between the carrying amount of
assets and liabilities for financial statement purposes and the amounts used
for income tax purposes.
Components of net deferred tax liability are as follows (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER 1,
1996 1995
------------- ----------
<S> <C> <C>
Deferred tax liabilities:
Property, plant, and equipment....................... $16,452 $14,590
Inventory............................................ 660 1,580
Other................................................ 1,097 549
------- -------
18,209 16,719
Deferred tax assets:
Restructuring costs.................................. 2,279
Employee benefits.................................... 1,404 1,238
Customer claims/rebates.............................. 1,346 513
Accounts receivable.................................. 244 150
Other................................................ 1,206 575
------- -------
6,479 2,476
------- -------
Net deferred tax liability............................. $11,730 $14,243
======= =======
Net current deferred tax asset......................... $(2,405) $ (389)
Net noncurrent deferred tax liability.................. 14,135 14,632
------- -------
$11,730 $14,243
======= =======
</TABLE>
The provision for income taxes is reconciled with the federal statutory rate
as follows (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
----------- ------------ -----------
AMOUNT % AMOUNT % AMOUNT %
------ ---- ------ ---- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Income tax at federal statutory rate.. $2,435 35.0% $5,178 35.0% $2,941 34.0%
State income taxes, net of federal
income tax benefit................... 314 4.5% 562 3.8% 346 4.0%
Nondeductible amortization of
intangibles.......................... 476 6.8% 304 2.1% 301 3.5%
Other................................. 14 0.2% (23) (0.2)% 31 0.3%
------ ---- ------ ---- ------ ----
$3,239 46.5% $6,021 40.7% $3,619 41.8%
====== ==== ====== ==== ====== ====
</TABLE>
The components of the provision for income taxes are as follows (in
thousands):
<TABLE>
<CAPTION>
SEPTEMBER 29, OCTOBER 1, OCTOBER 2,
1996 1995 1994
------------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal................................... $7,265 $4,287 $2,394
State..................................... 811 420 408
Deferred.................................... (4,837) 1,314 954
------ ------ ------
$3,239 $6,021 $3,756
====== ====== ======
</TABLE>
F-13
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
10. LEASE COMMITMENTS
The Company leases warehouses, office space, equipment, and vehicles under
operating leases. Rent expense during each of the last three fiscal years was
approximately $3.3 million (1996), $2.6 million (1995), and $2.6 million
(1994).
MCC leases its primary operating facility under an operating lease from a
partnership in which certain members of MCC's management are partners. The
lease, which is for a five-year period ending on September 30, 1999 with
renewal options, carries a monthly lease payment of $52,457.
MCC also leases a portion of a building under a capital lease. The present
values of minimum lease payments are presented in the consolidated balance
sheets as current and noncurrent obligations under capital leases of $110,897
and $252,404, respectively, at September 29, 1996. The lease does not contain
a renewal or purchase option by the Company.
Leased capital assets included in property, plant, and equipment at
September 29, 1996 are as follows:
<TABLE>
<S> <C>
Buildings....................... $181,605
Less accumulated amortization... (18,161)
--------
$163,444
========
</TABLE>
At September 29, 1996, future minimum rental payments under capitalized
leases and under noncancelable operating leases are as follows (in thousands):
<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
FISCAL YEAR
1997........................................................ $137 $ 5,238
1998........................................................ 137 3,879
1999........................................................ 137 3,285
2000........................................................ 1,846
2001........................................................ 1,407
Thereafter.................................................. 1,955
---- -------
Total minium lease payments............................... 411 $17,610
=======
Imputed interest at 8.66%..................................... (48)
----
Present value of minimum capitalized lease payments........... $363
====
</TABLE>
11. PROFIT SHARING AND PENSION PLANS
The Company has qualified profit sharing and savings plans for specified
employees. These plans are contributory defined contribution plans which
provide for employee contributions with a Company matching provision, and for
certain employees a deferred profit sharing component funded by the Company.
The Company's net contributions to the profit sharing and savings plans for
each of the last three fiscal years were approximately $1.5 million (1996),
$1.2 million (1995), and $1.0 million (1994).
MCC has a noncontributory defined benefit pension plan covering a majority
of its salaried employees. The plan provides benefit payments using a formula
based on an employee's compensation and length of service. MCC funds the plan
in amounts equal to the minimum funding requirements of the Employee
Retirement Income Security Act of 1974, plus additional amounts as MCC's
actuarial consultants advise to be appropriate and as management approves from
time to time. No contribution was required for the period owned by BWAY of
fiscal year 1996.
F-14
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The periodic net pension income related to continuing operations since the
date of acquisition is comprised of the following for the fiscal year ended
September 29, 1996:
<TABLE>
<S> <C>
Service cost--benefits earned during the period................ $ 42,000
Interest cost on projected benefit obligation.................. 81,000
Actual return on assets........................................ (183,000)
--------
Net pension income........................................... $(60,000)
========
</TABLE>
The following table shows the plans' funded status and amounts recognized in
the balance sheet for the fiscal year ended September 29, 1996:
<TABLE>
<S> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation......................................... $2,288,100
==========
Accumulated benefit obligation.................................... $2,298,500
==========
Fair value of plan assets......................................... $4,966,800
Projected benefit obligation...................................... (3,546,800)
----------
Plan assets in excess of projected benefit obligation............. $1,420,000
==========
Prepaid pension cost................................................ $1,420,000
==========
The actuarial assumptions used were:
Discount rate..................................................... 7.75%
Rate of increase in compensation levels........................... 6.00%
Expected return on assets......................................... 9.00%
</TABLE>
The Company is in the process of freezing this plan effective December 31,
1996.
Most of MCC's union employees are covered under multi-employer defined
benefit plans administered by the union. Total contributions charged to
expense for such plans since the date of acquisition are $347 thousand.
12. RELATED PARTY TRANSACTIONS
BSI was a party to a management agreement with AB Leasing and Management,
Inc. ("AB Leasing"), a company related by common ownership, whereby BSI paid
AB Leasing on an annual basis the greater of $200 thousand or 15% of net
income, as defined. Upon the completion of the Initial Public Offering, the
Company's management agreement with AB Leasing was terminated. In connection
with the termination, the Company paid $1.995 million, through the issuance of
133,000 shares of common stock to AB Leasing just prior to the effectiveness
of the Offering. The Company recorded a nonrecurring, noncash, pre-tax charge
to operations of $1.995 million in connection therewith in the third quarter
of 1995. BSI expensed fees of approximately $0 (1996), $1.08 million (1995),
and $989 thousand (1994) for management services including strategic and
financial planning. BSI also reimbursed AB Leasing for certain expenses
incurred on behalf of BSI amounting to approximately $0 (1996), $309 thousand
(1995), and $329 thousand (1994).
In 1996 and 1995, the Company purchased computer software and incurred
related implementation costs totaling approximately $1.2 million and $2.5
million, respectively, from a software company which has certain directors who
are also directors of the Company.
13. REORGANIZATION AND RESTRUCTURING
The acquisitions of MCC and Davies have resulted in redundancy of facilities
and equipment. Management has committed to a plan to exit certain activities
of the acquired companies and integrate acquired assets and
F-15
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
businesses with BWAY facilities. In connection with recording the purchase,
the Company established a reorganization liability of approximately $2.77
million which is classified in other current liabilities. The liability
represents the direct costs expected to be incurred which have no future
economic benefit to the Company. These costs include charges relating to the
closing of four manufacturing facilities and severance costs. Finalization of
the Company's integration plan may result in further adjustments to this
reserve. The reorganization liability at September 29, 1996 includes the
following (in thousands):
<TABLE>
<S> <C>
Closing/abandonment of facilities.................................. $2,046
Severance and benefit costs........................................ 612
------
$2,658
======
</TABLE>
As of September 29, 1996, the Company has charged approximately $114
thousand against the reorganization liability.
Also, during the fourth quarter of fiscal 1996, the Company recorded a
restructuring charge comprised of a write-down of assets to be disposed
against operations of $12.9 million. Increased volume resulting from the
acquisitions provided the opportunity for the Company to consolidate certain
of its manufacturing processes to meet increased customer demand and improve
efficiencies, which will result in the disposal of surplus equipment and
currently productive manufacturing equipment for an estimated nominal value
beginning in early fiscal 1997 and ending in fiscal 1998. When fully
implemented, the rationalization is expected on an overall basis, to result in
reduced overhead expense, and enhanced operational efficiencies.
14. CONTINGENCIES
Environmental
The Company continues to monitor and evaluate on an ongoing and regular
basis its compliance with applicable environmental laws and regulations.
Expenditures are expensed or capitalized depending on their future economic
benefit. Expenditures that relate to an existing condition caused by past
operations and that have no future economic benefit are expensed. Liabilities
for noncapital expenditures are recorded when environmental remediation is
probable and the costs can be reasonably estimated. The Company believes that
it is in compliance in all material respects with applicable federal, state,
and local environmental regulations.
Environmental investigations voluntarily conducted by the Company at its
Homerville, Georgia facility in 1993 and 1994 detected certain conditions of
soil and groundwater contamination, principally involving chlorinated
solvents, at the facility property. Environmental assessment work conducted by
the Company indicated that the subject contamination is the result of
operations prior to the Company's acquisition of the facility from Owens-
Illinois and is, therefore, subject to indemnification under the 1989 purchase
agreement. As required under the Hazardous Sites Response Program of the
Georgia Department of Natural Resources ("DNR"), the Company has reported the
subject contamination to the DNR. In 1994, the DNR listed the facility on the
Comprehensive Environmental Responsibility Compensation and Liability System
("CERCLIS") and designated the facility as a Class II site, which means that
further evaluation must be completed before the DNR decides whether corrective
action is needed. Pursuant to the 1989 purchase agreement, the Company and
Owens-Illinois have entered into a supplemental agreement affirming Owens-
Illinois' responsibility for this matter including establishment of procedures
for the related investigation and remediation work to be conducted by Owens-
Illinois. As a result, Owens-Illinois is managing the remediation activities
and paying for such work directly. Preliminary consultant estimates indicated
that the cost of cleanup could range from $1 million to $6 million, depending
on the extent of contamination. Since Owens-Illinois is conducting the
remediation work, management has no way of determining the actual costs
related to the clean-up efforts. Management does not
F-16
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
believe that the final resolution of this matter will have a material adverse
effect on the results of operations or financial condition of the Company, and
has not accrued a liability with respect to this matter because it believes
that a loss contingency is not probable.
Certain facilities of the Company have been identified as Potentially
Responsible Parties ("PRP") at six waste disposal sites and the Company
received a request for information for a seventh site pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"). These matters are, subject to certain limitations, indemnified by
the sellers of the relevant subsidiaries. Management believes that none of
these matters will have a material adverse effect on the results of operations
or financial condition of the Company. Because liability under CERCLA is
retroactive, it is possible that in the future the Company may be identified
as a PRP with respect to other sites. No natural resource damage claims have
been asserted to date. Accordingly, the Company has not recorded a loss
contingency.
The Company's subsidiary, MCC, leases a manufacturing facility in Peabody,
Massachusetts which is subject to an ongoing groundwater remediation pursuant
to the Massachusetts Chapter 21E program. MCC's landlord at the site has
agreed to retain all liability for the ongoing clean-up. Pursuant to the terms
of the Agreement and Plan of Merger and Reorganization dated March 21, 1996,
as amended on April 30, 1996 (the "Agreement") by which the Company acquired
MCC, the Company is indemnified, subject to certain limitation, for any
liabilities associated with this matter. Management does not believe that the
final resolution of this matter will have a material adverse effect on the
results of operations or financial condition of the Company.
Additionally, MCC has been named as a PRP at four sites. Pursuant to the
Agreement by which the Company acquired MCC, the Company is indemnified with
respect to such sites, subject to certain limitations. Management does not
believe that the final resolution of this matter will have a material adverse
effect on the results of operations or financial condition of the Company.
Letters of Credit
At September 29, 1996, a bank had issued standby letters of credit on behalf
of BSI in the aggregate amount of $868 thousand in favor of BSI's workers'
compensation insurer.
15. CONCENTRATIONS OF CREDIT RISK
The Company sells its metal containers to a large number of customers in
numerous industry sectors. To reduce credit risk, the Company sets credit
limits and performs ongoing credit evaluations. Sales to the Company's ten
largest customers amounted to approximately 39% (1996), 43% (1995), and 41%
(1994) of the Company's sales including sales to one customer of 13% (1996),
13% (1995), and 12% (1994).
Accounts receivable from one customer amounted to approximately 11% of total
accounts receivable at September 29, 1996. Although the Company's exposure to
credit risk associated with nonpayment is affected by conditions with the
customers' industries, the balances are substantially current and are within
terms and limits established by the Company. Accounts receivable from two
customers amounted to approximately 20% (approximately 10% each) of total
accounts receivable at October 1, 1995.
16. SUBSEQUENT EVENTS
On October 28, 1996, the Company acquired, through a newly formed
subsidiary, substantially all of the assets related to the metal aerosol can
business (the "Business") from Ball Metal Food Container Corporation (the
"Seller"), a wholly owned subsidiary of Ball Corporation. The business
consists of a facility in Cincinnati which includes a material center and
substantially all the assets used in connection with the marketing,
distributing, selling, manufacturing, designing, and engineering of metal
aerosol cans. The purchase price for acquiring the aerosol business was $40
million. At closing, the Company paid Ball consideration of approximately $36
million which was comprised of $33 million in cash and $3 million in notes.
The purchase price remaining was held by the Company and will be paid subject
to a purchase price adjustment based on a complete review of the Business'
current assets and liabilities on the closing date. The transaction was
recorded
F-17
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
using the purchase method of accounting. Separately, the parties have entered
into supply agreements whereby certain coating, decorating, and metal
processing services will be provided to the Seller.
17. QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
Fiscal year 1996:
Net sales.................................. $58,154 $61,768 $73,715 $89,368
======= ======= ======= =======
Gross profit............................... $ 8,118 $10,541 $12,557 $11,715
======= ======= ======= =======
Income before extraordinary item........... $ 2,219 $ 2,788 $ 3,867 $(5,155)
Extraordinary item......................... (2,535)
------- ------- ------- -------
Net income............................... $ 2,219 $ 2,788 $ 1,332 $(5,155)
======= ======= ======= =======
Earnings per common share:
Income before extraordinary item......... $ 0.35 $ 0.46 $ 0.63 $ (0.78)
======= ======= ======= =======
Net income............................... $ 0.35 $ 0.46 $ 0.23 $ (0.78)
======= ======= ======= =======
Fiscal Year 1995:
Net sales.................................. $55,211 $65,069 $64,522 $62,678
======= ======= ======= =======
Gross profit............................. $ 7,598 $ 9,755 $ 9,877 $ 9,135
======= ======= ======= =======
Net income............................... $ 1,588 $ 2,609 $ 1,774 $ 2,802
======= ======= ======= =======
Earnings per common share:
Net income............................... $ 0.38 $ 0.63 $ 0.41 $ 0.45
======= ======= ======= =======
</TABLE>
18. SUBSEQUENT DEBT OFFERING
On April 11, 1997, the Company received the net proceeds of approximately
$96 million from a private placement of $100 million 10 1/4% Senior
Subordinated Notes due 2007 (the "Notes"). The Company immediately loaned the
net proceeds to certain of its subsidiaries. The net proceeds were used by the
subsidiaries to repay a portion of the outstanding indebtedness under the
Credit Facility.
Interest on the Notes is payable semi-annually in arrears on April 15 and
October 15 of each year, commencing on October 15, 1997. The Notes are general
unsecured senior subordinated obligations of the Company and are effectively
subordinated to all secured indebtedness, as defined, of the Company to the
extent of the value of the assets securing any such indebtedness. The Notes
are redeemable, in whole or in part, at the option of the Company on or after
April 15, 2002 at the prices specified in the Notes. In addition, until April
15, 2000, the Company, may, at its option, redeem up to 33 1/3% of the
aggregate principal amount of the Notes originally issued, plus accrued and
unpaid interest, with the net cash proceeds of one or more public or private
sales of common stock of the Company, subject to certain provisions of the
indenture. Upon the occurrence of a change in control, as defined, the Company
will be required to make an offer to repurchase the Notes at 101% of the
principal amount plus accrued and unpaid interest. The Notes contain certain
restrictive covenants, including limitations on asset sales, additional
indebtedness, mergers and certain restricted payments.
The Company is filing a registration statement relating to an offer to
exchange the Notes for the Company's 10 1/4% Senior Subordinated Notes due
2007, Series B (the "Exchange Notes"). The Company is a holding company with
no independent operations (although it incurs some limited expenses on behalf
of its operating subsidiaries) and the Company has no significant assets other
than the common stock of its subsidiaries. The Notes are, and the Exchange
Notes will be, fully and unconditionally guaranteed on a joint and several
basis by certain of the Company's direct and indirect subsidiaries. The
Subsidiary Guarantors are wholly-owned by the Company and constitute all of
the direct and indirect subsidiaries of the Company except for four
subsidiaries that are individually, and in the aggregate, inconsequential.
Separate financial statements of the Subsidiary Guarantors are not presented
because management has determined that they would not be material to
investors.
F-18
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 29, SEPTEMBER 29,
1996 1996
------------ -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................... $ 864 $ 1,852
Accounts receivable, net of allowance of $535 at
December 29, 1996, and $390 at September 29,
1996............................................. 41,023 39,011
Inventories....................................... 48,087 37,044
Other current assets.............................. 3,289 1,293
Deferred tax asset................................ 2,405 2,405
-------- --------
Total Current Assets............................ 95,668 81,605
-------- --------
PROPERTY, PLANT AND EQUIPMENT--Net.................. 112,040 94,800
-------- --------
OTHER ASSETS:
Intangible assets, net............................ 77,114 64,807
Deferred financing costs, net..................... 1,267 1,336
Other assets...................................... 2,165 2,585
-------- --------
Total Other Assets.............................. 80,546 68,728
-------- --------
$288,254 $245,133
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................. $ 33,167 $ 36,206
Accrued salaries & wages.......................... 4,986 4,252
Accrued income taxes.............................. 1,686 759
Other current liabilities......................... 17,107 17,963
Current maturities of long-term debt.............. 144 145
-------- --------
Total Current Liabilities....................... 57,090 59,325
-------- --------
LONG-TERM DEBT...................................... 139,013 95,053
LONG-TERM LIABILITIES:
Deferred income taxes............................. 14,135 14,135
Other long-term liabilities....................... 3,969 3,991
-------- --------
18,104 18,126
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; authorized
24,000,000 shares, issued 6,564,546 (December 29,
1996 and September 29, 1996)..................... 66 66
Additional paid-in capital........................ 37,612 37,612
Retained earnings................................. 36,987 35,569
-------- --------
74,665 73,247
Less treasury stock, at cost, 32,791 (December 29,
1996 and September 29, 1996)..................... (618) (618)
-------- --------
Total Stockholders' Equity...................... 74,047 72,629
-------- --------
$288,254 $245,133
======== ========
</TABLE>
See notes to consolidated financial statements.
F-19
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
DECEMBER 29, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
NET SALES............................................ $91,166 $58,154
COSTS, EXPENSES AND OTHER:
Cost of products sold (excluding depreciation and
amortization)..................................... 77,590 48,623
Depreciation and amortization...................... 3,452 1,684
Selling and administrative expense................. 5,472 3,307
Interest expense, net.............................. 2,049 847
Other, net......................................... 199 (48)
------- -------
Total costs, expenses and other.................. 88,762 54,413
------- -------
INCOME BEFORE INCOME TAXES........................... 2,404 3,741
PROVISION FOR INCOME TAXES........................... 986 1,522
------- -------
NET INCOME........................................... $ 1,418 $ 2,219
======= =======
EARNINGS PER COMMON SHARE............................ $ 0.22 $ 0.35
======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING........... 6,573 6,350
======= =======
</TABLE>
See notes to consolidated financial statements
F-20
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
DECEMBER 29, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income......................................... $ 1,418 $ 2,219
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation..................................... 2,620 1,413
Amortization of intangibles...................... 828 264
Amortization of deferred financing costs......... 69 160
Provisions for doubtful accounts................. 135 13
(Gain) / Loss on disposition of property, plant
and equipment................................... 5 --
Changes in assets and liabilities, net of effects
of business acquisitions:
Accounts receivable.............................. 3,882 3,748
Inventories...................................... (2,487) (7,529)
Other assets..................................... 931 (258)
Accounts payable................................. (4,924) 4,237
Accrued liabilities.............................. (1,595) (153)
Income taxes, net................................ 927 990
------- -------
Net cash provided by operating activities...... 1,809 5,104
------- -------
INVESTING ACTIVITIES:
Capital expenditures............................... (3,590) (4,091)
Acquisitions, net of cash acquired................. (41,765) --
------- -------
Net cash used in investing activities.......... (45,355) (4,091)
------- -------
FINANCING ACTIVITIES:
Net borrowings under bank
credit agreement.................................. 40,998 --
Repayments on long-term debt....................... (81) (51)
Increase in unpresented bank drafts................ 1,641 916
Purchases of treasury stock........................ -- (329)
------- -------
Net cash provided by financing activities...... 42,558 536
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS. (988) 1,549
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....... 1,852 23,538
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD............. $ 864 $25,087
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest......................................... $ 1,595 $ 14
======= =======
Income taxes..................................... $ 169 $ 831
======= =======
Details of businesses acquired were as follows:
Fair value of assets acquired...................... $46,326
Liabilities assumed................................ (1,561)
Long-term note issued.............................. (3,000)
-------
Net cash paid for acquisitions................. $41,765
=======
</TABLE>
See notes to consolidated financial statements
F-21
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The accompanying consolidated financial statements have been prepared by the
Company without audit. Certain information and footnote disclosures, including
significant accounting policies, normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The consolidated financial statements as of December 29,
1996 and for the three months ended December 29, 1996 and December 31, 1995
include all normal recurring adjustments necessary for a fair presentation of
the financial position and results of operations for these periods. Operating
results for the three months ended December 29, 1996 are not necessarily
indicative of the results that may be expected for the entire year. It is
suggested that these unaudited consolidated financial statements and the
accompanying notes be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual Report on
Form 10-K.
The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to September 30 of the applicable year. The first three quarterly
fiscal periods end on the Sunday closest to December 31, March 31 or June 30
of the applicable quarter.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period. Actual results could differ from those estimates.
2. INVENTORIES
Inventories are carried at the lower of cost or market, with cost determined
under the last-in, first-out (LIFO) method of inventory valuation and are
summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 29, SEPTEMBER 29,
1996 1996
------------ -------------
<S> <C> <C>
Inventories at FIFO Cost:
Raw materials................................ $13,829 $ 9,300
Work-in-process.............................. 16,710 18,601
Finished goods............................... 17,594 9,189
------- -------
$48,133 $37,090
Reduction to LIFO valuation.............. (46) (46)
------- -------
$48,087 $37,044
======= =======
</TABLE>
3. EARNINGS PER COMMON SHARE
Earnings per common share are based on the weighted average number of common
shares outstanding during each period presented, including vested and unvested
shares issued under the Company's previous Management Stock Purchase Plan and
the dilutive effect of the shares from the 1995 Long-Term Incentive Plan.
Weighted average shares outstanding for the first quarter of fiscal 1997 and
1996 were 6.6 million and 6.4 million, respectively.
4. STOCKHOLDERS' EQUITY
Stock Option Plan
Immediately prior to the Initial Public Offering in June 1995, the Company
adopted the Brockway Standard Holdings Corporation 1995 Long-Term Incentive
Plan and the Formula Plan for Non-Employee Directors (the "Plans") for its
directors, officers, and key employees. On August 20, 1996, the Board of
Directors i) adopted, subject to shareholders approval, the Amended and
Restated 1995 Long-Term Incentive Plan (the "Amended Incentive Plan"), which
Amended Incentive Plan increased the aggregate number of shares of common
stock authorized for issuance under the Amended Incentive Plan from 490,000 to
750,000, and ii) froze the Formula Plan with only 30,000 of the available
100,000 shares of common stock being granted thereunder.
F-22
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
5. ACQUISITIONS
Milton Can Company
On May 28, 1996, the Company acquired all of the outstanding stock of Milton
Can Company, Inc. ("MCC"). The Company paid $13.4 million in cash, $1 million
in notes and $14.6 million in BWAY stock for 100% equity in MCC. MCC is a
manufacturer of paint, oblong and specialty cans within the general line
segment of the North American metal container industry. The Company issued a
total of 810,970 shares in connection with the merger, comprised of 656,174
shares of its treasury stock and 154,796 newly issued shares. The
consideration given to Milton's shareholders is subject to an adjustment based
on the change in working capital from December 31, 1995 through May 28, 1996.
In addition, the Company repaid MCC's approximately $12.3 million in term and
revolving bank debt concurrent with consummation of the purchase transaction.
Davies Can Company
On June 17, 1996, the Company acquired substantially all of the assets and
assumed certain of the liabilities of Davies Can Company ("Davies"), an
unincorporated division of the Van Dorn Company (a wholly-owned subsidiary of
Crown Cork & Seal Company, Inc.). Davies manufactures paint, oblong and
utility cans within the general line segment of the North American metal
container industry. The Company paid approximately $41.7 million in cash,
subject to an adjustment based on the change in working capital from December
31, 1995 through June 17, 1996.
Ball Aerosol
On October 28, 1996, the Company acquired substantially all of the assets
related to the metal aerosol can business (the "Business") from Ball Metal
Food Container Corporation (the "Seller"), a wholly owned subsidiary of Ball
Corporation. The Business consists of a facility in Cincinnati which includes
a material center and substantially all the assets used in connection with the
marketing, distribution, selling, manufacturing, designing, and engineering of
metal aerosol cans. The purchase price for acquiring the business was $44.6
million. At closing, the Company paid Ball consideration of approximately
$38.7 million which was comprised of $35.7 million in cash and $3 million in
notes. The purchase price remaining was held by the Company and paid in
December 1996. Separately, the parties entered into supply agreements whereby
certain coating, decorating, and metal processing services will be provided by
the Company to the Seller.
The purchase method of accounting was used to establish and record a new
cost basis for the assets acquired and liabilities assumed for each of the
foregoing transactions. The allocation of the purchase price and acquisition
costs to the assets acquired and liabilities assumed is preliminary at
December 29, 1996, and is subject to change pending finalization of appraisals
and other studies of fair value and finalization of management's plans which
may result in the recording of additional liabilities as part of the
allocation of purchase price. The operating results for MCC, Davies and Ball
Aerosol have been included in the Company's consolidated financial statements
since the date of acquisition. The excess purchase price over the fair market
value of net identifiable assets acquired was in aggregate approximately $55
million.
Management has committed to a plan to exit certain activities of the
acquired companies and integrate acquired assets and businesses with BWAY
facilities. In connection with recording the purchases, the Company
established a reorganization liability of approximately $2.77 million which is
classified in other current liabilities. The liability represents the direct
costs expected to be incurred which have no future economic benefit to the
Company. These costs include charges relating to the closing of manufacturing
facilities and severance costs. Finalization of the Company's integration plan
may result in further adjustments to this reserve. As of December 29, 1996,
the Company had charged approximately $1.09 million against the reorganization
liability.
F-23
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
The following pro forma results assume the acquisitions of MCC, Davies and
Ball Aerosol occurred at the beginning of the fiscal year ended September 29,
1996 after giving effect to certain pro forma adjustments, including an
adjustment to reflect the amortization of cost in excess of the net assets
acquired, increased interest expense and the estimated related income tax
effects.
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
DECEMBER 29, DECEMBER 31,
1996 1995
------------ ------------
(IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS)
<S> <C> <C>
Net sales...................................... $95,492 $97,324
Net income..................................... 1,522 713
Earnings per common share:
Net income................................... $ 0.23 $ 0.11
</TABLE>
The pro forma financial information is not necessarily indicative of the
operating results that would have occurred had the acquisition been
consummated as of the acquisition date, nor is it necessarily indicative of
future operating results.
6. LONG-TERM DEBT
On June 17, 1996, the Company terminated its bank agreement and entered into
a new credit agreement with Bankers Trust Company, NationsBank, N.A., and
certain financial institutions (the "Credit Agreement"). Initial borrowings
under the Credit Agreement were used to repay all obligations under the
Company's previous revolving credit facility. Funds from the Credit Agreement
were also used to prepay the $50 million private placement of 8.35% Senior
Secured Notes maturing September 1, 2001.
The Credit Agreement allows the Company and its subsidiaries to borrow up to
$175 million provided certain conditions are met. The interest rates under the
Credit Agreement are based on rate margins for either prime rate as announced
by NationsBank from time to time ("Prime") or LIBOR, at the option of the
borrower. The applicable rate margin is determined on a quarterly basis by a
review of the Company's leverage ratio. Loans under the Credit Agreement are
unsecured and can be prepaid at the option of the Company without premium or
penalty. The Credit Agreement is subject to certain restrictive covenants,
including covenants which require the Company to maintain a certain minimum
level of net worth and a maximum ratio for leverage. In addition, the Company
is restricted in its ability to pay dividends and to make other certain
restricted payments. As of December 29, 1996, the outstanding balance on the
Credit Agreement was $134.8 million. The interest rate being paid by the
Company as of December 29, 1996 was LIBOR plus 1.25%.
7. CONTINGENCIES
Environmental
The Company is subject to a broad range of federal, state and local
environmental and workplace health and safety requirements, including those
governing discharges to air and water, the handling and disposal of solid and
hazardous wastes and the remediation of contamination associated with the
releases of hazardous substances. The Company believes that it is in
substantial compliance with all material environmental, health and safety
requirements.
Environmental investigations voluntarily conducted by the Company at its
Homerville, Georgia facility in 1993 and 1994 detected certain conditions of
soil and groundwater contamination, principally involving
F-24
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
chlorinated solvents, at the facility property. Environmental assessment work
conducted by the Company indicated that the subject contamination is the
result of operations prior to the Company's acquisition of the facility from
Owens-Illinois and is, therefore, subject to indemnification under the 1989
purchase agreement. Pursuant to the 1989 purchase agreement, the Company and
Owens-Illinois have entered into a supplemental agreement affirming Owens-
Illinois' responsibility for this matter including establishment of procedures
for the related investigation and remediation work to be conducted by Owens-
Illinois. Since Owens-Illinois is conducting the remediation work, management
has no way of determining the actual costs related to the clean-up efforts. As
a result, Owens-Illinois is managing the remediation activities and paying for
such work directly. Preliminary consultant estimates, developed before Owens-
Illinois began conducting the remediation, indicated that the cost of clean-up
could range from $1 million to $6 million, depending on the extent of
contamination.
Certain facilities and subsidiaries of the Company were identified as
Potentially Responsible Parties ("PRP"), for disposals occurring prior to
their purchase by the Company, pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"). These matters are,
subject to certain limitations, indemnified by the sellers of the relevant
facilities. Because liability under CERCLA is retroactive, it is possible that
in the future the Company may be identified as a PRP with respect to other
sites. No natural resource damage claims have been asserted to date.
The Company is currently vacating a manufacturing facility that it leased in
Peabody, Massachusetts. The facility has been subject to an ongoing
groundwater remediation pursuant to the Massachusetts Chapter 21E program
relating to historical activities onsite. The landlord at the site has agreed
to retain all liability for the ongoing cleanup. Pursuant to the terms of the
Agreement and Plan of Merger and Reorganization by which the Company acquired
MCC, the Company is indemnified, subject to certain limitation, for any
liabilities associated with this matter.
Management does not believe that the final resolution of these matters will
have a material adverse effect on the results of operations or financial
condition of the Company, and has not accrued a liability with respect to
these matters because it believes that a loss contingency is not probable.
8. RESTRUCTURING
During the quarter ended September 29, 1996, the Company recorded a
restructuring charge comprised of a write-down of assets to be disposed
against operations of $12.9 million. Increased volume resulting from the
acquisitions provided the opportunity for the Company to consolidate certain
of its manufacturing processes to meet increased customer demand and improve
efficiencies, which will result in the disposal of surplus equipment and
currently productive manufacturing equipment for scrap values beginning in
early fiscal 1997 and ending in fiscal 1998. When fully implemented, the
rationalization is expected on an overall basis, to result in reduced overhead
expense, and enhanced operational efficiencies.
9. SUBSEQUENT DEBT OFFERING
On April 11, 1997, the Company received the net proceeds of approximately
$96 million from a private placement of $100 million 10 1/4% Senior
Subordinated Notes due 2007 (the "Notes"). The Company immediately loaned the
net proceeds to certain of its subsidiaries. The net proceeds were used by the
subsidiaries to repay a portion of the outstanding indebtedness under the
Credit Facility.
Interest on the Notes is payable semi-annually in arrears on April 15 and
October 15 of each year, commencing on October 15, 1997. The Notes are general
unsecured senior subordinated obligations of the Company and are effectively
subordinated to all secured indebtedness, as defined, of the Company to the
extent of the value of the assets securing any such indebtedness. The Notes
are redeemable, in whole or in part, at the
F-25
<PAGE>
BWAY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONCLUDED)
option of the Company on or after April 15, 2002 at the prices specified in
the Notes. In addition, until April 15, 2000, the Company, may, at its option,
redeem up to 33 1/3% of the aggregate principal amount of the Notes originally
issued, plus accrued and unpaid interest, with the net cash proceeds of one or
more public or private sales of common stock of the Company, subject to
certain provisions of the indenture. Upon the occurrence of a change in
control, as defined, the Company will be required to make an offer to
repurchase the Notes at 101% of the principal amount plus accrued and unpaid
interest. The Notes contain certain restrictive covenants, including
limitations on asset sales, additional indebtedness, mergers and certain
restricted payments.
The Company is filing a registration statement relating to an offer to
exchange the Notes for the Company's 10 1/4% Senior Subordinated Notes due
2007, Series B (the "Exchange Notes"). The Company is a holding company with
no independent operations (although it incurs some limited expenses on behalf
of its operating subsidiaries) and the Company has no significant assets other
than the common stock of its subsidiaries. The Notes are, and the Exchange
Notes will be, fully and unconditionally guaranteed on a joint and several
basis by certain of the Company's direct and indirect subsidiaries. The
Subsidiary Guarantors are wholly-owned by the Company and constitute all of
the direct and indirect subsidiaries of the Company except for four
subsidiaries that are individually, and in the aggregate, inconsequential.
Separate financial statements of the Subsidiary Guarantors are not presented
because management has determined that they would not be material to
investors.
F-26
<PAGE>
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- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER CONTAINED
HEREIN OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THOSE TO WHICH
IT RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICI-
TATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICI-
TATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUB-
SEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
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Available Information..................................................... ii
Incorporation of Certain Documents by Reference........................... iii
Prospectus Summary........................................................ 1
Risk Factors.............................................................. 13
Use of Proceeds........................................................... 19
Capitalization............................................................ 19
Selected Historical Consolidated Financial Data........................... 20
Unaudited Consolidated Pro Forma Condensed Financial Data................. 22
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 26
Business.................................................................. 32
Management................................................................ 41
Security Ownership of Certain Beneficial Owners and Management............ 51
Certain Relationships and Related Transactions............................ 52
Description of Credit Agreement........................................... 54
Description of Exchange Notes............................................. 55
Book-Entry; Delivery and Form............................................. 83
The Exchange Offer........................................................ 85
Certain Federal Income Tax Consequences................................... 93
Plan of Distribution...................................................... 93
Experts................................................................... 94
Legal Matters............................................................. 94
Index to Consolidated Financial Statements................................ F-1
</TABLE>
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---------------------------
PROSPECTUS
---------------------------
$100,000,000
LOGO
OFFER TO EXCHANGE ITS 10 1/4% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B FOR
ANY AND ALL OF ITS OUTSTANDING 10 1/4% SENIOR SUBORDINATED
NOTES DUE 2007
LOGO
, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and U.S. Subsidiary Guarantors (as defined).
The Company and each of ACI, BSI, BSNJ, BSO, MMI, MCC and PMI (the "U.S.
Subsidiary Guarantors") are incorporated under the laws of the State of
Delaware. Section 145 of the General Corporation Law of the State of Delaware
("Section 145") provides that a Delaware corporation may indemnify any persons
who are, or are threatened to be made, parties to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was an officer,
director, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding, provided such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's
best interests and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify any persons who are, or are threatened to be made, a
party to any threatened, pending or completed action or suit by or in the
right of the corporation by reason of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent
of another corporation or enterprise. The indemnity may include expenses
(including attorney's fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit, provided
such person acted in good faith and in a manner he reasonably believed to be
in or not opposed to the corporation's best interests except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director has actually and reasonably incurred.
The certificates of incorporation, as amended, of the Company and each U.S.
Subsidiary Guarantor provide that no director of the corporation shall be
liable to the corporation or its stockholders for monetary damages arising
from a breach of fiduciary duty owed to the corporation of its stockholders.
In addition, the Company's certificate of incorporation, as amended, provides
for the indemnification of directors and officers of the Company to the
fullest extent permitted by the General Corporation Law of the State of
Delaware.
Article V of the by-laws of the Company provides that, to the fullest extent
permitted by the General Corporation Law of the State of Delaware, no director
or the Company shall be liable to the Company or its stockholders for monetary
damages arising from a breach of fiduciary duty owed to the Company or its
stockholders. Article V of the by-laws of the Company further provides that
the Company shall indemnify, to the fullest extent permitted by the General
Corporation Law of the State of Delaware, any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a director or officer of
such corporation, or is or was serving at the request of such corporation as a
director, officer or member of another corporation, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding and such indemnification shall continue as to an indemnitee who
has ceased to a be a director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators. Article V
of the by-laws of the Company further provides that any person serving as a
director, officer, employee or agent of another corporation, partnership,
joint venture or other enterprise, at least 50% of whose equity interests are
owned by the corporation (which includes all Subsidiary Guarantors), shall be
conclusively presumed to be serving in such capacity at the request of the
Company and, hence, subject to indemnification by the Company.
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<PAGE>
Article V of the by-laws of each U.S. Subsidiary Guarantor provides that the
corporation shall indemnify, to the fullest extent permitted by the General
Corporation Law of the State of Delaware, any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a director or officer of
such corporation, or is or was serving at the request of such corporation as a
director, officer or member of another corporation, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding and such indemnification shall continue as to an indemnitee who
has ceased to a be a director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation
or enterprise, against any liability asserted against him and incurred by him
in any such capacity, arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
Article V of the by-laws of the Company and each U.S. Subsidiary Guarantor
further provides that the corporation may purchase and maintain insurance on
its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify
such person against such liability under Article V of its by-laws.
All of the directors and officers of the Company and each U.S. Subsidiary
Guarantor are covered by insurance policies maintained and held in effect by
such corporation against certain liabilities for actions taken in such
capacities, including liabilities under the Securities Act of 1933.
Brockway Standard (Canada), Inc.
BSC is incorporated under the laws of the province of Ontario, Canada. Under
the Business Corporations Act (Ontario) (the "Ontario Act"), BSC may indemnify
a present or former director of officer or a person who acts or acted at BSC's
requests as a director or officer of another corporation of which BSC is or
was a shareholder or creditor, and his or her heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him or her in respect of
any civil, criminal or administrative action or proceeding to which he or she
is made a party by reason of his or her being or having been a director or
officer of BSC or such other corporation if the director or officer acted
honestly and in good faith with a view to the best interests of BSC and, in
the case of a criminal or administrative action or proceeding that is enforced
by a monetary penalty, had reasonable grounds for believing that his or her
conduct was lawful. Such indemnification may be made in connection with an
action by or on behalf of BSC or such other corporation only with court
approval. A director is entitled to indemnification from BSC as a matter of
right if he or she was substantially successful on the merits of his or her
defense and fulfilled the conditions set forth above.
Section Six of By-law No. 1 of BSC provides that no director or officer
shall be liable for the acts, receipts, neglects or defaults of any other
director, officer, employee, or agent, or for joining in any receipt or other
act for conformity, or for any loss, damage or expense happening to BSC
through the insufficiency or deficiency of title to any property acquired for
or on behalf of BSC, or for the insufficiency or deficiency of any security in
or upon which any of the moneys of BSC shall be invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious acts of any person
with whom any of the moneys, securities or effects of BSC shall be deposited,
or for any loss occasioned by any error of judgment or oversight on his part,
or for any other loss, damage or misfortune whatever which shall happen in the
execution of the duties of his office or in relation thereto, unless the same
are occasioned by his own wilful neglect or default; provided that nothing
herein shall
II-2
<PAGE>
relieve any director or officer from the duty to act in accordance with the
Ontario Act or from liability for any breach thereof. Section Six further
provides that BSC shall indemnify and save harmless every director or officer,
every former director or officer, and every person who acts or acted at BSC's
request as a director or officer of a body corporate of which BSC is or was a
shareholder or creditor (or a person who undertakes or has undertaken any
liability on behalf of BSC or any such body corporate) and his heirs and legal
representatives, from and against all costs, charges and expenses, including
an amount paid to settle an action or satisfy a judgment, reasonably incurred
by him in respect of any civil, criminal or administrative action or
proceeding to which he is made a party by reason of being or having been a
director or officer of BSC or such body corporate, if (i) he acted honestly
and in good faith with a view to the best interests of BSC and (ii) in the
case of a criminal or administrative action or proceeding that is enforced by
a monetary penalty, he had reasonable grounds for believing that his conduct
was lawful.
Section Six of By-law No. 1 of BSC further provides that, subject to the
limitations contained in the Ontario Act, BSC may purchase and maintain such
insurance for the benefit of any director or officer, any former director or
officer, and any person who acts or acted at BSC's request as a director or
officer of a body corporate of which BSC is or was a shareholder or creditor
(or any person who undertakes or has undertaken any liability on behalf of BSC
or any such body corporate) and his heirs and legal representatives, as the
board may from time to time determine.
All of the directors and officers of BSC are covered by insurance policies
maintained and held in effect by BSC against certain liabilities for actions
taken in such capacities.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS.
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3.1 Amended and Restated Certificate of (1)
Incorporation of the Company.
3.2 Amended and Restated By-laws of the (2)
Company.
3.3 Amended and Restated Certificate of
Incorporation of Armstrong Containers,
Inc.
3.4 By-laws of Armstrong Containers, Inc.
3.5(i) Certificate of Incorporation of Brockway
Standard, Inc. (f/k/a OIB Standard,
Inc.).
3.5(ii) Certificate of Ownership and Merger
Merging Brockway Standard, Inc. into OIB
Standard, Inc. (n/k/a Brockway Standard,
Inc.).
3.5(iii) Certificate of Incorporation of Brockway
Standard, Inc. reflecting all amendments.
3.6 By-laws of Brockway Standard, Inc.
3.7 Articles of Incorporation of Brockway
Standard (Canada), Inc.
3.8 By-law No. 1 of Brockway Standard
(Canada), Inc.
3.9(i) Certificate of Incorporation of Brockway
Standard (New Jersey), Inc. (f/k/a Milton
Acquisition Corp. and Milton Can Company,
Inc.).
3.9(ii) Certificate of Merger of Milton Can
Company, Inc. with and into Milton
Acquisition Corp. (n/k/a Brockway
Standard (New Jersey), Inc.).
</TABLE>
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3.9(iii) Certificate of Amendment of Certificate
of Incorporation of Milton Can Company,
Inc. (n/k/a Brockway Standard (New
Jersey), Inc.).
3.9(iv) Certificate of Incorporation of Brockway
Standard (New Jersey), Inc. reflecting
all amendments.
3.10 By-laws of Brockway Standard (New
Jersey), Inc.
3.11(i) Certificate of Incorporation of Brockway
Standard (Ohio), Inc. (f/k/a Davies
Acquisition Corp. and Davies Can Company,
Inc.)
3.11(ii) Certificate of Amendment of Certificate
of Incorporation of Davies Acquisition
Corp. (n/k/a Brockway Standard (Ohio),
Inc.).
3.11(iii) Certificate of Amendment of Certificate
of Incorporation of Davies Can Company,
Inc. (n/k/a Brockway Standard (Ohio),
Inc.).
3.11(iv) Certificate of Incorporation of Brockway
Standard (Ohio), Inc. reflecting all
amendments.
3.12 By-laws of Brockway Standard (Ohio), Inc.
3.13 Certificate of Incorporation of Materials
Management, Inc.
3.14 By-laws of Materials Management, Inc.
3.15 Certificate of Incorporation of Milton
Can Company, Inc.
3.16 By-laws of Milton Can Company, Inc.
3.17(i) Certificate of Incorporation of Plate
Masters, Inc. (f/k/a Plate Masters
Acquisition Corp.).
3.17(ii) Certificate of Amendment of Certificate
of Incorporation of Plate Masters
Acquisition Corp. (n/k/a Plate Masters,
Inc.).
3.17(iii) Certificate of Incorporation of Plate
Masters, Inc. reflecting all amendments.
3.18 By-laws of Plate Masters, Inc.
4.1 Indenture dated as of April 11, 1997
among the Company, the Subsidiary
Guarantors and Harris Savings and Trust
Company, as trustee.
4.2 Forms of Series A and Series B 10 1/4%
Senior Subordinated Notes (contained in
Exhibit 4.1 as Exhibit A and B thereto,
respectively).
4.3 Form of Guarantee (contained in Exhibit
4.1 as Exhibit F thereto).
4.4 Registration Rights Agreement dated as of
April 11, 1997 among the Company, the
Subsidiary Guarantors, BT Securities
Corporation, Bankers Trust International
plc, Bear, Stearns & Co. Inc. and
NationsBanc Capital Markets, Inc.
4.5 Credit Agreement dated June 17, 1996 by
and among the Company, Brockway Standard,
Inc., Milton Can Company, Inc., the
additional borrowers, Bankers Trust
Company and NationsBank, N.A. (3)
</TABLE>
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The Registrant will furnish to the
Commission, upon request, each instrument
defining the rights of holders of long-
term debt of the Registrant and its
subsidiaries where the amount of such
debt does not exceed 10 percent of the
total assets of the Registrant and its
subsidiaries on a consolidated basis.
5.1 Opinion and consent of Kirkland & Ellis.
10.1 Asset Purchase Agreement dated December
19, 1988 between BS Holdings Corporation,
BW Plastics, Inc., BW-Morrow Plastics,
Inc. and Owens-Illinois Group, Inc. (2)
10.2 Management Agreement dated as of January
30, 1989 between BS Holdings Corporation,
BW-Morrow Plastics, Inc., Brockway
Standard, Inc. and AB Leasing and
Management, Inc. (2)
10.3 Registration Agreement dated as of
January 30, 1989 between BS Holdings
Corporation and certain stockholders. (2)
10.4 Acquisition Agreement dated as of March
4, 1993 between Ellisco Inc. and Brockway
Standard, Inc. (2)
10.5 Stock Purchase Agreement dated April 27,
1993 among Armstrong Industries, Inc.,
its stockholders, Armstrong Containers,
Inc. and Brockway Standard, Inc. (2)
10.6 Asset Purchase Agreement dated May 26,
1993 among DK Containers, Inc., Dennis
Dyck, Robert Vrhel, Mohan Patel and
Brockway Standard, Inc. (2)
10.7 Employment Agreement between the Company
and Warren J. Hayford* (2)
10.8 Employment Agreement between the Company
and John T. Stirrup* (2)
10.9 Memorandum of Agreement dated October 11,
1993 between The Folgers Company and
Brockway Standard, Inc.** (2)
10.10 Contract and Lease dated September 3,
1968, between the City of Picayune,
Mississippi and Standard Container
Company. (2)
10.11 Lease dated February 24, 1995 between Tab
Warehouse Fontana II and Brockway
Standard, Inc. (2)
10.12 Garland, Texas Industrial Net Lease dated
January 14, 1985 between MRM Associates
and Armstrong Containers, Inc. (2)
10.13 Gross Lease Agreement dated August 10,
1990 between Colonel Estates Joint
Venture and Brockway Standard, Inc. (2)
10.14 Lease dated February 11, 1991 between
Curto Reynolds Oelerick Inc. and
Armstrong Containers, Inc. (2)
10.15 Industrial Lease Agreement dated February
27, 1992 between Belz Investco L.P. and
Armstrong Containers, Inc. (2)
10.16 Lease dated August 9, 1991 between DK
Containers, Inc. and Smith Barney
Virtcher Institutional Fund-I Limited
Partnership and the First Amendment
thereto. (2)
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10.17 Lease dated September 2, 1994 between
Division Street Partners, L.P. and
Brockway Standard (New Jersey), Inc. (4)
10.18 Employee Stock Purchase Agreement dated
March 4, 1994 among BS Holdings
Corporation, Perry Schwartz, Mid-America
Group, Ltd., Warren J. Hayford and Daniel
P. Casey. (2)
10.19 Agreement dated May 15, 1995, between
Brockway Standard, Inc. and Owens-
Illinois, Inc. pursuant to (S)9.9(d) of
the December 19, 1988 Stock Purchase
Agreement. (2)
10.20 Termination Agreement dated as of June 1,
1995 by and among the Company and AB
Leasing and Management, Inc. (2)
10.21 BWAY Corporation Amended and Restated
1995 Long-Term Incentive Plan.* (4)
10.22 Brockway Standard Holdings Corporation
Formula Plan for Non-Employee Directors* (2)
10.23 Form of First Amendment to Termination
Agreement. (2)
10.24 Cooperation Agreement between Ball
Corporation and BWAY Corporation, dated
January 4, 1996. (1)
10.25 Merger Agreement with Milton Can Company,
Inc., dated March 12, 1996. (1)
10.26 Amendment #1 to the Merger Agreement with
Milton Can Company, Inc., dated April 30,
1996. (1)
10.27 Asset Purchase Agreement dated April 29,
1996, between Brockway Standard, Inc.,
BWAY Corporation, Van Dorn Company and
Crown Cork & Seal Company, Inc. (1)
10.28 Employment Agreement between the Company
and David P. Hayford* (3)
10.29 Employment Agreement between the Company
and James W. Milton.* (3)
10.30 Amended and Restated Registration Rights
Agreement dated as of May 28, 1996,
between BWAY Corporation and certain
shareholders. (3)
10.31 Asset Purchase Agreement dated October 6,
1996, between Brockway Standard (New
Jersey), Inc. formerly known as Milton
Can Company, Inc., BWAY Corporation, Ball
Metal Food Container Corp. and Ball
Corporation. (5)
10.32 Amendment No. 1 to the Asset Purchase
Agreement dated October 28, 1996. (5)
10.33 Purchase Agreement dated as of April 8,
1997 among the Company, the Subsidiary
Guarantors, BT Securities Corporation,
Bankers Trust International plc, Bear,
Stearns & Co. Inc. and NationsBank
Capital Markets, Inc.
12.1 Statement Regarding Computation of Ratios
of Earnings to Fixed Charges.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
LOCATION OF DOCUMENT
IN SEQUENTIAL
NUMBERING SYSTEM+
--------------------
<C> <S> <C>
21.1 Subsidiaries of the Company.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Kirkland & Ellis (included in
Exhibit 5.1).
24.1 Powers of Attorney of Directors and
Officers of the Company and each
Subsidiary Guarantor.
25.1 Statement of Eligibility of Trustee on
Form T-1.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Tender Instructions.
</TABLE>
- --------
+ This information appears only in the manually signed original copies of this
report.
* Management contract or compensatory plan or arrangement.
** Confidential treatment requested.
(1) Incorporated by reference to the respective exhibit to the Company's Form
10-Q for the period ending March 31, 1996 (File No. 0-26178).
(2) Incorporated by reference to the respective exhibit to the Company's
Registration Statement No. 33-91114.
(3) Incorporated by reference to the respective exhibit to the Company's Form
10-Q for the period ending June 30, 1996 (File No. 0-26178).
(4) Incorporated by reference to the respective exhibit to the Company's Form
10-K for the fiscal year ending September 29, 1996 (File No. 0-26178).
(5) Incorporated by reference to the respective exhibit to the Company's
Current Report on Form 8-K filed on November 12, 1996 (File No. 0-26178).
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
II-7
<PAGE>
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered, therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a directors, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BWAY CORPORATION
HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM S-4 TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ATLANTA,
STATE OF GEORGIA, ON APRIL 28, 1997.
BWAY Corporation
/s/ David P. Hayford
By: ___________________________________
David P. Hayford
Senior Vice President and
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* Chairman of the Board, Chief Executive
___________________________________________ Officer and Director
Warren J. Hayford
* President, Chief Operating Officer and
___________________________________________ Director (Principal Executive Officer)
John T. Stirrup
* Executive Vice President and Director
___________________________________________
James W. Milton
/s/ David P. Hayford Senior Vice President and Chief Financial
___________________________________________ Officer (Principal Financial Officer)
David P. Hayford
* Vice President and Corporate Controller
___________________________________________ (Principal Accounting Officer)
Kevin C. Kern
* Director
___________________________________________
Thomas A. Donahoe
* Director
___________________________________________
Alexander P. Dyer
* Director
___________________________________________
Jean-Pierre M. Ergas
* Director
___________________________________________
John E. Jones
* Director
___________________________________________
John W. Puth
</TABLE>
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form
S-4 on behalf of the above named officers and directors of the Company
pursuant to the Power of Attorney executed by such officers and directors
and filed with the Securities and Exchange Commission.
/s/ David P. Hayford
- ------------------------------------
David P. Hayford
Attorney-in-fact
II-9
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, ARMSTRONG
CONTAINERS, INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM S-4 TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Armstrong Containers, Inc.
/s/ David P. Hayford
By: __________________________________
David P. Hayford
Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President and Director
___________________________________________ (Principal Executive Officer)
John T. Stirrup
/s/ David P. Hayford Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
</TABLE> Warren J. Hayford
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form
S-4 on behalf of the above named officers and directors of the Company
pursuant to the Power of Attorney executed by such officers and directors and
filed with the Securities and Exchange Commission.
<TABLE>
<S> <C>
/s/ David P. Hayford
___________________________________________
David P. Hayford
Attorney-in-fact
</TABLE>
II-10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BROCKWAY
STANDARD, INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM S-4 TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Brockway Standard, Inc.
/s/ David P. Hayford
By: _________________________________
David P. Hayford
Senior Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* Chief Executive Officer and Director
___________________________________________ (Principal Executive Officer)
Warren J. Hayford
/s/ David P. Hayford Senior Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
</TABLE> John T. Stirrup
- --------
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-4 on behalf of the above named officers and
directors of the Company pursuant to the Power of Attorney executed by such
officers and directors and filed with the Securities and Exchange
Commission.
<TABLE>
<S> <C>
/s/ David P. Hayford
___________________________________________
David P. Hayford
Attorney-in-fact
</TABLE>
II-11
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BROCKWAY
STANDARD (CANADA), INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM
S-4 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED,
IN THE CITY OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Brockway Standard, (Canada), Inc.
/s/ David P. Hayford
By: _________________________________
David P. Hayford
Executive Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President
___________________________________________ (Principal Executive Officer)
Robert C. Coleman
/s/ David P. Hayford Executive Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
</TABLE> Michael J. Tobin
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-4 on behalf of the above named officers
and directors of the Company pursuant to the Power of Attorney executed by
such officers and directors and filed with the Securities and Exchange
Commission.
<TABLE>
<S> <C>
/s/ David P. Hayford
___________________________________________
David P. Hayford
Attorney-in-fact
</TABLE>
II-12
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BROCKWAY
STANDARD (NEW JERSEY), INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON
FORM S-4 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Brockway Standard (New Jersey), Inc.
/s/ David P. Hayford
By: ___________________________________
David P. Hayford
Senior Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President and Director
___________________________________________ (Principal Executive Officer)
John T. Stirrup
/s/ David P. Hayford Senior Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
</TABLE> Warren J. Hayford
- --------
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form
S-4 on behalf of the above named officers and directors of the Company
pursuant to the Power of Attorney executed by such officers and directors
and filed with the Securities and Exchange Commission.
<TABLE>
<S> <C>
/s/ David P. Hayford
___________________________________________
David P. Hayford
Attorney-in-fact
</TABLE>
II-13
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, BROCKWAY
STANDARD (OHIO), INC., CORPORATION HAS DULY CAUSED THIS REGISTRATION STATEMENT
ON FORM S-4 TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Brockway Standard (Ohio), Inc.,
/s/ David P. Hayford
By: _________________________________
David P. Hayford
Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President and Director
___________________________________________ (Principal Executive Officer)
John T. Stirrup
/s/ David P. Hayford Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
Warren J. Hayford
</TABLE>
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-4 on behalf of the above named officers
and directors of the Company pursuant to the Power of Attorney executed by
such officers and directors and filed with the Securities and Exchange
Commission.
<TABLE>
<S> <C>
/s/ David P. Hayford
___________________________________________
David P. Hayford
Attorney-in-fact
</TABLE>
II-14
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MATERIALS
MANAGEMENT, INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM S-4 TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Materials Management, Inc.
/s/ Blair G. Schlossberg
By: _________________________________
Blair G. Schlossberg
Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President and Director
___________________________________________ (Principal Executive and Financial Officer)
Daniel Sitler
/s/ Blair G. Schlossberg Secretary and Director
___________________________________________
Blair G. Schlossberg
</TABLE>
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-4 on behalf of the above named officers
and directors of the Company pursuant to the Power of Attorney executed by
such officers and directors and filed with the Securities and Exchange
Commission.
<TABLE>
<S> <C>
/s/ Blair G. Schlossberg
___________________________________________
Blair G. Schlossberg
Attorney-in-fact
</TABLE>
II-15
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MILTON CAN
COMPANY, INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM S-4 TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Milton Can Company, Inc.
/s/ David P. Hayford
By: _________________________________
David P. Hayford
Senior Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President and Director
___________________________________________ (Principal Executive Officer)
James W. Milton
/s/ David P. Hayford Senior Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
Warren J. Hayford
* Director
___________________________________________
John T. Stirrup
</TABLE>
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-4 on behalf of the above named officers
and directors of the Company pursuant to the Power of Attorney executed by
such officers and directors and filed with the Securities and Exchange
Commission.
/s/ David P. Hayford
- -------------------------------------
David P. Hayford
Attorney-in-fact
II-16
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, PLATE MASTERS,
INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT ON FORM S-4 TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
ATLANTA, STATE OF GEORGIA, ON APRIL 28, 1997.
Plate Masters, Inc.
/s/ David P. Hayford
By: _________________________________
David P. Hayford
Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-4 HAS BEEN SIGNED ON APRIL 28, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* President and Director
___________________________________________ (Principal Executive Officer)
John T. Stirrup
/s/ David P. Hayford Vice President
___________________________________________ (Principal Financial Officer)
David P. Hayford
* Director
___________________________________________
Warren J. Hayford
</TABLE>
- --------
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement on Form S-4 on behalf of the above named officers and
directors of the Company pursuant to the Power of Attorney executed by such
officers and directors and filed with the Securities and Exchange Commission.
<TABLE>
<S> <C>
/s/ David P. Hayford
___________________________________________
David P. Hayford
Attorney-in-fact
</TABLE>
II-17
<PAGE>
EXHIBIT 3.3
RESTATED CERTIFICATE OF INCORPORATION
-------------------------------------
OF
--
ARMSTRONG CONTAINERS, INC.
--------------------------
ARTICLE ONE
-----------
The name of the corporation is Armstrong Containers, Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is 32 Lookerman Square, in the City of Dover, County of Kent 19901. The name of
its registered agent at such address is The Prentice-Hall Corporation System,
Inc.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The corporation is to have perpetual existence.
ARTICLE SIX
-----------
<PAGE>
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE SEVEN
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE EIGHT
-------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may here after be amended, a director
of this corporation shall not be liable to the corporation or its stockholders
for monetary damages for a breach of fiduciary duty as a director. Any repeal
or modification of this ARTICLE EIGHT shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE NINE
------------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE TEN
-----------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
EXHIBIT 3.4
BY-LAWS
-------
OF
--
ARMSTRONG CONTAINERS, INC.
--------------------------
A Delaware Corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The registered office of the corporation in
the State of Delaware shall be located at 32 Lookerman Square, Dover, Delaware,
County of New Castle. The name of the corporation's registered agent at such
address shall be The Prentice-Hall Corporation System. The registered office
and/or registered agent of the corporation may be changed from time to time by
action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year within one hundred twenty (120) days after
the close of the immediately preceding fiscal year of the corporation, unless
such day should fall on a legal holiday, in which event the meeting shall be
held at the same hour on the next succeeding business day that is not a legal
holiday for the purpose of electing directors and conducting such other proper
business as may come before the meeting. The date, time and place of the annual
meeting shall be determined by the president of the corporation; provided, that
if the president does not act, the board of directors shall determine the date,
time and place of such meeting.
Section 2. Special Meetings. Special meetings of stock holders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors or the president and shall be called by the president
upon the written request of holders of shares entitled to
<PAGE>
cast not less than a majority of the votes at the meeting, such written request
shall state the purpose or purposes of the meeting and shall be delivered to the
president.
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than 10 nor more than 60 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the board of directors, the president or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present, the
holders of a majority of the shares present in person or
<PAGE>
represented by proxy at the meeting, and entitled to vote at the meeting, may
adjourn the meeting to another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative vote
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of common stock held
by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing the dates of
signature of the stockholders who signed the consent or consents, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the state of Delaware, or the corporation's principal place of business, or an
officer or agent of the
<PAGE>
corporation having custody of the book or books in which proceedings of meetings
of the stockholders are recorded. Delivery made to the corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. All consents properly delivered in accordance with this section shall
be deemed to be recorded when so delivered. No written consent shall be
effective to take the corporate action referred to therein unless, within sixty
days of the earliest dated consent delivered to the corporation as required by
this section, written consents signed by the holders of a sufficient number of
shares to take such corporate action are so recorded. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
Any action taken pursuant to such written consent or consents of the
stockholders shall have the same force and effect as if taken by the
stockholders at a meeting thereof.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the board shall be two (2). The directors shall be
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote in the election of
directors. The directors shall be elected in this manner at the annual meeting
of the stockholders, except as provided in Section 4 of this Article III.
Each director elected shall hold office until a successor is duly elected and
qualified or until his or her earlier death, resignation or removal as
hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors.
Whenever the holders of any class or series are entitled to elect one or more
directors by the provisions of the corporation's certificate of incorporation,
the provisions of this section shall apply, in respect to the removal without
cause of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in
<PAGE>
office, though less than a quorum, or by a sole remaining director. Each
director so chosen shall hold office until a successor is duly elected and
qualified or until his or her earlier death, resignation or removal as herein
provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this by-law
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the president on at least 24 hours notice to each director,
either personally, by telephone, by mail, or by telegraph; in like manner and
on like notice the president must call a special meeting on the written request
of at least one (1) of the directors.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these by-laws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law. The board of directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep regular minutes of its meetings and report the same to the board of
directors when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event
<PAGE>
that a member and that member's alternate, if alternates are designated by the
board of directors as provided in Section 8 of this Article III, of such
committee is or are absent or disqualified, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in place of any such absent or
disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting except when such
member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a chairman of the board, a
president, one or more vice-presidents, a chief operating officer, a chief
financial officer, an executive vice president, a secretary, a treasurer, and
such other officers and assistant officers as may be deemed necessary or
desirable by the board of directors. Any number of offices may be held by the
same
<PAGE>
person. In its discretion, the board of directors may choose not to fill
any office for any period as it may deem advisable,
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at any meeting
of the board of directors. Each officer shall hold office until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. Chairman of the Board. The chairman of the board shall be the
chief executive officer of the corporation, and shall have the powers and
perform the duties incident to that position. Subject to the powers of the board
of directors, he or she shall be in the general and active charge of the entire
business and affairs of the corporation, and shall be its chief policy making
officer. He or she shall preside at all meetings of the board of directors and
stockholders and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or provided in these by-laws.
Whenever the president is unable to serve, by reason of sickness, absence or
otherwise, the chairman of the board shall perform all the duties and
responsibilities and exercise all the powers of the president.
Section 6. The President. The president shall, subject to the powers of
the board of directors, and the chairman of the board, shall have general charge
of the business, affairs and property of the corporation, and control over its
officers, agents and employees; and shall see that all orders and resolutions of
the board of directors are carried into effect. The president shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except
<PAGE>
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation. The
president shall have such other powers and perform such other duties as may be
prescribed by the chairman of the board or the board of directors or as may be
provided in these by-laws.
Section 7. Chief Operating Officer. The chief operating officer of the
corporation, subject to the powers of the board of directors, shall have general
and active management of the business of the corporation; and shall see that all
orders and resolutions of the board of directors are carried into effect. The
chief operating officer shall have such other powers and perform such other
duties as may be prescribed by the chairman of the board, the chief executive
officer or the board of directors or as may be provided in these by-laws.
Section 8. Chief Financial Officer. The chief financial officer of the
corporation shall, under the direction of the chief executive officer, be
responsible for all financial and accounting matters and for the direction of
the offices of treasurer and controller. The chief financial officer shall have
such other powers and perform such other duties as may be prescribed by the
chairman of the board, the chief executive officer or the board of directors or
as may be provided in these by-laws.
Section 7. Vice-presidents. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of directors
or by the president, shall, in the absence or disability of the president, act
with all of the powers and be subject to all the restrictions of the president.
The vice-presidents shall also perform such other duties and have such other
powers as the board of directors, the chairman of the board, the president or
these by-laws may, from time to time, prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these by-laws or by law; shall have such powers
and perform such duties as the board of directors, the chairman of the board,
the president or these by-laws may, from time to time, prescribe; and shall have
custody of the corporate seal of the corporation. The secretary, or an
assistant secretary, shall have authority to affix the corporate seal to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature.
<PAGE>
The assistant secretary, or if there be more than one, the assistant secretaries
in the order determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors, the chairman of the board, the president, or secretary may,
from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the board of directors, the chairman
of the board, the president or these by-laws may, from time to time, prescribe.
If required by the board of directors, the treasurer shall give the corporation
a bond (which shall be rendered every six years) in such sums and with such
surety or sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of the office of treasurer and for the
restoration to the corporation, in case of death, resignation, retirement, or
removal from office, of all books, papers, vouchers, money, and other property
of whatever kind in the possession or under the control of the treasurer
belonging to the corporation. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the board of
directors, shall in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer. The assistant treasurers shall
perform such other duties and have such other powers as the board of directors,
the chairman of the board, the president or treasurer may, from time to time,
prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the absence
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
<PAGE>
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Nature of Indemnity. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corpora tion to the fullest extent which it is empowered
to do so unless prohibited from doing so] by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all expense,
liability and loss (including attorneys' fees actually and reasonably incurred
by such person in connection with such proceeding) and such indemnification
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in Section 2 hereof, the corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the board of directors of the corporation. The right to indemnification
conferred in this Article V shall be a contract right and, subject to Sections 2
and 5 hereof, shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final disposition.
The corporation may, by action of its board of directors, provide
indemnification to employees and agents of the corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within 30 days, upon the written request of the
director or officer. If a determination by the corporation that the director or
officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within sixty days to a written request for
indemnity, the corpora tion shall be deemed to have approved the request. If
the corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within 30 days, the right to indemnification or advances as granted by
this Article V shall be
<PAGE>
enforceable by the director or officer in any court of competent jurisdiction.
Such person's costs and expenses incurred in connection with successfully
establishing his or her right to indemnification, in whole or in part, in any
such action shall also be indemnified by the corporation. It shall be a defense
to any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the corporation) that the
claimant has not met the standards of conduct which make it permissible under
the General Corporation Law of the State of Delaware for the corporation to
indemnify the claimant for the amount claimed, but the burden of such defense
shall be on the corporation. Neither the failure of the corporation (including
its board of directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the General Corporation
Law of the State of Delaware, nor an actual determination by the corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the board of directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by
<PAGE>
other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the chairman, president or a vice-president and the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by such
holder in the corporation. If such a certificate is countersigned (1) by a
transfer agent or an assistant transfer agent other than the corporation or its
employee or (2) by a registrar, other than the corporation or its employee, the
signature of any such chairman, president, vice-president, secretary, or
assistant secretary may be facsimiles. In case any officer or officers who have
signed,
<PAGE>
or whose facsimile signature or signatures have been used on, any such
certificate or certificates shall cease to be such officer or officers of the
corporation whether because of death, resignation or otherwise before such
certificate or certificates have been delivered by the corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
such officer or officers of the corporation. All certificates for shares shall
be consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation. Shares of
stock of the corporation shall only be transferred on the books of the
corporation by the holder of record thereof or by such holder's attorney duly
authorized in writing, upon surrender to the corporation of the certificate or
certificates for such shares endorsed by the appropriate person or persons, with
such evidence of the authenticity of such endorsement, transfer, authorization,
and other matters as the corporation may reasonably require, and accompanied by
all necessary stock transfer stamps. In that event, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate or certificates, and record the transaction on its books.
The board of directors may appoint a bank or trust company organized under
the laws of the United States or any state thereof to act as its transfer agent
or registrar, or both in connection with the transfer of any class or series of
securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any
such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor
<PAGE>
less than ten days before the date of such meeting. If no record date is fixed
by the board of directors, the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be the close of
business on the next day preceding the day on which notice is given, or if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stock holders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating thereto.
<PAGE>
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any
officer or officers, or any agent or agents, of the corporation to enter into
any contract or to execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
<PAGE>
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities
in any other corporation held by the corporation shall be voted by the
president, unless the board of directors specifically confers authority to vote
with respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.
Section 9. Section Headings. Section headings in these by-laws are
for convenience of reference only and shall not be given
<PAGE>
any substantive effect in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision
of these by-laws is or becomes inconsistent with any provision of the
certificate of incorporation, the General Corporation Law of the State of
Delaware or any other applicable law, the provision of these by-laws shall not
be given any effect to the extent of such inconsistency but shall otherwise be
given full force and effect.
ARTICLE VIII
------------
AMENDMENTS
----------
These by-laws may be amended, altered, or repealed and new by-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter, or repeal the by-laws has been conferred
upon the board of directors shall not divest the stockholders of the same
powers.
ARTICLE IX
----------
CERTAIN BUSINESS COMBINATIONS
-----------------------------
The corporation, by the affirmative vote (in addition to any other
vote required by law or the certificate of incorporation) of its stockholders
holding a majority of the shares entitled to vote, expressly elects not to be
governed by (S)203 of the General Corporation Law of the State of Delaware,
provided that the amendment of the by-laws adopting this election (a) shall not
become effective until April 23, 1994 and (b) shall not apply to any business
combination (as defined in said (S)203) between the corporation and any person
who became an interested stockholder (as defined in said (S)203) of the
corporation on or prior to April 23, 1993.
<PAGE>
EXHIBIT 3.5(i)
CERTIFICATE OF INCORPORATION
OF
OIB STANDARD INC.
1. The name of the corporation is: OIB Standard Inc.
2. The address of its registered office in the State of Delaware is 229
South State Street in the City of Dover, County of Kent. The name of its
registered agent at such address is The Prentice-Hall Corporation System, Inc.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
4. The total number of shares of all classes of stock that the corporation
shall have authority to issue is 1,000 shares, all of which are Common Stock
with a par value of $0.01.
5. The name and mailing address of the incorporator is
Robert J. Palme
Latham & Watkins
885 Third Avenue
New York, New York 10022
6. In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter or repeal the
bylaws of the corporation.
7. Election of directors need not be by written ballot unless the bylaws of
the corporation shall so provide.
8. No director of this corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability
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<PAGE>
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, herein declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 30th day of October, 1987.
/S/ ROBERT J. PALME
-------------------
Robert J. Palme
Incorporator
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<PAGE>
EXHIBIT 3.5(ii)
CERTIFICATE OF OWNERSHIP AND MERGER
-----------------------------------
MERGING
-------
BROCKWAY STANDARD, INC.
-----------------------
INTO
----
OIB STANDARD, INC.
------------------
(Pursuant to Section 253 of the General
Corporation Law of the State of Delaware)
OIB Standard, Inc. (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"General Corporation Law"), hereby certifies:
FIRST: The Company was incorporated on the 2nd day of November, 1987,
pursuant to the provisions of the General Corporation Law.
SECOND: The Company owns all of the issued and outstanding shares of
each class of Brockway Standard, Inc. ("Brockway Standard"), a corporation
incorporated on the 13th day of August, 1979 as Standard Container Company,
pursuant to the provisions of the General Corporation Law. Standard
Container Company subsequently changed its name to Brockway Standard, Inc.
on the 25th day of January, 1985, pursuant to the provisions of the General
Corporation Law.
THIRD: The Company, by the following resolutions of its Board of
Directors, duly adopted by the unanimous written consent of the members
thereof on the 27th day of January, 1989, determined to merge Brockway
Standard into the Company.
RESOLVED, that the Company merge Brockway Standard into the Company
and, as the surviving corporation in the merger, assume all of Brockway
Standard's obligations effective as of 9:00 A.M. Chicago time on January
30, 1989.
RESOLVED, that upon the effectiveness of the merger, the corporate
name of the Company shall be changed to Brockway Standard, Inc.
RESOLVED, that the proper officers of the Company are hereby directed
(i) to make and execute a Certificate of Ownership and Merger setting forth
a copy of these resolutions to merge Brockway Standard into the
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<PAGE>
Company and assume Brockway Standard's obligations, and (ii) to cause the
same to be filed with the Delaware Secretary of State and a certified copy
thereof to be recorded in the office of the Recorder of Deeds of Kent
County, in the State of Delaware, and (iii) to do all other acts and
things, whether within or without the State of Delaware, that may be
necessary or proper to effect the merger.
IN WITNESS WHEREOF, the Company has caused this certificate to be
signed by Keith N. Junk, its Vice President, and attested by Thomas L. Young,
its Secretary, this 27th day of January, 1989.
OIB STANDARD, INC.
By /s/ KEITH N. JUNK
-----------------
Keith N. Junk
Vice President
ATTEST:
/s/ THOMAS L. YOUNG
- ------------------------
Thomas L. Young
Secretary
Dated: January 27, 1989
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<PAGE>
EXHIBIT 3.5(iii)
CERTIFICATE OF INCORPORATION
OF
BROCKWAY STANDARD INC.
1. The name of the corporation is:
Brockway Standard Inc.
2. The address of its registered office in the State of Delaware is
229 South State Street in the City of Dover, County of Kent. The name of its
registered agent at such address is The Prentice-Hall Corporation System, Inc.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
4. The total number of shares of all classes of stock that the
corporation shall have authority to issue is 1,000 shares, all of which are
Common Stock with a par value of $0.01.
5. The name and mailing address of the incorporator is
Robert J. Palme
Latham & Watkins
885 Third Avenue
New York, New York 10022
6. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or repeal
the bylaws of the corporation.
7. Election of directors need not be by written ballot unless the
bylaws of the corporation shall so provide.
8. No director of this corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability
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<PAGE>
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit.
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<PAGE>
EXHIBIT 3.6
BY-LAWS
-------
OF
--
BROCKWAY STANDARD, INC.
----------------------
A Delaware Corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The registered office of the corporation in
the State of Delaware shall be located at the Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware, County of New Castle. The name of the
corporation's registered agent at such address shall be The Corporation Trust
Company. The registered office and/or registered agent of the corporation may be
changed from time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year. The date, time and place of the annual
meeting shall be determined by the president of the corporation; provided, that
if the president does not act, the board of directors shall determine the date,
time and place of such meeting.
Section 2. Special Meetings. Special meetings of stock-holders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the president or the holders of shares entitled to cast
not less than 50 percent of the votes at the meeting.
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board Of
directors. If no designation is made, or if a special meeting be otherwise
called,
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<PAGE>
the place of meeting shall be the principal executive office of the corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than 10 nor more than 60 days before the. date of the meeting. All such notices
shall be delivered, either personally or by mail, by or at the direction bf the
board of directors, the president or the secretary, and if mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as the
same appears on the records of the corporation. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock ledger
of the corporation shall make, at least 10 days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alpha betical order, showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least 10 days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock, present in person or repre sented by proxy, shall constitute a
quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present, the
holders of a majority of the shares present in person or repre sented by proxy
at the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place. When a specified item of business requires a vote by
a class or series (if the corporation shall then have outstanding shares of more
than one class or series) voting as a class, the holders of a majority of the
shares of such class or series shall constitute a quorum (as to such class or
series) for the transaction of such item of business. When a quorum is once
present to commence a meeting of stockholders, it is not broken by the
subsequent withdrawal of any stockholders or their proxies.
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<PAGE>
Section 7. Adjourned Meetings. When a meeting is adjourned to another time
and place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative vote of
the majority of shares present in person or represented by proxy at the meeting
and entitled to vote on the subject matter shall be the act of the stockholders,
unless the question is one upon which by express provisions of an applicable law
or of the certificate of incorporation a different vote is required, in which
case such express provision shall govern and control the decision of such
question. Where a separate vote by class is required, the affirmative vote of
the majority of shares of such class present in person or represented by proxy
at the meeting shall be the act of such class.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of common stock held
by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. At each meeting of the stockholders, and
before any voting commences, all proxies filed at or before the meeting shall be
submitted to and examined by the secretary or a person designated by the
secretary, and no shares may be' represented or voted under a proxy that has
been found to be invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a
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<PAGE>
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken and bearing the dates of signature of
the stockholders who signed the consent or consents, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered to the corporation by delivery to its registered office in the state
of Delaware, or the corporation's principal place of business, or an officer or
agent of the corporation having custody of the book or books in which
proceedings of meetings of the stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. All consents properly delivered in accordance
with this section shall be deemed to be recorded when so delivered. No written
consent shall be effective to take the corporate action referred to therein
unless, within sixty days of the earliest dated consent delivered to the
corporation as required by this section, written consents signed by the holders
of a sufficient number of shares to take such corporate action are so recorded.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. Any action taken pursuant to such written consent or
consents of the stockholders shall have the same force and effect as if taken by
the stockholders at a meeting thereof.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the first board shall be one (1). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors.
Whenever the
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<PAGE>
holders of any class or series are entitled to elect one or more directors by
the provisions of the corporation's certificate of incorporation, the provisions
of this section shall apply, in respect to the removal without cause or a
director or directors so elected, to the vote of the holders of the outstanding
shares of that class or series and not to the vote of the outstanding shares as
a whole. Any director may resign at any time upon written notice to the
corporation.
Section 4. Vacancies. Newly created directorships result ing from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director. Vacancies resulting from the death, resignation or removal of a
director shall be filled by the affirmative vote of a majority of the
outstanding shares of the corporation entitled to vote thereon. Each director so
chosen shall hold office until a successor is duly elected and qualified or
until his or her earlier death, resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected board
of directors shall be held without other notice than this by-law immediately
after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at the
request of the president or any director on at least 24 hours notice to each
director, either personally, by telephone, by mail or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed by
a majority of the whole board, designate one or more committees, each committee
to consist of one or more of the directors of the corporation, which to the
extent provided in such resolution or these by-laws shall have and may exercise
the powers of the board of directors in the management and affairs of the
corporation except as otherwise limited by law. The board of directors may
designate one oe more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee or
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<PAGE>
committees shall have such name or names as may be determined from time to time
by resolution adopted by the board of directors. Each committee shall keep
regular minutes of its meetings and report the same to the board of directors
when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors or
any committee thereof may participate in and act at any meeting of such board or
committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting except when such
member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
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<PAGE>
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by the
board of directors and shall consist of a chairman of the board, a president,
one or more executive vice presidents, a chief financial officer, a secretary,
and such other officers and assistant officers as may be deemed necessary or
desirable by the board of directors. Any number of offices may be held by the
same person. In its discretion, the board of directors may choose not to fill
any office for any period as it may deem advisable, except that the offices of
president and secretary shall be filled as expeditiously as possible.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at any meeting
of the board of directors. Each officer shall hold office until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of directors
may be removed by the board of directors whenever in its judgment the best
interests of the corporation would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death,. resignation, removal, disqualification or otherwise, may be filled by
the board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by the
board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. Chairman of the Board. The chairman of the board shall be the
chief executive officer of the corporation, and shall have the powers and
perform the duties incident to that position. Subject to the powers of the board
of directors, he or she shall be in the general and active charge of the entire
business and affairs of the corporation, and shall be its chief policy making
officer. He or she shall preside at all meetings of the board of directors and
stockholders and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or provided in these by-laws.
Whenever the president is unable to serve, by reason of sickness, absence or
otherwise, the chairman of the board shall perform all the duties and
responsibilities and exercise all the powers of the president.
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<PAGE>
Section 7. The President. The president shall subject to the powers of the
board of directors and the chairman of the board, have general charge of the
business, affairs and property of the corporation, and control over its
officers, agents and employees; and shall see that all orders and resolutions of
the board of directors are carried into effect. The president shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation. The president shall have such other powers and perform such
other duties as may be prescribed by the chairman of the board or the board of
directors or as may be provided in these by-laws.
Section 8. Chief Operating Officer. The chief operating officer of the
corporation, subject to the powers of the board of directors shall have general
and active management of the business of the corporation; and shall see that all
orders and resolutions of the board of directors are carried into effect. The
chief operating officer shall have such other powers and perform such other
duties as may be prescribed by the chairman of the board, the chief executive
officer or the board of directors or as may be provided in these by-laws.
Section 9. Executive Vice-presidents. The executive vice-president', or if
there shall be more than one, the executive vice-presidents in the order
determined by the board of directors shall, in the absence or disability of the
president, act with all of the powers and be subject to all the restrictions of
the president. The executive vice-presidents shall also perform such other
duties and have such other powers as the board of directors, the chairman of the
board, the president or these by-laws may, from time to time, prescribe.
Section 10. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall: give, or cause to be given, all
notices required to be given by these by-laws or by law; shall have such powers
and perform such duties as the board of directors, the chairman of the board,
the president or these by-laws may, from time to time, prescribe; and shall have
custody of the corporate seal of the corporation. The secretary, or an assistant
secretary, shall have authority to affix the corporate seal to any instrument
requiring it and when so affixed, it may be attested by his or her signature or
by the signature of such assistant secretary. The board of directors may give
general authority to any other officer to affix the seal of the corporation and
to attest the affixing by his or her signature. The assistant secretary, or if
there be more than one, the
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<PAGE>
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors, the chairman of the board, the
president, or secretary may, from time to time, prescribe.
Section 11. The Chief Financial Officer. The chief financial officer: shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the board of directors, the chairman
of the board, the president or these by-laws may, from time to time, prescribe.
If required by the board of directors, the chief financial officer shall give
the corporation a bond (which shall be rendered every six years) in such sums
and with such surety or sureties as shall be satisfactory to the board of
directors for the faithful performance of the duties of the office of chief
financial officer and for the restoration to the corporation, in case of death,
resignation, retirement, or removal from office, of all books, papers, vouchers,
money, and other property of whatever kind in the possession or under the
control of the chief financial officer belonging to the corporation.
Section 12. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such
duties; as may from time to time be prescribed by resolution of the board of
directors.
Section 13. Absence or Disability of Officers. In the case of the absence
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Limitation of Liability.
-9-
<PAGE>
(i) To the fullest extent permitted by the General Corporation Law of
the State of Delaware (the "Delaware General Corporation Law") as it now exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the corporation to provide broader
indemnification rights than permitted prior thereto), no director of the
corporation shall be liable to the corporation or its stockholders for monetary
damages arising from a breach of fiduciary duty owed to the corporation or its
stockholders.
(ii) Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
Section 2. Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is otherwise involved (including
involvement as a witness) in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director or officer of the
corporation or, while a director or officer of the corporation, is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter, an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director or officer or in any other capacity
while serving as a director or officer, shall be indemnified and held harmless
by the corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of an such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than permitted prior
thereto), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in Section 3 hereof with respect to
proceedings to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the board of directors of the corporation. The right to
indemnification conferred in this Section 2 shall be a contract right and shall
include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if and to the extent
that the Delaware General Corporation Law requires, an advancement of expenses
incurred by an indemnitee in his or her
-10-
<PAGE>
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not entitled
to be indemnified for such expenses under this Section 2 or otherwise.
Section 3. Right of Indemnitee to Bring Suit. If a claim for
indemnification (including the advancement of expenses) under Section 2 is not
paid in full by the corporation within 45 days after a written claim has been
received by the corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim. if successful in whole or in part in any
such suit, or in a suit brought by the corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of procuring or defending such suit. In any
suit brought by the indemnitee to enforce a right to indemnification hereunder
(but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that the indemnitee has not met
the applicable standard of conduct set forth in the Delaware General Corporation
Law. In any suit by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the corporation shall be entitled to
recover such expenses upon a final adjudication that the indemnitee has not met
the applicable standard of conduct set forth in the Delaware General Corporation
Law. Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of any such suit that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this ARTICLE V or otherwise shall be on the
corporation.
Section 4. Service for Subsidiaries. Any person serving as a director,
officer, employee or agent of another corporation,
-11-
<PAGE>
partnership, joint venture or other enterprise, at least 50% of whose equity
interests are owned by the corporation (hereinafter a "subsidiary"), shall be
conclusively presumed to be serving in such capacity at the request of the
corporation.
Section 5. Reliance. Persons who after the date of the adoption of this
provision become or remain directors or officers of the corporation or who,
while a director or officer of the corporation, become or remain a director,
officer, employee or agent of a subsidiary, shall be conclusively presumed to
have relied on the rights to indemnity, advancement of expenses and other rights
contained in this ARTICLE V in entering into or continuing such service. The
rights to indemnification and to the advancement of expenses conferred in this
ARTICLE V shall apply to claims made against an indemnitee arising out of acts
or omissions which occurred or occur both prior and subsequent to the adoption
hereof.
Section 6. Non-Exclusivity of Rights. The rights to indemnification and to
the advancement of expenses conferred in this ARTICLE V shall not be exclusive
of any other right which any person may have or hereafter acquire under the
certificate of incorporation or under any statute, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 7. Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expenses,
liability or loss under the Delaware General Corporation Law.
Section 8. Indemnification of Employees and Agents of the Corporation. The
corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification and to the advancement of expenses,
to any employee or agent of the corporation to the fullest extent of the
provisions of this Section 8 with respect to the indemnification and advancement
of expenses of directors and officers of the corporation.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be entitled
to have a certificate signed by, or in the name of the corporation by, the
chairman, the president or a vice-president and the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by such
holder in the corporation. If such a certificate is countersigned (1) by a
transfer agent or an assistant transfer agent other than the
-12-
<PAGE>
corporation or its employee or (2) by a registrar, other than the corporation or
its employee, the signature of any such chairman, president, vice-president,
secretary, or assistant secretary may be facsimiles. In case any officer or
officers who have signed, or whose facsimile signature or signatures have been
used on, any such certificate or certificates shall cease to be such officer or
officers of the corporation whether because of death, resignation or otherwise
before such certificate or certificates have been delivered by the corporation,
such certificate or certificates may nevertheless be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures have been used thereon had not ceased to
be such officer or officers of the corporation. All certificates for shares
shall be consecutively numbered or otherwise identified. The name of the person
to whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation. Shares of stock
of the corporation shall only be transferred on the books of the corporation by
the holder of record thereof or by such holder's attorney duly authorized in
writing, upon surrender to the corporation of the certificate or certificates
for such shares endorsed by the appropriate person or persons, with such
evidence of the authenticity of such endorsement, transfer, authorization, and
other matters as the corporation may reasonably require, and accompanied by all
necessary stock transfer stamps. In that event, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate or certificates, and record the transaction on its books.
The board of directors may appoint a bank or trust company organized under the
laws of the United States or any state thereof to act as its transfer agent or
registrar, or both in connection with the transfer of any class or series of
securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates' previously issued by the corpo ration alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that the
corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, the board of directors
may fix a record date,
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<PAGE>
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the board of directors, and which record date
shall not be more than sixty nor less than ten days before the date of such
meeting. If no record date is fixed by the board of directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be the close of business on the next day preceding the day on
which notice is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stock holders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
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<PAGE>
close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation. Before
payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the directors from time
to time, in their absolute discretion, think proper as a reserve or reserves to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or any other purpose and the directors may
modify or abolish any such reserve in the manner in which it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation,
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<PAGE>
and such authority may be general or confined to specific instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
Section 6. Corporate seal. The board of directors shall provide a corporate
seal which shall be in the form of a circle and shall have inscribed thereon the
name of the corporation and the words "Corporate Seal, Delaware". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities in any
other corporation held by the corporation shall be voted by the president,
unless the board of directors specifi cally confers authority to vote with
respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.
Section 9. Section Headings. Section headings in these by-laws are for
convenience of reference only and shall not be given
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<PAGE>
any substantive effect in limiting or otherwise construing any provision-herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these by-laws is or becomes inconsistent with any provision of the certificate
of incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these by-laws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.
ARTICLE VIII
------------
AMENDMENTS
----------
These by-laws may be amended, altered, or repealed and new by-laws adopted
at any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the by-laws has been conferred upon the
board of directors shall not divest the stockholders of the same powers.
-17-
<PAGE>
EXHIBIT 3.7
For Ministry Use Only Ontario Corporation Number
A Usage exclusively Ministere Numero de la Societe en Ontario
1164133
---------
...............January 11, 1996...............
Line Comp Method
no. Stat Type Incorp
[O] [0] [A] [3]
Share Notice Jurisdiction
Req'd
[S] [N] [ONTARIO]
- --------------------------------------------------------------------------------
ARTICLES OF INCORPORATION
STATUTS CONSTITUTIFS
============
Form 1
Business
Corporations
Act
Formule 1
Loi sur les
Societes
par actions
============
1. The name of the corporation is: Denomination sociale de la Societe:
BROCKWAY STANDARD (CANADA), INC. / LES ENTERPRISES STANDARD BROCKWAY
(CANADA), INC.
2. The address of the registered office is: Adresse du siege social:
250 Yonge Street, Suite 2400
- --------------------------------------------------------------------------------
(Street & Number or R.R. Number & if Multi-Office Building give Room No.)
(Rue et numero ou numero de la R.R. et, s'il s'agit d' un
edifice a bureaux, numero du bureau)
Toronto, Ontario M5B2M6
- --------------------------------------------------------------------------------
(Name of Municipality or Post Office) (Postal Code)
(Nom de la Municipalite, ou du bureau de poste) (Code Postal)
in the Municipality of Metropolitan Toronto
- -------------------------- -----------------------------------------
(Name of Municipality, (County, District, Regional Municipality)
Geographic Township) dans le/la (Comte, District, Municipalite Regionale)
(Nom de la Municipalite,
du Canton Geographique)
3. Number (or minimum and Nombre (ou nombres minimal et maximal)
maximum number) of d'administrateurs:
directors is:
Minimum: One (1) Maximum: Twenty (20)
4. The first director(s) is/are:
Premier(s) administrateur(s): Canadian
Residence, address, giving Street & No. Resident
or R.R. No. or Municipality and Postal Code. State Yes/No
Canadien
Resident Oui/Non
First name, Initials and Surname Adresse personnelle, y compris la rue et la
Prenom, Initiales et Nom de Famille numero, le Numero de la R.R. ou, le Nom de
la Municipalite et le Code Postal.
- --------------------------------------------------------------------------------
David P. Hayford 820 Newport Terrace No
Alpharetta, Georgia
U.S.A. 30202
<PAGE>
Michael J. Tobin 98 McGee Crescent Yes
Aurora, Ontario
Canada L4G 6L8
5. Restrictions, if any, Limites, s'il y a lieu, imposees aux activities
on business the commerciales ou aux pouboirs de la societe
corporation may carry
on or on powers the
corporation may exercise.
None
6. The classes and any Categories et nombre maximal, s'il y a lieu,
maximum number of shares d'actions que la socieete est autorisee a
that the corporation is emettre.
authorized to issue.
The Corporation is authorized to issue an unlimited number of shares
designated as Common Shares.
<PAGE>
7. Rights, privileges, Droits, privileges, restrictions et conditions,
restrictions and s'il y a lieu, rattaches a chaque categorie
conditions (if any) d'action et pouvoirs des administrateurs
attaching to each class relatifs a chaque categorie d'actions qui peut
of shares and directors etre emise en serie:
authority with respect to
any class of shares which
may be issued in series:
The rights of the holders of Common Shares of the Corporation are equal in
all respects and include the rights,
(a) to vote at all meetings of shareholders; and
(b) to receive the remaining property of the Corporation upon dissolution.
<PAGE>
8. The issue, transfer or L'emission, le transfert ou la propriete
ownership of shares is/is d'actions est/n'est pas restreinte. Les
not restricted and the restrictions, s'il y a lieu, sont les
restrictions (if any) are suviantes:
as follows:
No shares of the Corporation shall be transferred without the consent of
the directors of the Corporation expressed by a resolution passed by the
board of directors or by an instrument or instruments in writing signed by
all of the directors then in office.
<PAGE>
9. Other provisions, if any, are: Autres dispositions, s'il y a lieu:
(a) The number of shareholders of the Corporation, exclusive of persons who
are in the employment of the Corporation and exclusive of persons who,
having been formerly in the employment of the Corporation, were, while
in that employment, and have continued after termination of that
employment to be, shareholders of the Corporation, is limited to not
more than fifty, two or more persons who are the joint registered
owners of one or more shares being counted as one shareholder.
(b) Any invitation to the public to subscribe for securities of the
Corporation is prohibited.
(c) Subject to the provisions of the Business Corporations Act (Ontario) as
amended or re-enacted from time to time, the directors may, without
authorization of the shareholders:
(i) borrow money on the credit of the Corporation;
(ii) issue, re-issue, sell or pledge debt obligations of the
Corporation;
(iii) give a guarantee on behalf of the Corporation to secure
performance of an obligation of any person;
(iv) mortgage, hypothecate, pledge or otherwise create a security
interest in all or any property of the Corporation owned or
subsequently acquired, to secure any obligation of the
Corporation; and
(v) by resolution, delegate any or all such powers to a director, a
committee of directors or an officer of the Corporation.
Nothing in this subparagraph shall limit or restrict the borrowing of
money by the Corporation on bills of exchange or promissory notes made,
drawn, accepted or endorsed by or on behalf of the Corporation.
(d) The holders of any fractional shares issued by the Corporation shall be
entitled to exercise voting rights and to receive dividends in respect
of each such fractional share.
<PAGE>
10. The names and addresses of the incorporators are
Nom et addresse des fondateurs
First name, initials and Full residence address or address of registered
surname or corporate name office or of principal place of business giving
Prenom, initiale et nom street & No. or R.R. No., municipality and
de famille ou postal code.
denomination sociale Adresse personnelle au complet, adresse du
siege social ou adresse de l'etablissement
principal, y compris la rue et le numero de
la R.R., le nom de la municipalite et le code
postal
- --------------------------------------------------------------------------------
David P. Hayford 820 Newport Terrace
Alpharetta, Georgia
U.S.A. 30202
Michael J. Tobin 98 McGee Crescent
Aurora, Ontario
Canada L4G 6L8
These articles are signed Les presents statuts sont signes en double
in duplicate exemplaire.
- --------------------------------------------------------------------------------
Signatures of incorporators / Signature des fondateurs
/s/ DAVID P. HAYFORD
----------------------------
David P. Hayford
/s/ MICHAEL J. TOBIN
----------------------------
Michael J. Tobin
<PAGE>
EXHIBIT 3.8
BY-LAW NO. 1
A by-law relating generally to the regulation of the
business and affairs of
BROCKWAY STANDARD (CANADA), INC.
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
One INTERPRETATION
Two DIRECTORS
Three MEETINGS OF DIRECTORS
Four COMMITTEES
Five OFFICERS
Six PROTECTION OF DIRECTORS,
OFFICERS AND OTHERS
Seven MEETINGS OF SHAREHOLDERS
Eight SECURITIES
Nine DIVIDENDS AND RIGHTS
Ten EXECUTION OF DOCUMENTS
AND VOTING OF SECURITIES
Eleven NOTICES
</TABLE>
RESOLVED as a by-law of Brockway Standard (Canada), Inc. (hereinafter
called the "Corporation") as follows:
Section One
INTERPRETATION
1.1 Definitions.
In this by-law and in all other by-laws of the Corporation, unless the
context otherwise requires:
(a) "Act" means the Business Corporations Act (Ontario) as amended or re-
enacted from time to time and includes the regulations made pursuant
thereto;
(b) "board" means the board of directors of the Corporation;
(c) "by-laws" means all by-laws of the Corporation;
(d) "director" means a director of the Corporation; and
(e) "non-business day" means Saturday, Sunday and any other day that is a
holiday as defined in the Interpretation Act (Ontario); and
<PAGE>
(f) "number of directors" means the number of directors provided for in
the articles or, where a minimum and maximum number of directors is
provided for in the articles, the number of directors determined by a
special resolution or resolution of the board where it is empowered by
special resolution to determine the number of directors.
1.2 All terms used in the by-laws of the Corporation which are defined in the
Act shall have the meanings given to such terms under the Act.
1.3 In all by-laws of the Corporation, the singular shall include the plural
and the plural the singular and words importing gender include the masculine,
feminine and neuter genders.
1.4 Headings used in the by-laws are for convenience of reference only and
shall not affect the construction or interpretation thereof.
1.5 If any of the provisions contained in this by-law are inconsistent with
those contained in the articles or a unanimous shareholder agreement, the
provisions contained in the articles or unanimous shareholder agreement, as the
case may be, shall prevail.
Section Two
DIRECTORS
2.1 Quorum. The quorum for the transaction of business at any meeting of the
board shall consist of a majority of the number of directors; provided that
where the number of directors of the Corporation is two directors, both
directors must be present at any meeting of the board to constitute a quorum.
2.2 Qualification. No person shall be qualified for election as a director if
he is less than 18 years of age; if he is of unsound mind and has been so found
by a court in Canada or elsewhere; if he is not an individual; or if he has the
status of a bankrupt. A director need not be a shareholder. A majority of
the directors shall be resident Canadians provided that if the number of
directors is fewer than three, at least one shall be a resident Canadian.
2.3 Election and Term. The election of directors shall take place at the first
meeting of shareholders and at each annual meeting of shareholders A director
not elected for an expressly stated term shall cease to hold office at the close
of the first annual meeting following his election or appointment. If an
election of directors is not held at the proper time, the incumbent directors
shall continue in office until their successors are elected.
2.4 Removal of Directors. Subject to the provisions of the Act, the
shareholders may by ordinary resolution passed at an annual or special meeting
remove any director from office and the vacancy created by such removal may be
filled at the same meeting failing which it may be filled by the directors.
2.5 Vacation of Office. A director ceases to hold office when he dies; he is
removed from office by the shareholders; he ceases to be qualified for election
as a director; or his written resignation is received by the Corporation, or if
a time is specified in such resignation, at the time so specified, whichever is
later; provided that a director named in the articles is not permitted to
<PAGE>
resign his office unless at the time the resignation is to become effective a
successor is elected or appointed.
2.6 Vacancies. Subject to the provisions of the Act, if a quorum of the board
remains in office, the board may fill a vacancy in the board, except:
(a) a vacancy resulting from (i) an increase in the number of directors
otherwise than by a resolution of the directors, or in the maximum
number of directors, or from (ii) a failure to elect the number of
directors required to be elected at any meeting of the shareholders;
or
(b) where the directors are empowered to determine the number of
directors, if, after such appointment, the total number of directors
would be greater than one and one-third times the number of directors
required to have been elected at the last annual meeting of
shareholders.
In the absence of a quorum of the board, or if the board is not
permitted to fill such vacancy, the board shall forthwith call a special meeting
of shareholders to fill the vacancy. If the board fails to call such meeting or
if there are no such directors then in office, any shareholder may call the
meeting.
2.7 Remuneration and Expenses. The directors shall be paid such remuneration
for their services as the board may from time to time determine and shall also
be entitled to be reimbursed for traveling and other expenses properly incurred
by them in attending meetings of the board or any committee thereof. Nothing
herein contained shall preclude any director from serving the Corporation in any
other capacity and receiving remuneration therefor.
Section Three
MEETINGS OF DIRECTORS
3.1 Canadian Majority. The board shall not transact business at a meeting,
other than filling a vacancy in the board, unless a majority of the directors
present are resident Canadians, except where
(a) a resident Canadian director who is unable to be present approves in
writing or by telephone or other communications facilities the
business transacted at the meeting;
(b) a majority of resident Canadians would have been present had that
director been present at the meeting; and
(c) the Corporation has only one or two directors, that director or one of
the two directors, as the case may be, shall be a resident Canadian.
3.2 Meetings by Telephone. If all the directors present at or participating in
the meeting consent, any or all of the directors may participate in a meeting of
the board, or of a committee of the board by means of such telephone, electronic
or other communications facilities as to permit all persons participating in the
meeting to communicate with each other, simultaneously and instantaneously, and
any director participating in such a meeting by such means is deemed to be
<PAGE>
present at the meeting. Any such consent shall be effective whether given
before or after the meeting to which it relates and may be given with respect to
all meetings of the board and of committees of the board held while a director
holds office.
3.3 Place of Meetings. Meetings of the board may be held at any place within
or outside Ontario. In any financial year of the Corporation, a majority of the
meetings of the board need not be held within Canada.
3.4 Calling of Meetings. Meetings of the board may be convened at any time by
the president or any director upon notice given to all directors in accordance
with subsection 3.5.
3.5 Notice of Meeting. Notice of the time and place of each meeting of the
board shall be given in the manner provided in subsection 11.1 to each director
(a) not less than 48 hours before the time when the meeting is to be held if the
notice is mailed, or (b) not less than 24 hours before the time the meeting is
to be held if the notice is given personally or is delivered or is sent by any
means of transmitted or recorded communication.
3.6 Waiver of Notice. A director may in any manner or at any time waive notice
of or otherwise consent to a meeting of the board. Attendance of a director at
a meeting of the board shall constitute a waiver of notice of that meeting
except where a director attends for the express purpose of objecting to the
transaction of any business on the grounds that the meeting has not been
properly called.
3.7 First Meeting of New Board. Provided a quorum of directors is present,
each newly elected board may without notice hold its first meeting immediately
following the meeting of shareholders at which such board is elected.
3.8 Adjourned Meeting. Notice of an adjourned meeting of the board is not
required if the time and place of the adjourned meeting is announced at the
original meeting.
3.9 Regular Meetings. The board may appoint a day or days in any month or
months for regular meetings of the board at a place and hour to be named. A
copy of any resolution of the board fixing the place and time of such regular
meetings shall be sent to each director forthwith after being passed, but no
other notice shall be required for any such regular meeting except where the Act
requires the purpose thereof or the business to be transacted thereat to be
specified.
3.10 Chairman. The chairman of any meeting of the board shall be the first
mentioned of such of the following officers as have been appointed and who, with
the exception of the Chair man of the Board, is a director and is present at
the meeting: chairman of the board, managing director, president, or a vice-
president (in order of seniority). If no such officer is present, the directors
present shall choose one of their number to be chairman.
3.11 Votes to Govern. At all meetings of the board, every question shall be
decided by a majority of the votes cast on the question. In case of an equality
of votes, the chairman of the meeting shall not be entitled to a second or
casting vote.
3.12 One Director Meeting. Where the board consists of only one director, that
director may constitute a meeting.
<PAGE>
Section Four
COMMITTEES
4.1 Committee of Directors. The board may appoint from their number one or
more committees of the board, however designated, and delegate to such
committee any of the powers of the board except those which, under the Act, a
committee of the board has no authority to exercise. A majority of the
members of any such committee shall be resident Canadians.
4.2 Audit Committee. If the Corporation is an offering corporation the board
shall, and otherwise the board may, constitute an audit committee composed of
not fewer than three directors, a majority of whom are not officers or employees
of the Corporation or any of its affiliates, and who shall hold office until the
next annual meeting of shareholders. The audit committee shall have the powers
and duties provided in the Act.
4.3 Transaction of Business. The powers of a committee of the board may be
exercised by a meeting at which a quorum is present or by resolution in writing
signed by all the members of such committee who would have been entitled to vote
on that resolution at a meeting of the committee. Meetings of such committee
may be held at any place within or outside Ontario.
4.4 Procedure. Unless otherwise determined by the board, each committee shall
have the power to fix its quorum at not less than a majority of its members, to
elect its chairman and to regulate its procedure. To the extent that the board
or the committee does not establish rules to regulate the procedure of the
committee, the provisions of this by-law applicable to meetings of the board
shall apply mutatis mutandis.
Section Five
OFFICERS
5.1 Appointment. The board may designate the offices of the Corporation and
from time to time appoint a chairman of the board, managing director (provided
he is a resident Canadian), president, one or more vice-presidents (to which
title may be added words indicating seniority or function), a secretary, a
treasurer and such other officers as the board may determine, including one or
more assistants to any of the officers so appointed. The board may specify the
duties of and, in accordance with this by-law and subject to the provisions of
the Act, delegate to such officers powers to manage the business and affairs of
the Corporation. One person may hold more than one office and, except for the
chairman of the board and the managing director, an officer need not be a
director.
5.2 Chairman of the Board. If appointed, the board may assign to the chairman
of the board any of the powers and duties that are by any provisions of this by-
law assigned to the managing director or to the president and subject to the
Act, such other powers and duties as the board may specify. The chairman of the
board shall, when present, preside at all meetings of the board and
shareholders. Subject to subsections 3.10 and 7.9, during the absence or
disability of the chairman of the board, his duties shall be performed and his
powers exercised by the first mentioned of the following officer then in office:
the managing director, the president, or a vice-president (in order of
seniority).
<PAGE>
5.3 Managing Director. If appointed, the managing director shall be the chief
executive officer and, subject to the authority of the board, shall have general
supervision of the business and affairs of the Corporation; and he shall,
subject to the provisions of the Act, have such other powers and duties as the
board may specify. During the absence or disability of the president, or if no
president has been appointed, the managing director shall also have the powers
and duties of that office.
5.4 President. If appointed, the president shall have general supervision of
the business and affairs of the Corporation, subject to the direction and
authority of the board, the chairman of the board and the managing director; and
he shall have such other powers and duties as the board may specify. During the
absence or disability of the managing director, or if no managing director has
been appointed, the president shall also have the powers and duties of that
office. In the absence of the appointment of a managing director or the
designation of the chairman of the board as such, the president shall be the
chief executive officer of the Corporation. Otherwise, the president shall be
the chief operating officer of the Corporation.
5.5 Vice-President. The vice-president, or if more than one, the vice-
presidents, in order of seniority as designated by the board, shall be vested
with all the powers and perform all the duties of the president in his absence,
inability or refusal to act except that he shall not preside at any meeting of
the directors unless he is appointed to do so by the board. A vice-president
shall have such powers and duties as the board or the chief executive officer
may specify.
5.6 Secretary. The secretary shall attend and be the secretary of all meetings
of the board, shareholders and committees of the board and shall enter or cause
to be entered in records kept for that purpose minutes of all proceedings
thereat; he shall give or cause to be given, as and when instructed, all notices
to shareholders, directors, officers and auditors; he shall be the custodian
of all books, papers, records, documents and instruments belonging to the
Corporation, except when some other officer or agent has been appointed for that
purpose; and he shall have such other powers and duties as the board or the
chief executive officer may specify.
5.7 Treasurer. The treasurer shall keep or cause to be kept proper accounting
records in compliance with the Act and shall be responsible for the deposit of
money, the safekeeping of securities and the disbursement of funds of the
Corporation; he shall render to the board when ever required an account of all
his transactions as treasurer and of the financial position of the 'corporation;
and he shall have such other powers and duties as the board or the chief
executive officer may specify.
5.8 Powers and Duties of Other Officers. The powers and duties of all other
officers shall be such as the terms of their engagement call for or as the board
or the chief executive officer may specify. Any of the powers and duties of an
officer to whom an assistant has been appointed may be exercised and performed
by such assistant, unless the board or the chief executive officer otherwise
directs.
5.9 Variation of Powers and Duties. Subject to the provisions of the Act, the
board may from time to time vary, add to or limit the powers and duties of any
officer.
5.10 Term of Office. The board, in its discretion, may remove any officer of
the Corporation, without prejudice to such officer's rights under any employment
contract. Otherwise, each officer appointed by the board shall hold office
until his successor is appointed, except that the term of
<PAGE>
office of the chairman of the board or managing director shall expire when the
holder thereof ceases to be a director.
5.11 Agents and Attorneys. The board shall have power from time to time to
appoint agents or attorneys for the Corporation in or out of Ontario with such
powers of management or other wise (including the power to sub-delegate) as may
be thought fit.
5.12 Fidelity Bonds. The board may require such officers, employees and agents
of the Corporation as the board deems advisable to furnish bonds for the
faithful discharge of their duties, in such form and with such surety as the
board may from time to time prescribe.
Section Six
PROTECTION OF DIRECTORS AND OFFICERS
6.1 Limitation of Liability. No director or officer shall be liable for the
acts, receipts, neglects or defaults of any other director, officer, employee,
or agent, or for joining in any receipt or other act for conformity, or for any
loss, damage or expense happening to the Corporation through the insufficiency
or deficiency of title to any property acquired for or on behalf of the
Corporation, or for the insufficiency or deficiency of any security in or upon
which any of the moneys of the Corporation shall be invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious acts of any person
with whom any of the moneys, securities or effects of the Corporation shall be
deposited, or for any loss occasioned by any error of judgment or oversight on
his part, or for any other loss, damage or misfortune whatever which shall
happen in the execution of the duties of his office or in relation thereto,
unless the same are occasioned by his own wilful neglect or default; provided
that nothing herein shall relieve any director or officer from the duty to act
in accordance with the Act or from liability for any breach thereof.
6.2 Indemnity. The Corporation shall indemnify and save harmless every
director or officer, every former director or officer, and every person who acts
or acted at the Corporation's request as a director or officer of a body
corporate of which the Corporation is or was a shareholder or creditor (or a
person who undertakes or has undertaken any liability on behalf of the
Corporation or any such body corporate) and his heirs and legal representatives,
from and against all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reason ably incurred by him in respect
of any civil, criminal or administrative action or proceeding to which he is
made a party by reason of being or having been a director or officer of the
Corporation or such body corporate, if:
(a) he acted honestly and in good faith with a view to the best interests
of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
6.3 Insurance. Subject to the limitations contained in the Act, the
Corporation may purchase and maintain such insurance for the benefit of any
person referred to in subsection 6.2 hereof, as the board may from time to time
determine.
<PAGE>
Section Seven
MEETINGS OF SHAREHOLDERS
7.1 Annual Meetings. The annual meeting of shareholders shall be held at such
time in each year and, subject to subsection 7.3, at such place as the board,
the chairman of the board, the managing director or the president may from time
to time determine, for the purpose of considering the financial statements and
reports required by the Act to be placed before the annual meeting, electing
directors, appointing auditors and fixing or authorizing the board to fix their
remuneration, and for the transaction of such other business as may properly be
brought before the meeting.
7.2 Special Meetings. The board, the chairman of the board, the managing
director or the president or any registered shareholder shall have power to call
a special meeting of shareholders at any time.
7.3 Place of Meetings. Meetings of shareholders shall be held at the place
where the registered office of the Corporation is situate or, if the board
shall so determine, at some other place within or outside of Ontario.
7.4 Meetings by Telephone. If all the shareholders present at or participating
in the meeting consent, any or all of the shareholders may participate in a
meeting of the shareholders by means of such telephone, electronic or other
communications facilities as to permit all persons participating in the
meeting to communicate with each other, simultaneously and instantaneously, and
any shareholder participating in such a meeting by such means is deemed to be
present at the meeting. Any such consent shall be effective whether given
before or after the meeting to which it relates and may be given with respect to
all meetings of the shareholders while such individual(s) continue to be a
shareholder.
7.5 Notice of Meetings. Notice of the time and place of each meeting of
shareholders (and of each meeting of shareholders adjourned for an aggregate of
30 days or more) shall be given in the manner provided in subsection 11.1 not
less than ten days (or such lesser number of days then required under the Act or
any other applicable legislation, regulation or administrative policy), unless
the Corporation is an offering corporation in which case not less than 21 days,
nor, in either case, more than 50 days before the date of the meeting, to each
director, to the auditor and to each shareholder who at the close of business on
the record date for notice, if any, is entered in the securities register as the
holder of one or more shares carrying the right to vote at the meeting. Notice
of a meeting of shareholders called for any purpose other than consideration
of the financial statements and auditor's report, election of directors and re-
appointment of the incumbent auditor shall state the nature of such business in
sufficient detail to permit a shareholder to form a reasoned judgment thereon
and shall state the text of any special resolution or by-law to be submitted to
the meeting. A shareholder and any other person entitled to attend a meeting of
shareholders may in any manner and at any time waive notice of or otherwise
consent to a meeting of shareholders. Attendance of any such person at a
meeting of shareholders shall constitute a waiver of notice of the meeting
except where he attends a meeting for the express purpose of objecting to the
transaction of any business on the grounds that the meeting is not properly
called.
7.6 List of Shareholders Entitled to Notice. For every meeting of
shareholders, the Corporation shall prepare a list of shareholders entitled to
receive notice of the meeting, arranged in
<PAGE>
alphabetical order and showing the number of shares entitled to vote at the
meeting held by each shareholder. If a record date for the meeting is fixed
pursuant to subsection 7.7, the shareholders listed shall be those registered at
the close of business on the record date and such list shall be prepared not
later than ten days after such record date. If no record date is fixed, the list
shall be prepared at the close of business on the day immediately preceding the
day on which notice of the meeting is given, or where no such notice is given,
the day on which the meeting is held and shall list all shareholders registered
at such time. The list shall be available for examination by any shareholder
during usual business hours at the registered office of the Corporation or at
the place where the securities register is kept and at the place where the
meeting is held.
7.7 Record Date for Notice. The board may fix in advance a record date,
preceding the date of any meeting of shareholders by not more than 50 days and
not less than 21 days, for the determination of the shareholders entitled to
notice of the meeting; and notice of any such record date shall be given not
less than seven days before such record date by newspaper advertisement in the
manner provided in the Act. If no record date is so fixed, the record date for
the determination of the shareholders entitled to notice of the meeting shall
be the close of business on the day immediately preceding the day on which the
notice is given.
7.8 Meetings Without Notice. A meeting of shareholders may be held without
notice at any time and place permitted by the Act in accordance with the
requirements of the Act and any other applicable legislation, regulation or
administrative policy. At such a meeting, any business may be transacted which
the Corporation at a meeting of shareholders may transact.
7.9 Chairman, Secretary and Scrutineers. The chairman of any meeting of
shareholders shall be the first mentioned of such of the following officers as
have been appointed and who is present at the meeting: chairman of the board,
managing director, president, or a vice-president who is a shareholder. If no
such officer is present within 15 minutes from the time fixed for holding the
meeting, the persons present and entitled to vote shall choose one of their
number to be chairman. If the secretary of the Corporation is absent, the
chairman shall appoint some person, who need not be a shareholder, to act as
secretary of the meeting. If desired, one or more scrutineers, who need not be
shareholders, may be appointed by a resolution or by the chairman with the
consent of the meeting.
7.10 Persons Entitled to be Present. The only persons entitled to be present
at a meeting of the shareholders shall be those entitled to vote thereat, the
directors and auditor of the Corporation and others who, although not entitled
to vote, are entitled or required under any provision of the Act, the articles
or the by-laws to be present at the meeting. Any other person may be admitted
only on the invitation of the chairman of the meeting or with the consent of the
meeting.
7.11 Quorum. A quorum for the transaction of business at any meeting of
shareholders shall be two persons, present in person, each being a shareholder
entitled to vote thereat or a duly appointed proxy for an absent shareholder so
entitled. Notwithstanding the foregoing, if the Corporation has only one
shareholder, or only one shareholder of any class or series of shares, the
shareholder present in person or by proxy constitutes a meeting and a quorum for
such meeting.
7.12 Right to Vote. Subject to the provisions of the Act as to authorized
representatives of any other body corporate, at any meeting of shareholders in
respect of which the Corporation has prepared the list referred to in subsection
7.6, every person who is named in such list shall be entitled to vote the shares
shown thereon opposite his name except to the extent that such person
<PAGE>
has transferred any of his shares after the date on which the list is prepared
or, where a record date has been fixed, after the record date and the
transferee, upon producing properly endorsed certificates evidencing such shares
or otherwise establishing that he owns such shares, demands at any time prior to
the meeting that his name be included to vote the transferred shares at the
meeting. In the absence of a list prepared as aforesaid in respect of a meeting
of shareholders, every person shall be entitled to vote at the meeting who at
the time is entered in the securities register as the holder of one or more
shares carrying the right to vote at such meeting.
7.13 Proxies. Every shareholder entitled to vote at a meeting of shareholders
may appoint a proxyholder, or one or more alternate proxyholders, who need not
be shareholders, to attend and act at the meeting in the manner and to the
extent authorized and with the authority conferred by the proxy. A proxy shall
be in writing executed by the shareholder or his attorney and shall conform with
the requirements of the Act.
7.14 Time for Deposit of Proxies. The board may specify in a notice calling a
meeting of shareholders a time, preceding the time of such meeting by not more
than 48 hours exclusive of non-business days, before which time proxies to be
used at such meeting must be deposited. A proxy shall be acted upon only if,
prior to the time so specified, it shall have been deposited with the
Corporation or an agent thereof specified in such notice or, if no such time is
specified in such notice, unless it has been received by the secretary of the
Corporation or by the chairman of the meeting or any adjournment thereof prior
to the time of voting.
7.15 Joint Shareholders. If two or more persons hold shares jointly, any one
of them present in person or represented by proxy at a meeting of shareholders
may, in the absence of the other or others, vote the shares; but if two or more
of those persons are present in person or represented by proxy and vote, they
shall vote as one the shares jointly held by them.
7.16 Votes to Govern. At any meeting of shareholders every question shall,
unless otherwise required by law, be determined by the majority of the votes
cast on the question. In the case of an equality of votes either upon a show of
hands or upon a ballot, the chairman of the meeting shall not be entitled to a
second or casting vote.
7.17 Show of Hands. Subject to the provisions of the Act, any question at a
meeting of share holders shall be decided by a show of hands unless a ballot
thereon is required or demanded as hereinafter provided. Upon a show of hands,
every person. who is present and entitled to vote shall have one vote. Whenever
a vote by show of hands shall have been taken upon a question, unless a ballot
thereon is so required or demanded, a declaration by the chairman of the meeting
as to the result of the vote upon the question and an entry to that effect in
the minutes of the meeting shall be prima facie evidence of the fact without
proof of the number or proportion of the votes recorded in favour of or against
any resolution or other proceeding in respect of such question, and the result
of the vote so taken shall be the decision of the shareholders upon such
question.
7.18 Ballots. On any question proposed for consideration at a meeting of
shareholders, and whether or not a show of hands has been taken thereon, any
shareholder or proxyholder entitled to vote at the meeting may demand a ballot.
A ballot so demanded shall be taken in such manner as the chairman shall direct.
A demand for a ballot may be withdrawn at any time prior to the taking of the
ballot. The result of the ballot so taken shall be the decision of the
shareholders upon the question.
<PAGE>
7.19 Resolution in Writing. A resolution in writing signed by all of the
shareholders entitled to vote on that resolution at a meeting of shareholders
(or such lesser number of shareholders as are then required for a written
resolution to be effective pursuant to the Act and any other applicable
legislation, regulation or administrative policy) is as valid as if it had been
passed at a meeting of the shareholders unless a written statement with respect
to the subject matter of the resolution is submitted by a director or the
auditor in accordance with the Act.
Section Eight
SECURITIES
8.1 Registration of Transfer. Subject to the provisions of the Act, no
transfer of shares shall be registered in a securities register except upon
presentation of the certificate representing such shares with a transfer
endorsed thereon or delivered therewith duly executed by the registered holder
or by his attorney or successor duly appointed, together with such reasonable
assurance or evidence of signature, identification and authority to transfer
as the board may from time to time prescribe, upon payment of all applicable
taxes and any fees prescribed by the board, upon compliance with such
restrictions on transfer as are authorized by the articles and upon satisfaction
of any lien referred to in subsection 8.4.
8.2 Transfer Agents and Registrars. The board may from time to time appoint a
registrar to maintain the securities register and a transfer agent to maintain
the register of transfers and may also appoint one or more branch registrars to
maintain branch securities registers and one or more branch transfer agents to
maintain branch registers of transfers, but one person may be appointed both
registrar and transfer agent. The board may at any time terminate any such
appointment.
8.3 Lien on Shares. The Corporation has a lien on any share or shares
registered in the name of a shareholder or his legal representative for any debt
of that shareholder to the Corporation.
8.4 Enforcement of Lien. The lien referred to in subsection 8.3 may be
enforced by any means permitted by law and:
(a) where the share or shares are redeemable pursuant to the articles of
the Corpora tion by redeeming such share or shares and applying the
redemption price to the debt;
(b) subject to the Act, by purchasing the share or shares for cancellation
for a price equal to the book value of such share or shares and
applying the proceeds to the debt;
(c) by selling the share or shares to any third party whether or not such
party is at arm's length to the Corporation, and including, without
limitation, any officer or director of the Corporation, for the best
price which the directors consider to be obtainable for such share or
shares; or
(d) by refusing to register a transfer of such share or shares until the
debt is paid.
8.5 Security Certificates. Every holder of securities of the Corporation shall
be entitled, at his option, to a security certificate, or to a non-transferable
written acknowledgment of his right to obtain a security certificate, stating
the number and designation, class or series of securities held by him as shown
on the securities register. Security certificates and acknowledgments of a
securities
<PAGE>
holder's right to a security certificate, respectively, shall be in such form as
the board shall from time to time approve. Any security certificate shall be
signed in accordance with subsection 10.1. A security certificate shall be
signed manually by at least one director or officer of the Corporation or by or
on behalf of the transfer agent and/or registrar. Any additional signatures
required may be printed or otherwise mechanically reproduced. A security
certificate executed as aforesaid shall be valid notwithstanding that one of
the directors or officers whose facsimile signature appears thereon no longer
holds office at the date of issue of the certificate.
8.6 Replacement of Security Certificates. The board, any officer or any agent
designated by the board may in its or his discretion direct the issue of a new
security certificate in lieu of and upon cancellation of a security certificate
that has been mutilated. In the case of a security certificate claimed to have
been lost, destroyed or wrongfully taken, the board, any officer or any agent
designated by the board shall issue a substitute security certificate if so
requested before the Corporation has notice that the security has been acquired
by a bona fide purchaser. The issuance of the substitute security certificate
shall be on such reasonable terms as to indemnity, reimbursement of expenses and
evidence of loss and of title as the board or the officer or the agent
designated by the board responsible for such issuance may from time to time
prescribe, whether generally or in any particular case.
8.7 Joint Shareholders. If two or more persons are registered as joint holders
of any security, the Corporation shall not be bound to issue more than one
certificate in respect thereof, and delivery of such certificate to one of such
persons shall be sufficient delivery to all of them. Any one of such persons
may give effectual receipts for the certificate issued in respect thereof or for
any dividend, bonus, return of capital or other money payable or warrant
issuable in respect of such security.
8.8 Deceased Security Holders. Subject to the provisions of paragraph 8. 9
below, in the event of the death of a holder of any security, the Corporation
shall not be required to make any entry in the securities register in respect
thereof or to make payment of any dividends thereon except upon production of
all such documents as may be required by law and upon compliance with the
reasonable requirements of the Corporation, which reasonable requirements shall
in the discretion of the board not necessarily include the production of letters
probate or letters of administration.
8.9 Deceased Jointly-Held Security Holders. Where a share is registered in the
name of two or more persons as joint holders with rights of survivorship, upon
satisfactory proof of the death of one joint holder and without the requirement
of letters probate or letters of administration, the Corporation shall treat
the surviving joint holder(s) as the sole owner(s) of the share effective as of
the date of death of such joint holder and the Corporation shall make the
appropriate entry in the securities register to reflect such ownership.
Section Nine
DIVIDENDS AND RIGHTS
9.1 Dividends. Subject to the provisions of the Act, the board may from time
to time by resolution declare and the Corporation may pay dividends to the
shareholders according to their respective rights and interests in the
Corporation.
<PAGE>
Dividends may be paid in money or property, subject to the restrictions on the
declaration and payment thereof under the Act, or by issuing fully paid shares
of the Corporation or options or rights to acquire fully paid shares of the
Corporation.
9.2 Dividend Cheques. A dividend payable in cash shall be paid by cheque drawn
on the Corporation's bankers or one of them to the order of each registered
holder of shares of the class or series in respect of which it has been declared
and mailed by prepaid ordinary mail to such registered holder at his recorded
address, unless such holder otherwise directs. In the case of joint holders the
cheque shall, unless such joint holders otherwise direct, be made payable to the
order of all of such joint holders and mailed to them at their recorded address.
The mailing of such cheque as aforesaid, unless the same is not paid on due
presentation, shall satisfy and discharge the liability for the dividend to
the extent of the sum represented thereby plus the amount of any tax which the
Corporation is required to and does withhold.
9.3 Non-receipt of Cheques. In the event of non-receipt of any dividend cheque
by the per son to whom it is sent as aforesaid, the Corporation shall issue to
such person a replacement cheque for a like amount on such terms as to
indemnity, reimbursement of expenses and evidence of non-receipt and of title
as the board may from time to time prescribe, whether generally or in any
particular case.
9.4 Record Date for Dividends and Rights. The board may fix in advance a date
as a record date for the determination of the persons entitled to receive
payment of dividends and to subscribe for securities of the Corporation,
provided that such record date shall not precede by more than 50 days the
particular action to be taken. Notice of any such record date shall be given
not less than seven days before such record date, by newspaper advertisement in
the manner provided in the Act, unless notice of the record date is waived by
every holder of a share of the class or series affected whose name is set out in
the securities register at the close of business on the day the directors fix
the record date. If the shares of the Corporation are listed for trading on one
or more stock exchanges in Canada, notice of such record date shall also be sent
to such stock exchanges. Where no record date is fixed in advance as aforesaid,
the record date for the determination of the persons entitled to receive payment
of any dividend or to exercise the right to subscribe for securities of the
Corporation shall be at the close of business on the day on which the resolution
relating to such dividend or right to subscribe is passed by the board.
9.5 Unclaimed Dividends. Any dividend unclaimed after a period of six years
from the date on which it has been declared to be payable shall be forfeited and
shall revert to the Corporation.
Section Ten
GENERAL
10.1 Execution of Instruments. Contracts, documents and other instruments in
writing may be signed on behalf of the Corporation by such person or persons as
the board may from time to time by resolution designate. In the absence of an
express designation as to the persons authorized to sign either contracts,
documents or instruments in writing generally or to sign specific contracts,
documents or instruments in writing, any one of the directors or officers of the
Corporation may sign contracts, documents or instruments in writing on behalf
of the Corporation. The corporate seal, if any, of the Corporation may be
affixed to any contract, obligation or instrument in writing
<PAGE>
requiring the corporate seal of the Corporation by any person authorized to sign
the same on behalf of the Corporation.
The phrase "contracts, documents and other instruments in writing" as used
in this provision shall include deeds, mortgages, hypothecs, charges,
conveyances, transfers and assignments of property, real or personal, immovable
or movable, agreements, releases, receipts and discharges for the payment of
money or other obligations, conveyances, transfers and assignments of
securities, all paper writings, all cheques, drafts or orders for the payment of
money and all notes, acceptances and bills of exchange.
10.2 Voting Rights in other Corporations. All securities carrying voting
rights of any other corporation held from time to time by the Corporation may be
voted at any and all meetings of shareholders, bond holders, debenture holders
or holders of other securities (as the case may be) of such other corporation
and in such manner as the board may from time to time determine. Any person or
persons authorized to sign on behalf of the Corporation may also from time to
time execute and deliver for and on behalf of the Corporation proxies and/or
arrange for the issuance of voting certificates and/or other evidence of the
right to vote in such names as they may determine.
Section Eleven
NOTICES
11.1 Method of Sending Notice. Any notice (which term includes any
communication or document) to be sent pursuant to the Act, the articles, the by-
laws or otherwise to a shareholder, director, officer, or to the auditor shall
be sufficiently sent if delivered personally to the person to whom it is to be
sent or if delivered to his recorded address or if mailed to him at his recorded
address by prepaid mail or if sent to him at his recorded address by any means
of prepaid transmitted or recorded communication. A notice so delivered shall
be deemed to have been sent when it is delivered personally or to the recorded
address as aforesaid; a notice so mailed shall be deemed to have been sent when
deposited in a post office or public letter box and shall be deemed to have been
received on the fifth day after so depositing; and a notice so sent by any means
of transmitted or recorded communication shall be deemed to have been sent when
dispatched by the Corporation if it uses its own facilities and otherwise when
delivered to the appropriate communication company or agency or its
representative for dispatch. The secretary may change or cause to be changed
the recorded address of any shareholder, director, officer or auditor in
accordance with any information believed by him to be reliable. The recorded
address of a director shall be his latest address as shown in the records of the
Corporation or in the most recent notice filed under the Corporations
Information Act, whichever is the more current.
11.2 Notice to Joint Shareholders. If two or more persons are registered as
joint holders of any share, any notice shall be addressed to all of such joint
holders but notice sent to one of such persons shall be sufficient notice to all
of them.
11.3 Computation of Time. In computing the date when notice must be sent under
any provision requiring a specified number of days notice of any meeting or
other event, both the date of sending the notice and the date of the meeting or
other event shall be excluded.
11.4 Undelivered Notices. If any notice sent to a shareholder pursuant to
subsection 11.1 is returned, on three consecutive occasions because the
shareholder cannot be found, the Corporation
<PAGE>
shall not be required to give any further notices to such shareholder until he
informs the Corporation in writing of his new address.
11.5 Omissions and Errors. The accidental omission to send any notice to
any shareholder, director, officer or to the auditor or the non-receipt of any
notice by any such person or any error in any notice not affecting the substance
thereof shall not invalidate any action taken at any meeting held pursuant to
such notice or otherwise founded thereon.
11.6 Persons Entitled by Operation of Law. Every person who, by operation of
law, transfer or by any other means whatsoever, shall become entitled to any
share, shall be bound by every notice in respect of such share which shall have
been duly sent to the shareholder from whom he derives his title to such share
prior to his name and address being entered on the securities register
(whether such notice was given before or after the happening of the event upon
which he became so entitled).
11.7 Deceased Shareholders. Any notice duly sent to any shareholder shall be
deemed to have been duly served in respect of the shares held by the shareholder
(whether held solely or with other persons), notwithstanding that such
shareholder is then deceased and whether or not the Corporation has notice of
his death, until some other person is entered in his stead in the securities
register of the Corporation as the holder or as one of the holders thereof and
such service shall for all purposes be deemed a sufficient service of notice to
his heirs, executors or administrators and all persons, if any, interested with
him in such shares.
11.8 Waiver of Notice. Any shareholder (or his duly appointed proxyholder),
director, officer or auditor may at any time waive any notice, or waive or
abridge the time for any notice, required to be given to him under any
provisions of the Act, the regulations thereunder, the articles, the by-laws or
otherwise and such waiver or abridgement shall cure any default in the giving or
in the time of such notice, as the case may be. Any such waiver or abridgement
shall be in writing except a waiver of notice of a meeting of shareholders or of
the board which may be given in any manner.
11.9 Execution of Notices. The signature of any director or officer of the
Corporation to any notice may be written, stamped, typewritten or printed or
partly written, stamped, typewritten or printed.
11.10 Proof of Service. A certificate of any officer or director of the
Corporation in office at the time of making of the certificate or of an agent of
the Corporation as to facts in relation to the sending of any notice to any
shareholder, director, officer or auditor or publication of any notice shall be
conclusive evidence thereof and shall be binding on every shareholder, director,
officer or auditor of the Corporation, as the case may be.
The foregoing resolution making By-law No. 1 of the Corporation, being a
by-law relating generally to the regulation of the business and affairs of the
Corporation, is hereby signed by all of the directors of the Corporation at the
direction of the shareholder.
DATED the 11th day of January, 1996.
<PAGE>
/S/ MICHAEL J. TOBIN /S/ DAVID P. HAYFORD
Michael J. Tobin David P. Hayford
The foregoing By-law No. 1 of the Corporation, made by all of the directors
at the direction of the sole shareholder, is hereby confirmed by the sole
shareholder of the Corporation entitled to vote at a meeting of shareholders.
DATED the llth day of January, 1996.
BROCKWAY STANDARD
HOLDINGS CORPORATION
Per: /S/ DAVID P. HAYFORD
<PAGE>
EXHIBIT 3.9(i)
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
MILTON ACQUISITION CORP.
------------------------
ARTICLE ONE
-----------
The name of the corporation is Milton Acquisition Corp.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
ARTICLE SEVEN
-------------
<PAGE>
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of this
corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator herein before named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
<PAGE>
accordingly have hereunto set my hand on the 14th day of March, 1996.
/S/ MAUREEN L. MAHER
-----------------------------
Maureen L. Maher
Sole Incorporator
<PAGE>
EXHIBIT 3.9(ii)
CERTIFICATE OF MERGER
OF
MILTON CAN COMPANY, INC.
(a Delaware corporation)
WITH AND INTO
MILTON ACQUISITION CORP.
(a Delaware corporation)
***********************************
In accordance with Section 251 of
the General Corporation Law
of the State of Delaware
***********************************
Milton Acquisition Corp., a corporation duly organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: The name and the state of incorporation of each of the constituent
corporations of the merger (the "Merger") are as follows:
Name State of Incorporation
---- ----------------------
Milton Can Company, Inc. Delaware
Milton Acquisition Corp. Delaware
SECOND: An Agreement and Plan of Merger and Reorganization (the "Merger
Agreement") between the parties to the Merger has been approved, adopted,
certified, executed and acknowledged by each of the constituent corporations in
accordance with the requirements of subsection (c) of Section 251 of the General
Corporation Law of the State of Delaware.
THIRD: The name of the Surviving Corporation is Milton Acquisition Corp.,
which shall continue its existence as said Surviving Corporation under the name
Milton Can Company, Inc. (the "Surviving Corporation").
FOURTH: The Certificate of Incorporation of the Surviving Corporation as
in effect immediately prior to the Merger shall be the Certificate of
Incorporation of Milton Acquisition Corp., except that Article One thereof shall
be amended to read as set forth below, and said Certificate of Incorporation, as
so amended, shall continue in full force and effect until further
-1-
<PAGE>
amended and changed in the manner prescribed by the provisions of the General
Corporation Law of the State of Delaware:
ARTICLE ONE
-----------
The name of the corporation is Milton Can Company, Inc.
FIFTH: The executed Merger Agreement is on file at the principal place of
business of the Surviving Corporation. The address of the principal place of
business of the Surviving Corporation is 580 Division Street, Elizabeth, New
Jersey 07201.
SIXTH: A copy of the Merger Agreement will be furnished by the Surviving
Corporation on request and without cost to any stockholder of any constituent
corporation.
IN WITNESS WHEREOF, the undersigned, for the purpose of effectuating the
Merger of the constituent corporations, pursuant to the General Corporation Law
of the State of Delaware, under penalties of perjury does hereby declare and
certify that this is the act and deed of the Surviving Corporation and the facts
stated herein are true and accordingly has hereunto signed this Certificate of
Merger the 28th day of May, 1996.
MILTON ACQUISITION CORP.
/S/ DAVID P. HAYFORD
--------------------------------------
Its: Vice President
-2-
<PAGE>
EXHIBIT 3.9(iii)
CERTIFICATE OF AMENDMENT OF
---------------------------
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
MILTON CAN COMPANY, INC.
------------------------
Milton Can Company, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Company adopted resolutions
declaring it advisable to amend Article One of the Company's Certificate of
Incorporation in its entirety to read as follows (the "Amendment"):
ARTICLE ONE
-----------
The name of the corporation is Brockway Standard (New Jersey), Inc.
SECOND: That thereafter, pursuant to said resolution, the Amendment was
submitted for approval to the holders of the outstanding shares of the Company
entitled to vote thereon, which approval was given by written consent pursuant
to Section 228 of the General Corporation Law of the State of Delaware.
THIRD: That the Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Milton Can Company, Inc. has caused this certificate to
be signed by its Vice President this 22nd day of October, 1996.
MILTON CAN COMPANY, INC.
By: /s/ David P. Hayford
----------------------------
David P. Hayford
Vice President
<PAGE>
EXHIBIT 3.9(iv)
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
BROCKWAY STANDARD (NEW JERSEY), INC.
------------------------------------
ARTICLE ONE
-----------
The name of the corporation is Brockway Standard (New Jersey), Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
<PAGE>
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may here after be amended, a director of
this corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
EXHIBIT 3.10
BYLAWS
OF
MILTON CAN COMPANY, INC.
(n/k/a Brockway Standard (New Jersey), Inc.
A Delaware corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The address of the corporation's registered
office in the State of Delaware is the Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company. The
registered office and/or registered agent of the corporation may be changed from
time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year to elect directors and conduct such other
proper business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the president of the corporation;
provided, that if the president does not act, the board of directors shall
determine the date, time and place of such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the chief executive officer, the president or the
holders of shares entitled to cast not less than 51 percent of the votes at the
meeting.
<PAGE>
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than ten (10) nor more than sixty (60) days before the date of the meeting. All
such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, postage prepaid, addressed to the stockholder at his, her or its
address as the same appears on the records of the corporation. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, unless
the person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least five (5) days before every
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for at least five (5)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting or,
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as otherwise
provided by statute or by the certificate of incorporation. Where a separate
vote by class or classes is required, a majority of the outstanding shares of
such class or classes, present in person or represented by proxy, shall
constitute a quorum to take action with respect to that vote on that matter. If
a quorum is not present, the holders of a majority of the shares present in
person or represented by proxy
<PAGE>
at the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business that might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative votes
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. When a separate vote by class is required, the
affirmative votes of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of common stock
held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. At each meeting
of the stockholders, and before any voting commences, all proxies filed at or
before the meeting shall be submitted to and examined by the secretary or a
person designated by the secretary, and no shares may be represented or voted
under a proxy that has been found invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action that may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing
<PAGE>
the dates of signature of the stockholders who signed the consent or consents,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the corporation by delivery to its registered office
in the state of Delaware, or the corporation's principal place of business, or
an officer or agent of the corporation having custody of the book or books in
which proceedings of meetings of the stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested provided, however, that no consent or
consents delivered by certified or registered mail shall be deemed delivered
until such consent or consents are actually received at the registered office.
All consents properly delivered according to this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
earliest dated consent delivered to the corporation as required by this section,
written consents signed by the holders of a sufficient number of shares to take
such corporate action are so recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing. Any action
taken pursuant to such written consent or consents of the stockholders shall
have the same force and effect as if taken by the stockholders at a meeting.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
that shall constitute the first board shall be two (2). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or
<PAGE>
without cause, by the holders of a majority of the shares then entitled to vote
generally at an election of directors. Whenever the holders of any class or
series are entitled to elect one or more directors by the provisions of the
corporation's certificate of incorporation, the provisions of this section shall
apply (with respect to the removal without cause of a director or directors so
elected), to the vote of the holders of the outstanding shares of that class or
series and not to the vote of the outstanding shares as a whole. Any director
may resign at any time upon written notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the chief executive officer or the president on at least twenty-
four (24) hours notice to each director, either personally, by telephone, by
mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law or the certificate of
incorporation. The board of directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at
<PAGE>
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting for any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting unless such member
attends for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Such member shall be conclusively presumed to have assented to any
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless his or her written dissent to such action shall be filed with
the person acting as the secretary of the meeting before the adjournment thereof
or shall be forwarded by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
<PAGE>
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more vice-
presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. The chief executive officer shall appoint other officers to serve for
such terms as he or she deems desirable. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer shall
hold office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall subject to the powers of
the board of directors, and the chief executive officer, shall have general
charge of the business, affairs and property of the corporation, and control
over its officers, agents and employees; and shall see that all orders and
resolutions of the board of directors are carried into effect. The president
shall execute bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by law to be
otherwise signed and executed and except
<PAGE>
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation. The
president shall have such other powers and perform such other duties as may be
prescribed by the chief executive officer, the board of directors or as may be
provided in these bylaws.
Section 7. Vice-presidents. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of directors,
shall, in the absence or disability of the president, act with all of the powers
and be subject to all the restrictions of the president. The vice-presidents
shall also perform such other duties and have such other powers as the board of
directors, the chief executive officer, the president or these bylaws may, from
time to time, prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these bylaws or by law; shall have such powers
and perform such duties as the board of directors, the chief executive officer,
the president or these bylaws may, from time to time, prescribe; and shall have
custody of the corporate seal of the corporation. The secretary, or an assistant
secretary, shall have authority to affix the corporate seal to any instrument
requiring it and when so affixed, it may be attested by his or her signature or
by the signature of such assistant secretary. The board of directors may give
general authority to any other officer to affix the seal of the corporation and
to attest the affixing by his or her signature. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors, the
chief executive officer, the president, or secretary may, from time to time,
prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the
<PAGE>
corporation; shall have such powers and perform such duties as the board of
directors, the chief executive officer, the president or these bylaws may, from
time to time, prescribe. If required by the board of directors, the treasurer
shall give the corporation a bond (which shall be rendered every six years) in
such sums and with such surety or sureties as shall be satisfactory to the board
of directors for the faithful performance of the duties of the office of
treasurer and for the restoration to the corporation, in case of death,
resignation, retirement, or removal from office, of all books, papers, vouchers,
money, and other property of whatever kind in the possession or under the
control of the treasurer belonging to the corporation. The assistant treasurer,
or if there shall be more than one, the assistant treasurers in the order
determined by the board of directors, shall in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer. The
assistant treasurers shall perform such other duties and have such other powers
as the board of directors, the chief executive officer, the president or
treasurer may, from time to time, prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the absence
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Nature of Indemnity. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director or officer, of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent that it is empowered to
do so unless prohibited from doing so by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the
<PAGE>
extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment) against all expense, liability and loss (including attorneys'
fees actually and reasonably incurred by such person in connection with such
proceeding) and such indemnification shall inure to the benefit of his heirs,
executors and administrators; provided, however, that, except as provided in
Section 2 hereof, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only if
such proceeding was authorized by the board of directors of the corporation. The
right to indemnification conferred in this Article V shall be a contract right
and, subject to Sections 2 and 5 of this Article V, shall include the right to
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition. The corporation may, by action
of its board of directors, provide indemnification to employees and agents of
the corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within thirty (30) days, upon the written
request of the director or officer. If a determination by the corporation that
the director or officer is entitled to indemnification pursuant to this Article
V is required, and the corporation fails to respond within sixty (60) days to a
written request for indemnity, the corporation shall be deemed to have approved
the request. If the corporation denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within thirty (30) days, the right to indemnification
or advances as granted by this Article V shall be enforceable by the director or
officer in any court of competent jurisdiction. Such person's costs and
expenses incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the corporation) that the claimant has not met the
standards of conduct that make it permissible under the General Corporation Law
of the State of Delaware for the corporation to indemnify the claimant for the
amount claimed, but the burden of such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have determined prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the General Corporation Law of the State of
<PAGE>
Delaware, nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standards of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable standard of
conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute, provision
of the certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the board of directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amounts if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V who are or were employees or agents of
the corporation, or who are or were serving at the request of the corporation as
employees or agents of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or
<PAGE>
obligations then existing with respect to any state of facts or proceeding then
existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
either of the chief executive officer, the chief operating officer, the
president or a vice president and the secretary or an assistant secretary of the
corporation, certifying the number of shares of a specific class or series owned
by such holder in the corporation. If such a certificate is countersigned (1)
by a transfer agent or an assistant transfer agent other than the corporation or
its employee or (2) by a registrar, other than the corporation or its employee,
the signature of any such chief executive officer, chief financial officer,
president, vice president, secretary, or assistant secretary may be facsimiles.
In case any officer or officers who have signed, or whose facsimile signature or
signatures have been used on, any such certificate or certificates, shall cease
to be such officer or officers of the corporation whether because of death,
resignation or otherwise before such certificate or certificates have been
delivered by the corporation, such certificate or certificates may nevertheless
be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the corporation.
All certificates for shares shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
books of the corporation. Shares of stock of the corporation shall only be
transferred on the books of the corporation by the holder of record thereof or
by such holder's attorney duly authorized in writing, upon surrender
<PAGE>
to the corporation of the certificate or certificates for such shares endorsed
by the appropriate person or persons, with such evidence of the authenticity of
such endorsement, transfer, authorization, and other matters as the corporation
may reasonably require, and accompanied by all necessary stock transfer stamps.
In that event, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate or
certificates, and record the transaction on its books. The board of directors
may appoint a bank or trust company organized under the laws of the United
States or any state thereof to act as its transfer agent or registrar, or both,
in connection with the transfer of any class or series of securities of the
corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by the
board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which
<PAGE>
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, and which date shall not be
more than five (5) days after the date upon which the resolution fixing the
record date is adopted by the board of directors. If no record date has been
fixed by the board of directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the board of directors is required by statute, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the board of
directors and prior action by the board of directors is required by statute, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be at the close of business on the day
on which the board of directors adopts the resolution taking such prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than thirty (30) days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the board of directors adopts
the resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares by any other
person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
<PAGE>
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed
to deny,
<PAGE>
or restrict the powers of guaranty or warranty of the corporation at common law
or under any statute.
Section 5. Fiscal-Year. The fiscal year of the corporation shall end of
the Sunday closest to the last September in each year.
Section 6. Employees and Compensation. The president shall have the
authority to hire and fire employees of the corporation and shall fix the
compensation of all employees (other than officers whose compensation is fixed
in accordance with Section 5 of Article IV) unless the board of directors
specifically confers such authority, which authority may be general or confined
to specific instances, upon itself or another person or officer.
Section 7. Voting Securities Owned By Corporation. Voting securities in
any other corporation or partnership held by the corporation (including, without
limitation, partnership interests) shall be voted by either the chief executive
officer or the president, unless the board of directors specifically confers
authority to vote with respect thereto, which authority may be general or
confined to specific instances, upon another person or officer. Any person
authorized to vote securities shall have the power to appoint proxies, with
general power of substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
that authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these bylaws is or becomes inconsistent with any provision of the certificate of
incorporation, the General Corporation Law of the State of Delaware or any other
applicable law, the provision of these bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.
<PAGE>
ARTICLE VIII
------------
AMENDMENTS
----------
These bylaws may be amended, altered, or repealed and new bylaws adopted at
any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the bylaws has been conferred upon the
board of directors shall not divest the stockholders holding a majority of the
then outstanding shares of the class of common stock entitled to vote on all
matters to be voted on by the corporation's stockholders at such time pursuant
to Article Fourth of the certificate of incorporation of the same powers.
<PAGE>
EXHIBIT 3.11(i)
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
DAVIES ACQUISITION CORP.
------------------------
ARTICLE ONE
-----------
The name of the corporation is Davies Acquisition Corp.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
<PAGE>
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of this
corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator herein before named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
<PAGE>
accordingly have hereunto set my hand on the 21st day of May, 1996.
/s/ MAUREEN L. MAHER
---------------------------
Maureen L. Maher
Sole Incorporator
<PAGE>
EXHIBIT 3.11(ii)
CERTIFICATE OF AMENDMENT OF
---------------------------
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
DAVIES ACQUISITION CORP.
------------------------
Davies Acquisition Corp., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Company adopted a resolution
amending Article One of the Certificate of Incorporation of the Company to read
in its entirety as follows (the "Amendment"):
ARTICLE ONE
-----------
The name of the corporation is Davies Can Company, Inc.
SECOND: That thereafter, pursuant to said resolution, the Amendment was
submitted for approval to the holders of the outstanding shares of the Company
entitled to vote thereon, which approval was given by written consent pursuant
to Section 228 of the General Corporation Law of the State of Delaware.
THIRD: That the Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
<PAGE>
IN WITNESS WHEREOF, Davies Acquisition Corp. has caused this certificate to
be signed by its Vice President this 17th day of June, 1996.
DAVIES ACQUISITION CORP.
By: /S/ DAVID P. HAYFORD
-----------------------------
David P. Hayford
Vice President
<PAGE>
EXHIBIT 3.11(iii)
CERTIFICATE OF AMENDMENT OF
---------------------------
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
DAVIES CAN COMPANY, INC..
-------------------------
Davies Can Company, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Company adopted a resolution
amending Article One of the Certificate of Incorporation of the Company to read
in its entirety as follows (the "Amendment"):
ARTICLE ONE
-----------
The name of the corporation is Brockway Standard (Ohio), Inc.
SECOND: That thereafter, pursuant to said resolution, the Amendment was
submitted for approval to the holders of the outstanding shares of the Company
entitled to vote thereon, which approval was given by written consent pursuant
to Section 228 of the General Corporation Law of the State of Delaware.
THIRD: That the Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Davies Acquisition Corp. has caused this certificate to
be signed by its Vice President this 21st day of March, 1997.
DAVIES CAN COMPANY, INC.
By: /S/ DAVID P. HAYFORD
-----------------------------
Name: David P. Hayford
Its: Vice President
<PAGE>
EXHIBIT 3.11(iv)
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
BROCKWAY STANDARD (OHIO), INC.
------------------------------
ARTICLE ONE
-----------
The name of the corporation is Brockway Standard (Ohio), Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
<PAGE>
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation in the manner now
or hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
EXHIBIT 3.12
BYLAWS
OF
BROCKWAY STANDARD (Ohio), INC.
(f/k/a Davies Can Company, Inc.)
A Delaware corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The address of the corporation's registered
office in the State of Delaware is the Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company. The
registered office and/or registered agent of the corporation may be changed from
time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year to elect directors and conduct such other
proper business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the president of the corporation;
provided, that if the president does not act, the board of directors shall
determine the date, time and place of such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the president or the holders of shares entitled to cast
not less than 51 percent of the votes at the meeting.
<PAGE>
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than ten (10) nor more than sixty (60) days before the date of the meeting. All
such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, postage prepaid, addressed to the stockholder at his, her or its
address as the same appears on the records of the corporation. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, unless
the person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least five (5) days before every
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for at least five (5)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting or,
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as otherwise
provided by statute or by the certificate of incorporation. Where a separate
vote by class or classes is required, a majority of the outstanding shares of
such class or classes, present in person or represented by proxy, shall
constitute a quorum to take action with respect to that vote on that matter. If
a quorum is not present, the holders of a majority of the shares present in
person or represented by proxy
<PAGE>
at the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business that might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative votes
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. When a separate vote by class is required, the
affirmative votes of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of common stock
held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. At each meeting
of the stockholders, and before any voting commences, all proxies filed at or
before the meeting shall be submitted to and examined by the secretary or a
person designated by the secretary, and no shares may be represented or voted
under a proxy that has been found invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action that may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing
<PAGE>
the dates of signature of the stockholders who signed the consent or consents,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the corporation by delivery to its registered office
in the state of Delaware, or the corporation's principal place of business, or
an officer or agent of the corporation having custody of the book or books in
which proceedings of meetings of the stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested provided, however, that no consent or
consents delivered by certified or registered mail shall be deemed delivered
until such consent or consents are actually received at the registered office.
All consents properly delivered according to this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
earliest dated consent delivered to the corporation as required by this section,
written consents signed by the holders of a sufficient number of shares to take
such corporate action are so recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing. Any action
taken pursuant to such written consent or consents of the stockholders shall
have the same force and effect as if taken by the stockholders at a meeting.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
that shall constitute the first board shall be two (2). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or
<PAGE>
without cause, by the holders of a majority of the shares then entitled to vote
generally at an election of directors. Whenever the holders of any class or
series are entitled to elect one or more directors by the provisions of the
corporation's certificate of incorporation, the provisions of this section shall
apply (with respect to the removal without cause of a director or directors so
elected), to the vote of the holders of the outstanding shares of that class or
series and not to the vote of the outstanding shares as a whole. Any director
may resign at any time upon written notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the president on at least twenty-four (24) hours notice to each
director, either personally, by telephone, by mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law or the certificate of
incorporation. The board of directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at
<PAGE>
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting for any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting unless such member
attends for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Such member shall be conclusively presumed to have assented to any
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless his or her written dissent to such action shall be filed with
the person acting as the secretary of the meeting before the adjournment thereof
or shall be forwarded by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
<PAGE>
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more vice
presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable, except that the offices of president and secretary shall be filled as
expeditiously as possible.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
possible. Vacancies may be filled or new offices created and filled at any
meeting of the board of directors. Each officer shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. Subject to the powers of the board of
directors, the president shall manage the business of the corporation and shall
see that all orders and resolutions of the board of directors are carried into
effect. The president shall be the corporation's chief operating officer. The
president shall have concurrent power to execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to another
<PAGE>
officer or agent of the corporation. Whenever the president is unable to serve,
by reason of sickness, absence or otherwise, the vice-president shall have the
powers and perform the duties of the president. The president shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or as may be provided in these bylaws.
Section 7. Vice President. The vice president, or if there shall be more
than one, the vice presidents in the order determined by the board of directors
or by the president, shall, in the absence or disability of the president, act
with all of the powers and be subject to all the restrictions of the president.
The vice presidents shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to
another officer or agent of the corporation. The vice presidents shall also
perform such other duties and have such other powers as the board of directors,
the president or these bylaws may, from time to time, prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof, and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
presidents' supervision, the secretary shall give, or cause to be given, all
notices required to be given by these bylaws or by law; shall have such powers
and perform such duties as the board of directors, the president or these bylaws
may, from time to time, prescribe; and shall have custody of the corporate seal
of the corporation. The secretary, or an assistant secretary, shall have
authority to affix the corporate seal to any instrument requiring it and when so
affixed, it may be attested by his signature or by the signature of such
assistant secretary. The board of directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his signature. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors, the president, or secretary may, from
time to time, prescribe.
Section 9. Treasurer and Assistant Treasurer. The treasurer shall have
the custody of the corporate funds and securities; shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation;
shall deposit all monies and other valuable effects in the name and to the
credit of the corporation as may be ordered by the board of directors; shall
cause the funds of the corporation to be
<PAGE>
disbursed when such disbursements have been duly authorized, taking proper
vouchers for such disbursements; and shall render to the president and the board
of directors, at its regular meeting or when the board of directors so requires,
an account of the corporation; and shall have such powers and perform such
duties as the board of directors, the president or these bylaws may, from time
to time, prescribe. If required by the board of directors, the treasurer shall
give the corporation a bond (which shall be rendered every six (6) years) in
such sums and with such surety or sureties as shall be satisfactory to the board
of directors for the faithful performance of the duties of the office of
treasurer and for the restoration to the corporation, in case of death,
resignation, retirement, or removal from office, of all books, papers, vouchers,
money, and other property of whatever kind in the possession or under the
control of the treasurer belonging to the corporation. The assistant treasurer,
or if there shall be more than one, the assistant treasurers in the order
determined by the board of directors, shall in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer. The
assistant treasurers shall perform such other duties and have such other powers
as the board of directors, the president, or treasurer may, from time to time,
prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the absence or
disability of any officer of the corporation and of any person hereby authorized
to act in such officer's place during such officer's absence or disability, the
board of directors may by resolution delegate the powers and duties of such
officer to any other officer or to any director, or to any other person whom it
may select.
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Nature of Indemnity. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director or officer, of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent that it is empowered to
do so
<PAGE>
unless prohibited from doing so by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all expense,
liability and loss (including attorneys' fees actually and reasonably incurred
by such person in connection with such proceeding) and such indemnification
shall inure to the benefit of his heirs, executors and administrators; provided,
however, that, except as provided in Section 2 hereof, the corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the board of directors of the corporation. The right to indemnification
conferred in this Article V shall be a contract right and, subject to Sections 2
and 5 of this Article V, shall include the right to be paid by the corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition. The corporation may, by action of its board of directors, provide
indemnification to employees and agents of the corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within thirty (30) days, upon the written
request of the director or officer. If a determination by the corporation that
the director or officer is entitled to indemnification pursuant to this Article
V is required, and the corporation fails to respond within sixty (60) days to a
written request for indemnity, the corporation shall be deemed to have approved
the request. If the corporation denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within thirty (30) days, the right to indemnification
or advances as granted by this Article V shall be enforceable by the director or
officer in any court of competent jurisdiction. Such person's costs and expenses
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the corporation) that the claimant has not met the
standards of conduct that make it permissible under the General Corporation Law
of the State of Delaware for the corporation to indemnify the claimant for the
amount claimed, but the burden of such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have determined prior to the
commencement of such
<PAGE>
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual determination by the
corporation (including its board of directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standards of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute, provision
of the certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the board of directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amounts if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V who are or were employees or agents of
the corporation, or who are or were serving at the request of the corporation as
employees or agents of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other
<PAGE>
applicable law are in effect, and any repeal or modification of this Article V
or any such law shall not affect any rights or obligations then existing with
respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
either of the president or a vice president and the secretary or an assistant
secretary of the corporation, certifying the number of shares of a specific
class or series owned by such holder in the corporation. If such a certificate
is countersigned (1) by a transfer agent or an assistant transfer agent other
than the corporation or its employee or (2) by a registrar, other than the
corporation or its employee, the signature of any such president, vice
president, secretary, or assistant secretary may be facsimiles. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates, shall cease to be such
officer or officers of the corporation whether because of death, resignation or
otherwise before such certificate or certificates have been delivered by the
corporation, such certificate or certificates may nevertheless be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the corporation. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the books of the
corporation. Shares of stock of the corporation shall only be transferred on the
books of the corporation by the holder of record thereof or by such holder's
<PAGE>
attorney duly authorized in writing, upon surrender to the corporation of the
certificate or certificates for such shares endorsed by the appropriate person
or persons, with such evidence of the authenticity of such endorsement,
transfer, authorization, and other matters as the corporation may reasonably
require, and accompanied by all necessary stock transfer stamps. In that event,
it shall be the duty of the corporation to issue a new certificate to the person
entitled thereto, cancel the old certificate or certificates, and record the
transaction on its books. The board of directors may appoint a bank or trust
company organized under the laws of the United States or any state thereof to
act as its transfer agent or registrar, or both, in connection with the transfer
of any class or series of securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by
the board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which
<PAGE>
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, and which date shall not be
more than five (5) days after the date upon which the resolution fixing the
record date is adopted by the board of directors. If no record date has been
fixed by the board of directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the board of directors is required by statute, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the board of
directors and prior action by the board of directors is required by statute, the
record date for determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of business on the day
on which the board of directors adopts the resolution taking such prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than thirty (30) days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the board of directors adopts
the resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares by any other
person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
<PAGE>
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit
<PAGE>
or restrict the powers of guaranty or warranty of the corporation at common law
or under any statute.
Section 5. Fiscal-Year. The fiscal year of the corporation shall end of
the Sunday closest to the last September in each year.
Section 6. Employees and Compensation. The president shall have the
authority to hire and fire employees of the corporation and shall fix the
compensation of all employees (other than officers whose compensation is fixed
in accordance with Section 5 of Article IV) unless the board of directors
specifically confers such authority, which authority may be general or confined
to specific instances, upon itself or another person or officer.
Section 7. Voting Securities Owned By Corporation. Voting securities in
any other corporation or partnership held by the corporation (including, without
limitation, partnership interests) shall be voted by the president, unless the
board of directors specifically confers authority to vote with respect thereto,
which authority may be general or confined to specific instances, upon another
person or officer. Any person authorized to vote securities shall have the
power to appoint proxies, with general power of substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
that authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these bylaws is or becomes inconsistent with any provision of the certificate of
incorporation, the General Corporation Law of the State of Delaware or any other
applicable law, the provision of these bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.
<PAGE>
ARTICLE VIII
------------
AMENDMENTS
----------
These bylaws may be amended, altered, or repealed and new bylaws adopted at
any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the bylaws has been conferred upon the
board of directors shall not divest the stockholders holding a majority of the
then outstanding shares of the class of common stock entitled to vote on all
matters to be voted on by the corporation's stockholders at such time pursuant
to Article Fourth of the certificate of incorporation of the same powers.
<PAGE>
EXHIBIT 3.13
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
MATERIALS MANAGEMENT, INC.
--------------------------
ARTICLE ONE
-----------
The name of the corporation is Materials Management, Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
<PAGE>
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
<PAGE>
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of
the General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
accordingly have hereunto set my hand on the 17th day of December, 1996.
/S/ MAUREEN L. MAHER
--------------------------------
Maureen L. Maher
Sole Incorporator
<PAGE>
EXHIBIT 3.14
BYLAWS
OF
MATERIALS MANAGEMENT, INC.
A Delaware corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The address of the corporation's registered
office in the State of Delaware is the Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company. The
registered office and/or registered agent of the corporation may be changed from
time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year to elect directors and conduct such other
proper business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the president of the corporation;
provided, that if the president does not act, the board of directors shall
determine the date, time and place of such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the president or the holders of shares entitled to cast
not less than 51 percent of the votes at the meeting.
<PAGE>
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than ten (10) nor more than sixty (60) days before the date of the meeting. All
such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, postage prepaid, addressed to the stockholder at his, her or its
address as the same appears on the records of the corporation. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, unless
the person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least five (5) days before every
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for at least five (5)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting or,
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as otherwise
provided by statute or by the certificate of incorporation. Where a separate
vote by class or classes is required, a majority of the outstanding shares of
such class or classes, present in person or represented by proxy, shall
constitute a quorum to take action with respect to that vote on that matter. If
a quorum is not present, the holders of a majority of the shares present in
person or represented by proxy
<PAGE>
at the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business that might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative votes
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. When a separate vote by class is required, the
affirmative votes of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of common stock
held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. At each meeting
of the stockholders, and before any voting commences, all proxies filed at or
before the meeting shall be submitted to and examined by the secretary or a
person designated by the secretary, and no shares may be represented or voted
under a proxy that has been found invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action that may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing
<PAGE>
the dates of signature of the stockholders who signed the consent or consents,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the corporation by delivery to its registered office
in the state of Delaware, or the corporation's principal place of business, or
an officer or agent of the corporation having custody of the book or books in
which proceedings of meetings of the stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested provided, however, that no consent or
consents delivered by certified or registered mail shall be deemed delivered
until such consent or consents are actually received at the registered office.
All consents properly delivered according to this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
earliest dated consent delivered to the corporation as required by this section,
written consents signed by the holders of a sufficient number of shares to take
such corporate action are so recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing. Any action
taken pursuant to such written consent or consents of the stockholders shall
have the same force and effect as if taken by the stockholders at a meeting.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
that shall constitute the first board shall be two (2). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or
<PAGE>
without cause, by the holders of a majority of the shares then entitled to vote
generally at an election of directors. Whenever the holders of any class or
series are entitled to elect one or more directors by the provisions of the
corporation's certificate of incorporation, the provisions of this section shall
apply (with respect to the removal without cause of a director or directors so
elected), to the vote of the holders of the outstanding shares of that class or
series and not to the vote of the outstanding shares as a whole. Any director
may resign at any time upon written notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the president on at least twenty-four (24) hours notice to each
director, either personally, by telephone, by mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law or the certificate of
incorporation. The board of directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at
<PAGE>
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting for any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting unless such member
attends for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Such member shall be conclusively presumed to have assented to any
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless his or her written dissent to such action shall be filed with
the person acting as the secretary of the meeting before the adjournment thereof
or shall be forwarded by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
<PAGE>
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more vice-
presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. The president shall appoint other officers to serve for such terms as
he or she deems desirable. Vacancies may be filled or new offices created and
filled at any meeting of the board of directors. Each officer shall hold office
until a successor is duly elected and qualified or until his or her earlier
death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall subject to the powers of
the board of directors shall have general charge of the business, affairs and
property of the corporation, and control over its officers, agents and
employees; and shall see that all orders and resolutions of the board of
directors are carried into effect. The president shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof
<PAGE>
shall be expressly delegated by the board of directors to some other officer or
agent of the corporation. The president shall have such other powers and perform
such other duties as may be prescribed by the board of directors or as may be
provided in these bylaws.
Section 7. Vice-presidents. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of directors,
shall, in the absence or disability of the president, act with all of the powers
and be subject to all the restrictions of the president. The vice-presidents
shall also perform such other duties and have such other powers as the board of
directors, the president or these bylaws may, from time to time, prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these bylaws or by law; shall have such powers
and perform such duties as the board of directors, the president or these bylaws
may, from time to time, prescribe; and shall have custody of the corporate seal
of the corporation. The secretary, or an assistant secretary, shall have
authority to affix the corporate seal to any instrument requiring it and when so
affixed, it may be attested by his or her signature or by the signature of
such assistant secretary. The board of directors may give general authority to
any other officer to affix the seal of the corporation and to attest the
affixing by his or her signature. The assistant secretary, or if there be more
than one, the assistant secretaries in the order determined by the board of
directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors, the president, or
secretary may, from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the board of directors, the
president or these bylaws may, from time to time, prescribe. If required by the
board of directors, the
<PAGE>
treasurer shall give the corporation a bond (which shall be rendered every six
years) in such sums and with such surety or sureties as shall be satisfactory to
the board of directors for the faithful performance of the duties of the office
of treasurer and for the restoration to the corporation, in case of death,
resignation, retirement, or removal from office, of all books, papers, vouchers,
money, and other property of whatever kind in the possession or under the
control of the treasurer belonging to the corporation. The assistant treasurer,
or if there shall be more than one, the assistant treasurers in the order
determined by the board of directors, shall in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer. The
assistant treasurers shall perform such other duties and have such other powers
as the board of directors, the president or treasurer may, from time to time,
prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the absence
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Nature of Indemnity. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director or officer, of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent that it is empowered to
do so unless prohibited from doing so by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all expense,
liability and loss (including attorneys' fees actually
<PAGE>
and reasonably incurred by such person in connection with such proceeding) and
such indemnification shall inure to the benefit of his heirs, executors and
administrators; provided, however, that, except as provided in Section 2 hereof,
the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding initiated by such person only if such proceeding
was authorized by the board of directors of the corporation. The right to
indemnification conferred in this Article V shall be a contract right and,
subject to Sections 2 and 5 of this Article V, shall include the right to be
paid by the corporation the expenses incurred in defending any such proceeding
in advance of its final disposition. The corporation may, by action of its board
of directors, provide indemnification to employees and agents of the corporation
with the same scope and effect as the foregoing indemnification of directors and
officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within thirty (30) days, upon the written
request of the director or officer. If a determination by the corporation that
the director or officer is entitled to indemnification pursuant to this Article
V is required, and the corporation fails to respond within sixty (60) days to a
written request for indemnity, the corporation shall be deemed to have approved
the request. If the corporation denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within thirty (30) days, the right to indemnification
or advances as granted by this Article V shall be enforceable by the director or
officer in any court of competent jurisdiction. Such person's costs and expenses
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the corporation) that the claimant has not met the
standards of conduct that make it permissible under the General Corporation Law
of the State of Delaware for the corporation to indemnify the claimant for the
amount claimed, but the burden of such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have determined prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standards of conduct, shall be a defense to the action or create a
<PAGE>
presumption that the claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute, provision
of the certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the board of directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amounts if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V who are or were employees or agents of
the corporation, or who are or were serving at the request of the corporation as
employees or agents of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation
<PAGE>
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this Article V with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation
if its separate existence had continued.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
either of the president or a vice president and the secretary or an assistant
secretary of the corporation, certifying the number of shares of a specific
class or series owned by such holder in the corporation. If such a certificate
is countersigned (1) by a transfer agent or an assistant transfer agent other
than the corporation or its employee or (2) by a registrar, other than the
corporation or its employee, the signature of any such president, vice
president, secretary, or assistant secretary may be facsimiles. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates, shall cease to be such
officer or officers of the corporation whether because of death, resignation or
otherwise before such certificate or certificates have been delivered by the
corporation, such certificate or certificates may nevertheless be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the corporation. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
books of the corporation. Shares of stock of the corporation shall only be
transferred on the books of the corporation by the holder of record thereof or
by such holder's attorney duly authorized in writing, upon surrender to the
corporation of the certificate or certificates for such shares endorsed by the
appropriate person or persons, with such evidence of the authenticity of such
endorsement, transfer, authorization, and other matters as the corporation may
reasonably require, and accompanied by all necessary stock transfer stamps. In
that event, it shall be the duty of the corporation to issue a new certificate
to the person entitled thereto, cancel the old
<PAGE>
certificate or certificates, and record the transaction on its books. The board
of directors may appoint a bank or trust company organized under the laws of the
United States or any state thereof to act as its transfer agent or registrar, or
both, in connection with the transfer of any class or series of securities of
the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any
such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by the
board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In
order that the corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the board of directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than five (5) days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a
<PAGE>
meeting, when no prior action by the board of directors is required by statute,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than thirty (30) days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose shall be at
the close of business on the day on which the board of directors adopts the
resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares by any other
person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.
<PAGE>
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares
of stock of the corporation. Nothing in this section contained shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the corporation
at common law or under any statute.
Section 5. Fiscal-Year. The fiscal year of the corporation shall end
of the Sunday closest to the last September in each year.
<PAGE>
Section 6. Employees and Compensation. The president shall have the
authority to hire and fire employees of the corporation and shall fix the
compensation of all employees (other than officers whose compensation is fixed
in accordance with Section 5 of Article IV) unless the board of directors
specifically confers such authority, which authority may be general or confined
to specific instances, upon itself or another person or officer.
Section 7. Voting Securities Owned By Corporation. Voting securities
in any other corporation or partnership held by the corporation (including,
without limitation, partnership interests) shall be voted by either the
president, unless the board of directors specifically confers authority to vote
with respect thereto, which authority may be general or confined to specific
instances, upon another person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing that
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.
Section 9. Section Headings. Section headings in these bylaws are
for convenience of reference only and shall not be given any substantive effect
in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision
of these bylaws is or becomes inconsistent with any provision of the certificate
of incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these bylaws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.
ARTICLE VIII
------------
AMENDMENTS
----------
These bylaws may be amended, altered, or repealed and new bylaws
adopted at any meeting of the board of directors by a
<PAGE>
majority vote. The fact that the power to adopt, amend, alter, or repeal the
bylaws has been conferred upon the board of directors shall not divest the
stockholders holding a majority of the then outstanding shares of the class of
common stock entitled to vote on all matters to be voted on by the corporation's
stockholders at such time pursuant to Article Four of the certificate of
incorporation of the same powers.
<PAGE>
EXHIBIT 3.15
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
MILTON CAN COMPANY, INC.
------------------------
ARTICLE ONE
-----------
The name of the corporation is Milton Can Company, Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
<PAGE>
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of this
corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
<PAGE>
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
accordingly have hereunto set my hand on the 22nd day of October, 1996.
/S/ MAUREEN L. MAHER
-----------------------------
Maureen L. Maher
Sole Incorporator
<PAGE>
EXHIBIT 3.16
BYLAWS
OF
MILTON CAN COMPANY, INC.
A Delaware corporation
ARTICLE I
---------
OFFICES
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Section 1. Registered Office. The address of the corporation's registered
office in the State of Delaware is the Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company. The
registered office and/or registered agent of the corporation may be changed from
time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
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MEETINGS OF STOCKHOLDERS
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Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year to elect directors and conduct such other
proper business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the president of the corporation;
provided, that if the president does not act, the board of directors shall
determine the date, time and place of such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the chief executive officer, the president or the
holders of shares entitled to cast not less than 51 percent of the votes at the
meeting.
<PAGE>
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than ten (10) nor more than sixty (60) days before the date of the meeting.
All such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, postage prepaid, addressed to the stockholder at his, her or its
address as the same appears on the records of the corporation. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, unless
the person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least five (5) days before every
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for at least five (5)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting or,
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as otherwise
provided by statute or by the certificate of incorporation. Where a separate
vote by class or classes is required, a majority of the outstanding shares of
such class or classes, present in person or represented by proxy, shall
constitute a quorum to take action with respect to that vote on that matter. If
a quorum is not present, the holders of a majority of the shares present in
person or represented by proxy
<PAGE>
at the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business that might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative votes
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. When a separate vote by class is required, the
affirmative votes of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of common stock
held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. At each meeting
of the stockholders, and before any voting commences, all proxies filed at or
before the meeting shall be submitted to and examined by the secretary or a
person designated by the secretary, and no shares may be represented or voted
under a proxy that has been found invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action that may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing
<PAGE>
the dates of signature of the stockholders who signed the consent or consents,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the corporation by delivery to its registered office
in the state of Delaware, or the corporation's principal place of business, or
an officer or agent of the corporation having custody of the book or books in
which proceedings of meetings of the stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested provided, however, that no consent or
consents delivered by certified or registered mail shall be deemed delivered
until such consent or consents are actually received at the registered office.
All consents properly delivered according to this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
earliest dated consent delivered to the corporation as required by this section,
written consents signed by the holders of a sufficient number of shares to take
such corporate action are so recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing. Any action
taken pursuant to such written consent or consents of the stockholders shall
have the same force and effect as if taken by the stockholders at a meeting.
ARTICLE III
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DIRECTORS
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Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
that shall constitute the first board shall be two (2). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or
<PAGE>
without cause, by the holders of a majority of the shares then entitled to vote
generally at an election of directors. Whenever the holders of any class or
series are entitled to elect one or more directors by the provisions of the
corporation's certificate of incorporation, the provisions of this section shall
apply (with respect to the removal without cause of a director or directors so
elected), to the vote of the holders of the outstanding shares of that class or
series and not to the vote of the outstanding shares as a whole. Any director
may resign at any time upon written notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the chief executive officer or the president on at least twenty-
four (24) hours notice to each director, either personally, by telephone, by
mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law or the certificate of
incorporation. The board of directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at
<PAGE>
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting for any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting unless such member
attends for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Such member shall be conclusively presumed to have assented to any
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless his or her written dissent to such action shall be filed with
the person acting as the secretary of the meeting before the adjournment thereof
or shall be forwarded by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
<PAGE>
ARTICLE IV
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OFFICERS
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Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more vice-
presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. The chief executive officer shall appoint other officers to serve for
such terms as he or she deems desirable. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer shall
hold office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall subject to the powers of
the board of directors, and the chief executive officer, shall have general
charge of the business, affairs and property of the corporation, and control
over its officers, agents and employees; and shall see that all orders and
resolutions of the board of directors are carried into effect. The president
shall execute bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by law to be
otherwise signed and executed and except
<PAGE>
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation. The
president shall have such other powers and perform such other duties as may be
prescribed by the chief executive officer, the board of directors or as may be
provided in these bylaws.
Section 7. Vice-presidents. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of directors,
shall, in the absence or disability of the president, act with all of the powers
and be subject to all the restrictions of the president. The vice-presidents
shall also perform such other duties and have such other powers as the board of
directors, the chief executive officer, the president or these bylaws may, from
time to time, prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these bylaws or by law; shall have such powers
and perform such duties as the board of directors, the chief executive officer,
the president or these bylaws may, from time to time, prescribe; and shall have
custody of the corporate seal of the corporation. The secretary, or an
assistant secretary, shall have authority to affix the corporate seal to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature. The
assistant secretary, or if there be more than one, the assistant secretaries in
the order determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors, the chief executive officer, the president, or secretary
may, from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the
<PAGE>
corporation; shall have such powers and perform such duties as the board of
directors, the chief executive officer, the president or these bylaws may, from
time to time, prescribe. If required by the board of directors, the treasurer
shall give the corporation a bond (which shall be rendered every six years) in
such sums and with such surety or sureties as shall be satisfactory to the board
of directors for the faithful performance of the duties of the office of
treasurer and for the restoration to the corporation, in case of death, resigna
tion, retirement, or removal from office, of all books, papers, vouchers, money,
and other property of whatever kind in the possession or under the control of
the treasurer belonging to the corporation. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors, shall in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer. The assistant treasurers
shall perform such other duties and have such other powers as the board of
directors, the chief executive officer, the president or treasurer may, from
time to time, prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the absence
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
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INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
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Section 1. Nature of Indemnity. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director or officer, of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent that it is empowered to
do so unless prohibited from doing so by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the
<PAGE>
extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment) against all expense, liability and loss (including attorneys'
fees actually and reasonably incurred by such person in connection with such
proceeding) and such indemnification shall inure to the benefit of his heirs,
executors and administrators; provided, however, that, except as provided in
Section 2 hereof, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only if
such proceeding was authorized by the board of directors of the corporation. The
right to indemnification conferred in this Article V shall be a contract right
and, subject to Sections 2 and 5 of this Article V, shall include the right to
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition. The corporation may, by action
of its board of directors, provide indemnification to employees and agents of
the corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within thirty (30) days, upon the written
request of the director or officer. If a determination by the corporation that
the director or officer is entitled to indemnification pursuant to this Article
V is required, and the corporation fails to respond within sixty (60) days to a
written request for indemnity, the corporation shall be deemed to have approved
the request. If the corporation denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within thirty (30) days, the right to indemnification
or advances as granted by this Article V shall be enforceable by the director or
officer in any court of competent jurisdiction. Such person's costs and expenses
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the corporation) that the claimant has not met the
standards of conduct that make it permissible under the General Corporation Law
of the State of Delaware for the corporation to indemnify the claimant for the
amount claimed, but the burden of such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have determined prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the General Corporation Law of the State of
<PAGE>
Delaware, nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standards of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable standard of
conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute, provision
of the certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the board of directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amounts if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V who are or were employees or agents of
the corporation, or who are or were serving at the request of the corporation as
employees or agents of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or
<PAGE>
obligations then existing with respect to any state of facts or proceeding
then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
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CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
either of the chief executive officer, the chief operating officer, the
president or a vice president and the secretary or an assistant secretary of the
corporation, certifying the number of shares of a specific class or series owned
by such holder in the corporation. If such a certificate is countersigned (1)
by a transfer agent or an assistant transfer agent other than the corporation or
its employee or (2) by a registrar, other than the corporation or its employee,
the signature of any such chief executive officer, chief financial officer,
president, vice president, secretary, or assistant secretary may be facsimiles.
In case any officer or officers who have signed, or whose facsimile signature or
signatures have been used on, any such certificate or certificates, shall cease
to be such officer or officers of the corporation whether because of death,
resignation or otherwise before such certificate or certificates have been
delivered by the corporation, such certificate or certificates may nevertheless
be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the corporation.
All certificates for shares shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
books of the corporation. Shares of stock of the corporation shall only be
transferred on the books of the corporation by the holder of record thereof or
by such holder's attorney duly authorized in writing, upon surrender
<PAGE>
to the corporation of the certificate or certificates for such shares endorsed
by the appropriate person or persons, with such evidence of the authenticity of
such endorse ment, transfer, authorization, and other matters as the corporation
may reasonably require, and accompanied by all necessary stock transfer stamps.
In that event, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate or
certificates, and record the transaction on its books. The board of directors
may appoint a bank or trust company organized under the laws of the United
States or any state thereof to act as its transfer agent or registrar, or both,
in connection with the transfer of any class or series of securities of the
corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any
such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by
the board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stock holders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution
<PAGE>
fixing the record date is adopted by the board of directors, and which date
shall not be more than five (5) days after the date upon which the resolution
fixing the record date is adopted by the board of directors. If no record date
has been fixed by the board of directors, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the board of directors is required by statute,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than thirty (30) days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the board of directors adopts
the resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares by any other
person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class
<PAGE>
or as to all shares of the same series. In case of default in the payment of any
installment or call when such payment is due, the corporation may proceed to
collect the amount due in the same manner as any debt due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares
of stock of the corporation. Nothing in this section contained shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the corporation
at common law or under any statute.
<PAGE>
Section 5. Fiscal-Year. The fiscal year of the corporation shall end of
the Sunday closest to the last September in each year.
Section 6. Employees and Compensation. The president shall have the
authority to hire and fire employees of the corporation and shall fix the
compensation of all employees (other than officers whose compensation is fixed
in accordance with Section 5 of Article IV) unless the board of directors
specifically confers such authority, which authority may be general or confined
to specific instances, upon itself or another person or officer.
Section 7. Voting Securities Owned By Corporation. Voting securities in
any other corporation or partnership held by the corporation (including, without
limitation, partnership interests) shall be voted by either the chief executive
officer or the president, unless the board of directors specifically confers
authority to vote with respect thereto, which authority may be general or
confined to specific instances, upon another person or officer. Any person
authorized to vote securities shall have the power to appoint proxies, with
general power of substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
that authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these by laws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these bylaws is or becomes inconsistent with any provision of the certificate of
incorporation, the General Corporation Law of the State of Delaware or any other
applicable law, the provision of these bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.
<PAGE>
ARTICLE VIII
------------
AMENDMENTS
----------
These bylaws may be amended, altered, or repealed and new by laws adopted
at any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the bylaws has been conferred upon the
board of directors shall not divest the stockholders holding a majority of the
then outstanding shares of the class of common stock entitled to vote on all
matters to be voted on by the corporation's stockholders at such time pursuant
to Article Fourth of the certificate of incorporation of the same powers.
<PAGE>
EXHIBIT 3.17(i)
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
PLATE MASTERS ACQUISITION CORP.
-------------------------------
ARTICLE ONE
-----------
The name of the corporation is Plate Masters Acquisition Corp.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is
<PAGE>
IN WITNESS WHEREOF, Plate Masters Acquisition Corp. has caused this
Certificate of Amendment to be signed by its Secretary as of this 28th day of
October, 1996.
PLATE MASTERS ACQUISITION CORP.
By: /S/ BLAIR G. SCHLOSSBERG
------------------------------
Blair G. Schlossberg
Secretary
<PAGE>
EXHIBIT 3.17(ii)
CERTIFICATE OF AMENDMENT OF
---------------------------
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
PLATE MASTERS ACQUISITION CORP.
-------------------------------
Plate Masters Acquisition Corp., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted a resolution
amending Article One of the Certificate of Incorporation of the Corporation to
read in its entirety to read as follows (the "Amendment"):
ARTICLE ONE
-----------
The name of the corporation is Plate Masters, Inc.
SECOND: That in lieu of a meeting and vote of stockholders, the holder of
all of the outstanding stock entitled to vote on the Amendment has voted in
favor of the Amendment in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
THIRD: That the Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
<PAGE>
expressly authorized to make, alter or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
<PAGE>
accordingly have hereunto set my hand on the 4th day of June, 1996.
/S/ MAUREEN L. MAHER
-----------------------------
Maureen L. Maher
Sole Incorporator
<PAGE>
EXHIBIT 3.17(iii)
CERTIFICATE OF INCORPORATION
----------------------------
OF
--
PLATE MASTERS, INC.
-------------------
ARTICLE ONE
-----------
The name of the corporation is Plate Masters, Inc.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
------------
The total number of shares of stock which the corporation has authority to
issue is 1,000 shares of Common Stock, with a par value of $0.01 per share.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the corporation is expressly authorized to make, alter
or repeal the by-laws of the corporation.
<PAGE>
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the corporation may provide. The books of the
corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the corporation. Election of directors need not be by written ballot unless
the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of this
corporation shall not be liable to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this ARTICLE NINE shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
EXHIBIT 3.18
BYLAWS
OF
PLATE MASTERS, INC.
(f/k/a Plate Masters Acquisition Corp.)
A Delaware corporation
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The address of the corporation's registered
office in the State of Delaware is the Corporation Trust Center, 1209 Orange
Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company. The
registered office and/or registered agent of the corporation may be changed from
time to time by action of the board of directors.
Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year to elect directors and conduct such other
proper business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the president of the corporation;
provided, that if the president does not act, the board of directors shall
determine the date, time and place of such meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the board of directors, the chief executive officer, the president or the
holders of shares entitled to cast not less than 51 percent of the votes at the
meeting.
<PAGE>
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such meeting,
shall be given to each stockholder entitled to vote at such meeting not less
than ten (10) nor more than sixty (60) days before the date of the meeting. All
such notices shall be delivered, either personally or by mail, by or at the
direction of the board of directors, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, postage prepaid, addressed to the stockholder at his, her or its
address as the same appears on the records of the corporation. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, unless
the person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least five (5) days before every
meeting of the stockholders, a complete list of the stockholders entitled to
vote at such meeting arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for at least five (5)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of the meeting or,
if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares of
capital stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as otherwise
provided by statute or by the certificate of incorporation. Where a separate
vote by class or classes is required, a majority of the outstanding shares of
such class or classes, present in person or represented by proxy, shall
constitute a quorum to take action with respect to that vote on that matter. If
a quorum is not present, the holders of a majority of the shares present in
person or represented by proxy
<PAGE>
at the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business that might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Vote Required. When a quorum is present, the affirmative votes
of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. When a separate vote by class is required, the
affirmative votes of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of common stock
held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period. At each meeting
of the stockholders, and before any voting commences, all proxies filed at or
before the meeting shall be submitted to and examined by the secretary or a
person designated by the secretary, and no shares may be represented or voted
under a proxy that has been found invalid or irregular.
Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action that may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing
<PAGE>
the dates of signature of the stockholders who signed the consent or consents,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the corporation by delivery to its registered office
in the state of Delaware, or the corporation's principal place of business, or
an officer or agent of the corporation having custody of the book or books in
which proceedings of meetings of the stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested provided, however, that no consent or
consents delivered by certified or registered mail shall be deemed delivered
until such consent or consents are actually received at the registered office.
All consents properly delivered according to this section shall be deemed to be
recorded when so delivered. No written consent shall be effective to take the
corporate action referred to therein unless, within sixty (60) days of the
earliest dated consent delivered to the corporation as required by this section,
written consents signed by the holders of a sufficient number of shares to take
such corporate action are so recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing. Any action
taken pursuant to such written consent or consents of the stockholders shall
have the same force and effect as if taken by the stockholders at a meeting.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of directors
that shall constitute the first board shall be two (2). Thereafter, the number
of directors shall be established from time to time by resolution of the board.
The directors shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote in the
election of directors. The directors shall be elected in this manner at the
annual meeting of the stockholders, except as provided in Section 4 of this
Article III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or
<PAGE>
without cause, by the holders of a majority of the shares then entitled to vote
generally at an election of directors. Whenever the holders of any class or
series are entitled to elect one or more directors by the provisions of the
corporation's certificate of incorporation, the provisions of this section shall
apply (with respect to the removal without cause of a director or directors so
elected), to the vote of the holders of the outstanding shares of that class or
series and not to the vote of the outstanding shares as a whole. Any director
may resign at any time upon written notice to the corporation.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at
the request of the chief executive officer or the president on at least twenty-
four (24) hours notice to each director, either personally, by telephone, by
mail, or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of business.
The vote of a majority of directors present at a meeting at which a quorum is
present shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these bylaws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law or the certificate of
incorporation. The board of directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at
<PAGE>
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
Section 9. Committee Rules. Each committee of the board of directors may
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting for any such absent or disqualified member.
Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of the
board of directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting unless such member
attends for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Such member shall be conclusively presumed to have assented to any
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless his or her written dissent to such action shall be filed with
the person acting as the secretary of the meeting before the adjournment thereof
or shall be forwarded by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by the
certificate of incorporation, any action required or permitted to be taken at
any meeting of the board of directors, or of any committee thereof, may be taken
without a meeting if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
<PAGE>
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more vice-
presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. The chief executive officer shall appoint other officers to serve for
such terms as he or she deems desirable. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer shall
hold office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.
Section 6. The President. The president shall subject to the powers of
the board of directors, and the chief executive officer, shall have general
charge of the business, affairs and property of the corporation, and control
over its officers, agents and employees; and shall see that all orders and
resolutions of the board of directors are carried into effect. The president
shall execute bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly
<PAGE>
delegated by the board of directors to some other officer or agent of the
corporation. The president shall have such other powers and perform such other
duties as may be prescribed by the chief executive officer, the board of
directors or as may be provided in these bylaws.
Section 7. Vice-presidents. The vice-president, or if there shall be more
than one, the vice-presidents in the order determined by the board of directors,
shall, in the absence or disability of the president, act with all of the powers
and be subject to all the restrictions of the president. The vice-presidents
shall also perform such other duties and have such other powers as the board of
directors, the chief executive officer, the president or these bylaws may, from
time to time, prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these bylaws or by law; shall have such powers
and perform such duties as the board of directors, the chief executive officer,
the president or these bylaws may, from time to time, prescribe; and shall have
custody of the corporate seal of the corporation. The secretary, or an
assistant secretary, shall have authority to affix the corporate seal to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature. The
assistant secretary, or if there be more than one, the assistant secretaries in
the order determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors, the chief executive officer, the president, or secretary
may, from time to time, prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the
<PAGE>
board of directors, the chief executive officer, the president or these bylaws
may, from time to time, prescribe. If required by the board of directors, the
treasurer shall give the corporation a bond (which shall be rendered every six
years) in such sums and with such surety or sureties as shall be satisfactory to
the board of directors for the faithful performance of the duties of the office
of treasurer and for the restoration to the corporation, in case of death,
resignation, retirement, or removal from office, of all books, papers,
vouchers, money, and other property of whatever kind in the possession or under
the control of the treasurer belonging to the corporation. The assistant
treasurer, or if there shall be more than one, the assistant treasurers in the
order determined by the board of directors, shall in the absence or disability
of the treasurer, perform the duties and exercise the powers of the treasurer.
The assistant treasurers shall perform such other duties and have such other
powers as the board of directors, the chief executive officer, the president or
treasurer may, from time to time, prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
Section 11. Absence or Disability of Officers. In the case of the absence
or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Nature of Indemnity. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director or officer, of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary, or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent that it is empowered to
do so unless prohibited from doing so by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the
<PAGE>
corporation to provide prior to such amendment) against all expense, liability
and loss (including attorneys' fees actually and reasonably incurred by such
person in connection with such proceeding) and such indemnification shall inure
to the benefit of his heirs, executors and administrators; provided, however,
that, except as provided in Section 2 hereof, the corporation shall indemnify
any such person seeking indemnification in connection with a proceeding
initiated by such person only if such proceeding was authorized by the board of
directors of the corporation. The right to indemnification conferred in this
Article V shall be a contract right and, subject to Sections 2 and 5 of this
Article V, shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final disposition.
The corporation may, by action of its board of directors, provide
indemnification to employees and agents of the corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within thirty (30) days, upon the written
request of the director or officer. If a determination by the corporation that
the director or officer is entitled to indemnification pursuant to this Article
V is required, and the corporation fails to respond within sixty (60) days to a
written request for indemnity, the corporation shall be deemed to have approved
the request. If the corporation denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within thirty (30) days, the right to indemnification
or advances as granted by this Article V shall be enforceable by the director or
officer in any court of competent jurisdiction. Such person's costs and expenses
incurred in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the corporation. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the corporation) that the claimant has not met the
standards of conduct that make it permissible under the General Corporation Law
of the State of Delaware for the corporation to indemnify the claimant for the
amount claimed, but the burden of such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have determined prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel, or
<PAGE>
its stockholders) that the claimant has not met such applicable standards of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute, provision
of the certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 4. Insurance. The corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee, fiduciary, or agent of the corporation or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, whether or not the corporation would have the power to indemnify such
person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section
1 of this Article V in defending a proceeding shall be paid by the corporation
in advance of such proceeding's final disposition unless otherwise determined by
the board of directors in the specific case upon receipt of an undertaking by or
on behalf of the director or officer to repay such amounts if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
corporation. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V who are or were employees or agents of
the corporation, or who are or were serving at the request of the corporation as
employees or agents of another corporation, partnership, joint venture, trust or
other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.
<PAGE>
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
either of the chief executive officer, the chief operating officer, the
president or a vice president and the secretary or an assistant secretary of the
corporation, certifying the number of shares of a specific class or series owned
by such holder in the corporation. If such a certificate is countersigned (1)
by a transfer agent or an assistant transfer agent other than the corporation or
its employee or (2) by a registrar, other than the corporation or its employee,
the signature of any such chief executive officer, chief financial officer,
president, vice president, secretary, or assistant secretary may be facsimiles.
In case any officer or officers who have signed, or whose facsimile signature or
signatures have been used on, any such certificate or certificates, shall cease
to be such officer or officers of the corporation whether because of death,
resignation or otherwise before such certificate or certificates have been
delivered by the corporation, such certificate or certificates may nevertheless
be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the corporation.
All certificates for shares shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
books of the corporation. Shares of stock of the corporation shall only be
transferred on the books of the corporation by the holder of record thereof or
by such holder's attorney duly authorized in writing, upon surrender to the
corporation of the certificate or certificates for such shares endorsed by the
appropriate person or persons, with such evidence of the authenticity of such
endorsement, transfer,
<PAGE>
authorization, and other matters as the corporation may reasonably require, and
accompanied by all necessary stock transfer stamps. In that event, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate or certificates, and record the transaction
on its books. The board of directors may appoint a bank or trust company
organized under the laws of the United States or any state thereof to act as its
transfer agent or registrar, or both, in connection with the transfer of any
class or series of securities of the corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any
such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by
the board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the
<PAGE>
board of directors, and which date shall not be more than five (5) days after
the date upon which the resolution fixing the record date is adopted by the
board of directors. If no record date has been fixed by the board of directors,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the board of
directors is required by statute, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by statute, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the board of
directors adopts the resolution taking such prior action.
Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than thirty (30) days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the board of directors adopts
the resolution relating thereto.
Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares by any other
person, whether or not it shall have express or other notice thereof.
Section 7. Subscriptions for Stock. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the
<PAGE>
corporation may proceed to collect the amount due in the same manner as any debt
due the corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in which
it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders
for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer or
officers, or any agent or agents, of the corporation to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares
of stock of the corporation. Nothing in this section contained shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the corporation
at common law or under any statute.
<PAGE>
Section 5. Fiscal-Year. The fiscal year of the corporation shall end of
the Sunday closest to the last September in each year.
Section 6. Employees and Compensation. The president shall have the
authority to hire and fire employees of the corporation and shall fix the
compensation of all employees (other than officers whose compensation is fixed
in accordance with Section 5 of Article IV) unless the board of directors
specifically confers such authority, which authority may be general or confined
to specific instances, upon itself or another person or officer.
Section 7. Voting Securities Owned By Corporation. Voting securities in
any other corporation or partnership held by the corporation (including, without
limitation, partnership interests) shall be voted by either the chief executive
officer or the president, unless the board of directors specifically confers
authority to vote with respect thereto, which authority may be general or
confined to specific instances, upon another person or officer. Any person
authorized to vote securities shall have the power to appoint proxies, with
general power of substitution.
Section 8. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
that authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision of
these bylaws is or becomes inconsistent with any provision of the certificate of
incorporation, the General Corporation Law of the State of Delaware or any other
applicable law, the provision of these bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.
<PAGE>
ARTICLE VIII
------------
AMENDMENTS
----------
These bylaws may be amended, altered, or repealed and new bylaws adopted
at any meeting of the board of directors by a majority vote. The fact that the
power to adopt, amend, alter, or repeal the bylaws has been conferred upon the
board of directors shall not divest the stockholders holding a majority of the
then outstanding shares of the class of common stock entitled to vote on all
matters to be voted on by the corporation's stockholders at such time pursuant
to Article Fourth of the certificate of incorporation of the same powers.
<PAGE>
EXHIBIT 4.1
================================================================================
INDENTURE
Dated as of April 11, 1997
Among
BWAY CORPORATION, as Issuer,
each of the Subsidiary Guarantors named herein
and
HARRIS TRUST AND SAVINGS BANK, as Trustee
__________________
$100,000,000
10 1/4% Senior Subordinated Notes due 2007, Series A
10 1/4% Senior Subordinated Notes due 2007, Series B
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.08; 7.10
(b) 7.08; 7.10;
13.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 13.03
(c) 13.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 7.06; 13.02
(d) 7.06
314(a) 4.07; 4.09;
13.02
(b) N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d) N.A.
(e) 13.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 13.02
(c) 7.01(a)
(d) 7.01(c)
(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
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 13.01
(c) 13.01
</TABLE>
____________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.01. Definitions........................................... 1
SECTION 1.02. Incorporation by Reference of TIA..................... 30
SECTION 1.03. Rules of Construction................................. 30
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating....................................... 31
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount.................................... 32
SECTION 2.03. Registrar and Paying Agent............................ 33
SECTION 2.04. Paying Agent To Hold Assets in Trust.................. 34
SECTION 2.05. Holder Lists.......................................... 35
SECTION 2.06. Transfer and Exchange................................. 35
SECTION 2.07. Replacement Notes..................................... 36
SECTION 2.08. Outstanding Notes..................................... 36
SECTION 2.09. Treasury Notes........................................ 37
SECTION 2.10. Temporary Notes....................................... 37
SECTION 2.11. Cancellation.......................................... 37
SECTION 2.12. Defaulted Interest.................................... 38
SECTION 2.13. CUSIP Numbers......................................... 38
SECTION 2.14. Deposit of Moneys..................................... 39
SECTION 2.15. Book-Entry Provisions for Global Notes................ 39
SECTION 2.16. Special Transfer Provisions........................... 40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.................................... 44
SECTION 3.02. Selection of Notes To Be Redeemed..................... 44
SECTION 3.03. Notice of Redemption.................................. 44
SECTION 3.04. Effect of Notice of Redemption........................ 45
SECTION 3.05. Deposit of Redemption Price........................... 46
SECTION 3.06. Notes Redeemed in Part................................ 46
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes...................................... 46
SECTION 4.02. Maintenance of Office or Agency....................... 47
SECTION 4.03. Limitation on Restricted Payments..................... 47
SECTION 4.04. Corporate Existence................................... 49
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 4.05. Payment of Taxes and Other Claims...................... 50
SECTION 4.06. Maintenance of Properties and Insurance................ 50
SECTION 4.07. Compliance Certificate; Notice of Default.............. 51
SECTION 4.08. Compliance with Laws................................... 52
SECTION 4.09. Reports to Holders..................................... 52
SECTION 4.10. Waiver of Stay, Extension or Usury Laws................ 52
SECTION 4.11. Limitations on Transactions with Affiliates............ 53
SECTION 4.12. Limitation on Incurrence of Additional
and Indebtedness..................................... 54
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries......................................... 54
SECTION 4.14. Change of Control...................................... 55
SECTION 4.15. Limitation on Asset Sales.............................. 58
SECTION 4.16. Limitation on Restricted and Unrestricted
Subsidiaries......................................... 62
SECTION 4.17. Prohibition on Incurrence of Senior
Subordinated Debt.................................... 64
SECTION 4.18. Limitation on Preferred Stock of Restricted
Subsidiaries......................................... 64
SECTION 4.19. Limitation on Liens.................................... 64
SECTION 4.20. Additional Subsidiary Guarantees....................... 65
SECTION 4.21. Conduct of Business.................................... 65
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets............... 65
SECTION 5.02. Successor Corporation Substituted...................... 67
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default...................................... 68
SECTION 6.02. Acceleration........................................... 70
SECTION 6.03. Other Remedies......................................... 71
SECTION 6.04. Waiver of Past Defaults................................ 71
SECTION 6.05. Control by Majority.................................... 71
SECTION 6.06. Limitation on Suits.................................... 72
SECTION 6.07. Rights of Holders To Receive Payment................... 72
SECTION 6.08. Collection Suit by Trustee............................. 72
SECTION 6.09. Trustee May File Proofs of Claim....................... 73
SECTION 6.10. Priorities............................................. 73
SECTION 6.11. Undertaking for Costs.................................. 74
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...................................... 74
SECTION 7.02. Rights of Trustee...................................... 76
SECTION 7.03. Individual Rights of Trustee........................... 77
SECTION 7.04. Trustee's Disclaimer................................... 77
SECTION 7.05. Notice of Default...................................... 78
SECTION 7.06. Reports by Trustee to Holders.......................... 78
SECTION 7.07. Compensation and Indemnity............................. 79
SECTION 7.08. Replacement of Trustee................................. 80
SECTION 7.09. Successor Trustee by Merger, Etc....................... 81
SECTION 7.10. Eligibility; Disqualification.......................... 81
SECTION 7.11. Preferential Collection of Claims
Against the Company.................................. 82
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations............... 82
SECTION 8.02. Acknowledgment of Discharge by Trustee................. 85
SECTION 8.03. Application of Trust Money............................. 85
SECTION 8.04. Repayment to the Company............................... 85
SECTION 8.05. Reinstatement.......................................... 86
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders............................. 86
SECTION 9.02. With Consent of Holders................................ 87
SECTION 9.03. Compliance with TIA.................................... 88
SECTION 9.04. Revocation and Effect of Consents...................... 88
SECTION 9.05. Notation on or Exchange of Notes....................... 89
SECTION 9.06. Trustee To Sign Amendments, Etc........................ 89
ARTICLE TEN
SUBORDINATION OF NOTES
SECTION 10.01. Notes Subordinated to Senior Indebtedness............. 90
SECTION 10.02. Suspension of Payment When Senior
Indebtedness Is in Default.......................... 90
SECTION 10.03. Notes Subordinated to Prior Payment of
All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Company............ 92
SECTION 10.04. Holders To Be Subrogated to Rights of
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Holders of Senior Indebtedness...................... 94
SECTION 10.05. Obligations of the Company Unconditional.............. 95
SECTION 10.06. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice...................... 96
SECTION 10.07. Application by Trustee of Assets Deposited
with It............................................. 97
SECTION 10.08. No Waiver of Subordination Provisions................. 97
SECTION 10.09. Holders Authorize Trustee To Effectuate
Subordination of Notes.............................. 98
SECTION 10.10. Right of Trustee To Hold Senior
Indebtedness........................................ 99
SECTION 10.11. No Suspension of Remedies............................. 99
SECTION 10.12. No Fiduciary Duty of Trustee to Holders
of Senior Indebtedness.............................. 99
ARTICLE ELEVEN
GUARANTEE OF NOTES
SECTION 11.01. Unconditional Guarantee............................... 100
SECTION 11.02. Limitations on Guarantees............................. 102
SECTION 11.03. Execution and Delivery of Guarantee................... 102
SECTION 11.04. Release of a Subsidiary Guarantor..................... 103
SECTION 11.05. Waiver of Subrogation................................. 104
SECTION 11.06. Immediate Payment..................................... 104
SECTION 11.07. No Set-Off............................................ 105
SECTION 11.08. Obligations Absolute.................................. 105
SECTION 11.09. Obligations Continuing................................ 105
SECTION 11.10. Obligations Not Reduced............................... 105
SECTION 11.11. Obligations Reinstated................................ 106
SECTION 11.12. Obligations Not Affected.............................. 106
SECTION 11.13. Waiver................................................ 107
SECTION 11.14. No Obligation To Take Action Against
the Company......................................... 108
SECTION 11.15. Dealing with the Company and Others................... 108
SECTION 11.16. Default and Enforcement............................... 109
SECTION 11.17. Amendment, Etc........................................ 109
SECTION 11.18. Acknowledgment........................................ 109
SECTION 11.19. Costs and Expenses.................................... 109
SECTION 11.20. No Merger or Waiver; Cumulative Remedies.............. 109
SECTION 11.21. Survival of Obligations............................... 110
SECTION 11.22. Guarantee in Addition to Other Obligations............ 110
SECTION 11.23. Severability.......................................... 110
SECTION 11.24. Successors and Assigns................................ 110
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
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SECTION 12.01. Guarantee Obligations Subordinated to
Guarantor Senior Indebtedness....................... 111
SECTION 12.02. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness
Is in Default....................................... 111
SECTION 12.03. Guarantee Obligations Subordinated to
Prior Payment of All Guarantor Senior
Indebtedness on Dissolution, Liquidation
or Reorganization of Such Subsidiary
Guarantor........................................... 114
SECTION 12.04. Holders of Guarantee Obligations To Be
Subrogated to Rights of Holders of
Guarantor Senior Indebtedness....................... 115
SECTION 12.05. Obligations of the Subsidiary Guarantors
Unconditional....................................... 117
SECTION 12.06. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice..................... 118
SECTION 12.07. Application by Trustee of Assets
Deposited with It................................... 118
SECTION 12.08. No Waiver of Subordination Provisions................. 119
SECTION 12.09. Holders Authorize Trustee To Effectuate
Subordination of Guarantee Obligations.............. 119
SECTION 12.10. Right of Trustee To Hold Guarantor Senior
Indebtedness........................................ 120
SECTION 12.11. No Suspension of Remedies............................. 120
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of
Guarantor Senior Indebtedness....................... 121
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.......................................... 121
SECTION 13.02. Notices............................................... 121
SECTION 13.03. Communications by Holders with Other
Holders............................................. 122
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent........................................... 123
SECTION 13.05. Statements Required in Certificate
or Opinion.......................................... 123
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar............. 124
SECTION 13.07. Legal Holidays........................................ 124
SECTION 13.08. Governing Law......................................... 124
SECTION 13.09. No Adverse Interpretation of Other
Agreements.......................................... 124
SECTION 13.10. No Recourse Against Others............................ 124
SECTION 13.11. Successors............................................ 125
SECTION 13.12. Duplicate Originals................................... 125
SECTION 13.13. Severability.......................................... 125
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SECTION 13.14. Independence of Covenants............................. 125
SIGNATURES ...................................................... 126
Exhibit A - Form of Series A Note
Exhibit B - Form of Series B Note
Exhibit C - Form of Legend for Global Notes
Exhibit D - Form of Certificate To Be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
Exhibit E - Form of Certificate To Be Delivered in Connection
with Transfers Pursuant to Regulation S
Exhibit F - Form of Guarantee
</TABLE>
Note: This Table of Contents shall not, for any purpose, be deemed to be
part of this Indenture.
-vi-
<PAGE>
INDENTURE, dated as of April 11, 1997, among BWAY CORPORATION, a
Delaware corporation (the "Company"), each of the Subsidiary Guarantors named
herein, as guarantors, and Harris Trust and Savings Bank, as trustee (the
"Trustee").
The Company has duly authorized the creation of an issue of 10
1/4% Senior Subordinated Notes due 2007, Series A, and 10 1/4% Senior
Subordinated Notes due 2007, Series B, to be issued in exchange for the 10 1/4%
Senior Subordinated Notes due 2007, Series A, pursuant to a registration rights
agreement and, to provide therefor, the Company has duly authorized the
execution and delivery of this Indenture. All things necessary to make the
Notes, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid and binding obligations of the Company and to
make this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's 10
1/4% Senior Subordinated Notes due 2007, Series A and Series B:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions
-----------
"Acceleration Notice" has the meaning provided in Section 6.02.
"Acquired Indebtedness" means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person be comes a Restricted
Subsidiary of such Person or at the time it merges or consolidates with such
Person or any of its Restricted Subsidiaries or assumed in connection with the
acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of such Person or such acquisition, merger or
consolidation.
"Additional Interest" has the meaning provided in the Registration
Rights Agreement.
"Affiliate" means, with respect to any specified Per son, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.
<PAGE>
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprises any division or line of business
of such Person or any other properties or assets of such Person other than in
the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company of (a) any Capital Stock of any Re stricted
Subsidiary of the Company; or (b) any other property or assets of the Company or
any Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales shall not include (i) any
-------- -------
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $15.0
million in any consecutive 12-month period, (ii) the sale, lease, conveyance,
disposition or other transfer of all or substantially all of the assets of the
Company as permitted under Section 5.01 or any disposition that constitutes a
Change of Control, (iii) the contribution or other transfer of assets or
property to a joint venture in which the Company has an interest; provided,
--------
however, that such contribution or other transfer constitutes an Investment that
- -------
is either (a) a Permitted Investment or (b) an Investment that is treated as a
Restricted Payment under this Indenture, (iv) the licensing of intellectual
property, (v) disposals or replacements of obsolete equipment in the ordinary
course of business, (vi) the sale, lease, conveyance, disposition or other
transfer by the Company or any Restricted Subsidiary of assets or property to
one or more Wholly Owned Restricted Subsidiaries in connection with Investments
permitted under Section 4.03, (vii) sales of accounts receivable, equipment and
related assets (including contract rights) of the type specified in the
definition of "Qualified Securitization Transaction" to a Securitization
Subsidiary for the fair market value thereof, including cash in an amount at
least equal to 75% of the fair
<PAGE>
market value thereof as determined in accordance with GAAP, and (viii) transfers
of accounts receivable, equipment and related assets (including contract rights)
of the type specified in the definition of "Qualified Securitization
Transaction" (or a fractional undivided interest therein) by a Securitization
Subsidiary in a Qualified Securitization Transaction.
"Bankruptcy Law" means Title 11, United States Code or any similar
federal, state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper ma turing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of de posit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United
<PAGE>
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $250,000,000; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture); (ii) the approval by the holders of Capital Stock of the Company of
any plan or proposal for the liquidation or dissolution of the Company (whether
or not otherwise in compliance with the provisions of this Indenture); (iii) any
Person or Group shall become the owner, directly or indirectly, beneficially or
of record, of shares representing more than 50% of the aggregate ordinary voting
power (except that for purposes of calculating the ownership of any Person or
Group, shares owned by any Permitted Holder who is a part of such Person or
Group shall be excluded from the calculation of the ownership by such Person or
Group) represented by the issued and outstanding Capital Stock of the Company;
or (iv) the replacement of a majority of the Board of Directors of the Company
over a two-year period from the directors who constituted the Board of Directors
of the Company at the beginning of such period, and such replacement shall not
have been approved by a vote of at least a majority of the Board of Directors of
the Company then still in office who either were members of such Board of
Directors at the beginning of such period or whose election as a member of such
Board of Directors was previously so approved.
"Change of Control Date" has the meaning provided in Section 4.14.
"Change of Control Offer" has the meaning provided in Section 4.14.
"Change of Control Payment Date" has the meaning pro vided in
Section 4.14.
"Commission" or "SEC" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such
<PAGE>
Person's common stock, whether outstanding on the Issue Date or issued after the
Issue Date, and includes, without limitation, all series and classes of such
common stock.
"Company" means the party named as such in this In denture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor and also includes for the purposes of any provision contained herein
and required by the TIA any other obligor on the Notes.
"Consolidated EBITDA" means, with respect to any Per son, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the ap plication of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Restricted Subsidiaries (including any Person who becomes a
Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming
or otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Securities Act as
in effect on the Issue Date) (provided that such Consolidated EBITDA shall be
included only to the extent
<PAGE>
includable pursuant to the definition of "Consolidated Net Income") attributable
to the assets which are the subject of the Asset Acquisition or Asset Sale
during the Four Quarter Period) occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date, as if such Asset Sale or Asset Acquisition (including
the incurrence, assumption or liability for any such Acquired Indebtedness)
occurred on the first day of the Four Quarter Period. If such Person or any of
its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such
Person had directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will con tinue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period; and (3) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense,
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person (other than dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal, state and
local tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted Subsidiaries and Permitted
Joint Ventures for such period determined on a consolidated basis in accordance
with GAAP, including without limitation, (a) any amortization of debt discount,
(b) the net costs under Interest Swap Obligations, (c) all capitalized interest
and (d) the interest portion of any deferred payment obligation; and (ii) the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be
<PAGE>
paid or accrued by such Person and its Restricted Subsidiaries and Permitted
Joint Ventures during such period as determined on a consolidated basis in
accordance with GAAP; provided, however, that amounts to be included in clauses
-------- -------
(i) and (ii) above with respect to Permitted Joint Ventures not constituting
Restricted Subsidiaries shall be the product of the amounts computed in
accordance with GAAP and the percentage of the total outstanding shares of
Capital Stock of such Permitted Joint Venture held by the Company or any
Restricted Subsidiary of the Company; and provided, further, however, that
-------- ------- -------
Consolidated Interest Expense with respect to any Person for any period shall
not include any amortization or write-off of deferred financing costs.
"Consolidated Net Income" means, with respect to any Person, for
any period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom (a) gains
-------- -------
(and losses) on an after tax effected basis from asset sales or abandonments or
reserves relating thereto, (b) items classified as extraordinary or nonrecurring
gains or losses (including, without limitation, restructuring costs related to
facilities and/or operating line closings) on an after tax effected basis, (c)
the net income or loss of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Restricted Subsidiary of the
referent Person or is merged or consolidated with the referent Person or any
Restricted Subsidiary of the referent Person, (d) the net income (but not loss)
of any Restricted Subsidiary of the referent Person to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is restricted by a contract, operation of law or otherwise (other
than restrictions contained in the Credit Agreement or any Acquired
Indebtedness), (e) the net income or loss of any other Person, other than a
Subsidiary of the referent Person, except to the extent (in the case of net
income) of cash dividends or distributions paid to the referent Person, or to a
Wholly Owned Restricted Subsidiary of the referent Person, by such other Person,
(f) any restoration to income of any contingency reserve of an extraordinary,
non-recurring or unusual nature, except to the extent that provision for such
reserve was made out of Consolidated Net Income accrued at any time following
the Issue Date, (g) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued), (h) in the case
of a successor to the referent Person by consolidation or merger or as a
transferee of the referent Person's assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets and (i)
any amortization or write-off of deferred financing costs.
"Consolidated Net Worth" of any Person means the con solidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without
<PAGE>
duplication) amounts attributable to Disqualified Capital Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person,
for any period, the aggregate (A) depreciation, (B) amortization and (C) other
non-cash expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP (excluding
for purposes of clause (C) any such charges which require an accrual of or a
reserve for cash charges for any future period).
"Credit Agreement" means the Credit Agreement dated as of June 17,
1996, as amended, among the Company, Brockway Standard, Inc., Brockway Standard
(New Jersey), Inc., Milton Can Company, Inc., Davies Can Company, Inc., each of
the guarantors party thereto, the lenders party thereto in their capacities as
lenders thereunder and Bankers Trust Company and NationsBank, N.A. (South), as
agents, together with the related documents thereto (including, without
limitation, any guarantee agreements), in each case as such agreements may be
further amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder (provided, however,
-------- -------
that such increase in borrowings is permitted by Section 4.12) or adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"Currency Agreement" means any foreign exchange con tract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is,
or with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Notes issued in the form of
one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (i) Indebtedness under or in
respect of the Credit Agreement and (ii) any other
<PAGE>
Indebtedness constituting Senior Indebtedness which, at the time of
determination, has an aggregate principal amount of at least $25,000,000 and is
specifically designated in the instrument evidencing such Senior Indebtedness as
"Designated Senior Indebtedness" by the Company.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Notes and to have satisfied all the obligations under this Indenture relating to
the Notes (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same upon compliance by the Company with the
provisions of Article Eight, except (i) the rights of the Holders of Notes to
receive, from the trust fund described in Article Eight, payment of the
principal of and the interest on such Notes when such payments are due, (ii) the
Company's obligations with respect to the Notes under Sections 2.03 through
2.07, 7.07 and 7.08 and (iii) the rights, powers, trusts, duties and immunities
of the Trustee hereunder.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Notes.
"Equity Offering" has the meaning provided in paragraph 5 of the
Notes.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Notes" means the 10 1/4% Senior Subordinated Notes due 2007,
Series B, to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement.
"Exchange Offer" has the meaning provided in the Registration Rights
Agreement.
"fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary
organized under the laws of a country or jurisdiction
<PAGE>
other than the United States, any state or territory thereof or the District of
Columbia.
"Funds" means the aggregate amount of U.S. Legal Tender and/or U.S.
Government Obligations deposited with the Trustee pursuant to Article Eight.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Global Notes" means one or more IAI Global Notes, Regulation S Global
Notes and 144A Global Notes.
"Guarantees" means the guarantees of the Notes of the Company by the
Subsidiary Guarantors.
"Guarantor Senior Indebtedness" means with respect to any Subsidiary
Guarantor, the principal of, premium, if any, and interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of a
Subsidiary Guarantor, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Guarantee of such Subsidiary Guarantor.
Without limiting the generality of the foregoing, "Guarantor Senior
Indebtedness" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
to the extent such interest is an allowed claim under applicable law) on, and
all other amounts owing in respect of, (x) all monetary obligations of every
nature of a Subsidiary Guarantor under the Credit Agreement, including, without
limitation, obligations to pay principal and interest, reimbursement obligations
under letters of credit, fees, expenses and indemnities, (y) all Interest Swap
Obligations and (z) all obligations under Currency Agreements, in each case
whether outstanding on the Issue Date or thereafter incurred. Notwithstanding
the foregoing, "Guarantor Senior In debtedness" shall not include (i) any
Indebtedness of such Subsidiary Guarantor to a Subsidiary of such Subsidiary
Guarantor or any Affiliate of such Subsidiary Guarantor or any of such
Affiliate's Subsidiaries, (ii) Indebtedness to, or guaranteed on behalf of, any
shareholder, director, officer or employee of such Subsidiary Guarantor or any
Subsidiary of such Subsidiary Guarantor
<PAGE>
(including, without limitation, amounts owed for compensation), (iii)
Indebtedness to trade creditors and other amounts incurred in connection with
obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing by such Subsidiary Guarantor, (vi) Indebtedness incurred in
violation of Section 4.12, (vii) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Title 11, United States Code,
is without recourse to such Subsidiary Guarantor and (viii) any Indebtedness
which is, by its express terms, subordinated in right of payment to any other
Indebtedness of such Subsidiary Guarantor.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"IAI Global Note" means a permanent global note in registered form
representing the aggregate principal amount of Notes sold to Institutional
Accredited Investors.
"Indebtedness" means with respect to any Person, without duplication,
(i) all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all Obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted), (v) all Obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all Obligations under currency agreements and interest swap
agreements of such Person and (ix) all Disqualified Capital Stock issued by such
Person with the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
<PAGE>
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the issuer of such
Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Notes" means the 10 1/4% Senior Subordinated Notes due 2007,
Series A, of the Company.
"Initial Purchasers" means BT Securities Corporation, Bear Stearns &
Co. Inc. and NationsBanc Capital Markets, Inc.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by the
Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For the purposes of Section 4.03, the amount of
any Investment shall be the original cost of such Investment plus the cost of
all additional Investments by the Company or any of its Restricted Subsidiaries,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the
payment of dividends or distributions in connection with such Investment or any
other amounts received
<PAGE>
in respect of such Investment; provided, however, that no such payment of
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dividends or distributions or receipt of any such other amounts shall reduce the
amount of any Investment if such payment of dividends or distributions or
receipt of any such amounts would be included in Consolidated Net Income. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, greater than 50% of the
outstanding Common Stock of such Restricted Subsidiary, the Company 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 Common Stock of such former Restricted
Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the Notes.
"Legal Holiday" has the meaning provided in Section 13.07.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means April 15, 2007.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid or payable after
taking into account any reduction in consolidated tax liability due to
available tax credits or deductions and any tax sharing arrangements, (c)
repayment of Indebtedness that is required to be repaid in connection with such
Asset Sale and (d) appropriate amounts to be pro vided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale.
<PAGE>
"Net Proceeds Offer" has the meaning provided in Section 4.15.
"Net Proceeds Offer Amount" has the meaning provided in Section 4.15.
"Net Proceeds Offer Payment Date" has the meaning provided in Section
4.15.
"Net Proceeds Offer Trigger Date" has the meaning provided in Section
4.15.
"Non-U.S. Person" has the meaning assigned to such term in Regulation
S.
"Notes" means, collectively, the Initial Notes, the Private Exchange
Notes, if any, and the Unrestricted Notes, treated as a single class of
securities under this Indenture.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 13.04 and 13.05, as they relate to the making of an
Officers' Certificate, and delivered to the Trustee.
"144A Global Note" means a permanent global note in registered form
representing the aggregate principal amount of Notes sold in reliance on Rule
144A under the Securities Act.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.04 and 13.05, as they relate to the giving of an Opinion of Counsel, and
delivered to the Trustee.
"Paying Agent" has the meaning provided in Section 2.03, except that,
during the continuance of a Default or Event of Default and for the purposes of
Articles Three and Eight and Sections 4.14 and 4.15, the Paying Agent shall not
be the Company or any Affiliate of the Company.
<PAGE>
"Permitted Holders" means Warren J. Hayford and his spouse, their
lineal descendants and adopted children and spouses of their lineal descendants
and adopted children, any foundation controlled by any of the foregoing persons,
and trusts for the benefit of any of the foregoing persons.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes, this Indenture and the Guarantees;
(ii) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $125.0
million in the aggregate; provided, however, that if at the time of any
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repayments under the revolving credit facility under the Credit Agreement
that are required pursuant to Section 4.15 (which are accompanied by a
corresponding reduction in the aggregate available commitment), the total
consolidated assets of the Company as reflected on the Company's most
recent balance sheet prepared in accordance with GAAP (and after giving pro
forma effect to any Asset Sales and Asset Acquisitions occurring subsequent
to the date of such balance sheet) were less than $275.0 million, the
Indebtedness permitted to be incurred pursuant to this clause (ii) shall be
reduced in an amount equal to such repayment until such time as both (A)
the total consolidated assets of the Company exceed $275.0 million and (B)
the Company could incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 4.12 (at which time the
aggregate Indebtedness permitted under this clause (ii) shall be $125.0
million); provided, however, that, in the event there is at any time more
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than $125 million available under the Credit Agreement, the aggregate
Indebtedness permitted under this clause (ii) shall be allocated first to
the revolving credit facility portion of the Credit Agreement;
(iii) Interest Swap Obligations of the Company covering Indebtedness
of the Company or any of its Restricted Subsidiaries; provided, however,
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that such Interest Swap Obligations are entered into to protect the Company
and its Restricted Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with this Indenture to the extent the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(iv) Indebtedness under Currency Agreements; provided, however, that
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in the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign
<PAGE>
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(v) Indebtedness of a Restricted Subsidiary of the Company to the
Company or to a Wholly Owned Restricted Subsidiary of the Company for so
long as such Indebtedness is held by the Company or a Wholly Owned
Restricted Subsidiary of the Company, in each case subject to no Lien held
by a Person other than the Company or a Wholly Owned Restricted Subsidiary
of the Company; provided, however, that (a) any Indebtedness of a Wholly
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Owned Restricted Subsidiary of the Company is unsecured and (b) if as of
any date any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
issuer of such Indebtedness;
(vi) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
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Indebtedness is extinguished within two business days of incurrence;
(vii) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations in
connection with self-insurance or similar requirements in the ordinary
course of business;
(viii) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company or any of its Restricted
Subsidiaries or otherwise incurred to finance the lease or improvement of
real or personal property or equipment in an aggregate principal amount not
to exceed $10.0 million at any one time outstanding;
(ix) the consummation of any Qualified Securitization Transaction;
(x) Refinancing Indebtedness;
(xi) Indebtedness of a Securitization Subsidiary incurred in a
Qualified Securitization Transaction that is not recourse to the Company or
any Restricted Subsidiary of the Company (except for representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably
<PAGE>
customary in an accounts receivable or equipment transaction);
(xii) Indebtedness incurred by Foreign Restricted Subsidiaries of the
Company with respect to such Subsidiaries' working capital requirements in
an aggregate principal amount outstanding at any one time not to exceed
$5.0 million; and
(xiii) additional Indebtedness in an aggregate principal amount not to
exceed $20.0 million at any one time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Restricted Subsidiary of the Company or that
will merge or consolidate into the Company or a Restricted Subsidiary of the
Company; (ii) Investments in the Company by any Restricted Subsidiary of the
Company; provided, however, that any Indebtedness evidencing such Investment is
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unsecured; (iii) Investments in cash and Cash Equivalents; (iv) loans and
advances to employees and officers of the Company and its Restricted
Subsidiaries in the ordinary course of business for bona fide business purposes
not in excess of $3.0 million at any one time outstanding; (v) Currency
Agreements and Interest Swap Obligations entered into in the ordinary course of
the Company's or its Restricted Subsidiaries' businesses and otherwise in
compliance with this Indenture; (vi) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vii) Investments made by the Company or its Restricted Subsidiaries
as a result of consideration received in connection with an Asset Sale made in
compliance with Section 4.15; (viii) Investments in Permitted Joint Ventures;
and (ix) additional Investments in (A) unconsolidated joint ventures in
businesses reasonably related or complementary to those of the Company and its
Restricted Subsidiaries (as determined in good faith by the Company's Board of
Directors) made in the ordinary course of business and (B) Unrestricted
Subsidiaries in an aggregate amount for all such Investments made pursuant to
this clause (ix) not to exceed $20.0 million at any one time outstanding.
"Permitted Joint Venture" means any joint venture arrangement (which
may be structured as a corporation, partnership, trust, limited liability
company or any other Person) if (a) no Affiliate (other than a Restricted
Subsidiary of the Company) of the Company or a Restricted Subsidiary has an
investment in such Person, (b) such Person is engaged in the same or a similar
line of business as the Company and its Restricted Subsidiaries were engaged in
on the Issue Date or any business ancillary or reasonably related or
complementary thereto or
<PAGE>
supportive thereof (as determined in good faith by the Company's Board of
Directors), (c) the Company and/or any of its Restricted Subsidiaries at all
times (i) is the operator of such Person and (ii) owns at least 30% of the total
outstanding shares of Capital Stock of such Person entitled to participate in
distributions in respect of the earnings, sale or liquidation of such Person,
(d) immediately after giving effect to such Investment on a pro forma basis (to
give effect to the contribution of any property or assets to such Person or
Indebtedness incurred to fund such Investment or otherwise), the Company could
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.12, and (e) no default with respect to any
Indebtedness of such Person or any Subsidiary of such Person (including any
right which the holders thereof may have to take enforcement action against such
Person) would permit (upon notice, lapse of time or both) any holder of any
Indebtedness of the Company or its Restricted Subsidiaries to declare a default
on such Indebtedness or cause the payment thereof to be accelerated or payable
prior to its final scheduled maturity. If, at any time, a Permitted Joint
Venture fails to comply with clauses (b) and (c) above, such Permitted Joint
Venture shall constitute an Investment and must comply with Section 4.03 (but
only with respect to the Company's then net Investment in such joint venture).
"Permitted Liens" means the following types of Liens:
(i) Liens in favor of the Trustee in its capacity as trustee for the
Holders;
(ii) Liens securing Indebtedness outstanding under the Credit
Agreement;
(iii) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(iv) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made in respect thereof;
(v) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds,
<PAGE>
bids, leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the payment of
borrowed money);
(vi) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall
not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(vii) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Subsidiaries;
(viii) any interest or title of a lessor under any Capitalized Lease
Obligation; provided, however, that such Liens do not extend to any
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property or assets which is not leased property subject to such Capitalized
Lease Obligation;
(ix) Liens to secure Purchase Money Indebtedness; provided, however,
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that (A) the related purchase money Indebtedness shall not exceed the cost
of such property or assets and shall not be secured by any property or
assets of the Company or any Restricted Subsidiary of the Company other
than the property and assets so acquired and (B) the Lien securing such
Indebtedness shall be created within 90 days of such acquisition;
(x) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(xi) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xii) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(xiii) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
<PAGE>
(xiv) Liens securing Indebtedness under Currency Agreements;
(xv) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.12; provided, however, that (A) such Liens secured such
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Acquired Indebtedness at the time of and prior to the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company and were not granted in connection with, or in anticipation of, the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company and (B) such Liens do not extend to or cover any
property or assets of the Company or of any of its Restricted Subsidiaries
other than the property or assets that secured the Acquired Indebtedness
prior to the time such Indebtedness became Acquired Indebtedness of the
Company or a Restricted Subsidiary of the Company and are no more favorable
to the lienholders than those securing the Acquired Indebtedness prior to
the incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company; and
(xvi) Liens granted in connection with any Qualified Securitization
Transaction.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Physical Notes" shall have the meaning provided in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Exchange Notes" shall have the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
Initial Notes in the form set forth on Exhibit A.
---------
"pro forma" means, unless otherwise provided herein, with respect to
any calculation made or required to be made pursuant to the terms of this
Indenture, a calculation in accordance with Article 11 of Regulation S-X
promulgated under the Securities Act.
<PAGE>
"Purchase Money Indebtedness" means Indebtedness the net proceeds of
which are used to finance the cost (including the cost of construction) of
property or assets acquired in the normal course of business by the Person
incurring such Indebtedness.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Securitization Transaction" means any transaction or series
of transactions that have been or may be entered into by the Company or any of
its Restricted Subsidiaries in connection with or reasonably related to a
transaction or series of transactions in which the Company or any of its
Restricted Subsidiaries may sell, convey or otherwise transfer to (i) a
Securitization Subsidiary or (ii) any other Person, or may grant a security
interest in, any Receivables or interests therein secured by the merchandise or
services financed thereby (whether such Receivables are then existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all security interests in
merchandise or services financed thereby, the proceeds of such Receivables, and
other assets which are customarily sold or in respect of which security
interests are customarily granted in connection with securitization transactions
involving such assets.
"Receivables" means any right of payment from or on behalf of any
obligor, whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising from the financing by the Company or any
Restricted Subsidiary of the Company of merchandise or services, and monies due
thereunder, security in the merchandise and services financed thereby, records
related thereto, and the right to payment of any interest or finance charges and
other obligations with respect thereto, proceeds from claims on insurance
policies related thereto, any other proceeds related thereto, and any other
related rights.
"Redemption Date" means, with respect to any Notes, the Maturity Date
of such Note or the earlier date on which such Note is to be redeemed by the
Company pursuant to paragraph 5 of the Notes.
"Redemption Price" has the meaning provided in Section 3.03.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of
<PAGE>
Indebtedness incurred in accordance with Section 4.12 (other than pursuant to
clause (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xii) or (xiii)
of the definition of Permitted Indebtedness), in each case that does not (1)
result in an increase in the aggregate principal amount of Indebtedness of such
Person as of the date of such proposed Refinancing (plus the amount of any
premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
or such Restricted Subsidiary, as the case may be, in connection with such
Refinancing), except to the extent that any such increase in Indebtedness is
otherwise permitted by this Indenture, or (2) create Indebtedness with (A) a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier
than the final maturity of the Indebtedness being Refinanced; provided, however,
-------- -------
that (x) if such Indebtedness being Refinanced is Indebtedness of the Company,
then such Refinancing Indebtedness shall be Indebtedness solely of the Company,
(y) if such Indebtedness being Refinanced is subordinate or junior to the Notes,
then such Refinancing Indebtedness shall be subordinate to the Notes at least to
the same extent and in the same manner as the Indebtedness being Refinanced and
(z) if such Indebtedness being refinanced is subordinated or junior to the
Guarantee of such Subsidiary Guarantor, then such Refinancing Indebtedness shall
be subordinate to the Guarantee of such Subsidiary Guarantor at least to the
same extent and in the same manner as the Indebtedness being refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the exchange and registration
rights agreement dated the Issue Date between the Company and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a permanent global note in registered
form representing the aggregate principal amount of Notes sold in reliance on
Regulation S under the Securities Act.
"Replacement Assets" has the meaning provided in Section 4.15.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Indebtedness; provided,
--------
however, that if, and for so long as, any Designated Senior Indebtedness lacks
- -------
such a representative, then the Representative for such Designated Senior
Indebtedness shall at all times constitute the holders of a majority in
outstanding principal amount of such Designated Senior Indebtedness in respect
of any Designated Senior Indebtedness.
<PAGE>
"Restricted Note" means a Note that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
- -------- -------
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Note.
"Restricted Subsidiary" of any Person, means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of the Company of any
property, whether owned by the Company or any Restricted Subsidiary of the
Company at the Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or to
any other Person from whom funds have been or are to be advanced by such Person
on the security of such Property.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Securitization Subsidiary" means a Wholly Owned Restricted Subsidiary
of the Company which engages in no activities other than those reasonably
related to or in connection with the entering into of securitization
transactions and which is designated by the Board of Directors of the Company
(as provided below) as a Securitization Subsidiary (a) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which (i) is
guaranteed by the Company or any other Restricted Subsidiary of the Company,
(ii) is recourse to or obligates the Company or any other Restricted Subsidiary
of the Company in any way other than pursuant to representations, warranties and
covenants (including those related to servicing) entered into in the ordinary
course of business in connection with a Qualified Securitization Transaction or
(iii) subjects any property or assets of the Company or any other Restricted
Subsidiary of the Company, directly or indirectly, contingently or otherwise, to
any Lien or to the satisfaction thereof, other than pursuant to representations,
warranties and covenants (including those related to servicing) entered into in
the ordinary course of business in connection with a Qualified Securitization
Transaction, (b) with which neither of the Company nor any other Restricted
Subsidiary of the Company (i) provides any credit support or (ii) has any
contract, agreement, arrangement or understanding other than on terms that are
fair and reasonable and that are no less favorable to the Company or such
Restricted Subsidiary than could be obtained from an unrelated Person (other
than, in the case of subclauses (i) and (ii) of this clause (b),
representations,
<PAGE>
warranties and covenants (including those relating to servicing) entered into in
the ordinary course of business in connection with a Qualified Securitization
Transaction and intercompany notes relating to the sale of Receivables to such
Securitization Subsidiary) and (c) with which neither the Company nor any
Restricted Subsidiary of the Company has any obligation to maintain or preserve
such Subsidiary's financial condition or to cause such Subsidiary to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolutions of the Board of Directors of the
Company giving effect to such designation.
"Senior Indebtedness" means, (i) the principal of, premium, if any,
and interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on any Indebtedness of the Company, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, to the extent such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature of the Company
under the Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, (y) all Interest Swap Obligations and (z) all
obligations under Currency Agreements, in each case whether outstanding on the
Issue Date or thereafter incurred. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (i) any Indebtedness of the Company to a
Subsidiary of the Company or any Affiliate of the Company or any of such
Affiliate's Subsidiaries, (ii) Indebtedness to, or guaranteed on behalf of, any
shareholder, director, officer or employee of the Company or any Subsidiary of
the Company (including, without limitation, amounts owed for compensation),
(iii) Indebtedness to trade creditors and other amounts incurred in connection
with obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing by the Company, (vi) Indebtedness incurred in violation of
Section 4.12, (vii) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to the Company and (viii) any Indebtedness which is, by its express
terms, subordinated in right of payment to any other Indebtedness of the
Company.
<PAGE>
"Significant Subsidiary" shall have the meaning set forth in Rule
1.02(v) of Regulation S-X under the Securities Act.
"Subsidiary," with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantor" means (i) each of the Company's present
Restricted Subsidiaries and (ii) each of the Company's Restricted Subsidiaries
that in the future executes a supplemental indenture in which such Subsidiary
agrees to be bound by the terms of this Indenture as a Subsidiary Guarantor;
provided, however, that any Person constituting a Subsidiary Guarantor as
- -------- -------
described above shall cease to constitute a Subsidiary Guarantor when its
respective Guarantee is released in accordance with the terms of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
77aaa-77bbbb), as amended, as in effect on the date on which this Indenture is
qualified under the TIA, except as otherwise provided in Section 9.03.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters or, in
the case of a successor trustee, an officer assigned to the department, division
or group performing the corporate trust work of such successor.
"Unrestricted Notes" means one or more Notes that do not and are
not required to bear the Private Placement Legend in the form set forth in
Exhibit A, including, without limitation, the Exchange Notes.
- ---------
"Unrestricted Subsidiary" means a Subsidiary of the Company
designated as such pursuant to and in compliance with Section 4.16.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
<PAGE>
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, that
portion of such provision that is required to be in corporated for this
Indenture to be qualified under the TIA is incorporated by reference in, and
made a part of, this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by the TIA by reference to another statute or defined by SEC rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
---------------------
<PAGE>
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the Issue Date;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
---------------
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes and
---------
the Trustee's certificate of authentication relating thereto shall be
substantially in the form of Exhibit B hereto. The Notes may have notations,
---------
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Notes and any notation, legend or
endorsement thereon. Each Note shall be dated the date of issuance and shall
show the date of its authentication. Each Note shall have an executed Guarantee
from each of the Subsidiary Guarantors endorsed thereon substantially in the
form of Exhibit F hereto.
---------
The terms and provisions contained in the Notes annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
- ----------------
this Indenture and, to the extent applicable, the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A, Notes offered and
sold to institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of one or more Global Notes,
substantially in the form set forth in Exhibit A, deposited with the Trustee, as
---------
custodian for the Depository, duly executed by the Company (and having an
executed Guarantee from each of the
<PAGE>
Subsidiary Guarantors endorsed thereon) and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Exhibit C. The
---------
aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
Notes issued in exchange for interests in a Global Note pursuant
to Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Physical
--------- --------
Notes").
- -----
All Notes offered and sold in reliance on Regulation S shall
remain in the form of a Global Note until the consummation of the Exchange Offer
pursuant to the Registration Rights Agreement; provided, however, that all of
-------- -------
the time periods specified in the Registration Rights Agreement to be complied
with by the Company and the Subsidiary Guarantors have been so complied with.
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount.
-----------------
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign, and one Officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Notes for the Company, and the
Guarantees for the Subsidiary Guarantors (except, in the case of Brockway
Standard (Canada), Inc., Armstrong Containers, Inc. and Materials Management,
Inc., whose Guarantees shall only require the signature of one Officer), by
manual or facsimile signature.
If an Officer or Assistant Secretary whose signature is on a Note
or a Guarantee, as the case may be, was an Officer or Assistant Secretary at the
time of such execution but no longer holds that office or position at the time
the Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature of such representative of the Trustee shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original
issue in an aggregate principal amount not to exceed $100,000,000, (ii) Private
Exchange Notes from time to time only in exchange for a like principal amount of
Initial Notes and (iii) Unrestricted Notes from time to time only in exchange
for (A) a like principal amount of Initial Notes or (B) a like principal amount
of Private Exchange Notes, in each case upon a written order of the Company in
the form of an Officers' Certificate of
<PAGE>
the Company. Each such written order shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated, whether
the Notes are to be Initial Notes, Private Exchange Notes or Unrestricted Notes
and whether (subject to Section 2.01) the Notes are to be issued as Physical
Notes or Global Notes and such other information as the Trustee may reasonably
request. The aggregate principal amount of Notes outstanding at any time may not
exceed $100,000,000, except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Notes issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Notes may vote or consent) as one class and no series of Notes will have
the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Notes. Unless otherwise provided in
the appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York),
where (a) Notes may be presented or surrendered for registration of transfer or
for exchange ("Registrar"), (b) Notes may be presented or surrendered for
payment ("Paying Agent") and (c) notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Registrar shall keep
a register of the Securities and of their transfer and exchange. The Company,
upon notice to the Trustee, may have one or more co-Registrars and one or more
additional paying agents reasonably acceptable to the Trustee. The term "Paying
Agent" includes any additional paying agent. The Company may change the Paying
Agent or Registrar without notice to any Holder.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to
<PAGE>
maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed. The Trustee may perform any such functions and duties through its
affiliate, Harris Trust Company of NY. Any of the Registrar, the Paying Agent
or any other agent may resign upon 30 days' notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, premium, if any, or interest on, the Notes (whether
such assets have been distributed to it by the Company or any other obligor on
the Notes), and shall notify the Trustee of any default by the Company (or any
other obligor on the Notes) in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent and the
completion of any accounting required to be made hereunder, the Paying Agent
shall have no further liability for such assets.
SECTION 2.05. Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee five (5) Business
Days before each Interest Payment Date and at such other times as the Trustee
may request in writing a list as of the applicable Record Date and in such form
as the Trustee may reasonably require of the names and addresses of the Holders,
which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
---------------------
Subject to Sections 2.15 and 2.16, when Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer of such
Notes or to exchange such Notes for an equal principal amount of Notes of other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Notes
-------- -------
<PAGE>
presented or surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Notes at the Registrar's or co-Registrar's written request. No service charge
shall be made 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. The Registrar or co-
Registrar shall not be required to register the transfer of or exchange of any
Note (i) during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption pursuant to Section 3.03 and paragraph 5 of
the Notes and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Note being redeemed in part.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Notes may be effected only through a book entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry system.
SECTION 2.07. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note and
each of the Subsidiary Guarantors shall execute a Guarantee thereon if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity, sufficient in the
reasonable judgment of the Company, the Subsidiary Guarantors and the Trustee,
to protect the Company, the Subsidiary Guarantors, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. The Company and the
Trustee may charge such Holder for its reasonable out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note shall constitute an additional obligation of the Company and
every replacement Guarantee shall constitute an additional obligation of the
Subsidiary Guarantors.
SECTION 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in
<PAGE>
this Section as not outstanding. Subject to Section 2.09, a Note does not cease
to be outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
---- ----
of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent
holds U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of
the principal, premium, if any, and interest due on the Notes payable on that
date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such Notes
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
--------------
In determining whether the Holders of the required aggregate
principal amount of Notes have concurred in any direction, waiver, consent or
notice, Notes owned by the Company or an Affiliate shall be considered as though
they are not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes which the Trustee actually knows are so owned shall be so
considered. The Company shall notify the Trustee, in writing, when it or any of
its Affiliates repurchases or otherwise acquires Notes, of the aggregate
principal amount of such Notes so repurchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes and the Subsidiary
Guarantors shall prepare temporary Guarantees thereon upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and execute, and the Trustee shall authenticate
and the Subsidiary Guarantors shall execute Guarantees on, upon receipt of a
written order of the Company pursuant to Section 2.02, definitive Notes in
exchange for temporary Notes.
SECTION 2.11. Cancellation.
------------
<PAGE>
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the Company, shall
dispose and deliver evidence of disposal of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Company may not
issue new Notes to replace Notes that the Company has paid or delivered to the
Trustee for cancellation. If the Company shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
------------------
The Company will pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Notes. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Notes. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months, and, in the case of a
partial month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(a) shall be paid
to Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid.
SECTION 2.13. CUSIP Numbers.
-------------
The Company in issuing the Notes may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided, however, that no
-------- -------
representation is hereby deemed to be made by the Trustee as to the correctness
or accuracy
<PAGE>
of the CUSIP numbers printed in the notice or on the Notes, and that reliance
may be placed only on the other identification numbers printed on the Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each Interest Payment
Date, Maturity Date, Redemption Date, Change of Control Payment Date, and Net
Proceeds Offer Payment Date, the Company shall have deposited with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date, Maturity Date, Redemption Date, Change
of Control Payment Date, and Net Proceeds Offer Payment Date, as the case may
be, in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, Maturity Date, Redemption Date, Change of
Control Payment Date, and Net Proceeds Offer Payment Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) The Global Notes initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
---------
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and
Participants, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.16. In addition, Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in Global Notes if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for any Global Note and a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing
<PAGE>
and the Registrar has received a request from the Depository to issue Physical
Notes.
(c) In connection with any transfer or exchange of a portion of
the beneficial interest in a Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute and the Trustee shall authenticate and deliver, one or more
Physical Notes of authorized denominations in an aggregate principal amount
equal to the principal amount of the beneficial interest in the Global Note so
transferred.
(d) In connection with the transfer of a Global Note as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, the Subsidiary Guarantors shall
execute Guarantees on and the Trustee shall upon written instructions from the
Company authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in such Global Note, an equal
aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered
in exchange for an interest in a Global Note pursuant to paragraph (b) or (c) of
this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the
Private Placement Legend.
(f) The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Notes.
SECTION 2.16. Special Transfer Provisions.
---------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors and
-----------------------------------------------------------
Non-U.S. Persons. The following additional provisions shall apply with
- ----------------
respect to the registration of any proposed transfer of a Restricted Note to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Restricted
Note, whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after the second anniversary of the Issue Date;
provided, however, that neither the Company nor any Affiliate of the
-------- -------
Company has held any beneficial interest in such note, or portion thereof,
at any time on or prior to the second anniversary of the Issue
<PAGE>
Date or (y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the proposed
transferee has delivered to the Registrar a certificate substantially in
the form of Exhibit D hereto and any legal opinions and certifications
---------
required thereby and (2) in the case of a transfer to a Non-U.S. Person,
the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit E hereto;
---------
(ii) if the proposed transferee is a Participant and the Notes
to be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the IAI Global Note or Regulation S Global
Note, as the case may be, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause
(y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and an increase in the principal
amount of the IAI Global Note or Regulation S Global Note, as the case may
be, in an amount equal to the principal amount of Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Note, upon receipt by the Registrar of (x)
written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall register
the transfer and reflect on its books and records the date and (A) a
decrease in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to the principal amount
of the Notes to be transferred and (B) an increase in the principal amount
of the IAI Global Note or the Regulation S Global Note, as the case may be,
in an amount equal to the principal amount of the Notes to be transferred.
(b) Transfers to QIBs. The following provisions shall apply
-----------------
with respect to the registration of any proposed transfer of a Restricted
Security to a QIB:
(i) the Registrar shall register the transfer of any Restricted
Note, whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after the second anniversary of the Issue Date;
provided, however, that neither the Company nor any Affiliate of the
-------- -------
Company has held any beneficial interest in such Note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date or (y)
such transfer is being made by a proposed transferor who has checked the
box provided for on the form
<PAGE>
of Note stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Note for its own account or
an account with respect to which it exercises sole investment discretion
and that it and any such account is a QIB within the meaning of Rule 144A,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the Notes
to be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the 144A Global Note, upon receipt by the
Registrar of written instructions given in accordance with the Depository's
and the Registrar's procedures, the Registrar shall register the transfer
and reflect on its book and records the date and an increase in the
principal amount of the 144A Global Note in an amount equal to the
principal amount of Physical Notes to be transferred, and the Trustee shall
cancel the Physical Note so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the IAI Global Note or the Regulation S Global
Note, upon receipt by the Registrar of written instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the principal amount of the IAI Global Note
or the Regulation S Global Note, as the case may be, in an amount equal to
the principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the 144A Global Note in an amount equal to the
principal amount of the Notes to be transferred.
(c) Restrictions on Transfer and Exchange of Global Notes.
-----------------------------------------------------
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(d) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do
<PAGE>
not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the Registrar or co-
Registrar shall deliver only Notes that bear the Private Placement Legend unless
(i) there is delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (ii) such Note
has been sold pursuant to an effective registration statement under the
Securities Act.
(e) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to paragraph 5 of
the Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the aggregate principal amount of the Notes to be redeemed.
Such notice must be given at least 45 days prior to the Redemption Date (unless
a shorter notice shall be satisfactory to the Trustee), but shall not be given
more than 60 days before the Redemption Date. Any such notice may be cancelled
at any time prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.
SECTION 3.02. Selection of Notes To Be Redeemed.
---------------------------------
If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption will be made by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, in the absence of such requirements or if the Notes are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate; provided, however, that no Notes of $1,000 or
-------- -------
less shall be redeemed in part. On and after the Redemption Date, interest
shall cease to accrue on the
<PAGE>
Note or portions of them called for redemption; provided, further, however, that
-------- ------- -------
if a partial redemption is made with the proceeds of an Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to DTC procedures), unless such method is otherwise
prohibited.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail or cause to be mailed a notice of redemption by
first-class mail to each Holder whose Notes are to be redeemed at its registered
address, with a copy to the Trustee. At the Company's request, the Trustee shall
give the notice of redemption in the Company's name and at the Company's
expense. Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the redemption price and the amount of accrued interest, if
any, to be paid (the "Redemption Price");
(3) the paragraph and subparagraph of the Notes pursuant to
which the Notes are being redeemed;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(6) that, unless the Company defaults in making the redemption
payment, interest, if any, on Notes called for redemption shall cease to
accrue on and after the Redemption Date, and the only remaining right of
the Holders of such Notes is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Notes redeemed;
(7) that, if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof will
be issued; and
(8) that, if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption.
<PAGE>
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 purchase
of Notes.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section
3.03, Notes called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent, such
Notes called for redemption shall be paid at the Redemption Price, but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant record dates referred to in the Notes. Interest shall accrue on or
after the Redemption Date and shall be payable only if the Company defaults in
payment of the Redemption Price.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or before the Redemption Date, the Company shall deposit with
the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Notes to be redeemed on that date. The Paying Agent shall promptly return to the
Company any U.S. Legal Tender so deposited that is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven.
Unless the Company fails to comply with the preceding paragraph
and defaults in the payment of such Redemption Price, interest on the Notes to
be redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Notes are presented for payment.
SECTION 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Note or Notes equal in principal
amount to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
----------------
The Company shall pay the interest on the Notes on the dates and
in the manner provided in the Notes. An installment of principal of or interest
on the Notes shall be considered paid on the date it is due if the Trustee or
Paying Agent holds on that date U.S. Legal Tender designated for and sufficient
to pay the installment. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
<PAGE>
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal, premium or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 12.02.
SECTION 4.03. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
solely in Qualified Capital Stock of the Company) on or in respect of shares of
the Company's Capital Stock to holders of such Capital Stock, (b) purchase,
redeem or otherwise acquire or retire for value any Capital Stock of the Company
or any warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock (other than the exchange of such Capital Stock or any
warrants, rights or options to acquire shares of any class of Capital Stock of
the Company for Qualified Capital Stock of the Company), (c) make any principal
payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or
retire for value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes or (d) make any
Investment (other than Permitted Investments) (each of the foregoing actions set
forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if at the time of such Restricted Payment or immediately after giving
effect thereto, (i) a Default or an Event of Default shall have occurred and be
continuing, or (ii) the Company is not able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.12, or (iii) the aggregate amount of all Restricted Payments
(including such proposed Restricted Payment) made subsequent to the Issue Date
(the amount expended for such purposes, if other than in cash, being the fair
market value of such property as determined reasonably and in good faith by the
Board of Directors of the Company or the Company) shall exceed the sum of: (v)
50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss) of the Company earned during
the period beginning on the first day of the fiscal quarter including the Issue
Date and
<PAGE>
ending on the last day of the fiscal quarter ending at least 30 days prior to
the date the Restricted Payment occurs (the "Reference Date") (treating such
period as a single accounting period); plus (w) 100% of the aggregate net
proceeds (including the fair market value of any business or property other than
cash) received by the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date and on or prior
to the Reference Date of Qualified Capital Stock of the Company, including
treasury stock; plus (x) without duplication of any amounts included in clause
(iii)(w) above, 100% of the aggregate net cash proceeds of any equity
contribution received by the Company from a holder of the Company's Capital
Stock (excluding, in the case of clauses (iii)(w) and (x), any net cash proceeds
from an Equity Offering to the extent used to redeem the Notes); plus (y) an
amount equal to the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, interest payments, repayments of loans or advances, or
other transfers of cash, in each case, to the Company or to any Restricted
Subsidiary of the Company from Unrestricted Subsidiaries (but without
duplication of any such amount included in cumulative Consolidated Net Income of
the Company), or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (in each case valued as provided in Section 4.16), not to exceed,
in the case of an Unrestricted Subsidiary, the amount of Investments previously
made by the Company or any Restricted Subsidiary of the Company in such
Unrestricted Subsidiary and which were treated as a Restricted Payment under
this Indenture; plus (z) $25.0 million.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit: (1) the payment of any
dividend or consummation of irrevocable redemption within 60 days after the date
of declaration of such dividend or giving of irrevocable redemption notice if
the dividend or redemption would have been permitted on the date of declaration
or giving of irrevocable redemption notice; (2) if no Default or Event of
Default shall have occurred and be continuing, the acquisition of any shares of
Capital Stock of the Company, either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock of the Company; (3) if no
Default or Event of Default shall have occurred and be continuing, the
acquisition of any Indebtedness of the Company that is subordinate or junior in
right of payment to the Notes either (i) solely in exchange for shares of
Qualified Capital Stock of the Company, or (ii) through the application of net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of (A) shares of Qualified Capital Stock of the Company or (B)
Refinancing Indebtedness; (4) if no Default or Event of Default shall have
occurred and be continuing, repurchases of Capital Stock deemed to occur upon
the exercise of stock options if such Capital Stock represents a portion of the
exercise price thereof; (5) if no
<PAGE>
Default or Event of Default shall have occurred and be continuing, payments by
the Company to repurchase Capital Stock or other securities of the Company from
directors, officers and other employees of the Company or any of its Restricted
Subsidiaries in an aggregate amount not to exceed in any one year the sum of (A)
$3.0 million and (B) any amounts permitted to have been paid in any preceding
years under subclause (A) above to the extent such amounts were not so paid in
any such prior years; (6) if no Default or Event of Default shall have occurred
and be continuing, payments by the Company to repurchase Qualified Capital Stock
or other securities of the Company for purposes of making contributions of
Qualified Capital Stock of the Company to employees of the Company pursuant to
the Profit Sharing and Savings Plan of the Company or any of its subsidiaries;
and (7) if no Default or Event of Default shall have occurred and be continuing,
payments by the Company to repurchase Qualified Capital Stock of the Company in
connection with a substantially concurrent transaction in which the Company
reissues such repurchased Qualified Capital Stock as all or a part of the
consideration for the acquisition of property or assets; provided, however, that
-------- -------
such acquisition is consummated within 180 days of such repurchase. In
determining the aggregate amount of Restricted Payments made subsequent to the
Issue Date in accordance with clause (iii) of the immediately preceding
paragraph, amounts expended pursuant to clauses (1), (2)(ii), (3)(ii)(A) and (7)
(to the extent that the value of the Qualified Capital Stock reissued shall have
been included in clause (iii)(w) of the preceding paragraph) shall be included
in such calculation.
SECTION 4.04. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, the Company shall
do or cause to be done all things reasonably necessary to preserve and keep in
full force and effect its corporate or other existence and the corporate or
other existence of each of its Significant Subsidiaries in accordance with the
respective organizational documents of each such Significant Subsidiary and the
material rights (charter and statutory) and franchises of the Company and each
such Significant Subsidiary; provided, however, that the Company shall not be
-------- -------
required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Significant Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company or such
Significant Subsidiary, as the case may be, shall determine that the
preservation thereof is no longer reasonably necessary or desirable in the
conduct of the business of the Company or any such Significant Subsidiary.
SECTION 4.05. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including
<PAGE>
withholding taxes and any penalties, interest and additions to taxes) levied or
imposed upon it or any of its Subsidiaries or properties of it or any of its
Subsidiaries and (ii) all material lawful claims for labor, materials, supplies
and services that, if unpaid, might by law become a Lien upon the property of it
or any of its Subsidiaries; provided, however, that there shall not be required
-------- -------
to be paid or discharged any such tax, assessment or charge, the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate provision has been made or where
the failure to effect such payment or discharge is not adverse in any material
respect to the Holders.
SECTION 4.06. Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in normal condition (subject
to ordinary wear and tear) and make all reasonably necessary repairs, renewals
or replacements thereto as in the judgment of the Company may be reasonably
necessary to the conduct of the business of the Company and its Restricted
Subsidiaries; provided, however, that nothing in this Section 4.06 shall prevent
-------- -------
the Company or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties, if such properties are, in
the reasonable and good faith judgment of the Board of Directors of the Company
or the Restricted Subsidiary, as the case may be, no longer reasonably
necessary in the conduct of their respective businesses.
(b) The Company shall provide or cause to be provided, for
itself and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company, are reasonably adequate and appropriate for
the conduct of the business of the Company and such Restricted Subsidiaries.
SECTION 4.07. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each of the Company's fiscal years, an Officers' Certificate
(signed by the principal executive officer, principal financial officer and
principal accounting officer) stating that a review of its activities and the
activities of its Restricted Subsidiaries during the preceding fiscal year has
been made under the supervision of the signing officers with a view to
determining whether it has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such officer
signing such certificate, that to the best of his knowledge the Company during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such obligation and no Default or Event of Default occurred during such
year and at the date of such certificate there is no Default or Event of Default
that has occurred and is continuing or, if such
<PAGE>
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered to the Trustee
pursuant to Section 4.09 shall be accompanied by a written report of the
Company's independent accountants that in conducting their audit of the
financial statements which are a part of such annual report or such annual
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four, Five or
Six insofar as they relate to accounting matters 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) So long as any of the Notes are outstanding (i) if any
Default or Event of Default has occurred and is continuing or (ii) if any Holder
seeks to exercise any remedy hereunder with respect to a claimed Default under
this Indenture or the Notes, the Company shall promptly deliver to the Trustee
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action.
SECTION 4.08. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Restricted Subsidiaries taken as
a whole.
SECTION 4.09. Reports to Holders.
------------------
The Company will deliver to the Trustee within 15 days after the
filing of the same with the Commission, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will file with the Commission, to the extent permitted, and provide the Trustee
and the Holders with such
<PAGE>
annual reports and such information, documents and other reports specified in
Sections 13 and 15(d) of the Exchange Act. The Company will also comply with the
other provisions of (S)314(a) of the TIA.
SECTION 4.10. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of, premium or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the obligations or the performance of this Indenture; and (to
the extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.11. Limitations on Transactions with Affiliates.
-------------------------------------------
(a) The Company will not, and will not cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affiliates
(each an "Affiliate Transaction"), other than (x) Affiliate Transactions
permitted under paragraph (b) below and (y) Affiliate Transactions on terms that
are no less favorable than those that might reasonably have been obtained or are
obtainable in a comparable transaction at such time on an arm's-length basis
from a Person that is not an Affiliate of the Company or such Restricted
Subsidiary. All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $2.0 million
shall be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate fair market value of more than $7.5 million, the Company or such
Restricted Subsidiary, as the case may be, shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company or the relevant Restricted
Subsidiary, as the case may
<PAGE>
be, from a financial point of view, from an Independent Financial Advisor.
(b) The restrictions set forth in clause (a) shall not apply to
(i) reasonable fees and compensation paid to and indemnity provided on behalf
of, officers, directors, employees, consultants or agents of the Company or any
Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions between or
among the Company and any of its Wholly Owned Restricted Subsidiaries or between
or among such Wholly Owned Restricted Subsidiaries, provided such transactions
are not otherwise prohibited by this Indenture; (iii) any agreement as in effect
as of the Issue Date or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) or in any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date; (iv) Restricted Payments and Permitted
Investments permitted by this Indenture; and (v) Qualified Securitization
Transactions.
SECTION 4.12. Limitation on Incurrence of Additional
Indebtedness.
-------------
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, acquire, become liable, contingently or otherwise, with respect to,
or otherwise become responsible for payment of (collectively, "incur") any
Indebtedness (including, without limitation, Acquired Indebtedness) other than
Permitted Indebtedness. Notwithstanding the foregoing, if no Default or Event of
Default shall have occurred and be continuing at the time of or as a consequence
of the incurrence of any such Indebtedness, the Company and its Restricted
Subsidiaries may incur Indebtedness (including, without limitation, Acquired
Indebtedness) if on the date of the incurrence of such Indebtedness, after
giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage
Ratio of the Company is greater than 2.50 to 1.0. No Indebtedness incurred
pursuant to the next preceding sentence shall be included in calculating any
limitation set forth in the definition of Permitted Indebtedness. Upon the
repayment of Indebtedness which may have been incurred pursuant to more than one
provision of this Indenture, the Company may, in its sole discretion, designate
which provision such Indebtedness shall have been incurred under.
SECTION 4.13. Limitation on Dividend and Other
Payment Restrictions Affecting
Restricted Subsidiaries.
------------------------
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any
<PAGE>
encumbrance or restriction on the ability of any Restricted Subsidiary of the
Company to (a) pay dividends or make any other distributions on or in respect of
its Capital Stock; (b) make loans or advances or to pay any Indebtedness or
other obligation owed to the Company or any other Restricted Subsidiary of the
Company; or (c) transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company, except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) this
Indenture; (3) the Credit Agreement; (4) non-assignment provisions of any
contract or any lease governing a leasehold interest of any Restricted
Subsidiary of the Company; (5) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties or
assets of the Person so acquired; (6) agreements existing on the Issue Date to
the extent and in the manner such agreements are in effect on the Issue Date;
(7) Indebtedness or any other contractual requirements (including pursuant to
any corporate governance documents in the nature of a charter or by-laws) of a
Securitization Subsidiary arising in connection with a Qualified Securitization
Transaction; provided, however, that any such encumbrances and restrictions
-------- -------
apply only to such Securitization Subsidiary; or (8) an agreement governing
Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clause (2), (3), (5), (6) or (7) above;
provided, however, that the provisions relating to such encumbrance or
- -------- -------
restriction contained in any such Indebtedness are no less favorable to the
Company in any material respect as determined by the Board of Directors of the
Company in their reasonable and good faith judgment than the provisions relating
to such encumbrance or restriction contained in agreements referred to in such
clause (2), (3), (5), (6) or (7), respectively.
SECTION 4.14. Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder will
have the right to require that the Company purchase all or a portion of such
Holder's Notes in cash pursuant to the offer described below (the "Change of
Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in
any event within 30 days following any Change of Control, the Company covenants
to (i) repay in full and terminate all commitments under Indebtedness under the
Credit Agreement and all other Senior Indebtedness the terms of which require
repayment upon a Change of Control or offer to repay in full and terminate all
commitments under all Indebtedness under the Credit Agreement and all other such
Senior Indebtedness and to repay the Indebtedness owed to each lender which has
accepted such offer or (ii) obtain the requisite consents under the Credit
Agreement and
<PAGE>
all other Senior Indebtedness to permit the repurchase of the Notes as provided
below. The Company shall first comply with the covenant in the immediately
preceding sentence before it shall be required to repurchase Notes pursuant to
the provisions described below. The Company's failure to comply with the
immediately preceding sentence shall be governed by clause (iii), and not clause
(iv), of Section 6.01.
(c) Within 30 days following the date on which a Change of
Control occurs (the "Change of Control Date"), the Company shall send, by first
class mail, postage prepaid, a notice to each Holder of Notes at their last
registered address and the Trustee, which notice shall govern the terms of the
Change of Control Offer. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
Section 4.14 of the Indenture and that all Notes validly tendered and not
withdrawn will be accepted for payment;
(2) the purchase price (including the amount of accrued
interest, if any) and the purchase date (which shall be no earlier than 30
days nor later than 45 days from the date such notice is mailed, other than
as may be required by law) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment
therefor, any Note accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Payment
Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent and Registrar for the Notes at the
address specified in the notice prior to the close of business on the third
Business Day prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the second Business Day prior to
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Note purchased;
<PAGE>
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided, however, that each Note purchased and each
-------- -------
new Note issued shall be in a principal amount of $1,000 or integral
multiples thereof; and
(8) the circumstances and relevant facts regarding such Change
of Control.
(d) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Notes or portions thereof (in integral multiples of
$1,000) validly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent in accordance with Section 2.14 U.S. Legal Tender
sufficient to pay the purchase price plus accrued and unpaid interest, if any,
of all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
being purchased by the Company. Upon receipt by the Paying Agent of the monies
specified in clause (ii) above and a copy of the Officers' Certificate specified
in clause (iii) above, the Paying Agent shall promptly mail to the Holders of
Notes so accepted payment in an amount equal to the purchase price plus accrued
and unpaid interest, if any, out of the funds deposited with the Paying Agent in
accordance with the preceding sentence. The Trustee shall promptly authenticate
and mail to such Holders new Notes equal in principal amount to any unpurchased
portion of the Notes surrendered. Upon the payment of the purchase price for
the Notes accepted for purchase, the Trustee shall return the Notes purchased to
the Company for cancellation. Any monies remaining after the purchase of Notes
pursuant to a Change of Control Offer shall be returned within three Business
Days by the Trustee to the Company except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven. For purposes of this
Section 4.14, the Trustee shall act as the Paying Agent.
(e) 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
purchase of the Notes pursuant to a Change of Control Offer. To the extent the
provisions of any securities laws and regulations conflict with the provisions
of this Indenture relating to a Change of Control Offer, the Company shall
comply with the applicable securities laws and regulations and be deemed not to
have breached its obligations relating to such Change of Control Offer by virtue
thereof.
SECTION 4.15. Limitation on Asset Sales.
-------------------------
(a) The Company will not, and will not cause or permit any of
its Restricted Subsidiaries to, consummate an Asset Sale
<PAGE>
unless (i) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined in
good faith by the Company's Board of Directors), (ii) at least 75% of the
consideration received by the Company or the Restricted Subsidiary, as the case
may be, from such Asset Sale shall be in the form of cash or Cash Equivalents
and is received at the time of such disposition; and (iii) upon the consummation
of an Asset Sale, the Company shall apply, or cause such Subsidiary to apply,
the Net Cash Proceeds relating to such Asset Sale within 270 days of receipt
thereof either (A) to prepay any Senior Indebtedness and, in the case of any
Senior Indebtedness under any revolving credit facility, effect a reduction in
the committed availability under such revolving credit facility, (B) to make an
investment in properties and assets that replace the properties and assets that
were the subject of such Asset Sale or in properties and assets that will be
used in the business of the Company and its Restricted Subsidiaries as existing
on the Issue Date or in businesses reasonably related or complementary thereto
(as determined in good faith by the Company's Board of Directors) ("Replacement
Assets"), or (C) a combination of prepayment and investment permitted by the
foregoing clauses (iii)(A) and (iii)(B). Pending final application, the Company
or the applicable Restricted Subsidiary may temporarily reduce Indebtedness
under any revolving credit facility or invest in cash or Cash Equivalents. On
the 271st day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by the Company or
such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds
Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor
more than 45 days following the applicable Net Proceeds Offer Trigger Date, from
all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds
Offer Amount at a price equal to 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase; provided, however, that if at any time any non-cash consideration
-------- -------
received by the Company or any Restricted Subsidiary of the Company, as the case
may be, in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such non-
cash consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this covenant. The Company or any such Restricted
Subsidiary of the Company, as the case may be, may defer the Net Proceeds Offer
<PAGE>
until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in
excess of $10.0 million resulting from one or more Asset Sales (at which time,
the entire unutilized Net Proceeds Offer Amount, and not just the amount in
excess of $10.0 million, shall be applied as required pursuant to this
paragraph).
(b) Notwithstanding the immediately preceding paragraph, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraph to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Replacement Assets and/or Cash
Equivalents and (ii) such Asset Sale is for fair market value; provided,
--------
however, that any consideration not constituting Replacement Assets received by
- -------
the Company or any of its Restricted Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the preceding paragraph.
(c) Subject to the deferral right set forth in the final proviso
of Section 4.15(a), each notice of a Net Proceeds Offer pursuant to this Section
4.15 shall be mailed, by first-class mail, by the Company to Holders of Notes at
their last registered address not more than 25 days following the Net Proceeds
Offer Trigger Date, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to
Section 4.15 of the Indenture, that all Notes tendered will be accepted for
payment; provided, however, that if the aggregate principal amount of Notes
-------- -------
tendered in a Net Proceeds Offer plus accrued interest at the expiration of
such offer exceeds the aggregate amount of the Net Proceeds Offer, the
Company shall select the Notes to be purchased on a pro rata basis (with
--- ----
such adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or multiples thereof shall be purchased)
and that the Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer periods as may be required by law;
(2) the purchase price (including the amount of accrued
interest) and the Net Proceeds Offer Payment Date (which shall be not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date and which shall be at least five Business Days after the
Trustee receives notice thereof from the Company);
(3) that any Note not tendered will continue to accrue interest;
<PAGE>
(4) that, unless the Company defaults in making payment
therefor, any Note accepted for payment pursuant to the Net Proceeds Offer
shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Net Proceeds Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the Business Day prior to the Net Proceeds
Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the second Business Day prior to
the Net Proceeds Offer Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Note surrendered; provided, however, that each Note purchased and each
-------- -------
new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof.
On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Notes or portions thereof (in integral multiples of
$1,000) validly tendered pursuant to the Net Proceeds Offer, (ii) deposit with
the Paying Agent in accordance with Section 2.14 U.S. Legal Tender sufficient to
pay the purchase price plus accrued and unpaid interest, if any, of all Notes to
be purchased and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. Upon receipt by the Paying Agent of the monies specified in clause
(ii) above and a copy of the Officers' Certificate specified in clause (iii)
above, the Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price plus accrued and unpaid
interest, if any, out of the funds deposited with the Paying Agent in accordance
with the preceding sentence. The Trustee shall promptly authenticate and mail
to such Holders new Notes equal in principal amount to any unpurchased portion
of the Notes surrendered. Upon the payment of the purchase price for the Notes
accepted for purchase, the Trustee shall return the Notes purchased to the
Company for cancellation. Any monies remaining after the purchase of Notes
pursuant to a Net Proceeds Offer shall be returned within three Business Days by
the Trustee to the Company except with respect to monies owed as obligations to
the Trustee pursuant to Article
<PAGE>
Seven. For purposes of this Section 4.15, the Trustee shall act as the Paying
Agent.
To the extent the amount of Notes tendered pursuant to any Net
Proceeds Offer is less than the amount of Net Cash Proceeds subject to such Net
Proceeds Offer, the Company may use any remaining portion of such Net Cash
Proceeds not required to fund the repurchase of tendered Notes for general
corporate purposes and such Net Proceeds Offer Amount shall be reset to zero.
(d) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent the
provisions of any securities laws and regulations conflict with the provisions
of this Indenture relating to a Net Proceeds Offer, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations relating to such Net Proceeds Offer by virtue
thereof.
SECTION 4.16. Limitation on Restricted and Unrestricted
Subsidiaries.
-------------
(a) The Board of Directors of the Company may, if no Default or
Event of Default shall have occurred and be continuing or would arise therefrom,
designate an Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
--------
however, that (i) any such redesignation shall be deemed to be an incurrence as
- -------
of the date of such redesignation by the Company and its Restricted Subsidiaries
of the Indebtedness (if any) of such redesignated Subsidiary for purposes of
Section 4.12, (ii) unless such redesignated Subsidiary shall not have any
Indebtedness outstanding (other than Permitted Indebtedness), no such
designation shall be permitted if immediately after giving effect to such
redesignation and the incurrence of any such additional Indebtedness, the
Company could not incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.12 and (iii) such Subsidiary assumes by
execution of a supplemental indenture all of the obligations of a Subsidiary
Guarantor under a Guarantee.
(b) The Board of Directors of the Company also may, if no Default
or Event of Default shall have occurred and be continuing or would arise
therefrom, designate any Restricted Subsidiary to be an Unrestricted Subsidiary
if (i) such designation is at that time permitted under Section 4.03 and (ii)
immediately after giving effect to such designation, the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.12. Any such designation by the Board of Directors of the Company
shall be evidenced to the Trustee by the filing with the Trustee of a certified
copy of the
<PAGE>
resolution of the Board of Directors of the Company giving effect to such
designation or redesignation and an officers' certificate certifying that such
designation or redesignation complied with the foregoing conditions and setting
forth in reasonable detail the underlying calculations. In the event that any
Restricted Subsidiary is designated an Unrestricted Subsidiary in accordance
with this covenant, such Restricted Subsidiary's Guarantee will be automatically
discharged and released.
(c) For purposes of Section 4.03, (i) an "Investment" shall be
deemed to have been made at the time any Restricted Subsidiary of the Company is
designated as an Unrestricted Subsidiary in an amount (proportionate to the
Company's equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
as an Unrestricted Subsidiary; (ii) at any date, the aggregate amount of all
Restricted Payments made as Investments since the Issue Date shall exclude and
be reduced by an amount (proportionate to the Company's equity interest in such
Subsidiary) equal to the net worth of any Unrestricted Subsidiary at the time
that such Unrestricted Subsidiary is designated as a Restricted Subsidiary, not
to exceed, in the case of any such redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, the amount of Investments previously made by the
Company and its Restricted Subsidiaries in such Unrestricted Subsidiary (in each
case (i) and (ii), "net worth" to be calculated based upon the fair market value
of the assets of such Subsidiary as of any such date of designation); and (iii)
any property transferred to or from an Unrestricted Subsidiary shall be valued
at its fair market value at the time of such transfer.
(d) Notwithstanding the foregoing, the Board of Directors of the
Company may not designate any Restricted Subsidiary of the Company to be an
Unrestricted Subsidiary if, after any such designation, (a) the Company or any
Restricted Subsidiary of the Company (i) provides credit support for, or a
guarantee of, any Indebtedness of such Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness) or (ii) is directly or
indirectly liable for any Indebtedness of such Subsidiary or (b) such Subsidiary
owns any Capital Stock of, or holds any Lien on any property of, the Company or
any Restricted Subsidiary of the Company which is not a Subsidiary of the
Subsidiary to be so designated.
Subsidiaries of the Company that are not designated by the Board
of Directors of the Company as Restricted or Unrestricted Subsidiaries will be
deemed to be Restricted Subsidiaries of the Company. Notwithstanding the
foregoing, all Subsidiaries of an Unrestricted Subsidiary will be Unrestricted
Subsidiaries.
SECTION 4.17. Prohibition on Incurrence of Senior
Subordinated Debt.
------------------
<PAGE>
The Company will not and will not cause or permit any Subsidiary
Guarantor to incur or suffer to exist Indebtedness that by its terms is senior
in right of payment to the Notes or the Guarantees, as the case may be, and
subordinate in right of payment to any other Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be.
SECTION 4.18. Limitation on Preferred Stock of Restricted
Subsidiaries.
-------------
The Company will not permit any of its Restricted Subsidiaries to
issue any Preferred Stock (other than to the Company or to a Wholly Owned
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company) to own any
Preferred Stock of any Restricted Subsidiary of the Company.
SECTION 4.19. Limitation on Liens.
-------------------
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes, the Notes are secured by
a Lien on such property, assets or proceeds that is senior in priority to such
Liens and (ii) in all other cases, the Notes are equally and ratably secured,
except for (A) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date; (B) Liens securing Senior
Indebtedness and Liens securing Guarantor Senior Indebtedness; (C) Liens
securing the Notes and the Guarantees; (D) Liens of the Company or a Wholly
Owned Restricted Subsidiary of the Company on assets of any Subsidiary of the
Company; (E) Liens securing Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted under this
Indenture and which has been incurred in accordance with the provisions of this
Indenture; provided, however, that such Liens (1) are no less favorable to the
-------- -------
Holders and are not more favorable to the lienholders with respect to such Liens
than the Liens in respect of the Indebtedness being Refinanced and (2) do not
extend to or cover any property or assets of the Company or any of its
Subsidiaries not securing the Indebtedness so Refinanced (other than property or
assets subject to Liens under clause (B) above); and (F) Permitted Liens.
SECTION 4.20. Additional Subsidiary Guarantees.
--------------------------------
<PAGE>
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property in excess of $1.0 million to any Restricted
Subsidiary that is not a Subsidiary Guarantor, or if the Company or any of its
Restricted Subsidiaries shall organize, acquire or otherwise invest in another
Subsidiary that is not a Subsidiary Guarantor (other than in any such
transaction in compliance with Section 4.03), then such transferee or acquired
or other Subsidiary shall (i) execute and deliver to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee pursuant to which such
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Notes and this Indenture on the terms set forth in this Indenture and
(ii) deliver to the Trustee an opinion of counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and constitutes a valid, binding and enforceable obligation of such Subsidiary,
subject to normal exceptions. Thereafter, such Subsidiary shall be a Subsidiary
Guarantor for all purposes of this Indenture.
SECTION 4.21. Conduct of Business.
-------------------
The Company will not and will not cause or permit any of its
Restricted Subsidiaries to engage in any businesses other than the businesses in
which the Company is engaged on the Issue Date and any businesses reasonably
related or complementary thereto (as determined in good faith by the Company's
Board of Directors).
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
----------------------------------------
(a) The Company will not, in a single transaction or a series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and its Restricted
Subsidiaries) unless:
(i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person that
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the Company's
Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia and (y) shall
<PAGE>
expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the
due and punctual payment of the principal of, and premium, if any, and
interest on all of the Notes and the performance of every covenant of the
Notes, this Indenture and the Registration Rights Agreement on the part of
the Company to be performed or observed, as the case may be;
(ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company
or such Surviving Entity, as the case may be, (1) shall have a Consolidated
Net Worth equal to or greater than the Consolidated Net Worth of the
Company immediately prior to such transaction and (2) shall be able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.12;
(iii) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and
(iv) the Company or the Surviving Entity, as the case may be,
shall have delivered to the Trustee an officers' certificate and an opinion
of counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to
such transaction have been satisfied.
(b) For purposes of this Section 5.01, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of related transactions) of all
or substantially all of the properties and assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties or assets of the Company, will be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
(c) Each Subsidiary Guarantor (other than any Subsidiary Guarantor whose
Guarantee is to be released in accordance with the terms of the Guarantee and
this Indenture in connection with any transaction complying with the provisions
of Section 4.15 or 4.16) will not, and the Company will not cause or permit any
Subsidiary
<PAGE>
Guarantor to, consolidate with or merge with or into any Person other than the
Company or any other Subsidiary Guarantor unless: (i) the entity formed by or
surviving any such consolidation or merger (if other than the Subsidiary
Guarantor) or to which such sale, lease, conveyance or other disposition shall
have been made is a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia; (ii) such entity
assumes by supplemental indenture all of the obligations of the Subsidiary
Guarantor on its Guarantee; (iii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (ii) of the first paragraph of this covenant.
Any merger or consolidation of a Subsidiary Guarantor with and into the Company
(with the Company being the surviving entity) or another Subsidiary Guarantor
that is a Wholly Owned Restricted Subsidiary of the Company need only comply
with clause (iv) of clause (a) above.
SECTION 5.02. Successor Corporation Substituted.
---------------------------------
Upon any consolidation, combination or merger, or any transfer of
all or substantially all of the assets of the Company in accordance with Section
5.01 in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Notes with the same effect as if such successor Person
had been named as the Company herein. When a successor corporation assumes all
of the obligations of the Company hereunder and under the Notes and agrees to be
bound hereby and thereby, the predecessor shall be released from such
obligations.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
Each of the following shall be an "Event of Default":
(1) the failure to pay interest (including Additional Interest,
if any) on the Notes when the same becomes due and payable and such Default
continues for a period of 30 days (whether or not such payment shall be
prohibited by the provisions described under Article Ten);
(2) the failure to pay principal on any Notes, when such
principal becomes due and payable, at maturity, upon acceleration, upon
redemption or otherwise (including the
<PAGE>
failure to make a payment to purchase Notes tendered pursuant to a Change
of Control Offer or a Net Proceeds Offer) (whether or not such payment
shall be prohibited by the provisions described under Article Ten);
(3) a default in the observance or performance of any other
covenant or agreement contained in this Indenture, which Default continues
for a period of 30 days after the Company receives written notice thereof
specifying the default (and demanding that such Default be remedied) from
the Trustee or the Holders of at least 25% of the outstanding principal
amount of the Notes (except in the case of a default with respect to
Section 5.01, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(4) the failure to pay at the final maturity (giving effect to
any applicable grace periods and any extensions thereof) the principal
amount of any Indebtedness of the Company or any Restricted Subsidiary of
the Company (other than a Securitization Subsidiary), or the acceleration
of the final stated maturity of any such Indebtedness, if the aggregate
principal amount of such Indebtedness, together with the principal amount
of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated, aggregates $10.0 million or
more at any time;
(5) one or more judgments in an aggregate amount in excess of
$10.0 million shall have been rendered against the Company or any of its
Subsidiaries and such judgment or judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become
final and nonappealable;
(6) the Company or any Significant Subsidiary (A) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to the appointment of a custodian of it or for substantially
all of its property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it or (E) makes a general
assignment for the benefit of its creditors;
(7) a court of competent jurisdiction enters a judgment, decree
or order for relief in respect of the Company or any Significant Subsidiary
in an involuntary case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company or any
Significant Subsidiary, (B) appoint a custodian of the Company or any
Significant Subsidiary or for
<PAGE>
substantially all of its property or (C) order the winding-up or
liquidation of its affairs; and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(8) any of the Guarantees ceases to be in full force and effect
or any of the Guarantees is declared to be null and void and unenforceable
or any of the Guarantees is found to be invalid or any of the Subsidiary
Guarantors denies its liability under its Guarantee (other than by reason
of release of a Subsidiary Guarantor in accordance with the terms of this
Indenture).
SECTION 6.02. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default
specified in Section 6.01(6) or (7)) shall occur and be continuing, the Trustee
may, and the Trustee upon request to the Trustee of Holders of 25% in principal
amount of the outstanding Notes shall, or the Holders of at least 25% in
principal amount of outstanding Notes may, declare the principal of all the
Notes, together with all accrued and unpaid interest, to be due and payable by
notice in writing to the Company and, in the case of an acceleration notice from
the Holders of at least 25% in principal amount of the outstanding Notes, the
Trustee specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same shall become immediately
due and payable. If an Event of Default specified in Section 6.01(6) or (7)
occurs and is continuing, then such amount will ipso facto become and be
---- -----
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of the Notes.
(b) At any time after a declaration of acceleration with
respect to the Notes as described in the preceding paragraph, the Holders of a
majority in principal amount of the Notes then outstanding (by notice to the
Trustee) may rescind and cancel such declaration and its consequences if (i) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction, (ii) all existing Events of Default have been cured or
waived except nonpayment of principal of or interest on the Notes that has
become due solely by such declaration of acceleration, (iii) to the extent the
payment of such interest is lawful, interest (at the same rate specified in the
Notes) on overdue installments of interest and overdue payments of principal,
which has become due other than by such declaration of acceleration, has been
paid, (iv) the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of a Default or Event of Default of the type
described in Sections 6.01(6) and (7), the Trustee has received an Officers'
Certificate and Opinion of Counsel that such Default or Event of Default has
been cured or waived and the Trustee shall be
<PAGE>
entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel. No such rescission shall affect any subsequent Default or Event of
Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, or accrued and unpaid interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the Notes by notice to the Trustee may waive an existing
Default or Event of Default and its consequences, except a Default in the
payment of the principal of or interest on any Note as specified in clauses (1)
and (2) of Section 6.01.
SECTION 6.05. Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal
amount of the then outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it, including, without limitation, any remedies
provided for in Section 6.03. Subject to Section 7.01, however, the Trustee may,
in its discretion, refuse to follow any direction that conflicts with any law or
this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Holder (it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders) or that may involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
-------- -------
proper by the Trustee, in its discretion, that is not inconsistent with such
direction.
SECTION 6.06. Limitation on Suits.
-------------------
A Holder may not pursue any remedy with respect to this Indenture
or the Notes unless:
<PAGE>
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) Holders of at least 25% in aggregate principal amount of
the then outstanding Notes make a written request to the Trustee to pursue
the remedy;
(3) such Holders offer to the Trustee indemnity or security
against any loss, liability or expense to be incurred in compliance with
such request which is satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of satisfactory indemnity or
security; and
(5) during such 45-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give the
Trustee a direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of, premium and interest on a
Note, on or after the respective due dates expressed in such Note, 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 Trustee.
--------------------------
If an Event of Default in payment of principal or interest
specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Notes for the whole amount of
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest at the rate set forth in the Notes
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
<PAGE>
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property, and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.07.
The Company's payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Sections 6.09 and 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes
for principal, premium, if any, and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
<PAGE>
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
aggregate principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent Person would exercise or use under the circumstances in the
conduct of its own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture or the TIA and no duties,
covenants, responsibilities or obligations shall be implied in this
Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates (including Officers'
Certificates) or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture. However, as
to any certificates or opinions which are required by any provision of this
Indenture to be delivered or provided to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
<PAGE>
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(f) The Trustee shall not be liable for interest on any money
or assets received by it except as the Trustee may agree with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
(g) In the absence of bad faith, negligence or willful
misconduct on the part of the Trustee, the Trustee shall not be responsible for
the application of any money by any Paying Agent other than the Trustee.
SECTION 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting
or refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.04 and 13.05. The Trustee shall not
be liable for and shall be fully protected in respect of any action it takes or
omits to take in good faith in reliance on such Officers' Certificate, or an
Opinion of Counsel or advice of counsel.
<PAGE>
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(d) The Trustee shall not be liable for any action that it
takes or omits to take in good faith that it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any Opinion of
Counsel), notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of the Notes pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred by it in compliance with such request, order or direction.
(g) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
with respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(h) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Restricted or Unrestricted Subsidiary, or their respective Affiliates, with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
--------------------
<PAGE>
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, and it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture or the Notes other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and
if the Trustee has actual knowledge of such Default or Event of Default, the
Trustee shall mail to each Noteholder notice of the uncured Default or Event of
Default within 60 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in the payment of interest or
principal of, premium or interest on, any Note, including an accelerated payment
and the failure to make payment on the Change of Control Payment Date pursuant
to a Change of Control Offer or on the Proceeds Purchase Date pursuant to a Net
Proceeds Offer and, except in the case of a failure to comply with Article Five,
the Trustee may withhold the notice if and so long as its Board of Directors,
the executive committee of its Board of Directors or a committee of its Board of
Directors and/or Trust Officers in good faith determines that withholding the
notice is in the interest of the Holders. The Trustee shall not be deemed to
have knowledge of a Default or Event of Default other than (i) any Event of
Default occurring pursuant to Sections 6.01(1) or 6.01(2); or (ii) any Default
or Event of Default of which a Trust Officer shall have received written
notification or obtained actual knowledge. As used herein, the term "actual
knowledge" means the actual fact or statement of knowing, without any duty to
make any investigation with regard thereto.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after April 1 of each year beginning with April 1,
1998, the Trustee shall, to the extent that any of the events described in TIA
(S) 313(a) occurred within the previous twelve months, but not otherwise, mail
to each Noteholder a brief report dated as of such date that complies with TIA
(S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and 313(c).
A copy of each report at the time of its mailing to Noteholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange, and if the Notes are so listed, the Trustee shall
comply with TIA (S) 313(d).
SECTION 7.07. Compensation and Indemnity.
--------------------------
<PAGE>
The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as may be agreed upon by the
Company and the Trustee. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by it in connection with the
performance of its duties and the discharge of its obligations under this
Indenture. Such expenses shall include the reasonable fees and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees,
officers, stockholders and directors for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the acceptance or administration of this
trust including the reasonable costs and expenses of defending themselves
against or investigating any claim or liability in connection with the exercise
or performance of any of the Trustee's rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee or any of its agents, employees, officers, stockholders and directors
for which it may seek indemnity. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee and its agents, employees,
officers, stockholders and directors subject to the claim may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel; provided, however, that the Company will not be required to pay such
-------- -------
fees and expenses if it assumes the Trustee's defense and there is no conflict
of interest between the Company and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim in connection with
such defense as reasonably determined by the Trustee. The Company need not pay
for any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) occurs, such expenses and
the compensation for such services shall be paid to the extent allowed under any
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
----------------------
<PAGE>
The Trustee may resign by so notifying the Company in writing at
least 10 days in advance. The Holders of a majority in principal amount of the
outstanding Notes may remove the Trustee by so notifying the Company and the
Trustee and may appoint a successor Trustee with the Company's consent. A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only with the successor Trustee's acceptance of
appointment as provided in this Section. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Promptly after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in aggregate principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
<PAGE>
SECTION 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
-------- -------
such corporation shall be otherwise qualified and eligible under this Article
Seven.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1) and 310(a)(2). The Trustee (or in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA (S) 310(a)(2). The Trustee shall
comply with TIA (S) 310(b); provided, however, that there shall be excluded from
-------- -------
the operation of TIA (S) 310(b)(1) any indenture or indentures under which other
notes, or certificates of interest or participation in other notes, of the
Company are outstanding, if the requirements for such exclusion set forth in TIA
(S) 310(b)(1) are met. The provisions of TIA (S) 310 shall apply to the Company
and any other obligor of the Notes.
SECTION 7.11. Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any
creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
The provisions of TIA (S) 311 shall apply to the Company and any other obligor
of the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
----------------------------------------
This Indenture will be Discharged and will cease to be of further
effect and the obligations of the Company under the Notes and this Indenture
shall terminate (except that the obligations under Sections 2.03 through 2.07,
7.01, 7.02, 7.07 and 7.08 and the rights, powers, trusts, duties and immunities
of the Trustee hereunder shall survive the effect of this Article Eight) when
(a) either (i) all Notes, theretofore authenticated and delivered (except lost,
stolen or destroyed Notes which have been
<PAGE>
replaced or paid and Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (ii) all Notes theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be; (b)
the Company has paid all other sums payable under this Indenture by the Company;
and (c) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel stating that all conditions precedent under this Indenture
relating to the satisfaction and discharge of this Indenture have been complied
with; provided, however, that such counsel may rely, as to matters of fact, on
-------- -------
a certificate or certificates of officers of the Company.
In addition, at the Company's option, either (a) the Company shall
be deemed to have been Discharged from any and all obligations with respect to
the Notes ("Legal Defeasance") after the applicable conditions set forth below
have been satisfied (except for the obligations of the Company under Sections
2.03, 2.04, 2.06, 2.07, 7.01, 7.02, 7.07 and this Section 8.01) or (b) the
Company shall cease to be under any obligation to comply with any term,
provision or condition set forth in Sections 4.03, 4.09 and 4.11 through 4.21
and Section 5.01 and thereafter any omission to comply with such obligations
shall not constitute a Default or Event of Default with respect to the Notes
("Covenant Defeasance") after the applicable conditions set forth below have
been satisfied:
(1) The Company shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Notes U.S. Legal Tender or U.S. Government Obligations or a combination
thereof that, together with the payment of interest and premium thereon and
principal in respect thereof in accordance with their terms, will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay all the principal of premium, if any, and interest
on the Notes on the dates such payments are due in accordance with the
terms of such Notes, as well as the Trustee's fees and expenses; provided,
--------
however, that no deposits made pursuant to this Section 8.01(1) shall cause
-------
the Trustee to have a conflicting interest as defined in and for purposes
of the TIA;
<PAGE>
and provided, further, that, as confirmed by an Opinion of Counsel, no such
-------- -------
deposit shall result in the Company, the Trustee or the trust becoming or
being deemed to be an "investment company" under the Investment Company Act
of 1940;
(2) No Event of Default or Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit after
giving effect to such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this
Article Eight);
(3) The Company shall have delivered to the Trustee an Opinion
of Counsel, subject to certain qualifications, to the effect that the Funds
will not be subject to any rights of holders of Senior Indebtedness of the
Company;
(4) The Company shall have paid or duly provided for payment of
all amounts then due to the Trustee pursuant to Section 7.07;
(5) No such deposit will result in a Default under this
Indenture or a breach or violation of, or constitute a default under, any
other instrument or agreement to which the Company or any of its
Subsidiaries is a party or by which it or its property is bound;
(6) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others;
(7) The Company shall have delivered to the Trustee an Opinion
of Counsel or a private letter ruling issued to the Company by the Internal
Revenue Service (the "IRS") to the effect that the Holders of the Notes
will not recognize income, gain or loss for federal income tax purposes as
a result of the deposit pursuant to clause (1) above and related Legal
Defeasance or Covenant Defeasance, as the case may be, and will be subject
to federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised and, in the case of an Opinion of Counsel furnished in connection
with a Legal Defeasance, accompanied by a private letter ruling issued to
the Company by the IRS to such effect;
(8) The Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to
<PAGE>
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally; and
(9) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that all
conditions precedent to Legal Defeasance or Covenant Defeasance, as the
case may be, have been complied with.
Notwithstanding the foregoing, the Opinion of Counsel required by
subparagraph 7 above need not be delivered if all Notes not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, (ii)
will become due and payable on the Maturity Date within one year, or (iii) are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company.
SECTION 8.02. Acknowledgment of Discharge by Trustee.
--------------------------------------
Subject to Section 8.05, after (i) the conditions of Section 8.01,
have been satisfied and (ii) the Company has delivered to the Trustee an Opinion
of Counsel, stating that all conditions precedent referred to in clause (i)
above relating to the satisfaction and discharge of this Indenture have been
complied with, the Trustee upon written request of the Company shall acknowledge
in writing the discharge of the Company's obligations under this Indenture
except for those surviving obligations specified in this Article Eight.
SECTION 8.03. Application of Trust Money.
--------------------------
The Trustee shall hold in trust Funds deposited with it pursuant
to Section 8.01. It shall apply the Funds through the Paying Agent and in
accordance with this Indenture to the payment of all the principal of, or
premium, if any, and interest on the Notes.
SECTION 8.04. Repayment to the Company.
------------------------
The Trustee and the Paying Agent shall promptly pay to the Company
any Funds held by them for the payment of all the principal of, or premium, if
any, and interest that remains unclaimed for one year; provided, however, that
-------- -------
the Trustee or such Paying Agent may, at the expense of the Company, cause to be
published once in a newspaper of general circulation in the City of New York or
mailed to each Holder, notice that such Funds remain unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such Funds then remaining
will be repaid to the Company. After payment to the Company, Holders entitled to
the Funds must look to the Company for payment as general creditors unless an
applicable abandoned property law
<PAGE>
designates another Person and all liability of the Trustee and Paying Agent with
respect to such Funds shall cease.
SECTION 8.05. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any Funds by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
apply all such Funds in accordance with Section 8.01; provided, however, that
-------- -------
if the Company has made any payment of principal, or premium, if any, and
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from Funds held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, the Subsidiary
Guarantors and the Trustee, together, may amend or supplement this Indenture or
the Notes without the consent of any Holders:
(1) to cure any ambiguity, defect or inconsistency, so long as
such change does not, in the opinion of the Trustee, adversely affect the
rights of any of the Holders in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(4) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA; or
(5) to make any other change that would provide any additional
benefit or rights to the Holders or that does not adversely affect in any
material respect the rights of any Noteholders hereunder;
provided, however, that the Company has delivered to the Trustee an Opinion of
- -------- -------
Counsel and an Officers' Certificate, each stating that such amendment or
supplement complies with the provisions of this Section 9.01.
<PAGE>
SECTION 9.02. With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, the Subsidiary Guarantors and the Trustee, together, with the
written consent of the Holder or Holders of at least a majority in principal
amount of the then outstanding Notes may make all other modifications, waivers
and amendments of this Indenture or the Notes, except that, without the consent
of each Holder of Notes affected thereby, no amendment or waiver may, directly
or indirectly, without the consent of each Holder affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Notes;
(3) reduce the principal of or change or have the effect of
changing the fixed maturity of any Notes, or change the date on which any
Notes may be subject to redemption or repurchase, or reduce the redemption
or repurchase price thereof;
(4) make any Notes payable in money other than that stated in
the Notes and this Indenture;
(5) make any change in provisions of this Indenture protecting
the right of each Holder to receive payment of principal and interest on
such Note on or after the due date thereof or to bring suit to enforce such
payment or permitting holders of a majority in principal amount of the
Notes to waive Default or Event of Default;
(6) amend, change or modify in any material respect the
obligation of the Company to make or consummate a Change of Control Offer
in the event of a Change of Control or make and consummate a Net Proceeds
Offer with respect to any Asset Sale that has been consummated or modify
any of the provisions or definitions with respect thereto;
(7) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the Notes or
any Guarantee in a manner which adversely affects the Holders; or
(8) release any Subsidiary Guarantor from any of its
obligations under its Guarantee or this Indenture otherwise than in
accordance with the terms of this Indenture.
<PAGE>
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective (as provided in Section 9.04), the Company shall mail to the
Holders 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 supplemental indenture.
SECTION 9.03. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the
Notes shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to his Note or portion of his Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver (at which time such amendment, supplement or
waiver shall become effective).
The Company may, but shall not be obligated to, fix such record
date as it may select for the purpose of determining the Holders entitled to
consent to any amendment, supplement or waiver. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(1) through (8) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
a consenting Holder's Note; provided, however that any such waiver shall not
-------- -------
impair or affect the right of any Holder to
<PAGE>
receive payment of principal of and interest on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.05. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a
Note, the Trustee may require the Holder of the Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Note shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to and adopted in accordance with this Article Nine;
provided, however, that the Trustee may, but shall not be obligated to, execute
- -------- -------
any such amendment, supplement or waiver which affects the Trustee's own rights,
duties or immunities under this Indenture. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture. Such Opinion of Counsel shall not be an expense of
the Trustee.
ARTICLE TEN
SUBORDINATION OF NOTES
SECTION 10.01. Notes Subordinated to Senior Indebtedness.
-----------------------------------------
Anything herein to the contrary notwithstanding, the Company, for
itself and its successors, and each Holder, by his or her acceptance of Notes,
agrees that the payment of all Obligations owing to the Holders in respect of
the Notes is subordinated, to the extent and in the manner provided in this
Article Ten, to the prior payment in full in cash or Cash Equivalents, or such
payment duly provided for to the satisfaction of the holders of Senior
Indebtedness, of all Obligations on Senior Indebtedness, including without
limitation, the Company's obligations under the Credit Agreement.
This Article Ten shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Senior Indebtedness, and such
provisions are made for the benefit of the holders of Senior Indebtedness and
such holders are made obligees hereunder and any one or more of them may enforce
such provisions.
<PAGE>
SECTION 10.02. Suspension of Payment When Senior
Indebtedness Is in Default.
---------------------------
(a) Unless Section 10.03 shall be applicable, upon (1) the
occurrence of any default in the payment when due, whether at maturity, upon any
redemption, by declaration or otherwise, of any principal of, interest on,
unpaid drawings for letters of credit issued in respect of, or regularly
accruing fees with respect to, any Senior Indebtedness (a "Payment Default") and
(2) receipt by the Trustee and the Company from a Representative of written
notice of such occurrence, then no payment (other than payments previously made
pursuant to Article Eight) or distribution of any assets of the Company of any
kind or character shall be made by or on behalf of the Company or any other
Person on its or their behalf on account of any Obligations under the Notes or
on account of the purchase, redemption or other acquisition of Notes for cash or
property or otherwise (except that Holders may receive (i) shares of stock and
any debt securities that are subordinated at least to the same extent as the
Notes to Senior Indebtedness and any securities issued in exchange for Senior
Indebtedness and (ii) payments made from the trusts described in Section 8.01)
and until such Payment Default shall have been cured or waived or shall have
ceased to exist or such Senior Indebtedness as to which such Payment Default
relates shall have been discharged or paid in full in cash or Cash Equivalents,
or such payment duly provided for to the satisfaction of the holders of Senior
Indebtedness, after which the Company shall resume making any and all required
payments in respect of the Notes, including any missed payments.
(b) Unless Section 10.03 shall be applicable, upon (1) the
occurrence of any event of default (other than a Payment Default) with respect
to any Designated Senior Indebtedness (as such event of default is defined in
the instrument creating or evidencing such Designated Senior Indebtedness)
permitting the holders of such Designated Senior Indebtedness then outstanding
to accelerate the maturity thereof (a "Non-payment Default") and (2) the earlier
of (i) receipt by the Trustee and the Company from a Representative of written
notice of such occurrence stating that such notice is a "Payment Blockage
Notice" pursuant to this Section 10.02 or (ii) if such Non-payment Default
results from the acceleration of the Notes, the date of such acceleration, no
payment (other than payments previously made pursuant to Article Eight) or
distribution of any assets of the Company of any kind or character shall be made
by or on behalf of the Company or any other Person on its or their behalf on
account of any Obligations under the Notes or on account of the purchase or
redemption or other acquisition of Notes for cash or property or otherwise
(except that Holders may receive (i) shares of stock and any debt securities
that are subordinated at least to the same extent as the Notes to Senior
Indebtedness and securities issued in exchange for Senior Indebtedness and (ii)
payments made from the trusts described in Section 8.01) for a period (the
"Payment Blockage
<PAGE>
Period") commencing on the date of receipt by the Trustee of the written notice
of a Non-payment Default from such Representative or the date of the
acceleration referred to in clause (ii) above, as the case may be, unless and
until the earlier to occur of the following events: (w) 180 days shall have
elapsed since receipt of such notice or the date of the acceleration of the
Notes, as the case may be (provided no Designated Senior Indebtedness shall
theretofore have been accelerated), (x) such Non-payment Default shall have been
cured or waived or shall have ceased to exist, (y) such Designated Senior
Indebtedness shall have been discharged or paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of such Designated Senior Indebtedness, or (z) such Payment Blockage
Period shall have been terminated by written notice to the Company or the
Trustee from the Representative initiating such Payment Blockage Period or the
holders of at least a majority in principal amount of such issue of Designated
Senior Indebtedness initiating such Payment Blockage Period, after which, in the
case of clause (w), (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments.
Notwithstanding anything herein to the contrary, (x) in no event will a Payment
Blockage Period or successive Payment Blockage Periods with respect to the same
payment on the Notes extend beyond 180 days from the date the payment on the
Notes was due and (y) only one such Payment Blockage Period may be commenced
within any 360 consecutive days. For all purposes of this Section 10.02(b), no
event of default which existed or was continuing on the date of the commencement
of any Payment Blockage Period with respect to the Designated Senior
Indebtedness of the Company initiating such Payment Blockage Period shall be, or
be made, the basis for the commencement of a second Payment Blockage Period by
the holders or by the Representative of such Designated Senior Indebtedness
whether or not within a period of 360 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Payment Blockage Period that, in either case, would give
rise to an event of default pursuant to any provisions under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose).
(c) In the event that, notwithstanding the foregoing, the
Company shall have made payment to the Trustee or directly to the Holder of any
Note prohibited by the foregoing provisions of this Section 10.02, then and in
such event such payment shall be segregated from other funds and held in trust
by the Trustee or such Holder or Paying Agent for the benefit of, and shall
immediately be paid over to, the holders of Senior Indebtedness or to the
Representatives or as a court of competent jurisdiction shall direct.
SECTION 10.03. Notes Subordinated to Prior Payment of All
<PAGE>
Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Company.
-----------------------------------------
Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
the Company or its property, whether voluntary or involuntary:
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full in cash or Cash Equivalents, or such
payment duly provided for to the satisfaction of the holders of Senior
Indebtedness, of all amounts payable under Senior Indebtedness before the
Holders will be entitled to receive any payment or distribution of any kind
or character on account of any Notes or for the acquisition of any of the
Notes for cash or property or otherwise, and until all Obligations with
respect to the Senior Indebtedness are paid in full in cash or Cash
Equivalents, or such payment provided for to the satisfaction of the
holders of Senior Indebtedness, any distribution to which the Holders would
be entitled shall be made to the holders of Senior Indebtedness;
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the
Holders or the Trustee on behalf of the Holders would be entitled except
for the provisions of this Article Ten, shall be paid by the liquidating
trustee or agent or other Person making such a payment or distribution,
directly to the holders of Senior Indebtedness or their representatives,
ratably according to the respective amounts of Senior Indebtedness
remaining unpaid held or represented by each, until all Senior Indebtedness
remaining unpaid shall have been paid in full in cash or Cash Equivalents,
or such payment duly provided for to the satisfaction of the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether such payment shall be in cash, property or securities, and the
Company shall have made payment to the Trustee or directly to the Holders
or any Paying Agent on account of any Obligations under the Notes before
all Senior Indebtedness is paid in full in cash or Cash Equivalents, or
such payment duly provided for to the satisfaction of the holders of Senior
Indebtedness, such payment or distribution (subject to the provisions of
<PAGE>
Sections 10.06 and 10.07) shall be received, segregated from other funds,
and held in trust by the Trustee or such Holder or Paying Agent for the
benefit of, and shall immediately be paid over by the Trustee (if the
notice required by Section 10.06 has been received by the Trustee) or by
the Holder to, the holders of Senior Indebtedness or their representatives,
ratably according to the respective amounts of Senior Indebtedness held or
represented by each, until all Senior Indebtedness remaining unpaid shall
have been paid in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Indebtedness,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of
the Company following the conveyance, transfer or lease of its properties
and assets substantially as an entirety to another Person upon the terms
and conditions set forth in Article Five shall not be deemed a liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets of the Company, as the case may be, for
the purposes of this Article Ten; provided, however, that the Person formed
-------- -------
by such consolidation or the surviving entity of such merger or the Person
which acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article Five.
The Company shall give prompt notice to the Trustee prior to any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors or marshaling of assets.
SECTION 10.04. Holders To Be Subrogated to Rights of
Holders of Senior Indebtedness.
-------------------------------------
Subject to the payment in full in cash or Cash Equivalents, or
such payment duly provided for to the satisfaction of the holders of Senior
Indebtedness, of all Senior Indebtedness, the Holders of Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Notes shall be paid in full in cash
or Cash Equivalents, and for the purpose of such subrogation no payments or
distributions to the holders of Senior Indebtedness by or on behalf of the
Company, or by or on behalf of the Holders by virtue of this Article Ten, which
otherwise would have been made to the Holders shall, as between the Company and
the Holders, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article Ten
are and are intended solely for the
<PAGE>
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Ten shall
have been applied, pursuant to the provisions of this Article Ten, to the
payment of all amounts payable under the Senior Indebtedness, then the Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
such payments or distributions received by such holders of Senior Indebtedness
in excess of the amount sufficient to pay all amounts payable under or in
respect of the Senior Indebtedness in full in cash or Cash Equivalents, or such
payment duly provided for to the satisfaction of the holders of Senior
Indebtedness.
Each Holder by purchasing or accepting a Note waives any and all
notice of the creation, modification, renewal, extension or accrual of any
Senior Indebtedness of the Company and notice of or proof of reliance by any
holder or owner of Senior Indebtedness of the Company upon this Article Ten and
the Senior Indebtedness of the Company shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Article Ten, and all
dealings between the Company and the holders and owners of the Senior
Indebtedness of the Company shall be deemed to have been consummated in reliance
upon this Article Ten.
SECTION 10.05. Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article Ten or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as between the Company
and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the Notes
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Ten, of the
holders of Senior Indebtedness in respect of cash, property or Notes of the
Company received upon the exercise of any such remedy. Upon any payment or
distribution of assets or securities of the Company referred to in this Article
Ten, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any liquidation, dissolution, winding-up or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee or agent or other Person making any
payment or distribution to the Trustee or to the Holders for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other
<PAGE>
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 Ten. Nothing in this Article Ten shall apply to the claims of,
or payments to, the Trustee under or pursuant to Section 7.07. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Indebtedness or a trustee
or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article Ten, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 10.06. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice.
---------------------------------------
The Trustee shall not at any time be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to or
by the Trustee unless and until the Trustee or any Paying Agent shall have
received written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any Representative therefor and, prior to the
receipt of any such notice, the Trustee, subject to the provisions of Sections
7.01 and 7.02, shall be entitled in all respects conclusively to assume that no
such fact exists.
SECTION 10.07. Application by Trustee of Assets Deposited
with It.
------------------------------------------
U.S. Legal Tender or U.S. Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Section 8.01 and 8.02
shall be for the sole benefit of the Holders of the Notes and, to the extent
allocated for the payment of Notes, shall not be subject to the subordination
provisions of this Article Ten. Otherwise, any deposit of assets or securities
by or on behalf of the Company with the Trustee or any Paying Agent (whether or
not in trust) for the payment of principal of or interest on any Notes shall be
subject to the provisions of this Article Ten; provided, however, that if prior
-------- -------
to the second Business Day preceding the date on which by the terms of this
<PAGE>
Indenture any such assets may become distributable for any purpose (including,
without limitation, the payment of either principal of or interest on any Note)
the Trustee or such Paying Agent shall not have received with respect to such
assets the notice provided for in Section 10.06, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary received by it on or after such date. The
foregoing shall not apply to the Paying Agent if the Company or any Subsidiary
or Affiliate of the Company is acting as Paying Agent. Nothing contained in this
Section 10.07 shall limit the right of the holders of Senior Indebtedness to
recover payments as contemplated by this Article Ten.
SECTION 10.08. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act by any such holder, or by any non-
compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 10.08, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article Ten or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place,
terms or time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 10.09. Holders Authorize Trustee To Effectuate
Subordination of Notes.
---------------------------------------
Each Holder of the Notes by such Holder's acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effect the subordination provisions
contained in this Article Ten, and appoints the Trustee such Holder's attorney-
in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Company tending towards
<PAGE>
liquidation or reorganization of the business and assets of the Company, the
immediate filing of a claim for the unpaid balance of such Holder's Notes in the
form required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then any of the holders of the Senior Indebtedness or their
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 10.10. Right of Trustee To Hold Senior
Indebtedness.
-------------
The Trustee shall be entitled to all of the rights set forth in
this Article Ten in respect of any Senior Indebtedness at any time held by it to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION 10.11. No Suspension of Remedies.
-------------------------
The failure to make a payment on account of principal of or
interest on the Notes by reason of any provision of this Article Ten shall not
be construed as preventing the occurrence of a Default or an Event of Default
under Section 6.01.
Nothing contained in this Article Ten shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Six or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Ten of the holders, from time to time, of Senior Indebtedness.
SECTION 10.12. No Fiduciary Duty of Trustee to Holders of
Senior Indebtedness.
--------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and it undertakes to perform or observe such of
its covenants and obligations as are specifically set forth in this Article Ten,
and no implied covenants or obligations with respect to the Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
liable to any such holders (other than for its willful misconduct or gross
negligence) if it shall pay over
<PAGE>
or deliver to the Holders of Notes or the Company or any other Person, money or
assets in compliance with the terms of this Indenture. Nothing in this Section
10.12 shall affect the obligation of any Person other than the Trustee to hold
such payment for the benefit of, and to pay such payment over to, the holders of
Senior Indebtedness or their Representative.
ARTICLE ELEVEN
GUARANTEE OF NOTES
SECTION 11.01. Unconditional Guarantee.
-----------------------
Subject to the provisions of this Article Eleven, each of the
Subsidiary Guarantors hereby, jointly and severally, unconditionally and
irrevocably guarantees, on a senior subordinated basis (such guarantees to be
referred to herein as the "Guarantee") to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company or any other Subsidiary Guarantors to the Holders
or the Trustee hereunder or thereunder, that: (a) the principal of, premium, if
any, and interest on the Notes (and any Additional Interest payable thereon)
shall be duly and punctually paid in full when due, whether at maturity, upon
redemption at the option of Holders pursuant to the provisions of the Notes
relating thereto, by acceleration or otherwise, and interest on the overdue
principal and (to the extent permitted by law) interest, if any, on the Notes
and all other obligations of the Company or the Subsidiary Guarantors to the
Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.07 hereof) and all other obligations shall 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 Notes or
any of such other obligations, the same shall be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed, or failing performance of any other obligation of the
Company to the Holders under this Indenture or under the Notes, for whatever
reason, each Subsidiary Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Notes shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Notes to accelerate the obligations
of the Subsidiary Guarantors hereunder in the same manner and to the same extent
as the obligations of the Company.
Each of the Subsidiary Guarantors hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any
<PAGE>
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, any release of any other Subsidiary Guarantor, the recovery
of any judgment against the Company, any action to enforce the same, whether or
not a Guarantee is affixed to any particular Note, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Subsidiary Guarantor. Each of the Subsidiary Guarantors hereby waives the
benefit of 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 covenants that its Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes, this Indenture
and this Guarantee. This Guarantee is a guarantee of payment and not of
collection. If any Holder or the Trustee is required by any court or otherwise
to return to the Company or to any Subsidiary Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Subsidiary Guarantor, any amount paid by the Company or such Subsidiary
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Subsidiary Guarantor further agrees that, as between it, on the one hand, and
the Holders of Notes and the Trustee, on the other hand, (a) subject to this
Article Eleven, the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six hereof for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (b) in
the event of any acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by the Subsidiary Guarantors for the purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator,
past, present or future, or any Subsidiary Guarantor, as such, shall have any
personal liability under this Guarantee by reason of his, her or its status as
such stockholder, officer, director, employee or incorporator.
Each Subsidiary Guarantor that makes a payment or distribution
under its Guarantee shall be entitled to a contribution from each other
Subsidiary Guarantor, determined in accordance with GAAP.
SECTION 11.02. Limitations on Guarantees.
-------------------------
The obligations of each Subsidiary Guarantor under its Guarantee
are limited to the maximum amount which, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
<PAGE>
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Indenture, will result in the obligations of such Subsidiary Guarantor
under the Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law.
SECTION 11.03. Execution and Delivery of Guarantee.
-----------------------------------
To further evidence the Guarantee set forth in Section 11.01,
each Subsidiary Guarantor hereby agrees that a notation of such Guarantee,
substantially in the form of Exhibit F hereto, shall be endorsed on each Note
---------
authenticated and delivered by the Trustee. Such Guarantee shall be executed on
behalf of each Subsidiary Guarantor by either manual or facsimile signature of
two Officers of each Subsidiary Guarantor, each of whom, in each case, shall
have been duly authorized to so execute by all requisite corporate action. The
validity and enforceability of any Guarantee shall not be affected by the fact
that it is not affixed to any particular Note.
Each of the Subsidiary Guarantors hereby agrees that its
Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee.
If an Officer of a Subsidiary Guarantor whose signature is on
this Indenture or a Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which such Guarantee is endorsed or at any
time thereafter, such Subsidiary Guarantor's Guarantee of such Note shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Subsidiary Guarantor.
SECTION 11.04. Release of a Subsidiary Guarantor.
---------------------------------
(a) If no Default exists or would exist under this Indenture,
upon the sale or disposition of all of the Capital Stock of a Subsidiary
Guarantor by the Company, in a transaction or series of related transactions
that either (i) does not constitute an Asset Sale or (ii) constitutes an Asset
Sale the Net Cash Proceeds of which are applied in accordance with Section 4.15,
or upon the consolidation or merger of a Subsidiary Guarantor with or into any
Person in compliance with Article Five (in each case, other than to the Company
or an Affiliate of the Company), or if any Subsidiary Guarantor is dissolved or
liquidated in accordance with this Indenture, or if a Subsidiary Guarantor is
designated an Unrestricted Subsidiary in accordance with Section 4.16, such
Subsidiary Guarantor's Guarantee will be automatically discharged and released,
and such Subsidiary Guarantor and each Subsidiary of such Subsidiary Guarantor
that is also a Subsidiary Guarantor shall be deemed automatically
<PAGE>
discharged released from all obligations under this Article Eleven without any
further action required on the part of the Trustee or any Holder. Any Subsidiary
Guarantor not so released or the entity surviving such Subsidiary Guarantor, as
applicable, shall remain or be liable under its Guarantee as provided in this
Article Eleven.
(b) The Trustee shall deliver an appropriate instrument
evidencing the release of a Subsidiary Guarantor upon receipt of a request by
the Company or such Subsidiary Guarantor accompanied by an Officers' Certificate
and an Opinion of Counsel certifying as to the compliance with this Section
11.04; provided, however, that the legal counsel delivering such Opinion of
-------- -------
Counsel may rely as to matters of fact on one or more Officers Certificates of
the Company.
The Trustee shall execute any documents reasonably requested by
the Company or a Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Guarantee endorsed on the
Notes and under this Article Eleven.
Except as set forth in Articles Four and Five and this Section
11.04, nothing contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of a Subsidiary Guarantor with or into the Company
or another Subsidiary Guarantor or shall prevent any sale or conveyance of the
property of a Subsidiary Guarantor as an entirety or substantially as an
entirety to the Company or another Subsidiary Guarantor.
SECTION 11.05. Waiver of Subrogation.
---------------------
Until this Indenture is discharged and all of the Notes are
discharged and paid in full, each Subsidiary Guarantor hereby irrevocably waives
and agrees not to exercise any claim or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of the Company's obligations under the Notes or this
Indenture and such Subsidiary Guarantor's obligations under this Guarantee and
this Indenture, in any such instance including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, and any
right to participate in any claim or remedy of the Holders against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to any Subsidiary Guarantor in
violation of the preceding sentence and any amounts owing to the Trustee or the
Holders of Notes under the Notes, this Indenture, or any other
<PAGE>
document or instrument delivered under or in connection with such agreements or
instruments, shall not have been paid in full, such amount shall have been
deemed to have been paid to such Subsidiary Guarantor for the benefit of, and
held in trust for the benefit of, the Trustee or the Holders and shall forthwith
be paid to the Trustee for the benefit of itself or such Holders to be credited
and applied to the obligations in favor of the Trustee or the Holders, as the
case may be, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by this
Indenture and that the waiver set forth in this Section 11.05 is knowingly made
in contemplation of such benefits.
SECTION 11.06. Immediate Payment.
-----------------
Each Subsidiary Guarantor agrees to make immediate payment to the
Trustee on behalf of the Holders of all Obligations owing or payable to the
respective Holders upon receipt of a demand for payment therefor by the Trustee
to such Subsidiary Guarantor in writing.
SECTION 11.07. No Set-Off.
----------
Each payment to be made by a Subsidiary Guarantor hereunder in
respect of the Obligations shall be payable in the currency or currencies in
which such Obligations are denominated, and shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.
SECTION 11.08. Obligations Absolute.
--------------------
The obligations of each Subsidiary Guarantor hereunder are and
shall be absolute and unconditional and any monies or amounts expressed to be
owing or payable by each Subsidiary Guarantor hereunder which may not be
recoverable from such Subsidiary Guarantor on the basis of a Guarantee shall be
recoverable from such Subsidiary Guarantor as a primary obligor and principal
debtor in respect thereof.
SECTION 11.09. Obligations Continuing.
----------------------
The obligations of each Subsidiary Guarantor hereunder shall be
continuing and shall remain in full force and effect until all the obligations
have been paid and satisfied in full. Each Subsidiary Guarantor agrees with the
Trustee that it will from time to time deliver to the Trustee suitable
acknowledgments of this continued liability hereunder and under any other
instrument or instruments in such form as counsel to the Trustee may advise and
as will prevent any action brought against it in respect of any default
hereunder being barred by any statute of limitations now or hereafter in force
and, in the event of the failure of a Subsidiary Guarantor so to do, it hereby
irrevocably
<PAGE>
appoints the Trustee the attorney and agent of such Subsidiary Guarantor to
make, execute and deliver such written acknowledgment or acknowledgments or
other instruments as may from time to time become necessary or advisable, in the
judgment of the Trustee on the advice of counsel, to fully maintain and keep in
force the liability of such Subsidiary Guarantor hereunder.
SECTION 11.10. Obligations Not Reduced.
-----------------------
The obligations of each Subsidiary Guarantor hereunder shall not
be satisfied, reduced or discharged solely by the payment of such principal,
premium, if any, interest, fees and other monies or amounts as may at any time
prior to discharge of this Indenture pursuant to Article Eight be or become
owing or payable under or by virtue of or otherwise in connection with the Notes
or this Indenture.
SECTION 11.11. Obligations Reinstated.
----------------------
The obligations of each Subsidiary Guarantor hereunder shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any payment which would otherwise have reduced the obligations of any
Subsidiary Guarantor hereunder (whether such payment shall have been made by or
on behalf of the Company or by or on behalf of a Subsidiary Guarantor) is
rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy,
liquidation or reorganization of the Company or any Subsidiary Guarantor or
otherwise, all as though such payment had not been made. If demand for, or
acceleration of the time for, payment by the Company is stayed upon the
insolvency, bankruptcy, liquidation or reorganization of the Company, all such
Indebtedness otherwise subject to demand for payment or acceleration shall
nonetheless be payable by each Subsidiary Guarantor as provided herein.
SECTION 11.12. Obligations Not Affected.
------------------------
The obligations of each Subsidiary Guarantor hereunder shall not
be affected, impaired or diminished in any way by any act, omission, matter or
thing whatsoever, occurring before, upon or after any demand for payment
hereunder (and whether or not known or consented to by any Subsidiary Guarantor
or any of the Holders) which, but for this provision, might constitute a whole
or partial defense to a claim against any Subsidiary Guarantor hereunder or
might operate to release or otherwise exonerate any Subsidiary Guarantor from
any of its obligations hereunder or otherwise affect such obligations, whether
occasioned by default of any of the Holders or otherwise, including, without
limitation:
(a) any limitation of status or power, disability, incapacity or
other circumstance relating to the Company or any other Person, including
any insolvency, bankruptcy,
<PAGE>
liquidation, reorganization, readjustment, composition, dissolution,
winding-up or other proceeding involving or affecting the Company or any
other Person;
(b) any irregularity, defect, unenforceability or invalidity in
respect of any indebtedness or other obligation of the Company or any other
Person under this Indenture, the Notes or any other document or instrument;
(c) any failure of the Company, whether or not without fault on
its part, to perform or comply with any of the provisions of this Indenture
or the Notes, or to give notice thereof to a Subsidiary Guarantor;
(d) the taking or enforcing or exercising or the refusal or
neglect to take or enforce or exercise any right or remedy from or against
the Company or any other Person or their respective assets or the release
or discharge of any such right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Company or any other Person;
(f) any change in the time, manner or place of payment of, or in
any other term of, any of the Notes, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any
of the Notes or this Indenture, including, without limitation, any increase
or decrease in the principal amount of or premium, if any, or interest on
any of the Notes;
(g) any change in the ownership, control, name, objects,
businesses, assets, capital structure or constitution of the Company or a
Subsidiary Guarantor;
(h) any merger or amalgamation of the Company or a Subsidiary
Guarantor with any Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations
or ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Obligations or the obligations of a Subsidiary Guarantor under its
Guarantee; and
(j) any other circumstance, including release of the Subsidiary
Guarantor pursuant to Section 11.04 (other than by complete, irrevocable
payment) that might otherwise constitute a legal or equitable discharge or
defense of the Company under this Indenture or the Notes or of a Subsidiary
Guarantor in respect of its Guarantee hereunder.
<PAGE>
SECTION 11.13. Waiver.
------
Without in any way limiting the provisions of Section 11.01
hereof, each Subsidiary Guarantor hereby waives notice of acceptance hereof,
notice of any liability of any Subsidiary Guarantor hereunder, notice or proof
of reliance by the Holders upon the obligations of any Subsidiary Guarantor
hereunder, and diligence, presentment, demand for payment on the Company,
protest, notice of dishonor or non-payment of any of the Obligations, or other
notice or formalities to the Company or any Subsidiary Guarantor of any kind
whatsoever.
SECTION 11.14. No Obligation To Take Action Against the
Company.
--------
Neither the Trustee nor any other Person shall have any
obligation to enforce or exhaust any rights or remedies or to take any other
steps under any security for the Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee is
entitled to demand payment and performance by any or all Subsidiary Guarantors
of their liabilities and obligations under their Guarantees or under this
Indenture.
SECTION 11.15. Dealing with the Company and Others.
-----------------------------------
The Holders, without releasing, discharging, limiting or
otherwise affecting in whole or in part the obligations and liabilities of any
Subsidiary Guarantor hereunder and without the consent of or notice to any
Subsidiary Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or
otherwise deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Company or any third party with respect to the obligations or matters
contemplated by this Indenture or the Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or
from any security upon such part of the Obligations as the Holders may see
fit or change any such application in whole or in part from time to time as
the Holders may see fit; and
<PAGE>
(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any security as the Holders or
the Trustee may see fit.
SECTION 11.16. Default and Enforcement.
-----------------------
If any Subsidiary Guarantor fails to pay in accordance with
Section 11.06 hereof, the Trustee may proceed in its name as trustee hereunder
in the enforcement of the Guarantee of any such Subsidiary Guarantor and such
Subsidiary Guarantor's obligations thereunder and hereunder by any remedy
provided by law, whether by legal proceedings or otherwise, and to recover from
such Subsidiary Guarantor the obligations.
SECTION 11.17. Amendment, Etc.
--------------
No amendment, modification or waiver of any provision of this
Indenture relating to any Subsidiary Guarantor or consent to any departure by
any Subsidiary Guarantor or any other Person from any such provision will in any
event be effective unless it is signed by such Subsidiary Guarantor and the
Trustee.
SECTION 11.18. Acknowledgment.
--------------
Each Subsidiary Guarantor hereby acknowledges communication of
the terms of this Indenture and the Notes and consents to and approves of the
same.
SECTION 11.19. Costs and Expenses.
------------------
Each Subsidiary Guarantor shall pay on demand by the Trustee any
and all costs, fees and expenses (including, without limitation, legal fees on a
solicitor and client basis) incurred by the Trustee, its agents, advisors and
counsel or any of the Holders in enforcing any of their rights under any
Guarantee.
SECTION 11.20. No Merger or Waiver; Cumulative Remedies.
----------------------------------------
No Guarantee shall operate by way of merger of any of the
obligations of a Subsidiary Guarantor under any other agreement, including,
without limitation, this Indenture. No failure to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, remedy, power
or privilege hereunder or under this Indenture or the Notes, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder or under this Indenture or the Notes preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges in the Guarantee
and under this Indenture, the Notes and any other document or instrument between
a Subsidiary Guarantor and/or the
<PAGE>
Company and the Trustee are cumulative and not exclusive of any rights,
remedies, powers and privilege provided by law.
SECTION 11.21. Survival of Obligations.
-----------------------
Without prejudice to the survival of any of the other obligations
of each Subsidiary Guarantor hereunder, the obligations of each Subsidiary
Guarantor under Section 11.01 shall survive the payment in full of the
Obligations and shall be enforceable against such Subsidiary Guarantor without
regard to and without giving effect to any defense, right of offset or
counterclaim available to or which may be asserted by the Company or any
Subsidiary Guarantor.
SECTION 11.22. Guarantee in Addition to Other Obligations.
------------------------------------------
The obligations of each Subsidiary Guarantor under its Guarantee
and this Indenture are in addition to and not in substitution for any other
obligations to the Trustee or to any of the Holders in relation to this
Indenture or the Notes and any guarantees or security at any time held by or for
the benefit of any of them.
SECTION 11.23. Severability.
------------
Any provision of this Article Eleven which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article Eleven.
SECTION 11.24. Successors and Assigns.
----------------------
Each Guarantee shall be binding upon and inure to the benefit of
each Subsidiary Guarantor and the Trustee and the other Holders and their
respective successors and permitted assigns, except that no Subsidiary Guarantor
may assign any of its obligations hereunder or thereunder.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to
Guarantor Senior Indebtedness.
------------------------------
Anything herein to the contrary notwithstanding, each of the
Subsidiary Guarantors, for itself and its successors, and each Holder, by his or
her acceptance of Guarantees, agrees that the payment of all Obligations owing
to the Holders in respect of its
<PAGE>
Guarantee (collectively, as to any Subsidiary Guarantor, its "Guarantee
Obligations") is subordinated, to the extent and in the manner provided in this
Article Twelve, to the prior payment in full in cash or Cash Equivalents, or
such payment duly provided for to the satisfaction of the holders of Guarantor
Senior Indebtedness, of all Obligations on Guarantor Senior Indebtedness of such
Subsidiary Guarantor, including without limitation, the Subsidiary Guarantors'
obligations under the Credit Agreement.
This Article Twelve shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Guarantor Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness and such holders are made obligees hereunder and
any one or more of them may enforce such provisions.
SECTION 12.02. Suspension of Guarantee Obligations When
Guarantor Senior Indebtedness Is in Default.
--------------------------------------------
(a) Unless Section 12.03 shall be applicable, upon (1) the
occurrence of a Payment Default with respect to any Designated Senior
Indebtedness of a Subsidiary Guarantor or guaranteed by a Subsidiary Guarantor
(which Designated Senior Indebtedness or guarantee, as the case may be,
constitutes Guarantor Senior Indebtedness of such Subsidiary Guarantor) and (2)
receipt by the Trustee, the Company and such Subsidiary Guarantor from a
Representative of written notice of such occurrence, then no payment (other than
payments previously made pursuant to Article Eight) or distribution of any
assets of such Subsidiary Guarantor of any kind or character shall be made by or
on behalf of such Subsidiary Guarantor or any other Person on its behalf on
account of any Obligations under the Notes or on account of the purchase,
redemption or other acquisition of Notes for cash or property or otherwise
(except that Holders may receive (i) shares of stock and any debt securities
that are subordinated at least to the same extent as the Guarantees to Guarantor
Senior Indebtedness and (ii) payments made from the trusts described in Section
8.01) until such Payment Default shall have been cured or waived or shall have
ceased to exist or such Guarantor Senior Indebtedness shall have been discharged
or paid in full in cash or Cash Equivalents, or such payment duly provided for
to the satisfaction of the holders of Guarantor Senior Indebtedness, after which
such Subsidiary Guarantor shall resume making any and all required payments in
respect of its obligations under this Guarantee, including any missed payments.
(b) Unless Section 12.03 shall be applicable upon (1) the
occurrence of any event of default (other than a Payment Default) with respect
to any Designated Senior Indebtedness of a Subsidiary Guarantor (as such event
of default is defined in the instrument creating or evidencing such Designated
Senior Indebtedness of a Subsidiary Guarantor) and (2) the earlier of (i)
receipt by the Trustee, the Company and such Subsidiary Guarantor
<PAGE>
from a Representative of written notice of such occurrence stating that such
notice is a "Payment Blockage Notice" pursuant to this Section 12.02 or (ii) if
such Non-payment Default results from the acceleration of the Securities, the
date of the acceleration of the Securities, no payment (other than payments
previously made pursuant to Article Eight hereof) or distribution of any assets
of such Subsidiary Guarantor of any kind or character shall be made by on or
behalf of such Subsidiary Guarantor or any other Person on its or their behalf
on account of principal, premium, if any, or interest on the Notes or on account
of the purchase, redemption or other acquisition of Notes for cash or property
or otherwise (except that Holders may receive (i) shares of stock and any debt
securities that are subordinated at least to the same extent as the Guarantees
to Guarantor Senior Indebtedness and (ii) payments made from the trusts
described in Section 8.01) for a period (the "Guarantor Payment Blockage
Period") commencing on the date of receipt by the Trustee of such notice or the
date of the acceleration referred to in clause (ii) above, as the case may be,
unless and until the earlier to occur of the following events: (w) 180 days
shall have elapsed since receipt of such written notice by the Trustee or the
date of the acceleration of the Notes, as the case may be (provided no
Designated Senior Indebtedness of a Subsidiary Guarantor shall theretofore have
been accelerated), (x) such Non-payment Default shall have been cured or waived
or shall have ceased to exist, (y) such Designated Senior Indebtedness shall
have been discharged or paid in full in cash or Cash Equivalents, or such
payment duly provided for to the satisfaction of the holders of such Designated
Senior Indebtedness of a Subsidiary Guarantor or (z) such Guarantor Payment
Blockage Period shall have been terminated by written notice to the Trustee from
the Representative initiating Guarantor Payment Blockage Period, or the holders
of at least a majority in principal amount of such issue of Guarantor Senior
Indebtedness, after which, in the case of clause (w), (x), (y) or (z), such
Subsidiary Guarantor shall resume making any and all required payments in
respect of its obligations under its Guarantee, including any missed payments.
Notwithstanding anything herein to the contrary, (x) in no event will a
Guarantor Payment Blockage Period or successive Guarantor Payment Blockage
Periods with respect to the same payment on a Guarantee extend beyond 180 days
from the date the payment on a Guarantee was due and (y) only one such Guarantor
Payment Blockage Period may be commenced within any 360 consecutive days. For
all purposes of this Section 12.02(b), no event of default which existed or was
continuing on the date of the commencement of any Guarantor Payment Blockage
Period with respect to the Designated Senior Indebtedness of a Subsidiary
Guarantor initiating such Guarantor Payment Blockage Period shall be, or be
made, the basis for the commencement of a second Guarantor Payment Blockage
Period by the holders or by the agent or other representative of such Designated
Senior Indebtedness of a Subsidiary Guarantor whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach
<PAGE>
of any financial covenants for a period commencing after the date of
commencement of such Guarantor Payment Blockage Period that, in either case,
would give rise to an event of default pursuant to any provisions under which an
event of default previously existed or was continuing shall constitute a new
event of default for this purpose).
(c) In the event that, notwithstanding the foregoing, a
Subsidiary Guarantor shall have made payment to the Trustee or directly to the
Holder of any Note prohibited by the foregoing provisions of this Section 12.02,
then and in such event such payment shall be segregated from other funds and
held in trust by the Trustee or such Holder or Paying Agent for the benefit of,
and shall immediately be paid over to, the holders of Designated Senior
Indebtedness of a Subsidiary Guarantor or to the Representatives or as a court
of competent jurisdiction shall direct.
SECTION 12.03. Guarantee Obligations Subordinated to Prior
Payment of All Guarantor Senior Indebtedness
on Dissolution, Liquidation or Reorganization
of Such Subsidiary Guarantor.
-----------------------------
Upon any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or securities to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Subsidiary Guarantor, whether voluntary or involuntary, or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
any Subsidiary Guarantor or its property, whether voluntary or involuntary, but
excluding any liquidation or dissolution of a Subsidiary Guarantor into the
Company or into another Subsidiary Guarantor):
(a) the holders of all Guarantor Senior Indebtedness of such
Subsidiary Guarantor shall first be entitled to receive payments in full in
cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Indebtedness, of all
amounts payable under Guarantor Senior Indebtedness before the Holders will
be entitled to receive any payment or distribution of any kind or character
on account of the Guarantee of such Subsidiary Guarantor, and until all
Obligations with respect to the Guarantor Senior Indebtedness are paid in
full in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Indebtedness, any
distribution to which the Holders would be entitled shall be made to the
holders of Guarantor Senior Indebtedness of such Subsidiary Guarantor;
(b) any payment or distribution of assets of such Subsidiary
Guarantor of any kind or character, whether in
<PAGE>
cash, property or securities, to which the Holders or the Trustee on behalf
of the Holders would be entitled except for the provisions of this Article
Twelve shall be paid by the liquidating trustee or agent or other Person
making such a payment or distribution, directly to the holders of Guarantor
Senior Indebtedness of such Subsidiary Guarantor or their representatives,
ratably according to the respective amounts of such Guarantor Senior
Indebtedness remaining unpaid held or represented by each, until all such
Subsidiary Guarantor Senior Indebtedness remaining unpaid shall have been
paid in full in cash or Cash Equivalents, or such payment duly provided for
to the satisfaction of the holders of Subsidiary Guarantor Senior
Indebtedness, after giving effect to any concurrent payment or distribution
to the holders of such Guarantor Senior Indebtedness;
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of such Subsidiary Guarantor of any kind
or character, whether such payment shall be in cash, property or
securities, and such Subsidiary Guarantor shall have made payment to the
Trustee or directly to the Holders or any Paying Agent in respect of
payment of the Guarantees before all Guarantor Senior Indebtedness of such
Subsidiary Guarantor is paid in full in cash or Cash Equivalents, or such
payment duly provided for to the satisfaction of the holders of Guarantor
Senior Indebtedness, such payment or distribution (subject to the
provisions of Sections 12.06 and 12.07) shall be received, segregated from
other funds, and held in trust by the Trustee or such Holder or Paying
Agent for the benefit of, and shall immediately be paid over by the Trustee
(if the notice required by Section 12.06 has been received by the Trustee)
or by the Holder to, the holders of such Guarantor Senior Indebtedness or
their representatives, ratably according to the respective amounts of such
Guarantor Senior Indebtedness held or represented by each, until all such
Guarantor Senior Indebtedness remaining unpaid shall have been paid in full
in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Indebtedness, after giving
effect to any concurrent payment or distribution to the holders of
Guarantor Senior Indebtedness.
Each Subsidiary Guarantor shall give prompt notice to the Trustee
prior to any dissolution, winding up, total or partial liquidation or total or
reorganization (including, without limitation, in bankruptcy, insolvency, or
receivership proceedings or upon any assignment for the benefit of creditors or
any other marshaling of such Subsidiary Guarantor's assets and liabilities).
SECTION 12.04. Holders of Guarantee Obligations To Be
Subrogated to Rights of Holders of
Guarantor Senior Indebtedness.
------------------------------
<PAGE>
Subject to the payment in full in cash or Cash Equivalents, or
such payment duly provided for to the satisfaction of the holders of Guarantor
Senior Indebtedness, of all Guarantor Senior Indebtedness, the Holders of
Guarantee Obligations of a Subsidiary Guarantor shall be subrogated to the
rights of the holders of Guarantor Senior Indebtedness of such Subsidiary
Guarantor to receive payments or distributions of assets of such Subsidiary
Guarantor applicable to such Guarantor Senior Indebtedness until all amounts
owing on or in respect of the Guarantee Obligations shall be paid in full in
cash or Cash Equivalents, and for the purpose of such subrogation no payments or
distributions to the holders of such Guarantor Senior Indebtedness by or on
behalf of such Subsidiary Guarantor, or by or on behalf of the Holders by virtue
of this Article Twelve, which otherwise would have been made to the Holders
shall, as between such Subsidiary Guarantor and the Holders, be deemed to be
payment by such Subsidiary Guarantor to or on account of such Guarantor Senior
Indebtedness, it being understood that the provisions of this Article Twelve are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of such Guarantor Senior Indebtedness,
on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Twelve shall
have been applied, pursuant to the provisions of this Article Twelve, to the
payment of all amounts payable under such Guarantor Senior Indebtedness, then
the Holders shall be entitled to receive from the holders of such Guarantor
Senior Indebtedness any such payments or distributions received by such holders
of such Guarantor Senior Indebtedness in excess of the amount sufficient to pay
all amounts payable under or in respect of such Guarantor Senior Indebtedness in
full in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Indebtedness.
Each Holder by purchasing or accepting a Note waives any and all
notice of the creation, modification, renewal, extension or accrual of any
Guarantor Senior Indebtedness of the Subsidiary Guarantors and notice of or
proof of reliance by any holder or owner of Guarantor Senior Indebtedness of the
Subsidiary Guarantors upon this Article Twelve and the Guarantor Senior
Indebtedness of the Subsidiary Guarantors shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this Article Twelve, and
all dealings between the Subsidiary Guarantors and the holders and owners of the
Guarantor Senior Indebtedness of the Subsidiary Guarantors shall be deemed to
have been consummated in reliance upon this Article Twelve.
SECTION 12.05. Obligations of the Subsidiary Guarantors
Unconditional.
--------------
<PAGE>
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Guarantees is intended to or shall impair, as between the
Subsidiary Guarantors and the Holders, the obligation of the Subsidiary
Guarantors, which is absolute and unconditional, to pay to the Holders all
amounts due and payable under the Guarantees as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of the Subsidiary
Guarantors other than the holders of the Guarantor Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Twelve, of the
holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of the Subsidiary Guarantors received upon the exercise of any such
remedy. Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article Twelve, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any liquidation,
dissolution, winding up or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent
or other Person making any payment or distribution to the Trustee or to the
Holders for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of Guarantor Senior Indebtedness and
other Indebtedness of any Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Twelve. Nothing in this Article Twelve
shall apply to the claims of, or payments to, the Trustee under or pursuant to
Section 7.07. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Guarantor Senior Indebtedness (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Guarantor Senior Indebtedness or a trustee or representative on
behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 12.06. Trustee Entitled To Assume Payments Not
<PAGE>
Prohibited in Absence of Notice.
--------------------------------
The Trustee shall not at any time be charged with knowledge of
the existence of any facts that would prohibit the making of any payment to or
by the Trustee unless and until the Trustee or any Paying Agent shall have
received notice thereof from the Company or any Subsidiary Guarantor or from one
or more holders of Guarantor Senior Indebtedness or from any Representative
therefor and, prior to the receipt of any such notice, the Trustee, subject to
the provisions of Sections 7.01 and 7.02, shall be entitled in all respects
conclusively to assume that no such fact exists.
SECTION 12.07. Application by Trustee of Assets Deposited
with It.
--------
U.S. Legal Tender or U.S. Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Sections 8.01 and 8.02
shall be for the sole benefit of Holders of the Notes and, to the extent
allocated for the payment of Notes, shall not be subject to the subordination
provisions of this Article Twelve. Otherwise, any deposit of assets or
securities by or on behalf of a Subsidiary Guarantor with the Trustee or any
Paying Agent (whether or not in trust) for payment of the Guarantees shall be
subject to the provisions of this Article Twelve; provided, however, that if
-------- -------
prior to the second Business Day preceding the date on which by the terms of
this Indenture any such assets may become distributable for any purpose
(including, without limitation, the payment of either principal of or interest
on any Note) the Trustee or such Paying Agent shall not have received with
respect to such assets the notice provided for in Section 12.06, then the
Trustee or such Paying Agent shall have full power and authority to receive such
assets and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary received by it on or after
such date. The foregoing shall not apply to the Paying Agent if the Company or
any Subsidiary or Affiliate of the Company is acting as Paying Agent. Nothing
contained in this Section 12.07 shall limit the right of the holders of
Guarantor Senior Indebtedness to recover payments as contemplated by this
Article Twelve.
SECTION 12.08. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Guarantor
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor or by any act or failure to act, by any such holder, or by
any non-compliance by any Subsidiary Guarantor with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
<PAGE>
(b) Without limiting the generality of subsection (a) of this
Section 12.08, the holders of Guarantor Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Holders of the Securities, without incurring responsibility to the Holders of
the Notes and without impairing or releasing the subordination provided in this
Article Twelve or the obligations hereunder of the Holders of the Notes to the
holders of Guarantor Senior Indebtedness, do any one or more of the following:
(1) change the manner, place, terms or time of payment of, or renew or alter,
Guarantor Senior Indebtedness or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (2) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Indebtedness; (3) release any Person liable
in any manner for the collection or payment of Guarantor Senior Indebtedness;
and (4) exercise or refrain from exercising any rights against the Subsidiary
Guarantors and any other Person.
SECTION 12.09. Holders Authorize Trustee To Effectuate
Subordination of Guarantee Obligations.
---------------------------------------
Each Holder of the Guarantee Obligations by his acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effect the subordination provisions
contained in this Article Twelve, and appoints the Trustee his attorney-in-fact
for such purpose, including, in the event of any liquidation, dissolution,
winding up, reorganization, assignment for the benefit of creditors or
marshaling of assets of any Subsidiary Guarantor tending towards liquidation or
reorganization of the business and assets of any Subsidiary Guarantor, the
immediate filing of a claim for the unpaid balance under its or his Guarantee
Obligations in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then any of the holders of the Guarantor
Senior Indebtedness or their Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Guarantee
Obligations. Nothing herein contained shall be deemed to authorize the Trustee
or the holders of Guarantor Senior Indebtedness or their Representative to
authorize or consent to or accept or adopt on behalf of any holder of Guarantee
Obligations any plan of reorganization, arrangement, adjustment or composition
affecting the Guarantee Obligations or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Guarantor Senior Indebtedness or their
Representative to vote in respect of the claim of any holder of Guarantee
Obligations in any such proceeding.
SECTION 12.10. Right of Trustee To Hold Guarantor Senior
Indebtedness.
-------------
<PAGE>
The Trustee shall be entitled to all of the rights set forth in
this Article Twelve in respect of any Guarantor Senior Indebtedness at any time
held by it to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
SECTION 12.11. No Suspension of Remedies.
-------------------------
The failure to make a payment in respect of the Guarantees by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section
6.01.
Nothing contained in this Article Twelve shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Six or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Twelve of the holders, from time to time, of Guarantor Senior
Indebtedness.
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of
Guarantor Senior Indebtedness.
------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness, and it undertakes to perform or
observe such of its covenants and obligations as are specifically set forth in
this Article Twelve, and no implied covenants or obligations with respect to the
Guarantor Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be liable to any such holders (other than for
its willful misconduct or gross negligence) if it shall pay over or deliver to
the holders of Guarantee Obligations or the Guarantors or any other Person,
money or assets in compliance with the terms of this Indenture. Nothing in this
Section 12.12 shall affect the obligation of any Person other than the Trustee
to hold such payment for the benefit of, and to pay such payment over to, the
holders of Guarantor Senior Indebtedness or their Representative.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. If any provision of
this Indenture modifies or excludes any provision of the TIA that may be so
modified or excluded, the
<PAGE>
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
SECTION 13.02. Notices.
-------
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to the Company or any Subsidiary Guarantor:
BWAY CORPORATION
8607 Roberts Drive
Suite 250
Atlanta, GA 30350
Attention: Chief Financial Officer
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: William S. Kirsch, P.C.
if to the Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Department
The Company, the Subsidiary Guarantors and the Trustee by written
notice to each other may designate additional or different addresses for
notices. Any notice or communication to the Company, the Subsidiary Guarantors
or the Trustee shall be deemed to have been given or made as of the date so
delivered if personally delivered; when answered back, if telexed; when receipt
is acknowledged, if faxed; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is
<PAGE>
mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.
SECTION 13.03. Communications by Holders with Other
Holders
-------
Holders may communicate pursuant to TIA (S) 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.
----------
Upon any request or application by the Company or the Subsidiary
Guarantors to the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent to be performed by the Company, if any, provided
for in this Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 13.05. Statements Required in Certificate or
Opinion.
--------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.07, shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
<PAGE>
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 13.07. Legal Holidays.
--------------
A "Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions in New
York, New York, Chicago, Illinois or at such place of payment are not required
to be open. If a payment date is a Legal Holiday at such place, payment may be
made at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 13.08. Governing Law.
-------------
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Each of the parties hereto agrees to submit to the jurisdiction of the courts of
the State of New York in any action or proceeding arising out of or relating to
this Indenture or the Notes.
SECTION 13.09. No Adverse Interpretation of Other
Agreements.
-----------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
--------------------------
A past, present or future director, officer, employee,
stockholder or incorporator, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Notes, the Guarantors or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
<PAGE>
SECTION 13.11. Successors.
----------
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 13.12. Duplicate Originals.
-------------------
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. Independence of Covenants.
-------------------------
All covenants and agreements in this Indenture and the Notes
shall be given independent effect so that if any particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
[Remainder of Page Intentionally Left Blank]
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the date first written above.
BWAY CORPORATION
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
HARRIS TRUST AND SAVINGS BANK, as
Trustee
By: /s/ D. G. Donovan
--------------------------------
Name: D. G. Donovan
Title: Assistant Vice President
BROCKWAY STANDARD (NEW JERSEY),
INC., as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
MILTON CAN COMPANY, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
BROCKWAY STANDARD, INC.,
as guarantor
By: /s/ David P. Hayford
--------------------------------
Name: David P. Hayford
Title: Senior Vice President and
Chief Financial Officer
MATERIALS MANAGEMENT, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
BROCKWAY STANDARD (CANADA), INC.,
<PAGE>
as guarantor
By: /s/ David P. Hayford
--------------------------------
Name: David P. Hayford
Title: Executive Vice President
BROCKWAY STANDARD (OHIO), INC.,
as guarantor
By: /s/ David P. Hayford
--------------------------------
Name: David P. Hayford
Title: Vice President
PLATE MASTERS, INC., as guarantor
By: /s/ David P. Hayford
--------------------------------
Name: David P. Hayford
Title: Vice President
ARMSTRONG CONTAINERS, INC.,
<PAGE>
as guarantor
By: /s/ Blair G. Schlossberg
---------------------------------
Name: Blair G. Schlossberg
Title: Secretary
<PAGE>
EXHIBIT A
- ---------
[FORM OF SERIES A NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE ACT) (AN "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (2) AGREES THAT
IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE), OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO REGISTRATION REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATIONS S UNDER THE ACT.
A-1
<PAGE>
BWAY CORPORATION
10 1/4% Senior Subordinated Note due 2007, Series A
No. $
BWAY CORPORATION, a Delaware corporation (the "Company"), for value
received, promises to pay to CEDE & CO. or registered assigns, the principal sum
of Dollars, on April 15, 2007.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
A-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated: BWAY CORPORATION
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 10 1/4% Senior Subordinated Notes due 2007,
Series A, referred to in the within-mentioned Indenture.
Dated: HARRIS TRUST AND SAVINGS BANK, as
By:
----------------------------------
Authorized Signatory
A-3
<PAGE>
(REVERSE OF NOTE)
10 1/4% Senior Subordinated Note due 2007, Series A
1. Interest. BWAY CORPORATION, a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from April 11, 1997. The Company will pay interest semi-annually in arrears on
each April 15 and October 15 (each, an "Interest Payment Date") and at stated
maturity, commencing on October 15, 1997. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal, premium and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, Harris Trust and Savings
--------------------------
Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Registrar or co-Registrar.
4. Indenture. The Company issued the Notes under an Indenture,
---------
dated as of April 11, 1997 (the "Indenture"), among the Company, each of the
Subsidiary Guarantors named therein and the Trustee. This Note is one of a duly
authorized issue of Notes of the Company designated as its 10 1/4% Senior
Subordinated Notes due 2007, Series A (the "Initial Notes"), limited (except as
otherwise provided in the Indenture) in aggregate principal amount to
$100,000,000, which may be issued under the Indenture. The Notes include the
Initial Notes, the Private Exchange Notes (as defined in the Indenture) and the
Unrestricted Notes, as defined
A-4
<PAGE>
below, issued in exchange for the Initial Notes pursuant to the Registration
Rights Agreement. The Initial Notes and the Unrestricted Notes are treated as a
single class of securities under the Indenture. Capitalized terms used herein
shall have the meanings assigned to them in this Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of them. The Notes are general unsecured obligations
of the Company.
5. Optional Redemption. (a) The Notes will be redeemable, at the
-------------------
Company's option, in whole at any time or in part from time to time, on and
after April 15, 2002, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on April
15 of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:
YEAR PERCENTAGE
---- ----------
2002 105.125%
2003 103.417%
2004 101.708%
2005 and thereafter 100.000%
(b) At any time, or from time to time, on or prior to April 15, 2000,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem up to 33 1/3% of the Notes at a
redemption price equal to 110.250% of the principal amount thereof plus accrued
and unpaid interest thereon, if any, to the date of redemption; provided,
--------
however, that at least 66 2/3% of the principal amount of Notes originally
- -------
issued remain outstanding immediately after any such redemption (it being
expressly agreed that for purposes of determining whether this condition is
satisfied, Notes owned by the Company or any of its Affiliates shall be deemed
not to be outstanding). In order to effect the foregoing redemption with the
proceeds of any Equity Offering, the Company shall make such redemption not more
than 120 days after the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a public
or private offering of Qualified Capital Stock of the Company.
6. 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 of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
A-5
<PAGE>
7. Change of Control Offer. In the event of a Change of Control,
-----------------------
upon the satisfaction of the conditions set forth in the Indenture, the Company
shall be required to offer to repurchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase. Holders of Notes that are the subject of such an offer to
repurchase shall receive an offer to repurchase and may elect to have such Notes
repurchased in accordance with the provisions of the Indenture pursuant to and
in accordance with the terms of the Indenture.
8. Limitation on Asset Sales. Under certain circumstances set forth
-------------------------
in Section 4.15 of the Indenture, the Company is required to apply the net
proceeds from Asset Sales to offer to repurchase the Notes at a price equal to
100% of the principal amount thereof plus accrued and unpaid interest thereon,
if any, to the date of repurchase.
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Notes during a period beginning 15 days before the mailing of a
redemption notice for any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of, premium and interest on the Notes to
redemption or maturity and complies with the other provisions of this Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, premium and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture or the Notes may be amended or
A-6
<PAGE>
supplemented with the written consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes, and any existing
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in aggregate principal
amount of the then outstanding Notes. Without consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes, or comply with Article
Five of the Indenture or make any other change that does not adversely affect in
any material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, pay dividends or make certain other restricted
payments, enter into transactions with Affiliates, create dividend or other
payment restrictions affecting Restricted Subsidiaries and merge or consolidate
with any other Person, sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with this
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable in
the manner, at the time and with the effect provided in the Indenture. Holders
of Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the Notes
unless it has been offered indemnity or security reasonably satisfactory to it.
The Indenture permits, subject to certain limitations therein provided, Holders
of a majority in aggregate principal amount of the Notes then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default or Event of
Default (except a Default in payment of principal or interest) if it determines
in good faith that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Restricted and Unrestricted
Subsidiaries or their respective Affiliates as if it were not the Trustee.
A-7
<PAGE>
18. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of the
Company shall have any liability for any obligation of the Company under the
Notes or the Indenture or for any claim based on, in respect of or by reason of,
such obligations or their creation. Each Holder of a Note by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or authenticating agent manually signs the certificate of authentication on this
Note.
20. Governing Law. This Note shall be governed by, and construed in
-------------
accordance with, the laws of the State of New York without giving effect to
applicable principles of conflicts of laws to the extent that the application of
the laws of another jurisdiction would be required thereby.
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note 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).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement, the Company and the Subsidiary Guarantors will be obligated upon the
occurrence of certain events to consummate an exchange offer pursuant to which
the Holder of this Note shall have the right to exchange this Series A Note for
a [ ]% Senior Subordinated Note due 2007, Series B, of the Company (an
"Unrestricted Note") which have been registered under the Securities Act, in
like principal amount and having terms identical in all material respects as the
Series A Notes. The Holders shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
A-8
<PAGE>
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture.
25. Guarantees. This Note will be entitled to the benefits of
----------
certain Guarantees, if any, made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Subsidiary
Guarantors, the Trustee and the Holders.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: BWAY
CORPORATION, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350.
A-9
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
________________________________
_______________________________________________________________
(please print or type name and address)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
_______________________________________________________________
attorney to transfer the Note on the books of the Company with full power
of substitution in the premises.
Dated:
-----------------------------
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the face of
the within Note in every particular without alteration
or enlargement or any change whatsoever and be
guaranteed by the endorser's bank or broker.
Signature Guarantee:
-----------------------------
In connection with any transfer of this Note occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") covering resales
of this Note (which effectiveness shall not have been suspended or
terminated at the date of the transfer) and (ii) April 11, 1999 the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer:
[Check One]
---------
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
A-10
<PAGE>
(4) ___ outside the United States to a "foreign purchaser" incompliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended; or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/__/ The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
-------- -------
(3), (4), (5) or (7) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4) and other information as the Trustee or the Company have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of l933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: _________________ Signed:_________________________
(Sign exactly as name
appears on the other side
of this Note)
Signature Guarantee:__________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with
A-11
<PAGE>
respect to which it exercises sole investment discretion and that it and any
such account is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act of 1933, as amended, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated: ______________________ _____________________________
NOTICE: To be executed by an
executive officer
A-12
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.14 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount: $_____________
Date: Your Signature:
- -------------------------------------
(Sign exactly as your name appears on the
other side of this Note)
Signature Guarantee:
- ----------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
A-13
<PAGE>
EXHIBIT B
---------
BWAY CORPORATION
10 1/4% Senior Subordinated Note due 2007, Series B
No. 1 $
BWAY CORPORATION, a Delaware corporation (the "Company"), for value
received, promises to pay to or registered assigns, the principal
sum of Dollars, on April 15, 2007.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
B-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated: BWAY CORPORATION
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 10 1/4% Senior Subordinated Notes due 2007, Series
B referred to in the within-mentioned Indenture.
Dated: HARRIS TRUST AND SAVINGS BANK,
as Trustee
By:
----------------------------------
Authorized Signatory
B-2
<PAGE>
(REVERSE OF NOTE)
10 1/4% Senior Subordinated Note due 2007, Series B
1. Interest. BWAY CORPORATION, a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from April 11, 1997. The Company will pay interest semi-annually in arrears on
each April 15 and October 15 (each, an "Interest Payment Date") and at stated
maturity, commencing on October 15, 1997. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are canceled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal, premium and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, Harris Trust and Savings
--------------------------
Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Registrar or co-Registrar.
4. Indenture. The Company issued the Notes under an Indenture,
---------
dated as of April 11, 1997 (the "Indenture"), among the Company, each of the
Subsidiary Guarantors named therein and the Trustee. This Note is one of a duly
authorized issue of Notes of the Company designated as its 10 1/4% Senior
Subordinated Notes due 2007, Series B (the "Unrestricted Notes"), limited
(except as otherwise provided in the Indenture) in aggregate principal amount to
$100,000,000, which may be issued under the Indenture. The Notes include the
11% Senior Subordinated Notes due 2007, Series A (the "Initial Notes"), the
Private Exchange Notes (as defined in the Indenture) and the Unrestricted Notes.
The Initial Notes, the
B-3
<PAGE>
Private Exchange Notes and the Unrestricted Notes are treated as a single class
of securities under the Indenture. Capitalized terms used herein shall have the
meanings assigned to them in the Indenture unless otherwise defined herein. The
terms of the Notes include those stated in this Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
77aaa-77bbbb) (the "TIA"), as in effect on the date of this Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of them. The Notes are general unsecured obligations of the Company.
5. Optional Redemption. (a) The Notes will be redeemable, at the
-------------------
Company's option, in whole at any time or in part from time to time, on and
after April 15, 2002, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on April
15 of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:
YEAR PERCENTAGE
---- ----------
2002 105.125%
2003 103.417%
2004 101.708%
2005 and thereafter 100.000%
(b) At any time, or from time to time, on or prior to April 15, 2000,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem up to 33 1/3% of the Notes at a
redemption price equal to 110.250% of the principal amount thereof plus accrued
and unpaid interest thereon, if any, to the date of redemption; provided,
--------
however, that at least 66 2/3% of the principal amount of Notes originally
- -------
issued remain outstanding immediately after any such redemption (it being
expressly agreed that for purposes of determining whether this condition is
satisfied, Notes owned by the Company or any of its Affiliates shall be deemed
not to be outstanding). In order to effect the foregoing redemption with the
proceeds of any Equity Offering, the Company shall make such redemption not more
than 120 days after the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a public
or private offering of Qualified Capital Stock of the Company.
6. 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 of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
B-4
<PAGE>
7. Change of Control Offer. In the event of a Change of Control,
-----------------------
upon the satisfaction of the conditions set forth in the Indenture, the Company
shall be required to offer to repurchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase. Holders of Notes that are the subject of such an offer to
repurchase shall receive an offer to repurchase and may elect to have such Notes
repurchased in accordance with the provisions of the Indenture pursuant to and
in accordance with the terms of the Indenture.
8. Limitation on Assets Sales. Under certain circumstances set
--------------------------
forth in Section 4.15 of the Indenture, the Company is required to apply the net
proceeds from Asset Sales to offer to repurchase the Notes at a price equal to
100% of the principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the date of repurchase.
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Notes during a period beginning 15 days before the mailing of a
redemption notice for any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of, premium and interest on the Notes to
redemption or maturity and complies with the other provisions of this Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, premium and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a
B-5
<PAGE>
majority in aggregate principal amount of the then outstanding Notes, and any
existing Default or Event of Default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes. Without consent of any Holder,
the parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, pay dividends or make certain other restricted
payments, enter into transactions with Affiliates, create dividend or other
payment restrictions affecting Restricted Subsidiaries and merge or consolidate
with any other Person, sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable in
the manner, at the time and with the effect provided in the Indenture. Holders
of Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the Notes
unless it has been offered indemnity or Security reasonably satisfactory to it.
The Indenture permits, subject to certain limitations therein provided, Holders
of a majority in aggregate principal amount of the Notes then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default or Event of
Default (except a Default in payment of principal or interest) if it determines
in good faith that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Restricted and Unrestricted
Subsidiaries or their respective Affiliates as if it were not the Trustee.
B-6
<PAGE>
18. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of the
Company shall have any liability for any obligation of the Company under the
Notes or the Indenture or for any claim based on, in respect of or by reason of,
such obligations or their creation. Each Holder of a Note by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or authenticating agent manually signs the certificate of authentication on this
Note.
20. Governing Law. This note shall be governed by, and construed in
-------------
accordance with, the laws of the State of New York without giving effect to
applicable principles of conflicts of laws to the extent that the application of
the law of another jurisdiction would be required thereby.
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note 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).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time. Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture.
24. Guarantees. This Note will be entitled to the benefits of
----------
certain Guarantees, if any, made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Subsidiary
Guarantors, the Trustee and the Holders.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: BWAY
CORPORATION, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350.
B-7
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
________________________________
_______________________________________________________________
(please print or type name and address)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
_______________________________________________________________
attorney to transfer the Note on the books of the Company with full power
of substitution in the premises.
Dated:
- --------------------------------
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the face of
the within Note in every particular without alteration
or enlargement or any change whatsoever and be
guaranteed by the endorser's bank or broker.
Signature Guarantee:
- --------------------------
B-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the
appropriate box:
Section 4.14 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by
the Company pursuant to Section 4.14 or Section 4.15 of the Indenture,
state the amount: $_____________
Date: Your Signature:
- ---------------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
- -----------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
B-9
<PAGE>
EXHIBIT C
---------
FORM OF LEGEND FOR GLOBAL NOTE
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.16 OF THE INDENTURE.
C-1
<PAGE>
EXHIBIT D
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
[ ], [ ]
[ ]
[ ]
[ ]
Ladies and Gentlemen:
In connection with our proposed purchase of 10 1/4% Senior
Subordinated Notes due 2007 (the "Notes") of BWAY Corporation, a Delaware
corporation (the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated April 8, 1997, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Transfer Restrictions" of such Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (the "Indenture") as described in the Offering Memorandum
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act"),
and all applicable State securities laws.
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes 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 any Notes, we will do so only (i) to the Company or any
of its subsidiaries, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act), (iii) inside the United States 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
the Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Notes (the form of
D-1
<PAGE>
which letter can be obtained from the Trustee), (iv) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act to non-U.S.
persons, (v) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974), except as permitted in the
section entitled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to the Trustee and the Company such certification, legal
opinions and other information as the Trustee and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our 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.
D-2
<PAGE>
You, the Company, the Trustee and others 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 proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ________________________
Name:
Title:
D-3
<PAGE>
EXHIBIT E
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
[ ], [ ]
[ ]
[ ]
[ ]
[ ]
Re: BWAY Corporation (the "Company")
10 1/4% Senior Subordinated Notes
due 2007 (the "Notes")
----------------------
Ladies and Gentlemen:
In connection with our proposed sale of $100,000,000 aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Company and counsel for 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
E-1
<PAGE>
any administrative or legal proceedings or official inquiry with respect to
the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
- ----------------------------------------------------------
Authorized Signature
E-2
<PAGE>
EXHIBIT F
---------
GUARANTEE
---------
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Note the
cash payments in United States dollars of principal of, premium, if any, and
interest on this Note (and including Additional Interest payable thereon) in the
amounts and at the times when due and interest on the overdue principal,
premium, if any, and interest, if any, of this Note, if lawful, and the payment
or performance of all other obligations of the Company under the Indenture (as
defined below) or the Notes, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of this Note, Article
Eleven of the Indenture and this Guarantee. This Guarantee will become
effective in accordance with Article Eleven of the Indenture and its terms shall
be evidenced therein. The validity and enforceability of any Guarantee shall
not be affected by the fact that it is not affixed to any particular Note.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of April 11, 1997, among BWAY
Corporation, a Delaware corporation, as issuer (the "Company"), each of the
Subsidiary Guarantors named therein and Harris Trust and Savings Bank, as
trustee (the "Trustee"), as amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. The undersigned Subsidiary Guarantor hereby agrees to submit
to the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
F-1
<PAGE>
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused its
Guarantee to be duly executed.
Date:__________________
[NAME OF SUBSIDIARY GUARANTOR],
as Subsidiary Guarantor
By:
- ------------------------------------------
Name:
Title:
By:
- ------------------------------------------
Name:
Title:
F-2
<PAGE>
EXHIBIT 4.4
=======
REGISTRATION RIGHTS AGREEMENT
Dated as of April 11, 1997
By and Among
BWAY CORPORATION
as Issuer
and
THE SUBSIDIARY GUARANTORS
named herein
as Guarantors
and
BT SECURITIES CORPORATION,
BEAR, STEARNS & CO. INC.
and
NATIONSBANC CAPITAL MARKETS, INC.
as Initial Purchasers
10 1/4% Senior Notes due 2007
=======
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
-----
<S> <C>
1. Definitions............................................................ 1
2. Exchange Offer......................................................... 5
3. Shelf Registration..................................................... 9
4. Additional Interest.................................................... 11
5. Registration Procedures................................................ 13
6. Registration Expenses.................................................. 25
7. Indemnification........................................................ 26
8. Rule 144A.............................................................. 30
9. Underwritten Registrations............................................. 31
10. Miscellaneous.......................................................... 31
(a) No Inconsistent Agreements........................................ 31
(b) Adjustments Affecting Registrable Notes........................... 31
(c) Amendments and Waivers............................................ 31
(d) Notices........................................................... 32
(e) Successors and Assigns............................................ 33
(f) Release of Subsidiary Guarantors.................................. 33
(g) Counterparts...................................................... 33
(h) Headings.......................................................... 33
(i) Governing Law..................................................... 33
(j) Severability...................................................... 33
(k) Securities Held by the Issuer, the Subsidiary Guarantors
or their Affiliates............................................... 34
(l) Third Party Beneficiaries......................................... 34
(m) Entire Agreement.................................................. 34
(n) Information Supplied by the Participants.......................... 34
</TABLE>
-2-
<PAGE>
-3-
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is dated as of
April 11, 1997, by and among BWAY CORPORATION, a Delaware corporation (the
"Issuer"), as issuer and each of the Issuer's subsidiaries listed on the
signature pages hereof (collectively, the "Subsidiary Guarantors") as
guarantors, and BT SECURITIES CORPORATION, BEAR, STEARNS & CO. INC. and
NATIONSBANC CAPITAL MARKETS, INC., as initial purchasers (the "Initial
Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of April 8, 1997, by and among the Issuer, the Subsidiary
Guarantors and the Initial Purchasers (the "Purchase Agreement"), which provides
for the sale by the Issuer to the Initial Purchasers of $100,000,000 aggregate
principal amount of the Issuer's 10-1/4% Senior Subordinated Notes due 2007 (the
"Notes"), unconditionally guaranteed on a senior subordinated basis by each of
the Subsidiary Guarantors. In order to induce the Initial Purchasers to enter
into the Purchase Agreement, the Issuer and the Subsidiary Guarantors have
agreed to provide the registration rights set forth in this Agreement for the
benefit of the Initial Purchasers and any subsequent holder or holders of the
Notes. The execution and delivery of this Agreement is a condition to the
Initial Purchasers' obligation to purchase the Notes under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4 hereof.
Advice: See Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2 hereof.
Effectiveness Date: The 120th day after the Issue Date; provided,
however, that with respect to any Shelf Registration, the Effectiveness Date
shall be the later of the 150th day after the Issue Date and the 60th day after
the Filing Date with respect thereto.
Effectiveness Period: See Section 3 hereof.
Event Date: See Section 4 hereof.
<PAGE>
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Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2 hereof.
Exchange Offer: See Section 2 hereof.
Exchange Offer Registration Statement: See Section 2 hereof.
Filing Date: (A) If no Registration Statement has been filed by the
Issuer pursuant to this Agreement, the 60th day after the Issue Date; provided,
however, that if a Shelf Notice is given after the 50th day after the Issue
Date, then the Filing Date with respect to the Initial Shelf Registration shall
be the 15th calendar day after the date of the giving of such Shelf Notice; and
(B) in each other case (which may be applicable notwithstanding the consummation
of the Exchange Offer), the 30th day after the delivery of a Shelf Notice.
Guarantors: See the introductory paragraphs hereto.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of April 11, 1997, by and among the
Issuer, the Subsidiary Guarantors and Harris Trust and Savings Bank, as trustee,
pursuant to which the Notes are being issued, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Inspectors: See Section 5(o) hereof.
Issue Date: April 11, 1997, the date of original issuance of the
Notes.
Issuer: See the introductory paragraphs hereto.
NASD: See Section 5(t) hereof.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2 hereof.
<PAGE>
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Person: An individual, trustee, corporation, partnership, joint stock
company, trust, unincorporated association, union, business association, firm or
other legal entity.
Private Exchange: See Section 2 hereof.
Private Exchange Notes: See Section 2 hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereof.
Records: See Section 5(o) hereof.
Registrable Notes: Each Note upon its original issuance and at all
times subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof
is applicable upon original issuance and at all times subsequent thereto and
each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until (i) a Registration Statement (other than, with respect
to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Note, Exchange Note or
Private Exchange Note has been declared effective by the SEC and such Note,
Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement (unless
such Note could have been tendered for exchange by the Holder thereof under
applicable law and currently prevailing interpretations of the staff of the SEC
and such Note was not tendered for exchange by the Holder thereof), (ii) such
Note has been exchanged pursuant to the Exchange Offer for an Exchange Note or
Exchange Notes that may be resold without restriction under state and federal
securities laws, (iii) such Note, Exchange Note or Private Exchange Note, as the
case may be, ceases to be outstanding for purposes of the Indenture or (iv) such
Note, Exchange Note or Private Exchange Note, as the case may be, may be resold
without restriction pursuant to Rule 144 under the Securities Act.
Registration Statement: Any registration statement of the Issuer and
the Subsidiary Guarantors that covers any of the
<PAGE>
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Notes, the Exchange Notes or the Private Exchange Notes filed with the SEC under
the Securities Act, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2 hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and the trustee under any
indenture (if any) governing the Exchange Notes and Private Exchange Notes.
Underwritten registration or underwritten offering: A registration in
which securities of the Issuer, guaranteed by the Guarantors, are sold to an
underwriter for reoffering to the public.
2. Exchange Offer
(a) The Issuer and the Subsidiary Guarantors shall file with the SEC,
no later than the Filing Date, a Registration Statement (the "Exchange Offer
Registration Statement") on an
<PAGE>
-7-
appropriate registration form with respect to a registered offer (the "Exchange
Offer") to exchange any and all of the Registrable Notes for a like aggregate
principal amount of notes (the "Exchange Notes") of the Issuer (guaranteed by
the Subsidiary Guarantors) that are identical in all material respects to the
Notes (other than such changes to the Indenture or any such identical trust
indenture as are necessary to comply with any requirements of the SEC to effect
or maintain the qualification thereof under the TIA) except that the Exchange
Notes (and the Subsidiary Guarantors' guarantees thereof) shall contain no
restrictive legend thereon. The Exchange Offer shall comply with all applicable
tender offer rules and regulations under the Exchange Act and other applicable
law. The Issuer and the Subsidiary Guarantors shall use their best efforts to
(x) cause the Exchange Offer Registration Statement to be declared effective
under the Securities Act on or before the Effectiveness Date; (y) keep the
Exchange Offer open for at least 30 days (or longer if required by applicable
law) after the date that notice of the Exchange Offer is mailed to Holders; and
(z) consummate the Exchange Offer on or prior to the 45th day following the date
on which the Exchange Offer Registration Statement is declared effective by the
SEC.
Each Holder that participates in the Exchange Offer will be required,
as a condition to its participation in the Exchange Offer, to represent to the
Issuer in writing (which may be contained in the applicable letter of
transmittal) that any Exchange Notes to be received by it will be acquired in
the ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes in violation of
the provisions of the Securities Act, and that such Holder is not an affiliate
of the Issuer within the meaning of the Securities Act.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Notes that are Private Exchange
Notes, Exchange Notes as to which Section 2(c)(iv) is applicable and Exchange
Notes held by Participating Broker-Dealers (as defined), and the Issuer and the
Subsidiary Guarantors shall have no further obligation to register Registrable
Notes (other than Private Exchange Notes and other than in respect of any
Exchange Notes as to which clause 2(c)(iv) hereof applies) pursuant to Section 3
hereof.
No securities other than the Exchange Notes shall be included in the
Exchange Offer Registration Statement.
(b) The Issuer and the Subsidiary Guarantors shall include within the
Prospectus contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," reasonably acceptable to the Holders, which
shall contain a
<PAGE>
-8-
summary statement of the positions taken or policies made by the staff of the
SEC with respect to the potential "underwriter" status of any broker-dealer that
is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"), whether such positions or policies have been
publicly disseminated by the staff of the SEC or such positions or policies
represent the prevailing views of the staff of the SEC. Such "Plan of
Distribution" section shall also expressly permit, to the extent permitted by
applicable policies and regulations of the SEC, the use of the Prospectus by all
Persons subject to the prospectus delivery requirements of the Securities Act,
including, to the extent permitted by applicable policies and regulations of the
SEC, all Participating Broker-Dealers, and include a statement describing the
means by which Participating Broker-Dealers may resell the Exchange Notes in
compliance with the Securities Act.
The Issuer and the Subsidiary Guarantors shall use their best efforts
to keep the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such Prospectus
to be lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as is necessary to
comply with applicable law in connection with any resale of the Exchange Notes
covered thereby; provided, however, that such period shall not exceed 180 days
after such Exchange Offer Registration Statement is declared effective (or such
longer period if extended pursuant to the last paragraph of Section 5 hereof)
(the "Applicable Period").
If, prior to consummation of the Exchange Offer, any Holder holds any
Notes acquired by it that have, or that are reasonably likely to be determined
to have, the status of an unsold allotment in an initial distribution, or any
Holder is not entitled to participate in the Exchange Offer (other than due
solely to the status of such Holder as an affiliate of the Issuer or the
Subsidiary Guarantors within the meaning of the Securities Act), the Issuer upon
the request of any such Holder shall simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to any such Holder, in
exchange (the "Private Exchange") for such Notes held by any such Holder, a like
principal amount of notes (the "Private Exchange Notes") of the Issuer that are
identical in all material respects to the Exchange Notes and the Subsidiary
Guarantors shall guarantee such Private Exchange Notes. The Private Exchange
Notes shall be issued pursuant to the same indenture as the Exchange Notes and
bear the same CUSIP number as the Exchange Notes.
In connection with the Exchange Offer, the Issuer and the Subsidiary
Guarantors shall:
<PAGE>
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(1) mail, or cause to be mailed, to each Holder entitled to
participate in the Exchange Offer a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(2) keep the Exchange Offer open for not less than 30 days after the
date that notice of the Exchange Offer is mailed to Holders (or longer if
required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw tendered Notes at any time prior to the
close of business, New York time, on the last business day on which the
Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer and the
Private Exchange, if any, the Issuer and the Subsidiary Guarantors shall:
(1) accept for exchange all Registrable Notes validly tendered and not
validly withdrawn pursuant to the Exchange Offer and the Private Exchange,
if any;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may
be, equal in principal amount to the Notes of such Holder so accepted for
exchange.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or Private Exchange, as
the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) no action or proceeding shall have
been instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Issuer and the Subsidiary Guarantors
to proceed with the Exchange Offer or the Private Exchange, and no material
adverse development shall have occurred in any existing action or proceeding
with respect to the Issuer and (iii) all governmental approvals shall have been
obtained, which approvals the Issuer deems necessary for the consummation of the
Exchange Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical
<PAGE>
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in all material respects to the Indenture and which, in either case, has been
qualified under the TIA or is exempt from such qualification and shall provide
that the Exchange Notes shall not be subject to the transfer restrictions set
forth in the Indenture. The Indenture or such other indenture shall provide that
the Exchange Notes, the Private Exchange Notes and the Notes shall vote and
consent together on all matters as one class and that none of the Exchange
Notes, the Private Exchange Notes or the Notes will have the right to vote or
consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuer and the Subsidiary
Guarantors are not permitted to effect the Exchange Offer, (ii) the Exchange
Offer is not consummated within 165 days of the Issue Date, (iii) any holder of
Private Exchange Notes so requests in writing to the Issuer within 60 days after
the consummation of the Exchange Offer, or (iv) in the case of any Holder that
participates in the Exchange Offer, such Holder does not receive Exchange Notes
on the date of the exchange that may be sold without restriction under state and
federal securities laws (other than due solely to the status of such Holder as
an affiliate of the Issuer or the Subsidiary Guarantors within the meaning of
the Securities Act), then in the case of each of clauses (i) to and including
(iv) of this sentence, the Issuer and the Subsidiary Guarantors shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by Section
2(c) hereof, then:
(a) Shelf Registration. The Issuer and the Subsidiary Guarantors shall
file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Notes not
exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as to
which Section 2(c)(iv) is applicable (the "Initial Shelf Registration"). The
Issuer and the Subsidiary Guarantors shall use their reasonable best efforts to
file with the SEC the Initial Shelf Registration on or before the applicable
Filing Date. The Initial Shelf Registration shall be on Form S-1 or another
appropriate form permitting registration of such Registrable Notes for resale by
Holders in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). The Issuer and the Subsidiary
Guarantors shall not permit any securities other than the Registrable Notes to
be included in the Initial Shelf Registration or any Subsequent Shelf
Registration (as defined below).
<PAGE>
-11-
The Issuer and the Subsidiary Guarantors shall use their reasonable
best efforts to cause the Initial Shelf Registration to be declared effective
under the Securities Act on or prior to the Effectiveness Date and to keep the
Initial Shelf Registration continuously effective under the Securities Act until
the date which is two years from the Effectiveness Date, subject to extension
pursuant to the last paragraph of Section 5 hereof (the "Effectiveness Period"),
or such shorter period ending when (i) all Registrable Notes covered by the
Initial Shelf Registration have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration or (ii) a Subsequent Shelf
Registration covering all of the Registrable Notes covered by and not sold under
the Initial Shelf Registration or an earlier Subsequent Shelf Registration has
been declared effective under the Securities Act; provided, however, that the
Effectiveness Period in respect of the Initial Shelf Registration shall be
extended to the extent required to permit dealers to comply with the applicable
prospectus delivery requirements of Rule 174 under the Securities Act and as
otherwise provided herein.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration
or any Subsequent Shelf Registration ceases to be effective for any reason at
any time during the Effectiveness Period (other than because of the sale of all
of the securities registered thereunder), the Issuer and the Subsidiary
Guarantors shall use their reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within 30 days of such cessation of effectiveness amend the Initial Shelf
Registration in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes covered by and not
sold under the Initial Shelf Registration or an earlier Subsequent Shelf
Registration (each, a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Issuer and the Subsidiary Guarantors shall use their
reasonable best efforts to cause the Subsequent Shelf Registration to be
declared effective under the Securities Act as soon as practicable after such
filing and to keep such subsequent Shelf Registration continuously effective for
a period equal to the number of days in the Effectiveness Period less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective. As used
herein the term "Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuer and the Subsidiary
Guarantors shall promptly supplement and amend any Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration, if required by the
Securities Act, or if reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Notes covered by such
<PAGE>
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Registration Statement or by any underwriter of such Registrable Notes.
4. Additional Interest
(a) The Issuer, the Subsidiary Guarantors and the Initial Purchasers
agree that the Holders will suffer damages if the Issuer and the Subsidiary
Guarantors fail to fulfill their obligations under Section 2 or Section 3 hereof
and that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, the Issuer and the Subsidiary Guarantors agree to pay,
as liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the applicable
Filing Date or (B) notwithstanding that the Issuer and the Subsidiary
Guarantors have consummated or will consummate the Exchange Offer, the
Issuer and the Subsidiary Guarantors are required to file a Shelf
Registration and such Shelf Registration is not filed on or prior to the
Filing Date applicable thereto, then, commencing on the day after such
Filing Date, Additional Interest shall accrue on the principal amount of
the Notes at a rate of 0.25% per annum for the first 90 days immediately
following each such Filing Date, and such Additional Interest rate shall
increase by an additional 0.25% per annum at the beginning of each
subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor the
Initial Shelf Registration is declared effective by the SEC on or prior to
the relevant Effectiveness Date or (B) notwithstanding that the Issuer and
the Subsidiary Guarantors have consummated or will consummate the Exchange
Offer, the Issuer and the Subsidiary Guarantors are required to file a
Shelf Registration and such Shelf Registration is not declared effective by
the SEC on or prior to the Effectiveness Date in respect of such Shelf
Registration, then, commencing on the day after such Effectiveness Date,
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 90 days immediately following the day
after such Effectiveness Date, and such Additional Interest rate shall
increase by an additional 0.25% per annum at the beginning of each
subsequent 90-day period; or
(iii) if (A) the Issuer and the Subsidiary Guarantors have not
exchanged Exchange Notes for all Notes validly tendered in accordance with
the terms of the Exchange Offer on or prior to the 45th day after the date
on which the Exchange Offer Registration Statement relating thereto was
<PAGE>
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declared effective or (B) if applicable, a Shelf Registration has been
declared effective and such Shelf Registration ceases to be effective at
any time during the Effectiveness Period, then Additional Interest shall
accrue on the principal amount of the Notes at a rate of 0.25% per annum
for the first 90 days commencing on the (x) 46th day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
ceases to be effective in the case of (B) above, and such Additional
Interest rate shall increase by an additional 0.25% per annum at the
beginning of each such subsequent 90-day period (it being understood and
agreed that, notwithstanding any provision to the contrary, so long as any
Note which is the subject of the Shelf Notice is then covered by an
effective Shelf Registration Statement, no Additional Interest shall accrue
on such Note);
provided, however, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 1.0% per annum; provided, further, however,
that (1) upon the filing of the applicable Exchange Offer Registration Statement
or the applicable Shelf Registration as required hereunder (in the case of
clause (i) above of this Section 4), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the applicable Shelf Registration Statement as
required hereunder (in the case of clause (ii) of this Section 4), or (3) upon
the exchange of the applicable Exchange Notes for all Notes validly tendered (in
the case of clause (iii)(A) of this Section 4), or upon the effectiveness of the
applicable Shelf Registration Statement which had ceased to remain effective (in
the case of (iii)(B) of this Section 4), Additional Interest on the Notes in
respect of which such events relate as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue.
(b) The Issuer shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash semiannually on each April 15 and October 15 (to the
holders of record on the April 1 and October 1 immediately preceding such
dates), commencing with the first such date occurring after any such Additional
Interest commences to accrue. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Registrable Notes, multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.
5. Registration Procedures
<PAGE>
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In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuer and the Subsidiary Guarantors shall effect
such registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Issuer and the Subsidiary Guarantors hereunder the Issuer and the Subsidiary
Guarantors shall:
(a) Prepare and file with the SEC prior to the applicable Filing Date,
a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use their best efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; provided, however, that, if (1) such filing is pursuant to Section
3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period relating thereto, before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Issuer and the Subsidiary Guarantors shall furnish
to and afford the Holders of the Registrable Notes covered by such
Registration Statement or each such Participating Broker-Dealer, as the
case may be, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed (in each case at least five days
prior to such filing, or such later date as is reasonable under the
circumstances). The Issuer and the Subsidiary Guarantors shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto if the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Offer
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the Effectiveness
Period or the Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by
applicable law, and as so supplemented to be filed pursuant to Rule 424 (or
any similar provisions then in force) promulgated under the Securities Act;
and comply with the provisions of the Securities Act and the Exchange Act
applicable to each of them with respect to the disposition of all
securities covered by such Registration
<PAGE>
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Statement as so amended or in such Prospectus as so supplemented and with
respect to the subsequent resale of any securities being sold by a
Participating Broker-Dealer covered by any such Prospectus. The Issuer and
the Subsidiary Guarantors shall be deemed not to have used their best
efforts to keep a Registration Statement effective during the Effective
Period or the Applicable Period, as the case may be, relating thereto if
the Issuer or the Subsidiary Guarantors voluntarily take any action that
would result in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being able
to sell such Registrable Notes or such Exchange Notes during that period
unless such action is required by applicable law or permitted by this
Agreement, including, without limitation, the provisions of paragraph 5(k)
hereof and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period relating thereto from whom the
Issuer has received written notice that it will be a Participating Broker-
Dealer in the Exchange Offer, notify the selling Holders of Registrable
Notes, or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, promptly (but in any event
within one day), and confirm such notice in writing, (i) when a Prospectus
or any Prospectus supplement or post-effective amendment has been filed,
and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon
request, obtain, at the sole expense of the Issuer, one conformed copy of
such Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits), (ii) of the issuance by the SEC of
any stop order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of any preliminary prospectus
or the initiation of any proceedings for that purpose, (iii) if at any time
when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange Notes
by Participating Broker-Dealers the representations and warranties of the
Issuer contained in any agreement (including any underwriting agreement)
contemplated by Section 5(m) hereof cease to be true and correct in all
material respects, (iv) of the receipt by the Issuer of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Notes
or the Exchange Notes to be sold by any
<PAGE>
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Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition or any information
becoming known that makes any statement made in such Registration Statement
or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any 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, and (vi) of
the Issuer's determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, use its best efforts to
prevent the issuance of any order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of
a Prospectus or suspending the qualification (or exemption from
qualification) of any of the Registrable Notes or the Exchange Notes to be
sold by any Participating Broker-Dealer, for sale in any jurisdiction, and,
if any such order is issued, to use its best efforts to obtain the
withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any), the Holders
of a majority in aggregate principal amount of the Registrable Notes being
sold in connection with an underwritten offering or any Participating
Broker-Dealer, (i) as promptly as practicable incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriter or underwriters (if any), such Holders, any Participating
Broker-Dealer or counsel for any of them reasonably request to be included
therein, (ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the Issuer has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make
amendments to such Registration Statement.
<PAGE>
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(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, furnish to each selling Holder
of Registrable Notes and to each such Participating Broker-Dealer who so
requests and to their respective counsel and each managing underwriter, if
any, at the sole expense of the Issuer, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein
by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, deliver to each selling Holder
of Registrable Notes, or each such Participating Broker-Dealer, as the case
may be, their respective counsel, and the underwriters, if any, at the sole
expense of the Issuer, as many copies of the Prospectus or Prospectuses
(including each form of preliminary prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of
this Section 5, the Issuer and the Subsidiary Guarantors hereby consent to
the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any,
and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by, or the sale by Participating Broker-Dealers
of the Exchange Notes pursuant to, such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Notes or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use their best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing underwriter
or underwriters, if any, and their respective counsel in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions
<PAGE>
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within the United States as any selling Holder, Participating Broker-
Dealer, or the managing underwriter or underwriters reasonably request in
writing; provided, however, that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, upon the request of such persons, the Issuer and the
Subsidiary Guarantors agree to cause their counsel to perform Blue Sky
investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h), use its best efforts to process such
registrations or qualifications to effectiveness, keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do
any and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the
applicable Registration Statement; provided, however, that the Issuer and
the Subsidiary Guarantors shall not be required to (A) qualify generally to
do business in any jurisdiction where it is not then so qualified, (B) take
any action that would subject them to general service of process in any
such jurisdiction where it is not then so subject or (C) subject themselves
to taxation in excess of a nominal dollar amount in any such jurisdiction
where they are not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Notes to be sold,
which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company; and enable
such Registrable Notes to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
request.
(j) Use their best efforts to cause the Registrable Notes covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to
enable the seller or sellers thereof or the underwriter or underwriters, if
any, to consummate the disposition of such Registrable Notes, except as may
be required solely as a consequence of the nature of such selling Holder's
business, in which case the Issuer and the Subsidiary Guarantors will
cooperate in all reasonable respects with the filing of such Registration
Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the
<PAGE>
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Exchange Offer Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, upon the occurrence of any event contemplated by paragraph 5(c)(v)
or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to
Section 5(a) hereof) file with the SEC, at the sole expense of the Issuer
and the Subsidiary Guarantors, a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder or to the
purchasers of the Exchange Notes to whom such Prospectus will be delivered
by a Participating Broker-Dealer, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the Issuer and the Subsidiary Guarantors
shall not be required to amend or supplement a Registration Statement, any
related Prospectus or any document incorporated therein by reference, in
the event that, and for a period not to exceed an aggregate of 30 days in
any calendar year if, (i) an event occurs and is continuing as a result of
which the Shelf Registration would, in the Issuer's good faith judgment,
contain an untrue statement of a material fact or omit 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, and (ii) (a) the
Issuer determines in its good faith judgment that the disclosure of such
event at such time would have a material adverse effect on the business,
operations or prospects of the Issuer or (b) the disclosure otherwise
relates to a pending material business transaction that has not yet been
publicly disclosed.
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes in a form eligible for deposit with
The Depository Trust Company and (ii) provide a CUSIP number for the
Registrable Notes.
(m) In connection with any underwritten offering of Registrable Notes
pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of debt securities similar to the
Notes in form and substance reasonably satisfactory to the Issuer and the
Subsidiary Guarantors and take all such other actions as are reasonably
requested by the managing underwriter or underwriters in order to expedite
or facilitate the registration or the disposition of such
<PAGE>
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Registrable Notes and, in such connection, (i) make such representations
and warranties to, and covenants with, the underwriters with respect to the
business of the Issuer and the Subsidiary Guarantors (including any
acquired business, properties or entity, if applicable) and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings of
debt securities similar to the Notes, and confirm the same in writing if
and when requested in form and substance reasonably satisfactory to the
Issuer and the Subsidiary Guarantors; (ii) obtain the written opinions of
counsel to the Issuer and the Subsidiary Guarantors and written updates
thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions reasonably requested
in underwritten offerings and such other matters as may be reasonably
requested by the managing underwriter or underwriters; (iii) use their best
efforts to obtain "cold comfort" letters and updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent auditors of the Issuer and the Subsidiary
Guarantors (and, if necessary, any other independent auditors of the Issuer
and the Subsidiary Guarantors or of any business acquired by the Issuer for
which financial statements and financial data are, or are required to be,
included or incorporated by reference in the Registration Statement),
addressed to each of the underwriters, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings of debt securities
similar to the Notes and such other matters as reasonably requested by the
managing underwriter or underwriters as permitted by the Statement on
Auditing Standards No. 72; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures no
less favorable to the sellers and underwriters, if any, than those set
forth in Section 7 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement and the managing
underwriter or underwriters or agents, if any). The above shall be done at
each closing under such underwriting agreement, or as and to the extent
required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, make available for inspection
by any selling Holder of such
<PAGE>
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Registrable Notes being sold, or each such Participating Broker-Dealer, as
the case may be, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating Broker-
Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and instruments of the Issuer and the Subsidiary Guarantors
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of each of the Issuer and the
Subsidiary Guarantors to supply all information reasonably requested by any
such Inspector in connection with such Registration Statement and
Prospectus. Each Inspector shall agree in writing that it will keep the
Records confidential and that it will not disclose any of the Records that
the Issuer determines, in good faith, to be confidential and notifies the
Inspectors in writing are confidential unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
material omission in such Registration Statement or Prospectus, (ii) the
release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (iii) disclosure of such
information is necessary or advisable, in the opinion of counsel for any
Inspector, in connection with any action, claim, suit or proceeding,
directly or indirectly, involving or potentially involving such Inspector
and arising out of, based upon, relating to, or involving this Agreement or
the Purchase Agreement, or any transactions contemplated hereby or thereby
or arising hereunder or thereunder, or (iv) the information in such Records
has been made generally available to the public; provided, however, that
prior notice shall be provided as soon as practicable to the Issuer of the
potential disclosure of any information by such Inspector pursuant to
clauses (i), (ii) or (iii) of this sentence to permit the Issuer to obtain
a protective order (or waive the provisions of this paragraph (n)) and that
such Inspector shall take such actions as are reasonably necessary to
protect the confidentiality of such information (if practicable) to the
extent such action is otherwise not inconsistent with, an impairment of or
in derogation of the rights and interests of the Holder or any Inspector.
Each selling Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to agree that information obtained by it as
a result of such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the securities of
the Issuer unless and until such information is generally available to the
public. Each selling Holder of such Registrable Notes and each such
Participating Broker-Dealer will be required to further agree that it will,
upon
<PAGE>
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learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Issuer and allow the Issuer to undertake
appropriate action to prevent disclosure of the Records deemed confidential
at the Issuer's sole expense.
(o) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the
Holders of the Registrable Notes, to effect such changes to such indenture
as may be required for such indenture to be so qualified in accordance with
the terms of the TIA; and execute, and use their best efforts to cause such
trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the
SEC to enable such indenture to be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 60 days after the end of any fiscal quarter (or 120 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Notes are
sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Issuer after
the effective date of a Registration Statement, which statements shall
cover said 12-month periods.
(q) Upon consummation of the Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuer and the Subsidiary Guarantors,
in a form customary for underwritten transactions, addressed to the Trustee
for the benefit of all Holders of Registrable Notes participating in the
Exchange Offer or the Private Exchange, as the case may be, that the
Exchange Notes or Private Exchange Notes, as the case may be, and the
related indenture constitute legal, valid and binding obligations of the
Issuer and the Subsidiary Guarantors, enforceable against the Issuer and
the Subsidiary Guarantors in accordance with its respective terms, subject
to customary exceptions and qualifications.
(r) If the Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Issuer (or to such
other Person as directed by the Issuer) in exchange for the Exchange Notes
or the Private
<PAGE>
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Exchange Notes, as the case may be, the Issuer shall mark, or cause to be
marked, on such Registrable Notes that such Registrable Notes are being
cancelled in exchange for the Exchange Notes or the Private Exchange Notes,
as the case may be; in no event shall such Registrable Notes be marked as
paid or otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in
connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
(t) Use their best efforts to take all other steps reasonably
necessary to effect the registration of the Exchange Notes and/or
Registrable Notes covered by a Registration Statement contemplated hereby.
The Issuer and the Subsidiary Guarantors may require each seller of
Registrable Notes as to which any registration is being effected to furnish to
the Issuer and the Subsidiary Guarantors such information regarding such seller
and the distribution of such Registrable Notes as the Issuer and the Subsidiary
Guarantors may, from time to time, reasonably request. The Issuer and the
Subsidiary Guarantors may exclude from such registration the Registrable Notes
of any seller so long as such seller fails to furnish such information within a
reasonable time after receiving such request. Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to the Issuer and the
Subsidiary Guarantors all information required to be disclosed in order to make
the information previously furnished to the Issuer and the Subsidiary Guarantors
by such seller not materially misleading and to promptly notify the Issuer
following any sale or other transfer of Registrable Notes covered by the Shelf
Registration, which notice shall specify the amount of securities involved and
the market, if any, on which such sale or transfer occurred.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Issuer and the Subsidiary
Guarantors, then such Holder shall have the right to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to the Issuer
and such Holder, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Issuer, or (ii) in the event that such reference to such
Holder by name or otherwise is not required by the Securities Act or any similar
federal statute then in force, the deletion of the reference to such Holder in
any amendment or supplement to the Registration
<PAGE>
-24-
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by its acquisition of such Registrable Notes or Exchange Notes to be sold
by such Participating Broker-Dealer, as the case may be, that, upon receipt of
any notice from the Issuer of the happening of any event of the kind described
in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will
forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof, or until it is advised
in writing (the "Advice") by the Issuer that the use of the applicable
Prospectus may be resumed, and has received copies of any amendments or
supplements thereto. In the event that the Issuer shall give any such notice,
each of the Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Registrable Notes
covered by such Registration Statement or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof or (y) the Advice; provided, however, nothing in this paragraph shall be
construed to mean that the Issuer and the Subsidiary Guarantors are required to
keep a Registration Statement effective at a time when the Registrable Notes
covered thereby may be sold without restriction under Rule 144.
6. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuer and the Subsidiary Guarantors shall be borne
by the Issuer whether or not the Exchange Offer Registration Statement or any
Shelf Registration is filed or becomes effective or the Exchange Offer is
consummated, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, fees and disbursements of counsel in connection with Blue
Sky qualifications of the Registrable Notes or Exchange Notes and determination
of the eligibility of the Registrable Notes or Exchange Notes for investment
under the laws of such jurisdictions (x) where the holders of Registrable Notes
are located, in the case of the Exchange Notes, or (y) as provided in Section
5(h) hereof, in the case of Registrable Notes or Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses, including, without limitation,
<PAGE>
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expenses of printing certificates for Registrable Notes or Exchange Notes in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Registrable Notes included in any Registration Statement
or in respect of Registrable Notes or Exchange Notes to be sold by any
Participating Broker-Dealer during the Applicable Period, as the case may be,
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuer and the Subsidiary Guarantors and reasonable fees and
disbursements of one special counsel for all of the sellers of Registrable Notes
(exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(m)(iii) hereof (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (vi) Securities Act liability insurance, if the Issuer and the
Subsidiary Guarantors desire such insurance, (vii) fees and expenses of all
other Persons retained by the Issuer and the Subsidiary Guarantors, (viii)
internal expenses of the Issuer and the Subsidiary Guarantors (including,
without limitation, all salaries and expenses of officers and employees of the
Issuer and the Subsidiary Guarantors performing legal or accounting duties),
(ix) the expense of any annual audit, (x) any fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of the securities, in each case, if
applicable, and (xi) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, indentures
and any other documents necessary in order to comply with this Agreement.
7. Indemnification
(a) The Issuer and the Subsidiary Guarantors agree, jointly and
severally, to indemnify and hold harmless each Holder of Registrable Notes and
each Participating Broker-Dealer selling Exchange Notes during the Applicable
Period, the officers, directors, employees and agents of each such Person, and
each Person, if any, who controls any such Person within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages, judgments,
liabilities and expenses (including, without limitation, the reasonable legal
fees and other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) or Prospectus (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by, arising out of or based
upon any omission or alleged omission to state therein
<PAGE>
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a material fact required to be stated therein or necessary to make the
statements therein, in the case of the Prospectus in light of the circumstances
under which they were made, not misleading, except (i) insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Participant furnished to the Issuer in writing
by such Participant expressly for use therein and (ii) with respect to any
preliminary Prospectus, to the extent such losses, claims, damages or
liabilities arise solely from the fact that a Participant sold securities to a
person to whom there was not sent or given, on or prior to the written
confirmation of such sale, a copy of the Final Prospectus, as amended and
supplemented, if (A) the Issuer shall have previously furnished copies thereof
to such Participant in accordance with this Agreement and (B) the final
Prospectus, as amended or supplemented, would have corrected any such untrue
statement or omission.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuer, the Subsidiary Guarantors, their directors,
officers who sign the Registration Statement and each Person who controls the
Issuer and the Subsidiary Guarantors within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent (but on a
several, and not joint, basis) as the foregoing indemnity from the Issuer and
the Subsidiary Guarantors to each Participant, but only with reference to
information relating to such Participant furnished to the Issuer in writing by
such Participant expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary prospectus. The
liability of any Participant under this paragraph shall in no event exceed the
proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Persons against whom such indemnity may be sought (the "Indemnifying
Persons") in writing, and the Indemnifying Persons, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may reasonably designate in such proceeding and shall pay
the fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Persons shall not relieve any of them of any obligation or liability which any
of them may have hereunder or otherwise. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such
<PAGE>
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Indemnified Person unless (i) the Indemnifying Persons and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Persons
shall have failed within a reasonable period of time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both any
Indemnifying Person and the Indemnified Person or any affiliate thereof and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that,
unless there exists a conflict among Indemnified Persons, the Indemnifying
Persons shall not, in connection with such proceeding or separate but
substantially similar related proceedings in the same jurisdiction arising out
of the same general allegations, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed promptly as
they are incurred. Any such separate firm for the Participants and such control
Persons of Participants shall be designated in writing by Participants who sold
a majority in interest of Registrable Notes and Exchange Notes sold by all such
Participants and shall be reasonably acceptable to the Issuer, and any such
separate firm for the Issuer, the Subsidiary Guarantors, their directors,
officers and such control Persons of the Issuer and the Subsidiary Guarantors
shall be designated in writing by the Issuer and shall be reasonably acceptable
to the Holders holding a majority in interest of Registrable Notes and Exchange
Notes.
The Indemnifying Persons shall not be liable for any settlement of any
proceeding effected without its prior written consent (which consent shall not
be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each of the Indemnifying Persons agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld or delayed), effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, or indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified
<PAGE>
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Person in respect of any losses, claims, damages or liabilities referred to
therein, then each Indemnifying Person under such paragraphs, in lieu of
indemnifying such Indemnified Person thereunder and in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other hand from the offering of the Notes
or (ii) if the allocation provided by the foregoing clause (i) is not permitted
by applicable law, not only such relative benefits but also the relative fault
of the Indemnifying Person or Persons on the one hand and the Indemnified Person
or Persons on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative benefits received by the Issuer and the
Subsidiary Guarantors on the one hand and the Participants on the other hand
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of discounts and commissions but before deducting expenses) of the
Notes received by the Issuer bears to the total proceeds received by such
Participant from the sale of Registrable Notes or Exchange Notes, as the case
may be, in each case as set forth in the table on the cover page of the Offering
Memorandum in respect of the sale of the Notes. The relative fault of the
parties 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 Issuer
or the Subsidiary Guarantors on the one hand or such Participant or such other
Indemnified Person, as the case may be, on the other hand, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall a Participant be required to contribute any amount in excess of the amount
by which proceeds received by such Participant from sales of Registrable Notes
or
<PAGE>
-29-
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid 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 Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the Indemnifying Party to the Indemnified Party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Issuer and the Subsidiary Guarantors set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Holder or any
person who controls a Holder, the Issuer, the Subsidiary Guarantors, their
directors, officers, employees or agents or any person controlling the Issuer or
the Subsidiary Guarantors, and (ii) any termination of this Agreement.
(g) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rule 144A
The Issuer and the Subsidiary Guarantors covenant and agree that they
will file the reports required to be filed by them under the Securities Act and
the Exchange Act and the rules and regulations adopted by the SEC thereunder in
a timely manner in accordance with the requirements of the Securities Act and
the Exchange Act and, if at any time the Issuer and the Subsidiary Guarantors
are not required to file such reports, the Issuer and the Subsidiary Guarantors
will, upon the request of any Holder or beneficial owner of Registrable Notes,
make available such information necessary to permit sales pursuant to Rule 144A
under the Securities Act. The Issuer and the Subsidiary Guarantors further
covenant and agree, for so long as any Registrable Notes remain outstanding that
they will take such further action as any Holder of Registrable Notes may
reasonably request, all to the extent required from time to time to enable such
holder to sell Registrable Notes without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC.
9. Underwritten Registrations
<PAGE>
-30-
If any of the Registrable Notes covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Issuer.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. The Issuer and the Subsidiary
Guarantors have not, as of the date hereof, and the Issuer and the Subsidiary
Guarantors shall not, after the date of this Agreement, enter into any agreement
with respect to any of their securities that is inconsistent with the rights
granted to the Holders of Registrable Notes 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 Issuer's and the Subsidiary Guarantors'
other issued and outstanding securities under any such agreements. The Issuer
and the Subsidiary Guarantors have not entered and will not enter into any
agreement with respect to any of their securities which will grant to any Person
piggy-back registration rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Notes. The Issuer and the
Subsidiary Guarantors shall not, directly or indirectly, take any action with
respect to the Registrable Notes as a class that would adversely affect the
ability of the Holders of Registrable Notes to include such Registrable Notes in
a registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuer and the Subsidiary Guarantors and (II)(A) the Holders
of not less than a majority in aggregate principal amount of the then
outstanding Registrable Notes and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers
holding not less than a majority in aggregate principal amount of the Exchange
Notes held by all Participating Broker-Dealers; provided, however, that Section
7
<PAGE>
-31-
and this Section 10(c) may not be amended, modified or supplemented without the
prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes may
be given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including, without
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture.
(ii) if to the Issuer or any of the Subsidiary Guarantors, at the
address as follows:
c/o BWAY Corporation
8607 Roberts Drive
Suite 250
Atlanta, Georgia 30350
Facsimile No.: (770) 587-0186
Attention: Chief Financial Officer
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
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 and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto,
the Holders and the Participating
<PAGE>
-32-
Broker-Dealers; provided, however, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder or Participating
Broker-Dealer unless and to the extent such successor or assign holds
Registrable Notes.
(f) Release of Subsidiary Guarantors. If any Subsidiary Guarantor that
is released from its obligations under the Indenture in accordance with the
terms thereof, then such Subsidiary Guarantor shall be automatically released
from its obligations hereunder.
(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, AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(k) Securities Held by the Issuer, the Subsidiary Guarantors or their
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable Notes held by
the Issuer, the Subsidiary Guarantors or their affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(l) Third-Party Beneficiaries. Holders of Registrable Notes and
Participating Broker-Dealers are intended third-party
<PAGE>
-33-
beneficiaries of this Agreement, and this Agreement may be enforced by such
Persons.
(m) Entire Agreement. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuer and the Subsidiary Guarantors on the other hand, or between or
among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the subject
matter hereof and thereof are merged herein and replaced hereby.
(n) Information Supplied by the Participants. The statements set forth
in the last paragraph on the front cover page and in the third, fifth, sixth and
seventh paragraphs under the heading "Private Placement" in the Final Offering
Memorandum (to the extent such statements relate to a Participant) constitute
the only information furnished by the Participants to the Issuer for the
purposes of Section 7 hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
BWAY CORPORATION
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
BROCKWAY STANDARD (NEW JERSEY),
INC., as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
MILTON CAN COMPANY, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
BROCKWAY STANDARD, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
<PAGE>
MATERIALS MANAGEMENT, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
BROCKWAY STANDARD (CANADA),
INC., as guarantor
By: /s/ David P. Hayford
--------------------------------
Name: David P. Hayford
Title: Executive Vice President
BROCKWAY STANDARD (OHIO), INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
PLATE MASTERS, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
--------------------------------
Name: Blair G. Schlossberg
Title: Secretary
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION,
as Initial Purchaser
By: /s/ Christina Minnis
-------------------------------
Name: Christina Minnis
Title: Vice President
BEAR, STEARNS & CO. INC.,
as Initial Purchaser
By: /s/ Tylene J. Elliott
-------------------------------
Name: Tylene J. Elliott
Title: Senior Managing Director
NATIONSBANC CAPITAL MARKETS,
INC., as Initial Purchaser
By: /s/ J. Scott Holmes
-------------------------------
Name: J. Scott Holmes
Title: Director
<PAGE>
Exhibit 5.1
-----------
KIRKLAND & ELLIS
PARTNERSHIPS INCLUDING PROFESSIONAL CORPORATIONS
200 East Randolph Drive
Chicago, Illinois 60601
312-861-2000
To Call Writer Direct: Facsimile:
312-861-2000 312-861-2200
April 28, 1997
BWAY Corporation
8607 Roberts Drive
Suite 250
Atlanta, Georgia 30350
Re: 10 1/4% Senior Subordinated Notes due 2007, Series B
----------------------------------------------------
Ladies and Gentlemen:
We are acting as special counsel to BWAY Corporation, a Delaware
corporation (the "Company"), in connection with the proposed registration by the
Company of up to $100,000,000 in aggregate principal amount of the Company's 10
1/4% Senior Subordinated Notes due 2007, Series B (the "Exchange Notes"),
pursuant to a Registration Statement on Form S-4 to be filed with the Securities
and Exchange Commission (the "Commission") on or about April 28, 1997 under the
Securities Act of 1933, as amended (the "Securities Act") (such Registration
Statement, as amended or supplemented, is hereinafter referred to as the
"Registration Statement"), for the purpose of effecting an exchange offer (the
"Exchange Offer") for the Company's 10 1/4% Senior Subordinated Notes due 2007
(the "Old Notes"). We are also acting as special counsel to Armstrong
Containers, Inc., Brockway Standard, Inc., Brockway Standard (Canada), Inc.,
Brockway Standard (New Jersey), Inc., Brockway Standard (Ohio), Inc., Materials
Management, Inc., Milton Can Company, Inc. and Plate Masters, Inc.
(collectively, the "Subsidiary Guarantors") as issuers of guarantees
(collectively, the "Guarantees") of the obligations of the Company under the
Exchange Notes. The Exchange Notes and the Guarantees are to be issued pursuant
to the Indenture (the "Indenture"), dated as of April 11, 1997, among the
Company, the Subsidiary Guarantors and Harris Trust and Savings Bank, as
Trustee, in exchange for and in replacement of the Company's outstanding Old
Notes, of which $100,000,000 in aggregate principal amount is outstanding.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the corporate and organizational documents of the Company
and each Subsidiary Guarantor, (ii) minutes and records of the corporate
proceedings of the Company and each Subsidiary Guarantor with respect to the
issuance of the
<PAGE>
BWAY Corporation
April 28, 1997
Page 2
Exchange Notes and the Guarantees, respectively, (iii) the Registration
Statement and exhibits thereto and (iv) the Registration Rights Agreement, dated
as of April 11, 1997, among the Company, the Subsidiary Guarantors, BT
Securities Corporation, Bankers Trust International plc, Bear, Stearns & Co.
Inc. and NationsBanc Capital Markets, Inc.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the genuineness of the
signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties thereto other than the Company and the Subsidiary Guarantors, and the
due authorization, execution and delivery of all documents by the parties
thereto other than the Company and the Subsidiary Guarantors. As to any facts
material to the opinions expressed herein which we have not independently
established or verified, we have relied upon statements and representations of
officers and other representatives of the Company and others.
Based upon and subject to the foregoing qualifications, assumptions and
limitations and the further limitations set forth below, we are of the opinion
that:
(1) The Company and each Subsidiary Guarantor (other than Brockway Standard
(Canada), Inc. ("BSC")) is a corporation existing and in good standing under the
General Corporation Law of the State of Delaware. BSC is a corporation
incorporated, amalgamated or continued under the laws of the Province of Ontario
and has not been dissolved.
(2) The sale and issuance of the Exchange Notes has been validly authorized
by the Company.
(3) The Guarantees have been validly authorized by each of the Subsidiary
Guarantors.
(4) When, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the Indenture
shall have been qualified pursuant to the provisions of the Trust Indenture Act
of 1939, as amended, (iii) the Old Notes shall have been validly tendered to the
Company and (iv) the Exchange Notes shall have been issued in the form and
containing the terms described in the Registration Statement, the Indenture, the
resolutions of the Company's and each Subsidiary Guarantor's Board of Directors
(or authorized committee thereof) authorizing the foregoing and any legally
required consents, approvals, authorizations and other order of the Commission
and any other regulatory authorities to be obtained, the Exchange Notes
<PAGE>
BWAY Corporation
April 28, 1997
Page 3
when issued pursuant to the Exchange Offer will be legally issued, fully paid
and nonassessable and will constitute valid and binding obligations of the
Company and each Guarantee will constitute the valid and binding obligation of
the respective Subsidiary Guarantor.
Our opinions expressed above are subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), (iii)
public policy considerations which may limit the rights of parties to obtain
certain remedies and (iv) any laws except the laws of the State of New York and
the General Corporation Law of the State of Delaware. We advise you that issues
addressed by this letter may be governed in whole or in part by other laws, but
we express no opinion as to whether any relevant difference exists between the
laws upon which our opinions are based and any other laws which may actually
govern. For purposes of the opinions in paragraph 1, we have relied exclusively
upon (a) in the case of the Company and each Subsidiary Guarantor (other than
BSC), recent certificates issued by the Delaware Secretary of State and (b) in
the case of BSC, a recent certificate issued by the Ministry of Consumer and
Commercial Relations of the Province of Ontario, and such opinions are not
intended to provide any conclusion or assurance beyond that conveyed by such
certificates. We have assumed without investigation that there has been no
relevant change or development between the respective dates of such certificates
and the date of this letter.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. We also consent to the reference to our firm under the
heading "Legal Matters" in the Registration Statement. In giving this consent,
we do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of the rules and regulations of
the Commission.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance of the Exchange Notes.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the States of Delaware or New York be changed by legislative action,
judicial decision or otherwise.
<PAGE>
BWAY Corporation
April 28, 1997
Page 4
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.
Yours very truly,
/S/ KIRKLAND & ELLIS
KIRKLAND & ELLIS
<PAGE>
-1-
EXHIBIT 10.33
BWAY CORPORATION
$100,000,000
10 1/4% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
------------------
April 8, 1997
BT SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
NATIONSBANC CAPITAL MARKETS, INC.
BANKERS TRUST INTERNATIONAL PLC
c/o BT Securities Corporation
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
BWAY CORPORATION, a Delaware corporation (the "Issuer"), hereby
confirms its agreement with you (the "Initial Purchasers") as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Issuer proposes to issue and sell to the Initial Purchasers
$100,000,000 aggregate principal amount of its 10 1/4% Senior Subordinated Notes
due 2007 (the "Notes"). The Notes will be guaranteed (collectively, the
"Guarantees") on a senior subordinated basis by each of the Issuer's
Subsidiaries listed on the signature pages hereof (collectively, and together
with any subsidiary that in the future executes a supplemental indenture
pursuant to which such subsidiary agrees to guarantee the Notes, the "Subsidiary
Guarantors"). The Notes and the Guarantees are collectively referred to herein
as the "Securities". The Securities are to be issued under an indenture (the
"Indenture") to be dated as of April 11, 1997 by and among the Issuer, the
Subsidiary Guarantors and Harris Trust and Savings Bank, as Trustee (the
"Trustee").
The Securities are being offered in connection with the Issuer's
refinancing of existing indebtedness primarily incurred under its senior
revolving credit facility dated June 17, 1996 (the "Credit Agreement").
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom.
<PAGE>
-2-
In connection with the sale of the Securities, the Issuer has prepared
a preliminary offering memorandum dated March 21, 1997 (the "Preliminary
Memorandum"), and a final offering memorandum dated April 8, 1997 (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Securities, the terms of the offering of the Securities, a
description of the Credit Agreement, a description of the Issuer and the
Subsidiary Guarantors and any material development relating to the Issuer and
the Subsidiary Guarantors occurring after the date of the most recent historical
financial statements included therein.
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement to be dated as of the Closing Date (as defined) (the "Registration
Rights Agreement"), pursuant to which the Issuer and the Subsidiary Guarantors
will agree, among other things, to file with the Securities and Exchange
Commission (the "Commission"), under the circumstances set forth therein, (i) a
registration statement under the Act (the "Exchange Offer Registration
Statement"), relating to Senior Subordinated Notes due 2007 of the Issuer (the
"Exchange Notes") to be offered in exchange (the "Exchange Offer") for the
Notes, and (ii) as and only to the extent required by the Registration Rights
Agreement, a shelf registration statement pursuant to Rule 415 under the Act
(the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements"), relating to the resale
by certain holders of the Notes, and to use its best efforts to cause (A) the
Exchange Offer Registration Statement to be declared effective and (B) as and
only to the extent required, the Shelf Registration Statement to be declared
effective. This Purchase Agreement (this "Agreement"), the Notes, the
Guarantees, the Exchange Notes, the Indenture and the Registration Rights
Agreement are hereinafter referred to collectively as the "Operative Documents."
2. Representations and Warranties. The Issuer and each of the
Subsidiary Guarantors, jointly and severally, represents and warrants to and
agrees with each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of its date nor the Final
Memorandum nor any amendment or supplement thereto as of the date thereof and at
all times subsequent thereto up to the Closing Date (as defined in Section 3
below) contained or contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 2(a) do
not apply to statements or omissions made in reliance upon and in conformity
<PAGE>
-3-
with information relating to any of the Initial Purchasers furnished to the
Issuer in writing by the Initial Purchasers expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto.
(b) As of the dates set forth therein, the Company had the authorized,
issued and outstanding capitalization as set forth in the Final Memorandum; all
of the shares of capital stock of each of the Company and each of its
subsidiaries (each, a "Subsidiary" and collectively, the "Subsidiaries") have
been, and as of the Closing Date will be, duly authorized and validly issued,
are fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights; and except as set forth in the Final Memorandum or
in the Company's publicly filed documents (and employee or director stock
options granted in the ordinary course of business since the dates of such
documents), there were no material (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations of the Issuer to issue or (iii)
other rights to convert any obligation into, or exchange any securities for,
shares of capital stock of or ownership interests in the Issuer or any of the
Subsidiaries outstanding. Except for the Issuer's interests in its
Subsidiaries, certain Subsidiaries' interests in other Subsidiaries and as
disclosed in the Final Memorandum, neither the Issuer nor any of the
Subsidiaries owns, directly or indirectly, any material amount of capital stock
or any other equity or long-term debt securities or have any equity interest in
any firm, partnership, joint venture or other entity (other than Material
Management, Inc.'s joint venture interest in Tinplate Alliance, L.L.C.).
(c) Each of the Issuer and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted and
as described in the Final Memorandum; each of the Issuer and the Subsidiaries is
duly qualified to do business as a foreign corporation in good standing in all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not, individually or in the aggregate, have a material
adverse effect on the business, condition (financial or otherwise), prospects or
results of operations of the Issuer and the Subsidiaries taken as a whole (any
such event, a "Material Adverse Effect").
(d) Each of the Issuer and the Subsidiary Guarantors has all requisite
corporate power and authority to execute, deliver and perform its respective
obligations under the Operative Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby, including, without
<PAGE>
-4-
limitation, the power and authority to issue, sell and deliver the Securities as
contemplated by this Agreement.
(e) This Agreement has been duly and validly authorized, executed and
delivered by the Issuer and each of the Subsidiary Guarantors.
(f) The Indenture has been duly and validly authorized by the Issuer
and the Subsidiary Guarantors and, when duly executed and delivered in
accordance with its terms (assuming the due execution and delivery thereof by
the Trustee), will be the legally valid and binding agreement of each of the
Issuer and the Subsidiary Guarantors, enforceable against each of them in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
or by the discretion of the court before which any proceeding therefor may be
brought.
(g) The Notes have been duly and validly authorized for issuance and
sale to the Initial Purchasers by the Issuer pursuant to this Agreement and,
when issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof, will be
the legally valid and binding obligations of the Issuer, enforceable against the
Issuer in accordance with its terms and entitled to the benefits of the
Indenture, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or hereinafter
in effect relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) or by the discretion of the court before which
any proceeding therefor may be brought.
(h) The Exchange Notes have been duly and validly authorized for
issuance by the Issuer and, when issued and authenticated in accordance with the
terms of the Indenture, the Registration Rights Agreement and the Exchange
Offer, will be the legally valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their terms and entitled to
the benefits of the Indenture, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws now or
hereinafter in effect relating to or affecting creditors' rights generally, by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by the discretion of the
court before which any proceeding therefor may be brought.
<PAGE>
-5-
(i) The Guarantees have been duly and validly authorized for issuance
and sale to the Initial Purchasers by the Subsidiary Guarantors and, when the
Notes are duly and validly authorized, executed, issued and authenticated in
accordance with the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof, will be the legally valid and
binding obligations of each of the Subsidiary Guarantors, enforceable against
each of the Subsidiary Guarantors in accordance with their terms and entitled to
the benefits of the Indenture, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
or by the discretion of the court before which any proceeding therefor may be
brought.
(j) The Registration Rights Agreement has been duly authorized by the
Issuer and the Subsidiary Guarantors and, when duly executed and delivered by
the Issuer and the Subsidiary Guarantors (assuming the due execution and
delivery thereof by you), will be the legally valid and binding obligation of
the Issuer and the Subsidiary Guarantors, enforceable against each of them in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
or by the discretion of the court before which any proceeding therefor may be
brought and, as to rights of indemnification and contribution, by principles of
public policy or federal or state securities laws relating thereto.
(k) No consent, waiver, approval, authorization or order of or filing,
registration, qualification, license or permit of or with any court or
governmental agency or body, or third party is required to be obtained (i) by
the Issuer for the issuance and sale by the Issuer of the Notes to the Initial
Purchasers or the consummation by the Issuer of each of the other transactions
contemplated hereby or by any of the other Operative Documents and (ii) by the
Subsidiary Guarantors for the issuance by the Subsidiary Guarantors of the
Guarantees or the consummation by the Subsidiary Guarantors of the other
transactions contemplated hereby or by any of the Operative Documents, except,
in each case, such as have been or, prior to the Closing Date, will be obtained
and such as may be required under applicable state securities or "Blue Sky" laws
in connection with the purchase and resale of the Securities by the Initial
Purchasers and as may be required in connection with the Exchange Offer and the
other transactions contemplated by the Registration Rights Agreement under the
Act, the Exchange Act, the TIA and the
<PAGE>
-6-
Securities or Blue Sky laws of the various states (and the rules and regulations
thereunder). None of the Issuer or any of the Subsidiaries is (A) in violation
of its charter or bylaws (or similar organizational document), (B) in breach or
violation of any statute, judgment, decree, order, rule or regulation applicable
to any of them or any of their respective properties or assets, except for any
such breach or violation which would not, individually or in the aggregate, have
a Material Adverse Effect, or (C) in breach of or default under (nor has any
event occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
permit, certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties or
assets is subject (collectively, "Contracts"), except for any such breach,
default, violation or event which would not, individually or in the aggregate,
have a Material Adverse Effect.
(l) The execution, delivery and performance by the Issuer and the
Subsidiary Guarantors of this Agreement and each of the other Operative
Documents (to the extent a party thereto) and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers and the issuance
of the Exchange Notes in the Exchange Offer) do not and will not (A) conflict
with or constitute or result in a breach of or a default under (or constitute an
event which with notice or passage of time or both would constitute a default
under) or cause an acceleration of any obligation under, or result in the
imposition or creation of (or the obligation to create or impose) a Lien (as
defined) on any properties or assets of the Issuer or any Subsidiary with
respect to the terms or provisions of any Contract, except for any such
conflict, breach, violation, default or event which would not, individually or
in the aggregate, have a Material Adverse Effect, (B) violate or conflict with
the charter or bylaws (or similar organizational document) of the Issuer or any
of the Subsidiaries, or (C) conflict with (assuming compliance with all
applicable state securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8 hereof)
any statute, judgment, decree, order, rule or regulation applicable to the
Issuer or any of the Subsidiaries or any of their respective properties or
assets, except for any such conflict, breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect.
(m) Deloitte & Touche LLP, Independent Auditors, who are reporting on
the audited financial statements of the Issuer in the Final Memorandum, are
independent public accountants within the meaning of the Act. The audited
financial statements of the Issuer and related notes thereto included in the
Final Memorandum (or, if the Final Memorandum is not in existence, the
Preliminary Memorandum) present fairly in all material respects the financial
<PAGE>
-7-
position of the Issuer as of the dates indicated and the results of its
respective operations and the changes in the financial position for the periods
specified, in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied throughout such periods, except as
otherwise stated therein. The summary and selected financial and statistical
data included in the Final Memorandum present fairly in all material respects
the information shown therein and have been prepared and compiled on a basis
consistent with the audited financial statements included therein, except as
stated therein.
(n) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(or, if the Final Memorandum is not in existence, the Preliminary Memorandum)
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and (ii) have been prepared in all material
respects in accordance with the Commission's rules and guidelines with respect
to pro forma financial statements; the assumptions used in the preparation of
the pro forma financial data and other pro forma financial information included
in the Final Memorandum (or, if the Final Memorandum is not in existence, the
Preliminary Memorandum) are reasonable.
(o) Other than as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the Preliminary Memorandum), there is not
pending or, to the knowledge of the Issuer, threatened any action, suit,
proceeding, inquiry or investigation to which the Issuer or any of the
Subsidiaries is a party, or to which the property or assets of the Issuer or any
of the Subsidiaries is subject, before or brought by any court, arbitrator or
governmental agency or body which, if determined adversely to the Issuer or any
such Subsidiary, as the case may be, would, individually or in the aggregate,
have a Material Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Securities to
be sold hereunder or the consummation of the other transactions described in the
Operative Documents.
(p) Each of the Issuer and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made or will have made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, presently required or
necessary to own or lease, as the case may be, and to operate its respective
properties and to carry on its respective businesses as now or proposed to be
conducted as set forth in the Final Memorandum (or, if the Final Memorandum is
not in existence, the Preliminary Memorandum) ("Permits"), except where the
failure to obtain such Permits would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and neither the Issuer
<PAGE>
-8-
nor any of the Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in the
Final Memorandum and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(q) Since the respective dates as of which information is given in the
Final Memorandum (or, if the Final Memorandum is not in existence, the
Preliminary Memorandum), except as described therein there has been no material
adverse change, or any fact known to the Issuer which could reasonably be
expected to result in a material adverse change, in the business, condition
(financial or other), prospects or results of operations of the Issuer and its
Subsidiaries taken as a whole, whether or not arising from transactions in the
ordinary course of business or any loss of, or damage to, properties (whether or
not insured) which could reasonably be expected to affect materially and
adversely the business, prospects, properties, assets, earnings, operations,
condition (financial or other) or results of operations of the Issuer and its
Subsidiaries taken as a whole. Since the date of the latest balance sheet
presented in the Final Memorandum (or, if the Final Memorandum is not in
existence, the Preliminary Memorandum), except as expressly disclosed therein,
neither the Issuer nor any of its Subsidiaries has (i) incurred or undertaken
any liabilities or obligations, direct or contingent, that are material to the
Issuer and its Subsidiaries taken as a whole, (ii) entered into any material
transaction not in the ordinary course of business and consistent with past
practice or (iii) declared or paid any dividend or made any distribution on any
shares of its capital stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares in excess of 25,000
shares of its capital stock.
(r) Each of the Issuer and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and has paid all taxes shown as due thereon
except as to taxes being contested in good faith, or where the failure to pay
any such taxes would not, individually or in the aggregate, have a Material
Adverse Effect; and other than tax deficiencies which the Issuer or any of the
Subsidiaries is contesting in good faith and for which the Issuer or such
Subsidiary has provided adequate reserves in accordance with generally accepted
accounting principles, there is no tax deficiency that has been asserted against
the Issuer or any Subsidiary that would have, individually or in the aggregate,
a Material Adverse Effect.
(s) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Issuer believes to be
reliable and accurate.
<PAGE>
-9-
(t) Neither the Issuer nor any of the Subsidiaries or any agent acting
on their behalf has taken or will take any action that might cause this
Agreement or the sale of the Securities to violate Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System, in each case as in effect,
or as the same may hereafter be in effect, on the Closing Date.
(u) Each of the Issuer and each of its Subsidiaries has good and
marketable title to all the properties and good title to all the assets
reflected as owned in the financial statements (or elsewhere) in the Final
Memorandum subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except (i) those, if any, reflected in the financial statement or (ii)
those which would not, individually or in the aggregate, have a Material Adverse
Effect. Each of the Issuer and its Subsidiaries holds its leased properties
under valid, subsisting and enforceable leases, with such exceptions as would
not, individually or in the aggregate, have a Material Adverse Effect. Except as
disclosed in the Final Memorandum, the Issuer and each of its Subsidiaries owns
or leases all such properties as are necessary to its operations as now
conducted or as proposed to be conducted. The Issuer and the Subsidiaries own
or possess adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to conduct the
businesses now or proposed to be operated by them as described in the Final
Memorandum, and neither the Issuer nor any of the Subsidiaries has received any
notice of infringement of or conflict with (or knows of any such infringement of
or conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which, if such
assertion of infringement or conflict were sustained, would have a Material
Adverse Effect.
(v) There are no legal or governmental proceedings involving or
affecting the Issuer or any Subsidiary or any of their respective properties or
assets which would be required to be described in a prospectus pursuant to the
Act that are not so described in the Final Memorandum, nor are there any
material contracts or other documents which would be required to be described in
a prospectus pursuant to the Act that are not so described in the Final
Memorandum.
(w) Except as described in the Final Memorandum or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, each of the Issuer and the Subsidiaries is in compliance with
and not subject to any known liability under applicable Environmental Laws (as
defined below).
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, provincial, state and local laws or regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated, approved
or entered
<PAGE>
-10-
thereunder, relating to pollution or protection of public or employee health and
safety or the environment, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of hazardous materials
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of hazardous materials, and (iii) underground and above
ground storage tanks and related piping, and emissions, discharges, releases or
threatened releases therefrom.
(x) Except as described in the Final Memorandum, there is no strike,
slowdown or work stoppage with the employees of the Issuer or the Subsidiaries
which is pending or, to the knowledge of the Issuer and the Subsidiaries, as the
case may be, threatened that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
(y) Each of the Issuer and the Subsidiaries carries insurance
including self-insurance in such amounts and covering such risks as in its
reasonable determination is adequate for the conduct of its business and the
value of its properties.
(z) Each of the Issuer and the Subsidiaries maintains internal
accounting controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions are
recorded as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is permitted
only in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at reasonable
intervals.
(aa) Neither the Issuer nor any of the Subsidiaries is or will be upon
consummation of the transactions contemplated hereby an "investment company" or
"promoter" or "principal underwriter" for an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(bb) The Notes, the Guarantees, the Indenture and the Registration
Rights Agreement conform in all material respects to the descriptions thereof
contained in the Final Memorandum.
(cc) No holder of securities of the Issuer or any Subsidiary Guarantor
will be entitled to have such securities registered under the Registration
Statements required to be filed by the Issuer and the Subsidiary Guarantors
pursuant to the Registration Rights Agreement, other than as expressly permitted
thereby.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement and the Indenture, the present fair value of the
assets of each of the Issuer and its
<PAGE>
-11-
"significant subsidiaries" (as defined in Rule 1.02(v) of Regulation S-X under
the Securities Act) will exceed the sum of its stated liabilities and identified
contingent liabilities (after giving effect, in the case of each of the
Subsidiary Guarantors, to the limitations contained in such Subsidiary
Guarantor's Guarantee); neither the Issuer nor any of the Subsidiary Guarantors
(each on a consolidated basis) is, or will be, after giving effect to the
execution, delivery and performance of the Notes, the Guarantees, this Agreement
and the Indenture, and the consummation of the transactions contemplated hereby
and thereby, (a) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (b) unable to pay its debts
(contingent or otherwise) as they mature or (c) otherwise insolvent.
(ee) Neither the Issuer nor the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under the Act)
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
Act) which is or could be integrated with the sale of the Securities in a manner
that would require the registration under the Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
(ff) When the Securities are delivered pursuant to this Agreement,
none of the Securities will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Issuer or any Subsidiary Guarantor that
are listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
(gg) Neither the Issuer nor the Subsidiaries, any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) or any
person acting on any of their behalf (other than the Initial Purchasers as to
which the Issuer and the Subsidiaries make no representation) has engaged in any
directed selling efforts (as that term is defined in Regulation S under the Act
("Regulation S")) with respect to the Securities; the Issuer and its respective
Affiliates and any person acting on any of their behalf (other than the Initial
Purchasers as to which the Issuer and the Subsidiaries make no representation)
have complied with the offering restrictions requirement of Regulation S.
(hh) Assuming that the representations and warranties of the Initial
Purchasers contained in Section 8 are true and correct, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchasers or the
<PAGE>
-12-
reoffer and resale by the Initial Purchasers in the manner contemplated by
Section 8 of this Agreement to register the Securities under the Act or to
qualify the Indenture in respect of the Securities under the Trust Indenture Act
of 1939, as amended (the "TIA").
Any certificate signed by any officer of the Issuer or any Subsidiary
Guarantor and delivered to any Initial Purchaser or to counsel for the Initial
Purchasers pursuant to Section 7 of this Agreement shall be deemed a
representation and warranty by the Issuer or such Subsidiary Guarantor, as the
case may be, to each Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuer and the
Subsidiary Guarantors agree to issue and sell to the Initial Purchasers, and the
Initial Purchasers, acting severally and not jointly, agree to purchase the
Notes (including the related Guarantees) in the respective amounts set forth
opposite their respective names on Schedule I attached hereto at 97.0% of their
principal amount. One or more certificates in definitive form for the Notes and
Guarantees that the Initial Purchasers have agreed to purchase hereunder, and in
such denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Issuer at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Issuer to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer (same day funds) to such account or
accounts as the Issuer shall specify prior to the Closing Date, or by such means
as the parties hereto shall agree prior to the Closing Date. Such delivery of
and payment for the Securities shall be made at the offices of Kirkland & Ellis,
200 East Randolph Drive, Chicago, Illinois 60601 at 9:00 A.M., Chicago time, on
April 11, 1997, or at such other place, time or date as the Initial Purchasers,
on the one hand, and the Issuer, on the other hand, may agree upon, such time
and date of delivery against payment being herein referred to as the "Closing
Date." The Issuer will make such certificate or certificates for the Securities
available for checking and packaging by the Initial Purchasers at the offices of
BT Securities Corporation in New York, New York, or at such other place as BT
Securities Corporation may designate, at least 24 hours prior to the Closing
Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum, as soon as practicable after this Agreement
is entered into and as in the judgment of the Initial Purchasers is advisable.
<PAGE>
-13-
5. Covenants of the Issuer and the Subsidiary Guarantors. The
Issuer and the Subsidiary Guarantors covenant and agree with each of the Initial
Purchasers that:
(a) The Issuer will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given their consent, which consent shall not
unreasonably be withheld. The Issuer will promptly, upon the reasonable request
of the Initial Purchasers or counsel for the Initial Purchasers, make any
reasonable amendments or supplements to the Preliminary Memorandum or the Final
Memorandum that may be necessary or advisable in connection with the resale of
the Securities by the Initial Purchasers.
(b) The Issuer and the Subsidiary Guarantors will cooperate with the
Initial Purchasers in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such jurisdictions
as the Initial Purchasers may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the Securities;
provided, however, that in connection therewith, the Issuer and the Subsidiary
Guarantors shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or subject
itself to taxation in excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.
(c) If, at any time prior to the initial resale by the Initial
Purchasers of the Securities or the Exchange Notes, any event occurs or
information becomes known as a result of which the Final Memorandum as then
amended or supplemented would include any untrue statement of a material fact,
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement the
Final Memorandum to comply with applicable law, the Issuer will promptly notify
the Initial Purchasers thereof and will prepare, at the expense of the Issuer,
an amendment or supplement to the Final Memorandum that corrects such statement
or omission or effects such compliance.
(d) The Issuer will, without charge, provide to the Initial Purchasers
and to counsel for the Initial Purchasers as many copies of the Preliminary
Memorandum and the Final Memorandum or any amendment or supplement thereto as
the Initial Purchasers may reasonably request.
(e) The Issuer will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
<PAGE>
-14-
(f) For so long as any of the Securities remain outstanding, the
Issuer will furnish pursuant to the Indenture copies of all reports and other
communications (financial or otherwise) to the Trustee or to the holders of the
Notes and, as soon as available, copies of any reports or financial statements
furnished to or filed by the Issuer with the Commission or any national
securities exchange on which any class of securities of the Issuer may be
listed.
(g) None of the Issuer, the Subsidiary Guarantors or any of their
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Act) which could be
integrated with the sale of the Securities in a manner which would require the
registration under the Act of the Securities.
(h) Neither the Issuer nor any Subsidiary Guarantor will, nor will the
Issuer permit any of the Subsidiaries to, engage in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) in connection with the offering of the Securities or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act.
(i) For so long as any of the Securities remain outstanding, the
Issuer will make available, upon request, to any holder of such Securities and
any prospective purchasers thereof, the information specified in Rule 144A(d)(4)
under the Act (at no cost to such holder), unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(j) The Issuer and the Subsidiary Guarantors will use their best
efforts to (i) assist the Initial Purchasers in permitting the Securities to be
designated for trading in the Private Offerings, Resales and Trading through
Automated Linkages market (the "PORTAL Market") of the NASD and (ii) permit the
Securities to be eligible for clearance and settlement through The Depository
Trust Company.
6. Expenses. The Issuer agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Issuer, (iv) preparation
<PAGE>
-15-
(including printing), issuance and delivery to the Initial Purchasers of the
Securities, (v) the qualification of the Securities under state securities and
"Blue Sky" laws, including filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto, (vi) expenses in connection
with any meetings with prospective investors in the Securities, (vii) fees and
expenses of the Trustee including reasonable fees and expenses of its counsel,
(viii) all expenses and listing fees incurred in connection with the application
for quotation of the Securities on the PORTAL Market and (ix) any fees charged
by investment rating agencies for the rating of the Securities. If the sale of
the Securities provided for herein is not consummated because any condition to
the obligations of the Initial Purchasers set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated or because of any failure,
refusal or inability on the part of the Issuer or the Subsidiary Guarantors to
perform all obligations and satisfy all conditions on their part to be performed
or satisfied hereunder (other than solely by reason of a default by the Initial
Purchasers of their obligations hereunder after all conditions hereunder have
been satisfied in accordance herewith), the Issuer agrees to promptly reimburse
the Initial Purchasers upon demand for all reasonable out-of-pocket expenses
(including the reasonable fees, disbursements and charges of Cahill Gordon &
Reindel, counsel for the Initial Purchasers) that shall have been incurred by
the Initial Purchasers in connection with the proposed purchase and sale of the
Securities.
7. Conditions of the Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase and pay for the Securities
shall, in their sole discretion, be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Kirkland & Ellis, counsel for the Issuer and the Subsidiary
Guarantors, in form and substance satisfactory to counsel for the Initial
Purchasers, to the effect that:
(i) The Issuer is a corporation existing and in good standing under
the General Corporation Law of the State of Delaware. Each Subsidiary
Guarantor is a corporation existing and in good standing under the General
Corporation Law of the State of Delaware. Each of the Issuer and each
Subsidiary Guarantor is qualified as foreign corporation in good standing
in each of the jurisdictions set forth on a Schedule to such counsel's
opinion.
(ii) As of December 31, 1996, the Issuer had the authorized equity
capitalization set forth in the Final Memorandum under Capitalization. To
such counsel's actual
<PAGE>
-16-
knowledge, there are no (A) options, warrants or other rights to purchase,
(B) agreements or other obligations of the Issuer or any Subsidiary
Guarantor to issue or (C) other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership
interests in any of the Subsidiaries outstanding.
(iii) Each of the Issuer and each Subsidiary Guarantor has the
corporate power to enter into and perform its obligations under the
Operative Agreements to which it is a party, including without limitation
the corporate power to issue, sell and deliver the Notes and the
Guarantees, respectively, as contemplated by the Purchase Agreement.
(iv) The Issuer's Board of Directors has adopted by requisite vote the
resolutions necessary to authorize the Issuer's execution, delivery and
performance of the Operative Agreements to which it is a party and the
Pricing Committee appointed by the Issuer's Board of Directors to act with
respect to this Agreement has approved by requisite vote the price and
interest rate set forth therein. Each Subsidiary Guarantor's Board of
Directors has adopted by requisite vote the resolutions necessary to
authorize such Subsidiary Guarantor's execution, delivery and performance
of the Operative Agreements to which it is a party.
(v) Each of the Issuer and each Subsidiary Guarantor has duly executed
and delivered this Agreement, the Indenture and the Registration Rights
Agreement.
(vi) Each of this Agreement, the Indenture and the Registration Rights
Agreement is a valid and binding obligation of each of the Issuer and each
Subsidiary Guarantor and (assuming the due authorization, execution and
delivery thereof by the other parties thereto) is enforceable against each
of the Issuer and each Subsidiary Guarantor in accordance with its terms.
(vii) The Notes have been duly executed and delivered by the Issuer
and, when paid for by the Initial Purchasers in accordance with the terms
of this Agreement (assuming the due authorization, execution and delivery
of the Indenture by the Trustee and due authentication and delivery of the
Notes by the Trustee in accordance with the Indenture), will constitute the
valid and binding obligations of the Issuer, entitled to the benefits of
the Indenture, and enforceable against the Issuer in accordance with their
terms.
(viii) The Guarantees have been duly executed and delivered by each
of the Subsidiary Guarantors and, when the Notes are duly and validly
authorized, executed, issued and authenticated in accordance with the terms
of the Indenture and delivered against payment therefor in accordance with
the terms hereof, will be the valid and binding obligations of
<PAGE>
-17-
each of the Subsidiary Guarantors, enforceable against each of the
Subsidiary Guarantors in accordance with their terms and entitled to the
benefits of the Indenture.
(ix) When the Exchange Notes have been duly executed and delivered by
the Issuer in accordance with the terms of the Registration Rights
Agreement, the Exchange Offer and Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and
due authentication and delivery of the Exchange Notes by the Trustee in
accordance with the Indenture), the Exchange Notes will constitute the
valid and binding obligations of the Issuer, entitled to the benefits of
the Indenture, and enforceable against the Issuer in accordance with their
terms.
(x) The statements in the Final Memorandum under the headings
"Description of Notes," "Description of Credit Agreement" and "Exchange
Offer and Registration Rights," insofar as such statements purport to
summarize certain provisions of the Indenture, the Notes, the Guarantees,
the Registration Rights Agreement and the Credit Agreement and subject to
the limitations contained in such statements, provide a fair and accurate
summary in all material respects of such provisions of such agreements.
(xi) The execution and delivery of this Agreement, the Registration
Rights Agreement and the Indenture, and the consummation of the
transactions contemplated thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers) do not and
will not conflict with or constitute or result in a breach or default under
(or an event which with notice or the passage of time or both would
constitute a default under) or violation of any of, (i) the certificate of
incorporation or bylaws of the Issuer or any Subsidiary Guarantor, (ii) any
statute or governmental rule or regulation which, in the experience of such
counsel, is normally applicable both to general business corporations that
are not engaged in regulated business activities and to transactions of the
type contemplated by the Final Memorandum (but without such counsel having
made any special investigation as to other laws and provided that such
counsel need express no opinion with respect to (a) any laws, rules or
regulations to which the Issuer or any Subsidiary Guarantor may be subject
as a result of any of the Initial Purchasers' legal or regulatory status or
the involvement of any of the Initial Purchasers in such transactions or
(b) any laws, rules or regulations relating to disclosure,
misrepresentations or fraud), (iii) the terms or provisions of any contract
set forth on a Schedule to such counsel's opinion attached hereto, except
(in the case of clauses (ii) and (iii) above) for any such conflict,
breach, violation, default or event which would not, individually or
<PAGE>
-18-
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(xii) To the actual knowledge of such counsel, no consent, waiver,
approval, authorization or order of any court or governmental authority is
required for the issuance and sale by the Issuer and the Subsidiary
Guarantors of the Securities to the Initial Purchasers or the consummation
by the Issuer and the Subsidiary Guarantors of the other transactions
contemplated by the Operative Agreements, except such as may be required
under the Act, the Exchange Act, the TIA and the security or Blue Sky laws
of the various states (and the rules and regulations thereunder), as to
which such counsel need express no opinion in this paragraph.
(xiii) To the actual knowledge of such counsel, no legal or
governmental proceedings are pending to which the Issuer or the Subsidiary
Guarantors is a party or to which the property or assets of the Issuer or
the Subsidiary Guarantors is subject which seek to restrain, enjoin or
prevent the consummation of or otherwise challenge the issuance or sale of
the Securities to be sold to the Initial Purchasers or the consummation of
the other transactions contemplated by the Operative Documents.
(xiv) Neither the Issuer nor any Subsidiary Guarantor is, or
immediately after the sale of the Notes to the Initial Purchasers and
application of the net proceeds therefrom as described in the Offering
Memorandum under the caption "Use of Proceeds" will be, an "investment
company" as such term is defined in the Investment Issuer Act of 1940, as
amended.
(xv) No registration under the Act of the Securities is required in
connection with the sale of the Securities to the Initial Purchasers in the
manner contemplated by this Agreement and the Offering Memorandum or in
connection with the initial resale of the Securities by the Initial
Purchasers in accordance with Section 8 hereof, and prior to the
commencement of the Exchange Offer or the effectiveness of the Shelf
Registration Statement, the Indenture is not required to be qualified under
the TIA, in each case assuming (i) that the purchasers who buy such
Securities in the initial resale thereof are qualified institutional buyers
as defined in Rule 144A promulgated under the Act or accredited investors
as defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Act,
(ii) the accuracy and completeness of the Initial Purchasers'
representations in Section 8 hereof and those of the Issuer contained in
the Purchase Agreement regarding the absence of a general solicitation in
connection with the sale of such Securities to the Initial Purchasers and
the initial resale thereof, (iii) the due performance by the Initial
Purchasers of the agreements set forth in Section 8 hereof and (iv) the
accuracy of the representations made by each Accredited Investor who
<PAGE>
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purchased Securities in the initial resale as set forth in the Offering
Memorandum.
(xvi) As of the date hereof, none of the Securities are of the same
class (within the meaning of Rule 144A under the Act) as securities of the
Issuer or any Subsidiary Guarantor that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted
in a United States automated inter-dealer quotation system.
(xvii) Neither the sale, issuance, execution or delivery of the Notes
nor the application of the net proceeds therefrom as described in the Final
Memorandum under the caption "Use of Proceeds" will contravene Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.
At the time the foregoing opinion is delivered, Kirkland & Ellis shall
additionally state that it has participated in conferences with officers and
other representatives of the Issuer, representatives of the independent public
accountants for the Issuer, representatives of the Initial Purchasers and
counsel for the Initial Purchasers, at which conferences the contents of the
Final Memorandum and related matters were discussed, and, although it has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except to the extent specified in subsection (x), no facts have come
to its attention which lead it to believe that the Final Memorandum, on the date
thereof or on the Closing Date, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such firm need express no opinion with
respect to the financial statements and related notes thereto and the other
financial, statistical and accounting data included in the Final Memorandum).
In rendering the foregoing opinions, Kirkland & Ellis may (i) rely, to the
extent such counsel deems proper, upon the representations and certifications of
officers of the Issuer and the Subsidiaries or of public officials and (ii) rely
as to matters involving the application of laws of any jurisdiction other than
the federal laws of the United States of America, the laws of the State of New
York and the General Corporation law of the State of Delaware, to the extent
such counsel deems proper and specifies in such opinion, upon the opinion of
other counsel who are reasonably satisfactory to counsel for the Initial
Purchasers.
References to the Final Memorandum in this subsection (a) shall include any
amendment or supplement thereto prepared in accordance with the provisions of
this Agreement at the Closing Date.
<PAGE>
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(b) On the Closing Date, the Initial Purchasers shall have received the
opinion, in form and substance satisfactory to the Initial Purchasers, dated as
of the Closing Date and addressed to the Initial Purchasers, of Cahill Gordon &
Reindel, counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, Cahill Gordon &
Reindel shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(c) The Initial Purchasers shall have received from Deloitte & Touche LLP,
Independent Auditors, a comfort letter or letters dated the date hereof and the
Closing Date, in form and substance satisfactory to counsel for the Initial
Purchasers.
(d) The representations and warranties of the Issuer and the Subsidiary
Guarantors contained in this Agreement shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date; the Issuer shall have performed all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in the Final Memorandum, there shall have been no event or
development, and no information shall have become known, that, individually or
in the aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(e) The sale of the Securities hereunder shall not be enjoined (temporarily
or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements in the
Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), neither the Issuer nor any Subsidiary shall have sustained any
loss or interference with respect to its business or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any strike, slow down or work stoppage or from any legal or
governmental proceeding, order or decree, which loss or interference,
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect.
(g) The Initial Purchasers shall have received a certificate of the Issuer
dated the Closing Date, signed on behalf of the Issuer by its Chairman of the
Board, President or Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Issuer and the
Subsidiary Guarantors contained in this Agreement were, on the date of the
Purchase Agreement, and are, as of the date hereof, true and correct in all
material respects,
<PAGE>
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and the Issuer and the Subsidiary Guarantors have performed all covenants
and agreements and satisfied all conditions on their part to be performed
or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known, that,
individually or in the aggregate, has or would be reasonably likely to have
a Material Adverse Effect; and
(iii) The sale of the Securities hereunder has not been enjoined
(temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall have received a copy
of the Registration Rights Agreement, executed by the Issuer and the Subsidiary
Guarantors and (assuming the due execution and delivery by other parties
thereto) such agreement shall be in full force and effect at all times from and
after the Closing Date.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Issuer shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. (a) Each of the
Initial Purchasers represents and warrants (as to itself only) that it is a
"Qualified Institutional Buyer" (as defined in Rule 144A promulgated under the
Act) (a "QIB"). Each of the Initial Purchasers agrees with the Issuer (as to
itself only) that (i) it has not and will not solicit offers for, or offer or
sell, the Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act; and
(ii) it has and will solicit offers for the Securities only from, and will offer
the Securities only to (A) in the case of offers inside the United States, (x)
persons whom the Initial Purchasers reasonably believe to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchasers that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A or (y) a limited number of other
institutional investors reasonably believed by the Initial Purchasers to be
Accredited
<PAGE>
-22-
Investors that, prior to their purchase of the Securities, deliver to the
Initial Purchasers a letter containing the representations and agreements set
forth in Annex A to the Final Memorandum and (B) in the case of offers outside
the United States, to persons other than U.S. persons ("foreign purchasers,"
which term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); in reliance upon Regulation S under the Act provided,
however, that, in the case of this clause (B), in purchasing such Securities
such persons are deemed to have represented and agreed as provided under the
caption "Transfer Restrictions" contained in the Final Memorandum (or, if the
Final Memorandum is not in existence, in the most recent Memorandum).
(b) Each of the Initial Purchasers represents and warrants (as to itself
only) with respect to offers and sales outside the United States that (i) it has
complied and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or has
in its possession or distributes any Memorandum or any such other material, in
all cases at its own expense; (ii) the Securities have not been and will not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act; (iii) it
has offered the Securities and will offer and sell the Securities (A) as part of
its distribution at any time and (B) otherwise until 40 days after the later of
the commencement of the offering and the Closing Date, only in accordance with
Rule 903 of Regulation S and, accordingly, neither it nor any persons acting on
its behalf have engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Securities, and any such
persons have complied and will comply with the offering restrictions requirement
of Regulation S; and (iv) it agrees that, at or prior to confirmation of sales
of the Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the United
States 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 the distribution of the Securities at any time
or (ii) otherwise until 40 days after the later of the commencement of the
offering and the closing date of the offering, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them in
Regulation S."
<PAGE>
-23-
Terms used in this Section 8(b) and not defined in this Agreement have the
meanings given to them in Regulation S.
(c) Each of the Initial Purchasers represents and warrants (as to
itself only) that the source of funds being used by it to acquire the Securities
does not include the assets of any "employee benefit plan" (within the meaning
of Section 3 of ERISA) or any "plan" (within the meaning of Section 4975 of the
Code).
9. Indemnification and Contribution. (a) The Issuer and the
Subsidiary Guarantors agree, jointly and severally, to indemnify and hold
harmless the Initial Purchasers, their directors, officers, agents and
affiliates and each person, if any, who controls any Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which any Initial Purchaser or
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by the Issuer or based upon written information furnished by or on
behalf of the Issuer or the Subsidiary Guarantors filed in any jurisdiction
in order to qualify the Securities under the securities or "Blue Sky" laws
thereof or filed with any securities association or securities exchange
(each an "Application"); or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchasers, each such director,
officer, agent and affiliate and each such controlling person for any reasonable
legal or other reasonable expenses incurred by the Initial Purchasers, such
director, officer, agent and affiliate or such controlling person in connection
with investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided,
however, that the Issuer and the Subsidiary Guarantors will not be liable (i) in
any such case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in any Memorandum or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information concerning the Initial Purchasers furnished to the Issuer by
the Initial
<PAGE>
-24-
Purchasers specifically for use therein or (ii) with respect to the Preliminary
Memorandum, to the extent that any such loss, claim, damage or liability arises
solely from the fact that the Initial Purchasers sold Securities to a person to
whom there was not sent or given, on or prior to the written confirmation of
such sale, a copy of the Final Memorandum, as amended and supplemented, if the
Issuer shall have previously furnished copies thereof to the Initial Purchasers
in accordance with this Agreement and the Final Memorandum, as amended and
supplemented, would have corrected any such untrue statement or omission. This
indemnity agreement will be in addition to any liability that the Issuer and the
Subsidiary Guarantors may otherwise have to the indemnified parties. The Issuer
and the Subsidiary Guarantors shall not be liable under this Section 9 for any
settlement of any claim or action effected without their prior written consent,
which shall not be unreasonably withheld.
The Initial Purchasers shall not, without the prior written consent of the
Issuer, effect any settlement or compromise of any pending or threatened
proceeding in respect of which the Issuer and the Subsidiary Guarantors are or
could have been a party, or indemnity could have been sought hereunder by the
Issuer and the Subsidiary Guarantors, unless such settlement (A) includes an
unconditional written release of the Issuer and the Subsidiary Guarantors, in
form and substance reasonably satisfactory to the Issuer, from all liability on
claims that are the subject matter of such proceeding and (B) does not include
any statement as to an admission of fault, culpability or failure to act by or
on behalf of the Issuer or the Subsidiary Guarantors.
(b) The Initial Purchasers agree, severally and not jointly, to indemnify
and hold harmless the Issuer and the Subsidiary Guarantors, their respective
directors, officers, agents, affiliates and each person, if any, who controls
the Issuer and the Subsidiary Guarantors within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Issuer or any of the Subsidiary Guarantors or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Memorandum or any amendment or supplement thereto or any Application, or
(ii) the omission or the alleged omission to state therein a material fact in
any Memorandum or any amendment or supplement thereto or any Application
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Initial Purchaser, furnished to the Issuer
by such Initial Purchaser specifically for use therein; and subject to the
limitation set forth immediately
<PAGE>
-25-
preceding this clause, will reimburse, as incurred, any reasonable legal or
other expenses incurred by the Issuer or any of the Subsidiary Guarantors or any
such director, officer, agent, affiliate or controlling person in connection
with investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability that the
Initial Purchasers may otherwise have to the indemnified parties. The Initial
Purchasers shall not be liable under this Section 9 for any settlement of any
claim or action effected without their consent, which shall not be unreasonably
withheld.
The Issuer and the Subsidiary Guarantors shall not, without the prior
written consent of the Initial Purchasers, effect any settlement or compromise
of any pending or threatened proceeding in respect of which any Initial
Purchaser is or could have been a party, or indemnity could have been sought
hereunder by any Initial Purchaser, unless such settlement (A) includes an
unconditional written release of the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action for which such indemnified party is
entitled to indemnification under this Section 9, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability under paragraph (a) or (b) above
unless and to the extent the indemnifying party is materially prejudiced by such
failure. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after
<PAGE>
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receipt by the indemnifying party of notice of the institution of such action,
then, in each such case, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 9 or the Issuer in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld), unless
such indemnified party waived in writing its rights under this Section 9, in
which case the indemnified party may effect such a settlement without such
consent.
(d) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other from the offering of the Securities or (ii) if the allocation provided by
the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party or parties on the other in
connection with the statements or omissions or alleged statements
<PAGE>
-27-
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Issuer and
the Subsidiary Guarantors on the one hand and any Initial Purchaser on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (before deducting expenses) received by the Issuer bear to the total
discounts and commissions received by such Initial Purchaser. The relative fault
of the parties 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
Issuer and the Subsidiary Guarantors on the one hand, or such Initial Purchaser
on the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Issuer, the Subsidiary Guarantors and the Initial Purchasers
agree that it would not be just and equitable if the amount of such contribution
were determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), no Initial Purchaser shall be obligated to make
contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact. 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. For purposes of this paragraph (d),
each director, officer and affiliate of an Initial Purchaser and each person, if
any, who controls an Initial Purchaser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as the Initial Purchasers, and each director and officer of the Issuer or any
Subsidiary Guarantor, and each person, if any, who controls the Issuer or any
Subsidiary Guarantor within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Issuer
and the Subsidiary Guarantors.
10. Survival Clause. The representations, warranties, agreements,
covenants, indemnities and other statements of the Issuer, the Subsidiary
Guarantors, their officers and the Initial Purchasers set forth in this
Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Issuer, the Subsidiary Guarantors, any of their officers or
directors, the Initial Purchasers or any controlling person
<PAGE>
-28-
referred to in Section 9 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6, 9, 13 and 15 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Issuer given prior to the
Closing Date in the event that the Issuer or any of the Subsidiary Guarantors
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto in all material respects or, if at or prior to the Closing Date:
(i) either (A) the Issuer or any of the Subsidiary Guarantors shall
have sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any strike, labor dispute, slow down
or work stoppage or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchasers, has had a
Material Adverse Effect, or (B) there shall have been, in the sole judgment
of the Initial Purchasers, any event or development that, individually or
in the aggregate, has had or could be reasonably likely to have a Material
Adverse Effect (including without limitation a change in control of the
Issuer or any Subsidiary Guarantor), except in each case as described in
the Final Memorandum (exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency, or (C) any material change in the financial markets of the
United States which, in the case of (A), (B) or (C) above and in the sole
judgment of the Initial Purchasers, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities as
contemplated by the Final Memorandum; or
<PAGE>
-29-
(v) any securities of the Issuer shall have been downgraded or placed
on any "watch list" for possible downgrading by any nationally recognized
statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by the Initial Purchasers. The statements
set forth in the last paragraph on the front cover page and in the third, fifth,
sixth and seventh paragraphs under the heading "Private Placement" in the Final
Memorandum (to the extent such statements relate to the Initial Purchasers)
constitute the only information furnished by the Initial Purchasers to the
Issuer for the purposes of Sections 2(a) and 9 hereof and the Initial Purchasers
confirm that such statements are correct as of the date hereof and as of the
Closing Date.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered to BT Securities
Corporation, 130 Liberty Street, New York, New York 10006, Attention: Corporate
Finance Department, with a copy to Cahill Gordon & Reindel, 80 Pine Street, New
York, New York 10005, Attention: Daniel J. Zubkoff; if sent to the Issuer or
the Subsidiary Guarantors, shall be mailed or delivered to the Issuer at 8607
Roberts Drive, Suite 250, Atlanta, Georgia 30350, Attention: David P. Hayford,
with a copy to Kirkland & Ellis, 200 East Randolph Drive, Chicago, Illinois
60601, Attention: William S. Kirsch.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Issuer and the Subsidiary Guarantors,
if any, and their respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained; this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of the Issuer and the Subsidiary
Guarantors, if any, contained in Section 9 of this Agreement shall
<PAGE>
-30-
also be for the benefit of any person or persons who control an Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Issuer and the Subsidiary Guarantors, if any, their respective directors,
officers and any person or persons who control the Issuer within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of
Securities from the Initial Purchasers will be deemed a successor because of
such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed 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.
[Remainder of Page Intentionally Left Blank]
<PAGE>
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Issuer and the
Initial Purchasers.
Very truly yours,
BWAY CORPORATION
By: /s/ David P. Hayford
---------------------------------
Name: David P. Hayford
Title: Senior Vice President and
Chief Financial Officer
BROCKWAY STANDARD (NEW JERSEY), INC.,
as guarantor
By: /s/ David P. Hayford
---------------------------------
Name: David P. Hayford
Title: Senior Vice President
MILTON CAN COMPANY, INC.,
as guarantor
By: /s/ David P. Hayford
---------------------------------
Name: David P. Hayford
Title: Senior Vice President
BROCKWAY STANDARD, INC.,
as guarantor
By: /s/ David P. Hayford
---------------------------------
Name: David P. Hayford
Title: Senior Vice President
<PAGE>
MATERIALS MANAGEMENT, INC.,
as guarantor
By: /s/ Blair G. Schlossberg
-----------------------------------
Name: Blair G. Schlossberg
Title: Secretary
BROCKWAY STANDARD (CANADA), INC.,
as guarantor
By: /s/ David P. Hayford
------------------------------------
Name: David P. Hayford
Title: Executive Vice President
PLATE MASTERS, INC.,
as guarantor
By: /s/ David P. Hayford
------------------------------------
Name: David P. Hayford
Title: Vice President
BROCKWAY STANDARD (OHIO), INC.,
as guarantor
By: /s/ David P. Hayford
------------------------------------
Name: David P. Hayford
Title: Vice President
<PAGE>
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
BT SECURITIES CORPORATION,
as Initial Purchaser
By: /s/ Christina Minnis
------------------------------
Name: Christina Minnis
Title: Vice President
BEAR, STEARNS & CO. INC.,
as Initial Purchaser
By: /s/ Tylene J. Elliott
-------------------------------
Name: Tylene J. Elliott
Title: Senior Managing Director
NATIONSBANC CAPITAL MARKETS, INC.,
as Initial Purchaser
By: /s/ J. Scott Holmes
-------------------------------
Name: J. Scott Holmes
Title: Director
<PAGE>
BANKERS TRUST INTERNATIONAL PLC
By: /s/ G. Clempson
------------------------------
Name: G. Clempson
Title: Director
<PAGE>
SCHEDULE I
----------
Principal
Amount of
Initial Purchaser Notes
- ----------------- ------------
BT Securities Corporation.................................... $ 50,000,000
Bear, Stearns & Co. Inc...................................... 25,000,000
NationsBanc Capital Markets, Inc............................. 25,000,000
------------
Total........................................................ $100,000,000
============
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12.1
------------
BWAY CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended September 30, Three Months Ended December 31,
------------------------------------- -------------------------------
SELECTED HISTORICAL FINANCIAL DATA: 1992 1993 1994 1995 1996 1995 1996
----- ------ ------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings were calculated as follows:
Income before income taxes, extraordinary item and
cumulative effect of change in accounting 5,474 8,887 9,001 14,794 6,958 3,741 2,404
Add: Fixed charges 1,417 3,328 6,597 6,478 6,625 1,682 2,420
----- ------ ------ ------ ------ ----- -----
Earnings 6,891 12,215 15,598 21,272 13,583 5,423 4,824
===== ====== ====== ====== ====== ===== =====
Fixed charges were calculated as follows:
Interest expense (a) 1,132 2,795 5,730 5,611 5,525 1,407 2,087
Portion of rentals attributable to interest (b) 285 533 867 867 1,100 275 333
----- ------ ------ ------ ------ ----- -----
Fixed charges 1,417 3,328 6,597 6,478 6,625 1,682 2,420
===== ====== ====== ====== ====== ===== =====
Ratio of earnings to fixed charges 4.9x 3.7x 2.4x 3.3x 2.1x 3.2x 2.0x
===== ====== ====== ====== ====== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Pro Forma 3
Year Ended months ended
September 30, December 31,
1996 1996
------------- -------------
<S> <C> <C>
SELECTED HISTORICAL FINANCIAL DATA:
Earnings were calculated as follows:
Income before income taxes, extraordinary item and
cumulative effect of change in accounting 9,388 1,952
Add: Fixed charges 14,400 3,658
------ -----
Earnings 23,788 5,610
Fixed charges were calculated as follows: ====== =====
Interest expense (a) 13,300 3,325
Portion of rentals attributable to interest (b) 1,100 333
------ -----
Fixed charges 14,400 3,658
====== =====
Ratio of earnings to fixed charges 1.7x 1.5x
====== =====
</TABLE>
(a) Interest expense includes amortization of deferred financing costs.
(b) Portion of rentals attributable to interest is deemed to be one-third of
operating lease rental expense for the period.
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES
<TABLE>
<CAPTION>
STATE OR OTHER JURISDICTION OF
REGISTRANT SUBSIDIARY INCORPORATION OR ORGANIZATION
---------- ---------- ------------------------------
<S> <C> <C>
BWAY Corporation Brockway Standard, Inc. Delaware
Brockway Standard (Canada), Inc. Ontario, Canada
Brockway Standard (New Jersey), Inc. Delaware
BWAY Foreign Sales Corporation Barbados
Materials Management, Inc. Delaware
Milton Can Company, Inc. Delaware
Armstrong Containers, Inc. (a) Delaware
Brockway Standard (Ohio), Inc. (a) Delaware
Plate Masters, Inc. (a) Delaware
Milton Metal Graphics, Inc. (b) Delaware
Northeast Tin Plate Company (b) Delaware
Tin Plate Alliance, L.L.C. (c) Delaware
Brockway Standard Milton Metal Graphics, Inc. Delaware
(New Jersey), Inc. Northeast Tin Plate Company Delaware
Brockway Standard, Armstrong Containers, Inc. Delaware
Inc. Brockway Standard (Ohio), Inc. Delaware
Plate Masters, Inc. Delaware
Materials Tin Plate Alliance, L.L.C. Delaware
Management, Inc.
</TABLE>
- ----------
Notes:
(a) Armstrong Containers, Inc., Brockway Standard (Ohio), Inc. and Plate
Masters, Inc. are direct subsidiaries of Brockway Standard, Inc., a
direct subsidiary of BWAY Corporation.
(b) Milton Metal Graphics, Inc. and Northeast Tin Plate Company are direct
subsidiaries of Brockway Standard (New Jersey), Inc., a direct
subsidiary of BWAY Corporation.
(c) Tin Plate Alliance, L.L.C. is a direct subsidiary of Materials
Management, Inc., a direct subsidiary of BWAY Corporation.
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of BWAY Corporation,
Armstrong Containers, Inc., Brockway Standard, Inc., Brockway Standard (Canada),
Inc., Brockway Standard (New Jersey), Inc., Brockway Standard (Ohio), Inc.,
Materials Management, Inc., Milton Can Company, Inc., and Plate Masters, Inc. on
Form S-4 of our report dated November 8, 1996 (except for Note 18, which is
dated April 11, 1997), appearing in the Prospectus, which is part of this
Registration Statement.
We also consent to the reference to us under the headings "SUMMARY CONSOLIDATED
HISTORICAL AND PRO FORMA FINANCIAL DATA", "SELECTED HISTORICAL FINANCIAL DATA",
AND "EXPERTS" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
April 25, 1997
<PAGE>
Exhibit 23.2
------------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of BWAY Corporation
of our report dated July 31, 1996 relating to the financial statements of Davies
Can which appears in the current report on Form 8-K/A of BWAY Corporation dated
August 30, 1996. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
April 24, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
BWAY CORPORATION
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to BWAY
Corporation, to sign the Registration Statement on Form S-4 of (i) BWAY
Corporation and (ii) Armstrong Containers, Inc., Brockway Standard, Inc.,
Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc., Brockway
Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company, Inc. and
Plate Masters, Inc. (collectively, the "Subsidiary Guarantors") relating to the
registration of $100,000,000 aggregate principal amount of 10 1/4% Senior
Subordinated Notes due 2007, Series B (the "Exchange Notes") to be issued by
BWAY Corporation and the related guarantees of the Subsidiary Guarantors, and
any or all amendments to such registration statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JOHN T. STIRRUP
Warren J. Hayford, John T. Stirrup,
Chief Executive Officer and Director President, Chief Operating Officer
and Director
/S/ JAMES W. MILTON /S/ DAVID P. HAYFORD
James W. Milton, David P. Hayford,
Executive Vice President and Director Senior Vice President and Chief
Financial Officer
/S/ KEVIN C. KERN /S/ THOMAS A. DONAHOE
Kevin C. Kern, Thomas A. Donahoe,
Vice President and Corporate Controller Director
/S/ ALEXANDER P. DYER /S/ JEAN-PIERRE M. ERGAS
Alexander P. Dyer, Jean-Pierre M. Ergas
Director Director
/S/ JOHN E. JONES
/S/ JOHN W. PUTH
John E. Jones, John W. Puth,
Director Director
<PAGE>
POWER OF ATTORNEY
-----------------
ARMSTRONG CONTAINERS, INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to
Armstrong Containers, Inc., to sign the Registration Statement on Form S-4 of
(i) BWAY Corporation and (ii) Armstrong Containers, Inc., Brockway Standard,
Inc., Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc.,
Brockway Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company,
Inc. and Plate Masters, Inc. (collectively, the "Subsidiary Guarantors")
relating to the registration of $100,000,000 aggregate principal amount of 10
1/4% Senior Subordinated Notes due 2007, Series B (the "Exchange Notes") to be
issued by BWAY Corporation and the related guarantees of the Subsidiary
Guarantors, and any or all amendments to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JOHN T. STIRRUP
Warren J. Hayford, John T. Stirrup,
Director President and Director
/S/ DAVID P. HAYFORD
David P. Hayford,
Vice President
<PAGE>
POWER OF ATTORNEY
-----------------
BROCKWAY STANDARD, INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to
Brockway Standard, Inc., to sign the Registration Statement on Form S-4 of (i)
BWAY Corporation and (ii) Armstrong Containers, Inc., Brockway Standard, Inc.,
Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc., Brockway
Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company, Inc. and
Plate Masters, Inc. (collectively, the "Subsidiary Guarantors") relating to the
registration of $100,000,000 aggregate principal amount of 10 1/4% Senior
Subordinated Notes due 2007, Series B (the "Exchange Notes") to be issued by
BWAY Corporation and the related guarantees of the Subsidiary Guarantors, and
any or all amendments to such registration statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JOHN T. STIRRUP
Warren J. Hayford, John T. Stirrup,
Chief Executive Officer and Director Director
/S/ DAVID P. HAYFORD
David P. Hayford,
Senior Vice President
<PAGE>
POWER OF ATTORNEY
-----------------
BROCKWAY STANDARD (CANADA), INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to
Brockway Standard (Canada), Inc., to sign the Registration Statement on Form S-4
of (i) BWAY Corporation and (ii) Armstrong Containers, Inc., Brockway Standard,
Inc., Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc.,
Brockway Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company,
Inc. and Plate Masters, Inc. (collectively, the "Subsidiary Guarantors")
relating to the registration of $100,000,000 aggregate principal amount of 10
1/4% Senior Subordinated Notes due 2007, Series B (the "Exchange Notes") to be
issued by BWAY Corporation and the related guarantees of the Subsidiary
Guarantors, and any or all amendments to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ DAVID P. HAYFORD /S/ ROBERT C. COLEMAN
David P. Hayford, Robert C. Coleman,
Executive Vice President and Director President
/S/ MICHAEL J. TOBIN
Michael J. Tobin,
Director
<PAGE>
POWER OF ATTORNEY
-----------------
BROCKWAY STANDARD (NEW JERSEY), INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to
Brockway Standard (New Jersey), Inc., to sign the Registration Statement on Form
S-4 of (i) BWAY Corporation and (ii) Armstrong Containers, Inc., Brockway
Standard, Inc., Brockway Standard (Canada), Inc., Brockway Standard (New
Jersey), Inc., Brockway Standard (Ohio), Inc., Materials Management, Inc.,
Milton Can Company, Inc. and Plate Masters, Inc. (collectively, the "Subsidiary
Guarantors") relating to the registration of $100,000,000 aggregate principal
amount of 10 1/4% Senior Subordinated Notes due 2007, Series B (the "Exchange
Notes") to be issued by BWAY Corporation and the related guarantees of the
Subsidiary Guarantors, and any or all amendments to such registration statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JOHN T. STIRRUP
Warren J. Hayford, John T. Stirrup,
Director President and Director
/S/ DAVID P. HAYFORD
David P. Hayford,
Senior Vice President
<PAGE>
POWER OF ATTORNEY
-----------------
BROCKWAY STANDARD (OHIO), INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to
Brockway Standard (Ohio), Inc., to sign the Registration Statement on Form S-4
of (i) BWAY Corporation and (ii) Armstrong Containers, Inc., Brockway Standard,
Inc., Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc.,
Brockway Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company,
Inc. and Plate Masters, Inc. (collectively, the "Subsidiary Guarantors")
relating to the registration of $100,000,000 aggregate principal amount of 10
1/4% Senior Subordinated Notes due 2007, Series B (the "Exchange Notes") to be
issued by BWAY Corporation and the related guarantees of the Subsidiary
Guarantors, and any or all amendments to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JOHN T. STIRRUP
Warren J. Hayford, John T. Stirrup,
Director President and Director
/S/ DAVID P. HAYFORD
David P. Hayford,
Vice President
<PAGE>
POWER OF ATTORNEY
-----------------
MATERIALS MANAGEMENT, INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to
Materials Management, Inc., to sign the Registration Statement on Form S-4 of
(i) BWAY Corporation and (ii) Armstrong Containers, Inc., Brockway Standard,
Inc., Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc.,
Brockway Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company,
Inc. and Plate Masters, Inc. (collectively, the "Subsidiary Guarantors")
relating to the registration of $100,000,000 aggregate principal amount of
10 1/4% Senior Subordinated Notes due 2007, Series B (the "Exchange Notes") to
be issued by BWAY Corporation and the related guarantees of the Subsidiary
Guarantors, and any or all amendments to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ DANIEL SITLER /S/ BLAIR G. SCHLOSSBERG
Daniel Sitler, Blair G. Schlossberg,
President and Director Director
<PAGE>
POWER OF ATTORNEY
-----------------
MILTON CAN COMPANY, INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to Milton
Can Company, Inc., to sign the Registration Statement on Form S-4 of (i) BWAY
Corporation and (ii) Armstrong Containers, Inc., Brockway Standard, Inc.,
Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc., Brockway
Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company, Inc. and
Plate Masters, Inc. (collectively, the "Subsidiary Guarantors") relating to the
registration of $100,000,000 aggregate principal amount of 10 1/4% Senior
Subordinated Notes due 2007, Series B (the "Exchange Notes") to be issued by
BWAY Corporation and the related guarantees of the Subsidiary Guarantors, and
any or all amendments to such registration statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JAMES W. MILTON
Warren J. Hayford, James W. Milton,
Director President and Director
/S/ JOHN T. STIRRUP /S/ DAVID P. HAYFORD
John T. Stirrup, David P. Hayford,
Director Senior Vice President
<PAGE>
POWER OF ATTORNEY
-----------------
PLATE MASTERS, INC.
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears below
constitutes and appoints David P. Hayford and Blair G. Schlossberg and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities which such person serves or may serve with respect to Plate
Masters, Inc., to sign the Registration Statement on Form S-4 of (i) BWAY
Corporation and (ii) Armstrong Containers, Inc., Brockway Standard, Inc.,
Brockway Standard (Canada), Inc., Brockway Standard (New Jersey), Inc., Brockway
Standard (Ohio), Inc., Materials Management, Inc., Milton Can Company, Inc. and
Plate Masters, Inc. (collectively, the "Subsidiary Guarantors") relating to the
registration of $100,000,000 aggregate principal amount of 10 1/4% Senior
Subordinated Notes due 2007, Series B (the "Exchange Notes") to be issued by
BWAY Corporation and the related guarantees of the Subsidiary Guarantors, and
any or all amendments to such registration statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
<PAGE>
This power of attorney has been signed as of the 21st day of April, 1997,
by the following persons:
/S/ WARREN J. HAYFORD /S/ JOHN T. STIRRUP
Warren J. Hayford, John T. Stirrup,
Director President and Director
/S/ DAVID P. HAYFORD
David P. Hayford,
Vice President
<PAGE>
Exhibit 25.1
------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as
Trustee
Check if an Application to Determine
Eligibility of a Trustee Pursuant to Section
305(b)(2) _______________
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(I.R.S. Employer
(State of Incorporation) Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Daniel G. Donovan, Harris Trust and Savings Bank,
111 West Monroe Street, Chicago, Illinois, 60603
312-461-2908
(Name, address and telephone number for agent for service)
BWAY Corporation
(Name of Obligor)
See Table of Subsidiary Guarantors on Schedule 1 hereto
(Names of Guarantors)
Delaware 36-3624491
(I.R.S. Employer
(State of Incorporation) Identification No.)
8607 Roberts Drive, Suite 250
Atlanta, Georgia 30350
(Address of principal executive offices)
10 1/4% Senior Subordinated Notes due 2007, Series B
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence business
and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Commercial Federal Corporation, File
No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 3 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 4 of this statement)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 22nd day of April, 1997.
HARRIS TRUST AND SAVINGS BANK
By: /s/ DGDonovan
-------------
D. G. Donovan
Assistant Vice President
EXHIBIT A
The consents of the Trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ DGDonovan
-------------
D.G. Donovan
Assistant Vice President
2
<PAGE>
SCHEDULE 1
TABLE OF SUBSIDIARY GUARANTORS
The address and telephone number of the principal executive offices of each of
the Subsidiary Guarantors listed below are the same as set forth for BWAY
Corporation. All of such Subsidiary Guarantors are direct or indirect
subsidiaries of BWAY Corporation.
<TABLE>
<CAPTION>
Exact Name of Registrant As Specified State or Other Jurisdiction of I.R.S. Employer
in its Charter Incorporation or Organization Identification Number
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Armstrong Containers, Inc. Delaware 36-3493902
Brockway Standard, Inc. Delaware 25-1364972
Brockway Standard (Canada), Inc. Ontario, Canada None
Brockway Standard (New Jersey), Inc. Delaware 58-2241193
Brockway Standard (Ohio), Inc. Delaware 65-0666452
Materials Management, Inc. Delaware 58-2295302
Milton Can Company, Inc. Delaware 58-2264009
Plate Masters, Inc. Delaware 58-2262496
- ---------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of December 31, 1996, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO OF HARRIS BANK]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on December 31, 1996, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
Cash and balances due from depository institutions:
<S> <C> <C>
Non-interest bearing balances and currency and coin.................. $ 1,157,832
Interest bearing balances............................................ $ 658,287
Securities:....................................................................
a. Held-to-maturity securities $ 0
b. Available-for-sale securities $ 2,759,331
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold................................................... $ 316,275
Securities purchased under agreements to resell...................... $ 0
Loans and lease financing receivables:
Loans and leases, net of unearned income............................. $ 8,199,096
LESS: Allowance for loan and lease losses........................... $ 108,408
-------------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................. $ 8,090,688
Assets held in trading accounts................................................ $ 185,153
Premises and fixed assets (including capitalized leases)....................... $ 180,043
Other real estate owned........................................................ $ 582
Investments in unconsolidated subsidiaries and associated companies............ $ 82
Customer's liability to this bank on acceptances outstanding................... $ 78,983
Intangible assets.............................................................. $ 294,420
Other assets................................................................... $ 542,257
-----------
TOTAL ASSETS $14,263,933
===========
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
DEPOSITS:
In domestic offices.................................................................... $ 7,898,588
Non-interest bearing................................................................ $ 3,135,907
Interest bearing.................................................................... $ 4,762,681
In foreign offices, Edge and Agreement subsidiaries, and IBF's......................... $ 1,839,922
Non-interest bearing................................................................ $ 35,116
Interest bearing.................................................................... $ 1,804,806
Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased............................................................. $ 1,615,797
Securities sold under agreements to repurchase...................................... $ 376,270
Trading Liabilities $ 74,165
Other borrowed money:...................................................................
a. With remaining maturity of one year or less $ 697,591
b. With remaining maturity of more than one year $ 9,265
Bank's liability on acceptances executed and outstanding $ 78,983
Subordinated notes and debentures....................................................... $ 310,000
Other liabilities....................................................................... $ 170,785
--------------------------------------
TOTAL LIABILITIES $13,071,366
======================================
EQUITY CAPITAL
Common stock............................................................................ $ 100,000
Surplus................................................................................. $ 600,377
a. Undivided profits and capital reserves.............................................. $ 506,301
b. Net unrealized holding gains (losses) on available-for-sale securities.............. ($14,111)
--------------------------------------
TOTAL EQUITY CAPITAL $ 1,192,567
======================================
Total liabilities, limited-life preferred stock, and equity capital..................... $14,263,933
======================================
</TABLE>
I, Steve Neudecker, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
STEVE NEUDECKER
1/29/97
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
MARIBETH S. RAHE
Directors.
5
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
OF
BWAY CORPORATION
Pursuant to the Prospectus Dated , 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1997 UNLESS EXTENDED (THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed, and submitted to:
HARRIS TRUST AND SAVINGS BANK, DEPOSITARY
c/o HARRIS TRUST COMPANY OF NEW YORK
By Overnight Courier:
77 Water Street, 4th Floor
New York, NY 10005
By Mail: By Facsimile Transmission By Hand:
Wall Street Station (for Eligible Receive Window
P.O. Box 1010 Institutions only): 77 Water Street, 5th
New York, NY 10268-1010 (212) 701-7636 Floor
(212) 701-7637 New York, NY 10005
Confirm by telephone:
(212) 701-7649
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY ADDITIONAL
INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT (212) 701-
7649, OR BY FACSIMILE AT (212) 701-7636 OR (212) 701-7637.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1997 (the "Prospectus") of BWAY Corporation, a Delaware corporation
("Company"), and this Letter of Transmittal (the "Letter of Transmittal"),
that together constitute the Company's offer (the "Exchange Offer") to
exchange $1,000 in principal amount of its 10 1/4% Senior Subordinated Notes
due 2007, Series B (the "Exchange Notes"), which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement, for each $1,000 in principal amount of its outstanding
10 1/4% Senior Subordinated Notes due 2007 (the "Notes"), of which
$100,000,000 aggregate principal amount is outstanding. Capitalized terms used
but not defined herein have the meanings ascribed to them in the Prospectus.
The undersigned hereby tenders the Notes described in Box 1 below (the
"Tendered Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Notes and the undersigned represents that it has
received from each beneficial owner of the Tendered Notes ("Beneficial
Owners") a duly completed and executed form of "Instruction to Registered
Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner"
accompanying this Letter of Transmittal, instructing the undersigned to take
the action described in this Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the Tendered
Notes, the undersigned hereby exchanges, assigns and transfers to, or upon the
order of, the Company all right, title, and interest in, to and under the
Tendered Notes.
<PAGE>
Please issue the Exchange Notes exchanged for Tendered Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions" below (Box 3), please send or cause to be sent the
certificates for the Exchange Notes (and accompanying documents, as
appropriate) to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned
with respect to the Tendered Notes, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (i) deliver the Tendered Notes to the Company or cause ownership
of the Tendered Notes to be transferred to, or upon the order of, the Company,
on the books of the registrar for the Notes and deliver all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company
upon receipt by the Exchange Agent, as the undersigned's agent, of the
Exchange Notes to which the undersigned is entitled upon acceptance by the
Company of the Tendered Notes pursuant to the Exchange Offer, and (ii) receive
all benefits and otherwise exercise all rights of beneficial ownership of the
Tendered Notes, all in accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Notes pursuant to the procedures
described under the caption "The Exchange Offer" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer, subject only to withdrawal of such tenders on the terms
set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal
of Tenders." All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned and any Beneficial
Owner(s), and every obligation of the undersigned or any Beneficial Owner(s)
hereunder shall be binding upon the heirs, representatives, successors, and
assigns of the undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign, and transfer the Tendered
Notes and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, and adverse
claims when the Tendered Notes are acquired by the Company as contemplated
herein. The undersigned and each Beneficial Owner will, upon request, execute
and deliver any additional documents reasonably requested by the Company or
the Exchange Agent as necessary or desirable to complete and give effect to
the transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired
by the undersigned and any Beneficial Owner(s) in the ordinary course of
business of the undersigned and any Beneficial Owner(s), (ii) the undersigned
and each Beneficial Owner are not participating, do not intend to participate,
and have no arrangement or understanding with any person to participate, in
the distribution of the Exchange Notes, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Company,
and (iv) the undersigned and each Beneficial Owner acknowledge and agree that
any person participating in the Exchange Offer with the intention or for the
purpose of distributing the Exchange Notes must comply with the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the
"Securities Act"), in connection with a secondary resale of the Exchange Notes
acquired by such person and cannot rely on the position of the Staff of the
Securities and Exchange Commission (the "Commission") set forth in the no-
action letters that are discussed in the section of the Prospectus entitled
"The Exchange Offer." In addition, by accepting the Exchange Offer, the
undersigned hereby (i) represents and warrants that, if the undersigned or any
Beneficial Owner of the Notes is a Participating Broker-Dealer, such
Participating Broker-Dealer acquired the Notes for its own account as a result
of market-making activities or other trading activities and has not entered
into any arrangement or understanding with the Company or any "affiliate" of
the Company (within the meaning of Rule 405 under the
2
<PAGE>
Securities Act) to distribute the Exchange Notes to be received in the
Exchange Offer, and (ii) acknowledges that, by receiving Exchange Notes for
its own account in exchange for Notes, where such Notes were acquired as a
result of market-making activities or other trading activities, such
Participating Broker-Dealer will deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of such Exchange Notes.
[_]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH.
[_]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"USE OF GUARANTEED DELIVERY" BELOW (BOX 4).
[_]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE "USE OF BOOK-ENTRY TRANSFER" BELOW (BOX 5).
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
BOX 1
DESCRIPTION OF NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- -------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
NAME(S) AND ADDRESS(ES) OF REGISTERED AMOUNT AGGREGATE
NOTE HOLDER(S), EXACTLY AS NAME(S) CERTIFICATE REPRESENTED PRINCIPAL
APPEAR(S) ON NOTE CERTIFICATE(S) NUMBER(S) BY AMOUNT
(PLEASE FILL IN, IF BLANK) OF NOTES* CERTIFICATE(S) TENDERED**
- -------------------------------------------------------------------------------
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
TOTAL
- -------------------------------------------------------------------------------
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Notes.
All other tenders must be in integral multiples of $1,000 of principal
amount. Unless otherwise indicated in this column, the principal amount
of all Note Certificates identified in this Box 1 or delivered to the
Exchange Agent herewith shall be deemed tendered. See Instruction 4.
BOX 2
BENEFICIAL OWNER(S)
- -------------------------------------------------------------------------------
STATE OF PRINCIPAL RESIDENCE OF EACH PRINCIPAL AMOUNT OF TENDERED NOTES
BENEFICIAL OWNER OF TENDERED NOTES HELD FOR ACCOUNT OF BENEFICIAL OWNER
- -------------------------------------------------------------------------------
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
3
<PAGE>
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED
NOTES ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE
UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail Exchange Note(s) and any untendered Notes to:
Name(s):
---------------------------------------------------------------------------
(please print)
Address:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(include Zip Code)
Tax Identification or
Social Security No.: ______________________________________________________
BOX 4
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery: _______________________
Name of Institution which Guaranteed Delivery: ____________________________
BOX 5
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY BOOK-
ENTRY TRANSFER.
Name of Tendering Institution: ____________________________________________
Account Number: ___________________________________________________________
Transaction Code Number: __________________________________________________
4
<PAGE>
BOX 6
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
X _________________________________ Signature Guarantee
(If required by Instruction 5)
X _________________________________ Authorized Signature
(Signature of Registered Holder(s)
or Authorized Signatory)
Note: The above lines must be X _________________________________
signed by the registered holder(s)
of Notes as their name(s) Name: _____________________________
appear(s) on the Notes or by (please print)
person(s) authorized to become
registered holder(s) (evidence of Title: ____________________________
such authorization must be
transmitted with this Letter of Name of Firm: _____________________
Transmittal). If signature is by a (Must be an Eligible
trustee, executor, administrator, Institution as defined
guardian, attorney-in-fact, in Instruction 2)
officer, or other person acting in
a fiduciary or representative Address: __________________________
capacity, such person must set
forth his or her full title below. __________________________
See Instruction 5.
__________________________
Name(s): __________________________ (include Zip Code)
__________________________ Area Code and Telephone Number:
Capacity: _________________________ _______________________________
_________________________ Dated: ____________________________
Street Address: ___________________
___________________
(include Zip Code)
Area Code and Telephone Number:
___________________________________
Tax Identification or Social
Security Number:
___________________________________
BOX 7
BROKER-DEALER STATUS
- --------------------------------------------------------------------------------
[_]Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes
for its own account as a result of market-making activities or other
trading activities. IF THIS BOX IS CHECKED, A COPY OF THIS LETTER OF
TRANSMITTAL MUST BE RECEIVED WITHIN THREE BUSINESS DAYS AFTER THE
EXPIRATION DATE BY BWAY CORPORATION, ATTENTION BLAIR G. SCHLOSSBERG,
FACSIMILE (770) 587-0186.
5
<PAGE>
PAYOR'S NAME: BWAY CORPORATION
- -------------------------------------------------------------------------------
SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE
Name (if joint names, list first and circle the name of the person or entity
whose number you enter in Part 1 below. See instructions if your name has
changed.)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City, State and ZIP Code
- --------------------------------------------------------------------------------
List account number(s) here (optional)
- --------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TAXPAYER Social
IDENTIFICATION NUMBER ("TIN") IN THE BOX Security
AT RIGHT AND CERTIFY BY SIGNING AND DATING Number or
BELOW TIN
- --------------------------------------------------------------------------------
PART 2--Check the box if you are NOT subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code because (1)
you have not been notified that you are subject to backup withholding as a
result of failure to report all interest or dividends or (2) the Internal
Revenue Service has notified you that you are no longer subject to backup
withholding. [_]
- --------------------------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PART 3--
PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND Awaiting TIN
COMPLETE. [_]
SIGNATURE __________________ DATE ___________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
6
<PAGE>
BWAY CORPORATION
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTES. A properly completed
and duly executed copy of this Letter of Transmittal, including Substitute
Form W-9, and any other documents required by this Letter of Transmittal must
be received by the Exchange Agent at its address set forth herein, and either
certificates for Tendered Notes must be received by the Exchange Agent at its
address set forth herein or such Tendered Notes must be transferred pursuant
to the procedures for book-entry transfer described in the Prospectus under
the caption "Exchange Offer--Procedures for Tendering" (and a confirmation of
such transfer received by the Exchange Agent), in each case prior to 5:00
p.m., New York City time, on the Expiration Date. The method of delivery of
certificates for Tendered Notes, this Letter of Transmittal and all other
required documents to the Exchange Agent is at the election and risk of the
tendering holder and the delivery will be deemed made only when actually
received by the Exchange Agent. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. Instead of
delivery by mail, it is recommended that the Holder use an overnight or hand
delivery service. In all cases, sufficient time should be allowed to assure
timely delivery. No Letter of Transmittal or Notes should be sent to the
Company. Neither the Company nor the registrar is under any obligation to
notify any tendering holder of the Company's acceptance of Tendered Notes
prior to the closing of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes
but whose Notes are not immediately available, and who cannot deliver their
Notes, this Letter of Transmittal or any other documents required hereby to
the Exchange Agent prior to the Expiration Date must tender their Notes
according to the guaranteed delivery procedures set forth below, including
completion of Box 4. Pursuant to such procedures: (i) such tender must be made
by or through a firm which is a member of a recognized Medallion Program
approved by the Securities Transfer Association Inc. (an "Eligible
Institution") and the Notice of Guaranteed Delivery must be signed by the
holder; (ii) prior to the Expiration Date, the Exchange Agent must have
received from the holder and the Eligible Institution a properly completed and
duly executed Notice of Guaranteed Delivery (by mail, hand delivery or
facsimile transmission) setting forth the name and address of the holder, the
certificate number(s) of the Tendered Notes and the principal amount of
Tendered Notes, stating that the tender is being made thereby and guaranteeing
that, within three New York Stock Exchange trading days after the Expiration
Date, this Letter of Transmittal together with the certificate(s) representing
the Notes and any other required documents will be deposited by the Eligible
Institution with the Exchange Agent; and (iii) such properly completed and
executed Letter of Transmittal, as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all Tendered
Notes in proper form for transfer, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the Expiration Date.
Any holder who wishes to tender Notes pursuant to the guaranteed delivery
procedures described above must ensure that the Exchange Agent receives the
Notice of Guaranteed Delivery relating to such Notes prior to 5:00 p.m., New
York City time, on the Expiration Date. Failure to complete the guaranteed
delivery procedures outlined above will not, of itself, affect the validity or
effect a revocation of any Letter of Transmittal form properly completed and
executed by an Eligible Holder who attempted to use the guaranteed delivery
process.
3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED HOLDERS. Only a holder in
whose name Tendered Notes are registered on the books of the registrar (or the
legal representative or attorney-in-fact of such registered holder) may
execute and deliver this Letter of Transmittal. Any Beneficial Owner of
Tendered Notes who is not the registered holder must arrange promptly with the
registered holder to execute and deliver this Letter of Transmittal on his or
her behalf through the execution and delivery to the registered holder of the
Instructions to Registered Holder and/or Book-Entry Transfer Facility
Participant from Beneficial Owner form accompanying this Letter of
Transmittal.
7
<PAGE>
4. PARTIAL TENDERS. Tenders of Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Notes held by the holder is tendered, the tendering holder should
fill in the principal amount tendered in the column labeled "Aggregate
Principal Amount Tendered" of the box entitled "Description of Notes Tendered"
(Box 1) above. The entire principal amount of Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated. If the
entire principal amount of all Notes held by the holder is not tendered, then
Notes for the principal amount of Notes not tendered and Exchange Notes issued
in exchange for any Notes tendered and accepted will be sent to the Holder at
his or her registered address, unless a different address is provided in the
appropriate box on this Letter of Transmittal, as soon as practicable
following the Expiration Date.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Notes, the signature must correspond with
the name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever.
If any of the Tendered Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Notes are held in different names, it will be necessary to complete, sign and
submit as many separate copies of the Letter of Transmittal as there are
different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Notes, and Exchange Notes issued in exchange therefor are to be
issued (and any untendered principal amount of Notes is to be reissued) in the
name of the registered holder(s), then such registered holder(s) need not and
should not endorse any Tendered Notes, nor provide a separate bond power. In
any other case, such registered holder(s) must either properly endorse the
Tendered Notes or transmit a properly completed separate bond power with this
Letter of Transmittal, with the signature(s) on the endorsement or bond power
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Notes, such Tendered Notes must be
endorsed or accompanied by appropriate bond powers, in each case, signed as
the name(s) of the registered holder(s) appear(s) on the Tendered Notes, with
the signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by
the Company, evidence satisfactory to the Company of their authority to so act
must be submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Notes are tendered (i) by a registered holder
who has not completed the box set forth herein entitled "Special Delivery
Instructions" (Box 3) or (ii) by an Eligible Institution.
6. SPECIAL DELIVERY INSTRUCTIONS. Tendering holders should indicate, in the
applicable box (Box 3), the name and address to which the Exchange Notes
and/or substitute Notes for principal amounts not tendered or not accepted for
exchange are to be sent, if different from the name and address of the person
signing this Letter of Transmittal. In the case of issuance in a different
name, the taxpayer identification or social security number of the person
named must also be indicated.
7. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the exchange of Tendered Notes pursuant to the Exchange Offer.
If, however, a transfer tax is imposed for any reason other than the transfer
and exchange of Tendered Notes pursuant to the Exchange Offer, then the amount
of any such transfer taxes
8
<PAGE>
(whether imposed on the registered holder or on any other person) will be
payable by the tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with this Letter of Transmittal,
the amount of such transfer taxes will be billed directly to such tendering
holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Tendered Notes listed in this Letter
of Transmittal.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
holder(s) of any Tendered Notes which are accepted for exchange must provide
the Company (as payor) with its correct taxpayer identification number
("TIN"), which, in the case of a holder who is an individual, is his or her
social security number. If the Company is not provided with the correct TIN,
the Holder may be subject to backup withholding and a $50 penalty imposed by
the Internal Revenue Service. (If withholding results in an over-payment of
taxes, a refund may be obtained.) Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. See the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for additional instructions.
To prevent backup withholding, each holder of Tendered Notes must provide
such holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN), and that (i) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result
of failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified the holder that such holder is no longer subject to
backup withholding. If the Tendered Notes are registered in more than one name
or are not in the name of the actual owner, consult the "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
information on which TIN to report.
The Company reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Company's obligation regarding backup
withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of Tendered Notes will
be determined by the Company in its sole discretion, which determination will
be final and binding. The Company reserves the right to reject any and all
Notes not validly tendered or any Notes the Company's acceptance of which
would, in the opinion of the Company or its counsel, be unlawful. The Company
also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Notes as to any ineligibility of any
holder who seeks to tender Notes in the Exchange Offer. The interpretation of
the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by the Company shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Notes must be cured within such time as the Company
shall determine. Neither the Company, the Exchange Agent nor any other person
shall be under any duty to give notification of defects or irregularities with
respect to tenders of Notes, nor shall any of them incur any liability for
failure to give such notification. Tenders of Notes will not be deemed to have
been made until such defects or irregularities have been cured or waived. Any
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend,
waive or modify any of the conditions in the Exchange Offer in the case of any
Tendered Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Notes or transmittal of this Letter of Transmittal will
be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any tendering Holder whose
Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated herein for further instructions.
9
<PAGE>
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Prospectus or this Letter
of Transmittal may be directed to the Exchange Agent at the address indicated
herein. Holders may also contact their broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Exchange Offer.
14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF NOTES; RETURN OF NOTES.
Subject to the terms and conditions of the Exchange Offer, the Company will
accept for exchange all validly tendered Notes as soon as practicable after
the Expiration Date and will issue Exchange Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Company shall
be deemed to have accepted tendered Notes when, as and if the Company has
given written or oral notice (immediately followed in writing) thereof to the
Exchange Agent. If any Tendered Notes are not exchanged pursuant to the
Exchange Offer for any reason, such unexchanged Notes will be returned,
without expense, to the undersigned at the address shown in Box 1 or at a
different address as may be indicated herein under "Special Delivery
Instructions" (Box 3).
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer."
10
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
OF
BWAY CORPORATION
Pursuant to the Prospectus Dated , 1997
This form must be used by a holder of 10 1/4% Senior Subordinated Notes due
2007 (the "Notes") of BWAY Corporation, a Delaware limited liability company
(the "Company"), who wishes to tender Notes to the Exchange Agent pursuant to
the guaranteed delivery procedures described in "The Exchange Offer--
Guaranteed Delivery Procedures" of the Company's Prospectus, dated ,
1997 (the "Prospectus") and in Instruction 2 to the related Letter of
Transmittal. Any holder who wishes to tender Notes pursuant to such guaranteed
delivery procedures must ensure that the Exchange Agent receives this Notice
of Guaranteed Delivery prior to the Expiration Date of the Exchange Offer.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1997 UNLESS EXTENDED (THE "EXPIRATION DATE").
HARRIS TRUST AND SAVINGS BANK, DEPOSITARY
(THE "EXCHANGE AGENT")
C/O HARRIS TRUST COMPANY OF NEW YORK
By Overnight Courier:
77 Water Street, 4th Floor
New York, NY 10005
By Mail: By Facsimile Transmission By Hand:
Wall Street Station (for Eligible Receive Window
P.O. Box 1010 Institutions only): 77 Water Street, 5th
New York, NY 10268-1010 (212) 701-7636 Floor
(212) 701-7637 New York, NY 10005
Confirm by telephone:
(212) 701-7649
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the related Letter of Transmittal.
<PAGE>
The undersigned hereby tenders the Notes listed below:
AGGREGATE
PRINCIPAL AGGREGATE
CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AMOUNT PRINCIPAL
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY REPRESENTED AMOUNT TENDERED
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------
Signatures of Registered Holder(s)
or Authorized Signatory: ___________ Date: _________________ , 1997
____________________________________ Address: ___________________________
____________________________________ ____________________________________
Name(s) of Registered Holder(s): ___ Area Code and Telephone No. ________
____________________________________
____________________________________
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Notes or on a security position
listing as the owner of Notes, or by person(s) authorized to become
Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
Please print name(s) and address(es)
Name(s): ____________________________________________________________________
_____________________________________________________________________________
Capacity: ___________________________________________________________________
Address(es): ________________________________________________________________
_____________________________________________________________________________
-2-
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, guarantees deposit with the Exchange Agent
of the Letter of Transmittal (or facsimile thereof), together with the Notes
tendered hereby in proper form for transfer (or confirmation of the book-
entry transfer of such Notes into the Exchange Agent's account at the Book-
Entry Transfer Facility described in the prospectus under the caption "The
Exchange Offer--Guaranteed Delivery Procedures" and in the Letter of
Transmittal) and any other required documents, all by 5:00 p.m., New York
City time, on the third New York Stock Exchange trading day following the
Expiration Date.
Name of firm: ______________________ ____________________________________
(Authorized Signature)
Address: ___________________________
Name: ______________________________
____________________________________ (Please Print)
(Include Zip Code) Title: _____________________________
Area Code and Tel. No. _____________ Dated: _______________ , 1997
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST
BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by
the Exchange Agent at its address set forth herein prior to the Expiration
Date. The method of delivery of this Notice of Guaranteed Delivery and any
other required documents to the Exchange Agent is at the election and sole
risk of the holder, and the delivery will be deemed made only when actually
received by the Exchange Agent. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. As an alternative
to delivery by mail, the holders may wish to consider using an overnight or
hand delivery service. In all cases, sufficient time should be allowed to
assure timely delivery. For a description of the guaranteed delivery
procedures, see Instruction 2 of the related Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Notes
referred to herein, the signature must correspond with the name(s) written on
the face of the Notes without alteration, enlargement, or any change
whatsoever. If this Notice of Guaranteed Delivery is signed by a participant
of the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of the Notes, the signature must correspond with the name
shown on the security position listing as the owner of the Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s)
appears on the Notes or signed as the name of the participant shown on the
Book-Entry Transfer Facility's security position listing.
-3-
<PAGE>
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests for
assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
-4-
<PAGE>
EXHIBIT 99.3
INSTRUCTIONS
TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
BWAY CORPORATION
10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated
, 1997 (the "Prospectus") of BWAY Corporation, a Delaware corporation
(the "Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 10 1/4% Senior Subordinated Notes due 2007 (the
"Notes") held by you for the account of the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
$ of the 10 1/4% Senior Subordinated Notes due 2007
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[_]TO TENDER the following Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY): $
[_]NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representation and warranties contained in
the Letter of Transmittal that are to be made with respect to the undersigned
as a beneficial owner, including but not limited to the representations that
the undersigned's principal residence is in the state of (FILL IN STATE)
, (i) the undersigned is acquiring the Exchange Notes in
the ordinary course of business of the undersigned, (ii) the undersigned is
not participating, does not participate, and has no arrangement or
understanding with any person to participate in the distribution of the
Exchange Notes, (iii) the undersigned acknowledges that any person
participating in the Exchange Offer for the purpose of distributing the
Exchange Notes must comply with the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Act"), in
connection with a secondary resale transaction of the Exchange Notes acquired
by such person and cannot rely on the position of the Staff of the Securities
and Exchange Commission set forth in no-action letters that are discussed in
the section of the Prospectus entitled "The Exchange Offer--Resale of the
Exchange Notes," and the undersigned is not an "affiliate," as defined in Rule
405 under the Act, of the Company or any Subsidiary Guarantor; to agree, on
behalf of the undersigned, as set forth in the Letter of Transmittal; and to
take such other action as necessary under the Prospectus or the Letter of
Transmittal to effect the valid tender of such Notes.
[_]Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes
for its own account as a result of market-making activities or other
trading activities. IF THIS BOX IS CHECKED, A COPY OF THESE
INSTRUCTIONS MUST BE RECEIVED WITHIN THREE BUSINESS DAYS AFTER THE
EXPIRATION DATE BY BWAY CORPORATION, ATTENTION BLAIR G. SCHLOSSBERG,
FACSIMILE (770) 587-0186.
<PAGE>
SIGN HERE
Name of beneficial owner(s): ______________________________________________
Signature(s): _____________________________________________________________
Name (please print): ______________________________________________________
Address: __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Telephone number: _________________________________________________________
Taxpayer Identification or Social Security Number: ________________________
Date: _____________________________________________________________________
2
